Today’s News 14th October 2016

  • Hillary Clinton's Axis Of Evil

    Authored by Pepe Escobar, originally posted op-ed via SputnikNews.com,

    Let’s cut to the chase; Hillary Clinton is ready to go to war against Russia in Syria – with inbuilt, potentially terrifying, thermonuclear consequences.

    Anticipating an outcome of the US presidential election as a remix of the 1972 Nixon landslide, Hillary has also coined, George “Dubya” Bush-style, a remixed axis of evil: Russia, Iran and “the Assad regime”.

    That’s not even counting China, which, via “aggression” in the South China Sea, will also feature as a certified foe for the Founding Mother of the pivot to Asia.

    And if all that was not worrying enough, Turkey now seems on the path to join the axis.

    President Putin and President Erdogan met in Istanbul. Moscow positioned itself as ready to develop large-scale military-technical cooperation with Ankara.

    That includes, of course, the $20 billion, Rosatom-built, four-reactor Akkuyu nuclear power plant. And the drive to “speed up the work” on Turkish Stream – which will de facto strengthen even more Russia’s position in the European gas market, bypassing Ukraine for good, while sealing Ankara’s position as a key East-West energy crossroads.

    In addition, both Moscow and Ankara back UN Special Envoy for Syria Staffan de Mistura’s position that “moderate rebels” (the Beltway’s terminology) holding eastern Aleppo hostage must be eradicated.

    The geopolitical game-changer is self-evident. As much as Erdogan may be a whirling political dervish, impossible to fathom and trust, while Putin is a master of the strategic long game, Moscow’s and Ankara’s interests tend to converge in the New Great Game; and that spells out closer integration in the dawn of the Eurasian Century.

    Quite a cup of hemlock for Hillary Clinton, who has already equated Putin with Hitler.

    Regime change or hot war?

    In the appalling spectacle that turned out to be round two of the interminable Trump/Clinton cage match, Donald Trump once again made a rational point – expressing his wish for a normalized working relationship with Russia. Yet that is absolute anathema for the War Party, as in the neocon/neoliberalcon nebulae in the Beltway-Wall Street axis.

    The Clinton (Cash) Machine-controlled Democrats once again condemned Trump as a tool of Putin while bewildered Republicans condemned Trump because he goes against “mainstream Republican thinking”.

    Here’s what Trump said; “I don’t like Assad at all, but Assad is killing ISIS. Russia is killing ISIS and Iran is killing ISIS.”

    Trump’s outlook on Southwest Asia relies on only one vector; destroy ISIS/ISIL/Daesh. That’s what adviser and former Defense Intelligence Agency (DIA) director, retired Lt. Gen. Michael Flynn, has been infiltrating into Trump’s notoriously short attention span.

    Flynn may have admitted on the record that ISIS/ISIL/Daesh’s progress was a “willful” decision taken by the Obama administration. Yet in his disjointed book Field of Fight, Flynn insists that, “the Russians haven’t been very effective at fighting jihadis on their own territory”, are “in cahoots with the Iranians”, and “the great bulk of their efforts are aimed at the opponents of the Assad regime.”

    This is a neocon mantra; unsurprisingly, the co-author of Flynn’s book is neocon Michael Ledeen.

    From dodgy American Enterprise Institute (AEI) and Washington Institute for Near East Policy (WINEP) armchair “experts” to former counselors at the State Department, they all subscribe to the laughable view that the remixed axis of evil – now fully adopted by Hillary – is useless against jihadis; the good guys doing the difficult work are “the US-led coalition”. And damn those who dare criticizing the “relative moderates” backed by the CIA.

    What Trump said is anathema not only for establishment Republicans who despise Obama for not fighting against the Hillary-adopted remixed axis of evil. The real mortal sin is that it “disregards” core US foreign policy bipartisan assumptions held to be as sacred as the Bible.

    Thus the success of the neocon Ash Carter-led Pentagon in bombing the Kerry-Lavrov ceasefire deal which would imply coordinated airstrikes against both ISIS/ISIL/Daesh and the Front for the Conquest of Syria, formerly Jabhat al-Nusra, a.k.a. al Qaeda in Syria.

    Neocons and mainstream Republicans blame lame duck Team Obama for the “unholy reliance” on Russia and Iran, while neoliberalcons blame Russia outright. And high in the altar of righteousness, hysteria rules, with the neocon president of the NED http://www.informationclearinghouse.info/article45643.htm calling for the US government to “summon the will” to pull a Putin regime change.

    Ready to go nuclear?

    Hillary Clinton continues to insist the US is not at war with Islam. The US is de facto at war in Afghanistan, Iraq, Syria, Yemen, Somalia, Pakistan’s tribal areas; involved in covert war in Iran; and has totally destroyed Libya. It’s not hard to do the math.

    In parallel, the deafening talk about Washington now advancing a Plan C in Syria is nonsense. There has never been a Plan C; only Plan A, which was to draw Russia into another Afghanistan. It did not work with the controlled demolition of Ukraine. And it will not work in Syria, as Moscow is willing to supply plenty of air and missile power but no boots on the ground of any consequence. That’s a matter for the Syrian Arab Army (SAA), Iran and its Shi’ite militias, and Hezbollah.

    Ash Carter has threatened Russia with “consequences”. After blowing up the ceasefire, the Pentagon – supported by the Joint Chiefs of Staff – now is peddling “potential strikes” on Syria’s air force to “punish the regime” for what the Pentagon actually did; blow up the ceasefire. One can’t make this stuff up.

    Major-General Igor Konashenkov, Russia’s Defense Ministry spokesman, sent a swift message to “our colleagues in Washington”; think twice if you believe you can get away with launching a “shadow” hot war against Russia. Russia will target any stealth/unidentified aircraft attacking Syrian government targets – and they will be shot down.

    The only serious question then is whether an out of control Pentagon will force the Russian Air Force – false flag and otherwise – to knock out US Air Force fighter jets, and whether Moscow has the fire power to take out each and every one of them.

    So in this three-month window representing the “death throes” of the Obama era, before the likely enthronization of the Queen of War, the question is whether the Pentagon will risk launching WWIII because “Aleppo is falling”.

    Afterwards, things are bound to get even more lethal. The US government is holding open a first-strike nuclear capacity against Russia. Hillary firmly supports it, as Trump made clear he “would not do first-strike”. The prospect of having axis of evil practitioner Hillary Clinton with her fingers on the nuclear button must be seen as the most life-and-death issue in this whole circus.

  • The Psychology of Trading: Learning How to Handle Success (Video)

    By EconMatters


    In this video we discuss the Psychology of trading, learning how to handle success and failure in a more reasoned, rational manner. It really boils down to good decision making in Financial Markets.

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

  • What Exactly Is Agenda 21?

    Via DaisyLuther.com,

    When most folks hear the words “Agenda 21” they have one of three responses:

    1. Huh? What’s that?

     

    2. Oh yay! It’ll turn the world into Utopia and global warming will stop and life will be rainbows and unicorns again!

     

    3. It’s a plan to remove personal liberty and move us closer to a one-world government. Where the heck is my tinfoil?

    Some folks don’t even believe it exists,  others think it exists but is a good thing turned into a nasty conspiracy theory, and the majority are blissfully oblivious. Even though many people don’t realize it, we’re all being nudged toward an Agenda-21 ruled world. It’s easy, too, because it promises a green world of lollipops and rainbows and most of it will be “free.”

    To put it as simply as possible, Agenda 21 is world domination with a warm, fuzzy glow. Once you understand it, you’ll never look at “regulations” the same way again.

    Here’s how it all started.

    In 1992, peace-loving tree huggers at the UN devised a plan for the world. That’s right – the friendly folks at the UN’s Division for Sustainable Development (DSD) created a master plan for ALL of us.

    Agenda 21 is a comprehensive plan of action to be taken globally, nationally, and locally by organizations of the United Nations System, Governments, and Major Groups in every area in which human impacts on the environment.

    So, let’s see if we understand this correctly.

    • A plan of action. Got it.

    • To be taken globally…okay – everyone must participate.

    • In every area in which human impacts on the environment….yep, that covers everyone and everything in the entire world.

    It’s a warm fuzzy way to take over the world! Group hug, anyone?

    Agenda 21 is a 350-page action plan divided into 40 chapters. It was developed at a summit in Rio de Janeiro in 1992. The “21” in Agenda 21 refers to the 21st Century. You can read the entire unsettling plot HERE but the general idea is that the group of “leaders” intends to have a collective finger in every pie on the planet.

    I.  SOCIAL AND ECONOMIC DIMENSIONS

    The first section of the pact plan deals with the people of the world. Particularly, the DSD wants to “help” those in Third World countries live “better”. They’ll be taught:

    • How to make more money by putting everyone to work in perfect accordance with the goals of the Agenda

    • How to maintain their health through vaccinations and modern medicine

    • How to govern themselves in accordance with the plan

    • How to control their populations

    • All in all, they’ll learn how to make decisions that will concur with the ideals of the Agenda.

    II.  CONSERVATION AND MANAGEMENT OF RESOURCES FOR DEVELOPMENT

    This section includes protection of the atmosphere, land, mountains, oceans, and fresh waters – everything in the environment of a given country. This means that historical ways of using these resources could be outlawed – changing the basic ways of life for the indigenous people to make way for “progress” and “sustainability”.  This gives control of all natural resources to the good folks of the DSD.

    Section 2 (specifically Chapter 9, subsection #8) also uses the unproven science of global warming to further the controls placed on the acquisition and use of resources. This section of the articles of Agenda 21 confers vast taxation on resources while allowing huge companies to use the green ideology to receive carbon credits, reallocating money from the power to the rich under a cloak of green hypocrisy.

    ….the United Nations is demanding $76 trillion from the first world over the next 40 years to encourage the development of “green” technologies in the third world. The defense of such a reckless agenda has rested on the unwarranted claim that the globe was hovering on the precipice of environmental devastation. “Green” ideology has become the bulwark of older agendas: The nations of the West must end their own prosperity, because that is only “fair” — and it necessary to save the world from Capitalist greed.  from The New American

    By specifically outlining the management of all natural resources, it disallows the use of them for any but the 1% in power, effectively keeping people from farming, fishing, mining, or otherwise harvesting the innate supplies provided by their environments.

    III.  STRENGTHENING THE ROLE OF MAJOR GROUPS

    The language in this section implies empowerment of women, children, unions, farmers, and indigenous peoples.  However, if you dig deeper you’ll discover that all of this equality actually means

    • the abolition of personal property

    • the demise of rural living

    • mandatory birth (population) control

    • the “redevelopment” of cities

    So, basically, Communism 101.

    They intend to warehouse people in small areas for a multi-fold goal. It will make them easier to control, easier to poison and/or chemically sterilize through managed food and water supplies, and will remove personal ownership of natural resources.

    The sleight-of-hand empowerment will actually take away the rights of families by disallowing ownership of personal property, curtailing their physical liberty by making all transportation public, and providing a pro-Agenda education/brainwashing for all.

    IV.  MEANS OF IMPLEMENTATION

    This section describes how to get the whole world on board the happy train to Agenda 21-land.

    • Redistribution of financial resources (i.e., taking it away from some and sharing it with others)

    • Technology (public transit, “equal” distribution of energy usage, monitoring of behaviors through big brother technologies)

    • Science and environmentalism (removing people from rural areas to “save” the natural resources from pollution and mismanagement)

    • Re-education (brainwashing with propaganda)

    • Restructuring of local governments (installing puppet leaders)

    This will be presented as Utopian, but really, it will turn everyone into carefully warehoused slaves with just enough food and supplies to make those who don’t think too deeply, content.

    Agenda 21: Not Just for 3rd World Countries

    All of this peace and love isn’t just for developing countries. The principles of Agenda 21 are insinuating themselves into the lives of North Americans and Europeans at warp speed. I’ll bet when you read this list, you can see dozens of ways this plan has begun to take root right in your own backyard.

    • With the decline of the American farm, people are being funneled into the cities in search of work.

    • With the decline of the economy, fewer people can afford private transportation and are therefore limited to the places that public transit will take them.

    • Support of the local down-trodden is geared to further incite class warfare.

    • Separation of families through child protection agencies, Big Brother parenting,  mandatory public schools at younger and younger ages, and the dumbing down of our education system is planned to break down our society even further.

    • Publicly funded health care  (cough*Obamacare* cough) will dictate toxic vaccinations, secretive sterilization, eugenics of the elderly and less-productive members of society, and mandated birth control.

    AGENDA 21 IS FULL-SPECTRUM DOMINATION BY THE 1%. 

    Nothing has been left out.

    • It guarantees both birth control and death control.

    • It promises the basic essentials of life in return for submission.

    • It exchanges critical thinking for re-education and brainwashing.

    • It destroys the epicenter of the family, society, and culture, allowing only one way to live. It groups the population into small contained areas to be more easily controlled.

    • It takes away from some to give to others who will be more easily managed by the promise of a full belly and a warm shelter.

    It’s a parasitical representation of the 1%, feeding on the 99.

    Agenda 21.
    Divide.
    Dumb down.
    Conquer.

    And it’s only going to get worse.

  • An Inside Look At Two "Unrelated" Banker Suicides Reveals A Fascinating Rabbit Hole

    It has been nearly four years since one of the most infamous, and still largely unexplained, banker “suicides” took place, the first in a series of many: we are talking about the death of the director of communications at Monte dei Paschi di Siena, David Rossi, who allegedly jumped to his death on March 6, 2013.

    Since this event has largely faded away from the public consciousness here is a quick recap: David Rossi, who was the head of communications for Monte dei Paschi di Siena bank, which was founded in 1472 and which is currently seeking to finalize its third bailout since the financial crisis, died after falling – or being pushed – from a third floor window of the bank’s headquarters in a 14th century palazzo in the Tuscan city of Siena.

    His death in March 2013 came at a time when the bank was pushed close to the brink of collapse over a scandal involving the loss of hundreds of millions of euros through risky investments.

    While a quickly cobbled together post-mortem found that Rossi, 51, had killed himself, his family strongly suspected that he was murdered because he knew too much about the bank’s shady financial deals. As a result, earlier this year, prosecutors in Siena, where the bank is based, ordered his body to be exhumed and for the trajectory of his fall to be simulated, in an attempt to discover exactly how he died.

    The death itself was suspicious: while Rossi fell, or was pushed, from his office at exactly 7:59:23 pm on March 6, 2013, and landed in a darkened alleyway, he did not die immediately – he was alive for 22 minutes, investigators believe.

    What made Rossi’s death even more puzzling is that security camera footage, released years after his death, showed two shadowy figures appear at the end of the alley, apparently checking that there was no chance he would survive.

    The scandalous video emerged in public this June, when the Post’s Michael Gray used it as the basis for an article asking “Why are so many bankers committing suicide?” For those who have not seen the 4 minute clip, we present it below in its entirety.

    Among the oddities revealed at the site of the alleged suicide is that the executive had bruises and scratches on his arms and wrists which suggested that he may have been gripped forcibly by one or two assailants before being pushed out of the window. On the back of his head was a deep, L-shaped gash suggesting he may have been hit with a blunt object before falling from the window.

    Three apparent suicide notes were found crumpled in a bin in his study, but Antonella Tognazzi, his widow, said they contained phrases that her husband would never have used. One of them said: “Ciao, Toni, my love. I’m sorry.”

    “He never called me Toni, he always called me Antonella,” his widow, who has long contended that her husband did not kill himself but was murdered, said. The recent reopening

    A handwriting expert who analyzed the notes said they seemed to have been written under duress. Another unexplained element is the fact that 33 minutes after Mr Rossi fell from his office window, a call was made on his mobile phone.

    At exactly the same moment, the CCTV footage showed an object falling onto the ground and landing a few feet from the body; it was later found to be Mr Rossi’s watch, minus the strap.

    To be sure, the recent emergence of the video has somehwat placated Rossi’s widow, Antonella Tognazzi, who got her wish for a re-examination into the circumstances surrounding Rossi’s death:  “We’ve been waiting a long time for the investigation to be reopened,” said Ms Tognazzi early this year quoted by the Telegraph. “It’s what we had been hoping for – it’s an important sign on the part of the judiciary. I have never believed he committed suicide.”

    The plot thickens when one digs into the details revealed by the footage captured on the surveillance video.

    The footage shows the three-story fall didn’t kill Rossi instantly. For almost 20 minutes, the banker lay on the dimly lit cobblestones, occasionally moving an arm and leg. As he lay dying, two murky figures appear. Two men appear and one walks over to gaze at the banker. He offers no aid or comfort and doesn’t call for help before turning around and calmly walking out of the alley.

    Two minutes into the clip, Gray also notes that “Italian authorities have yet to identify these two men.”

    Following the Post article, there was a scramble by the Italian press to explain that the two men had indeed been identified, and to suggest that the local police knew, all along who they were. In a statement, the prosecutor of Siena said that the video on the fall of David Rossi “being circulated on the internet corresponds to the one already acquired during the investigation”. Moreover, the two men seen near Rossi’s body in the video footage were already interviewed in the first phase of the investigation.

    “For final confirmation and to avoid any further speculation, we have decided to re-interview the two men in the video as part of the new investigation,” wrote the prosecutor. The two people in question are Giancarlo Filippone and Bernardo Mingrone. “The first, seen wearing a padded jacket, was a colleague and friend of David Rossi, while Mingrone, who is wearing a coat and remains in the background, was at the time a senior executive in the MPS finance department.”

    Courtesy of the police inquest into the suicide can confirm the two individuals seen in the back alley where Rossi died, were indeed his former coworkers Giancarlo Filippone a manager at Monte Paschi and a friend of Rossi, and Bernardo Mingrone, the CFO of Monte Paschi.

    The police report notes the following testimony from Filippone, as recounted by Il Fatto Quotidiano: “I came from work at 18 and later I was contacted by the wife of Rossi who had not heard from her husband and begged me to go and call him. I sent him a text message at 19:41 (…) and got no response, so after waiting a bit I went to the office at 20:30 and when I entered the room I saw the window open, I looked below and saw David’s lifeless body.”

    Mingrone’s testimony was also recorded: “At 20:40 on my way out I was talking on the phone, and just as I was in the hallway on the ground floor of the building heading towards the main exit, I met another man (Filippone) gesticulating dramatically and confused. The concierge mouthed the following words: “David Rossi” then “window”, then after hanging up the phone i met with Rossi’s colleague (Filippone, ed) who told me that David Rossi was thrown from the window. I asked the two where Rossi’s office was located and to accompany me there asking if they had called an ambulance. I entered the office and I looked out the window seeing the body on the ground; at that point I called 118 (emergency sevices) since I had been told that no one had called previously.”

    That’s the official version; the actual video evidence demonstrates no panic, and no distressed among the two individuals, who calmly walk up to the dying body and then calmly walk away. The public prosector found little in the circumstances suspect, and as he detailed on June 17, there was no mystery as to the presence of the two men in the alley, where Rossi was either pushed or had jumped on his own.

    Where some confusion does emerge, however, is that according to a different recount of events that night, Rossi did in fact speak to his wife Antonella whom he called at 19:02, one hour prior to the deadly fall, in which he did not speak as like someone who is going to commit suicide. To the contrary they were making dinner plans: “I will be home at 19.30. I already bought everything you need. But first I need to take the meatballs that I ordered for dinner. See you later.” He would never make it home as he was dead shortly after. Adding to the confusion is that after his death a number was typed on his cell: 409909 which, according to his lawyer, may have been a computer access code. It is unclear what was being accessed or who typed in the code.

    But the question about the presence of the Monte Paschi CFO at the crime (or suicide) scene, is just one part of the mystery.

    Two days prior to Rossi’s death, the communications director sent a cryptic
    email to the bank’s CEO, Fabrizio Viola according to Rossi’s wife. “I want guarantees of not being overwhelmed by this thing,” he wrote. “We would have to do right away, before tomorrow. Can you help me?” As the post previously asked,”it remains a mystery what specifically Rossi thought could “overwhelm” him just before his death, but many have speculated that he was referring to Monte Paschi’s troubled financial position.”

    Incidentally, Fabrizio Viola stepped down as Monte Paschi CEO just one month ago, as the bank was deep in the middle of its latest, third, bailout process which however according to press reports has met substantial procedural hurdles and may not be completed, with speculation a debt for equity swap may be required to facilitate the bank’s rescue.

    Furthermore, Rossi was a close confidant of former bank Chairman, Joseph Mussari, who was the driving force behind Monte Paschi’s 2008 $13 billion purchase of Banca Antonveneta from Spain’s Santander. Many banking analysts agreed at the time that Monte Paschi had overpaid for the acqusition, which incidentally was financed by Deutsche Bank.


    Giuseppe Mussari poses at the ABI headquarters in Rome July 27, 2010

    Adding to the mystery, in October 2014, an Italian court sentenced Mussari to three years and six months in jail for misleading regulators in relation to a 2009 derivative trade with Nomura that prosecutors said was used to conceal losses. The court in Siena, where Italy’s third-biggest lender is based, also sentenced former chief executive Antonio Vigni and ex-finance boss Gianluca Baldassarri to the same jail term. Prosecutors had asked for a seven-year jail sentence for Mussari and six years for Vigni and Baldassarri.

    Prosecutors had accused Mussari, Vigni and Baldassarri of hiding a document known as a mandate agreement, which prosecutors and regulators said made clear that the derivative, called Alexandria, was linked to the acquisition of 3 billion euros worth of long-term Italian government bonds by Monte dei Paschi. The link between the two trades meant they should have received different accounting treatment, which would have shown heavy losses. Alexandria and two other derivatives trades ultimately forced Monte Paschi to restate its accounts and book a loss of 730 million euros on its 2012 results.

    New management at the bank, now working on a plan to fill the 2.1-billion-euro capital hole, has said it only discovered the existence of the mandate agreement when it was found in a safe in Vigni’s former office in October 2012, more than three years after it was signed.

    If so far this all appears very confusing, is because it indeed is.

    Where it gets even more confusing is that in January of this year, three executives from Deutsche Bank, which as we now know was very intimately involved with some of the illegal derivative transactions undertaken by Monte Pasci, were also implicated civilly, including Michele Faissola, the head of Private & Asset Wealth Management at Deutsche Bank— charged by Italian authorities with colluding with the troubled Monte Paschi in falsifying accounts, manipulating the market and obstructing justice.

    Prosecutors have been reconstructing how Monte Paschi’s former managers misrepresented the lender’s finances in the years before it sought a government bailout. The misrepresentation first came to light in January 2013 when Bloomberg reported that Monte Paschi used a transaction with Deutsche Bank, the infamous Santorini (profiled here), to mask losses from an earlier derivative contract. The bank the same year had to restate its accounts

    Faissola denied the charges.


    Michele Faissola, head of Private & Asset Wealth Management

    Faissola, whose roles included overseeing rates and commodities, was put in charge of Deutsche Bank’s combined asset and wealth management division in 2012 when Anshu Jain and Juergen Fitschen took over as co-chief executive officers of the Frankfurt-based lender. Deutsche Bank on Oct. 18 said Faissola would leave after a transition period; his departure came just a few months after the sudden resignation of Co-CEOs Anshu Jain and Jurgen Fitschen in June 2015; it is said that Faissola was their close protege.

    As a reminder, earlier this month, the recently troubled Deutsche Bank was itself charged by Italy for market manipulation and creating false accounts. Additionally, the name Faissole emerged once again, when as Bloomberg reported, six current and former managers of Deutsche Bank, including Michele Faissola, Michele Foresti and Ivor Dunbar, were charged in Milan for colluding to falsify the accounts of Italy’s third-biggest bank, Monte Paschi and manipulate the market.

    Here is where things get interesting.

    Michele Faissola was a coworker of one William S. Broeksmit. By way of background, Broeksmit had two stints at Frankfurt-based Deutsche Bank, first from 1996 to 2001, then from 2008 until his retirement in September 2013, having previously worked at Merrill Lynch. When he rejoined the bank in 2008 it was in a newly created position, head of portfolio risk optimization. In 2012, as Jain and Fitschen prepared to take over as CEOs, the duo advanced Broeksmit’s name to become the new chief risk officer. The bank retreated on his nomination after German financial regulator BaFin raised concerns that Broeksmit’s lack of experience managing a large number of employees.

    Broeksmit worked as a consultant from his retriement until Janury 28, 2014… when the body of the 58 year old was found hanging in his London flat from a dog leash tied to the top of a door. He had just commited suicide..

    As we reported at the time, financial papers had been strewn about the scene of his suicide, and on a dog bed near the body were a number of notes to family and friends. One was addressed to Deutsche Bank CEO Anshu Jain, with an apology. That note offered no clue as to the reason he was sorry.

    And this is where the story gets even more fascinating: the abovementioned Michele Faissola, who was instrumental in helping Monte Paschi arrange its various derivative deals with Deutsche Bank, was the first to arrive at the gruesome scene of Broeksmit’s suicide in 2014.

     When he arrived at the South Kensington home, he immediately began going through the bank papers and read the suicide notes.


    The west London home of William S. Broeksmit where he was found dead in 2014

    We know all this because it was recounted to us by Val Broeksmit, the son of the deceased high-ranking Deutsche Bank banker. Val also who provided us the police report of David Rossi’s death, and various other key notes as he has tried to piece together over the years how and why his father committed suicide.

    While there is no evidence Faissola was involved in any misconduct related to Broeksmit’s death, Val wonders what, if anything, Faissola had been searching for.

    So do we.

    The reason why this story, which has seen bits and pieces float around over the past 3 years, is reemerging is because now that both the insolvent Monte Paschi is in the news for its ongoing third bailout, not to mention the significantly troubled Deutsche Bank is also a daily source of market stress, the fact that two bankers who were intimately familiar and certainly involved in many of the transactions between Deutsche Bank and Monte Paschi, and which have been deemed illegal and are being prosecuted by the Italian state, have committed suicide, is worth bringing to the public’s attention.

    * * *

    What is fascinating, is not only how interconnected the fates of Deutsche Bank and Monte Paschi have been over the years – two banks that have each seen a dramatic, high ranking suicide in recent years – but also how far the political process has pushed to preserving a cone of silence surrounding these events: recall that on September 1, Milan prosecutors filed a request to shelve a probe for alleged market manipulation and false accounting against the chief executive of Monte Paschi, Fabrizio Viola, and the bank’s former chairman, Alesandro Profumo; a probe that was launched just several weeks prior. As noted above, Viola quietly resigned from his post shortly after the announcement.

    Most importantly, while investigators on both the UK and Italian side have been quick to dismiss the banker deaths as open and shut cases of suicide, courtesy of Broeksmit’s son we have access to certain documents which we are confident will reveal not just how deep the rabbit hole truly goes, linking the oldest and biggest European banks through two still largely unexplained suicides, but also what is hidden behind Deutsche Bank’s mirrored facade.

  • Leaked Emails Reveals Clinton Campaign Plotted Supreme Court Threat Over Obamacare

    Remember back in 2012 when the Supreme Court narrowly upheld the Obamacare mandate with a 5-4 decision but only after Judge Roberts, a Bush appointee, seemingly parted with his conservative counterparts on the bench to effectively, single-handedly preserve perhaps the most destructive piece of legislation in American history (if not, we wrote about it here)?  Many people were shocked by Judge Roberts’ decision and subsequently alleged that it was driven more by politics than his interpretation of the Constitution. 

    Turns out those people were proven right today as a new Podesta email confirms that the Obama administration applied political pressure on Roberts to sway his decision:  “it was pretty critical that the President threw the gauntlet down last time on the Court…that was vital to scaring Roberts off.”

    While it’s fairly disturbing that the Clinton team would flippantly admit such things, what’s even worse is that they plotted to use Obama’s same strategy of applying political pressure on the Supreme Court in 2015 to overturn “King v Burwell” which also threatened Obamacare’s future.

    The email below from Neera Tanden, clearly shows Clinton staffers colluding with the President of the Center for American Progress on a scheme to apply political pressure on the Supreme Court to overturn the challenge. 

    Supreme Court

     

    Subsequently, both Palmieri, Clinton’s Communications Director, and Fallon, Press Secretary, agreed with the strategy. 

    Supreme Court

    Supreme Court

     

    Of course, the Supreme Court ultimately ruled in favor of the Obama administration with Justice Roberts writing the majority opinion.  Meanwhile, the late Justice Scalia wrote the dissenting opinion in which he said the following:

    Words no longer have meaning if an Exchange that is not established by a State is “established by the State.” It is hard to come up with a clearer way to limit tax credits to state Exchanges than to use the words “established by the State.” And it is hard to come up with a reason to include the words “by the State” other than the purpose of limiting credits to state Exchanges.”

    In hindsight, aren’t we all so lucky that Justice Roberts sold his soul to uphold such an amazing piece of legislation?  For his efforts, we’ve all received the benefits of worse healthcare coverage for twice the price.

  • Obama To Decide Friday On Military Action In Syria

    Two weeks ago when the US broke off bilateral relations with Russia over the ongoing Syrian proxy war, we reported that as part of America’s “next steps” would be a discussion on military options. As Reuters reported then, the “discussions were being held at “staff level,” and have yet to produce any recommendations to President Barack Obama, who has resisted ordering military action against Syrian President Bashar al-Assad in the country’s multi-sided civil war. “The president has asked all of the agencies to put forward options, some familiar, some new, that we are very actively reviewing,” Blinken said. “When we are able to work through these in the days ahead we’ll have an opportunity to come back and talk about them in detail.”

    Fast forward to today, when as Reuters once again reports, the time has come for the US to make a decision: on Friday President Barack Obama and his top foreign policy advisers are expected to meet to consider their military and other options in Syria as Syrian and Russian aircraft continue to pummel Aleppo and other targets.

    The tensions here are well known: some of the more hawkish “top officials” told Reuters that the United States must act more forcefully in Syria or “risk losing what influence it still has over moderate rebels and its Arab, Kurdish and Turkish allies in the fight against Islamic State.” Naturally, this means that one set of options includes direct U.S. military action such as air strikes on Syrian military bases, munitions depots or radar and anti-aircraft bases.

    That is also the scenario which General Joseph Dunford warned may lead to war with Russia. Indeed, the quoted said one danger of such action is that Russian and Syrian forces are often co-mingled, “raising the possibility of a direct confrontation with Russia that Obama has been at pains to avoid.” This is also known as the “world war” scenario.

    Luckily, there are options.

    One alternative, U.S. officials said, is allowing allies to provide U.S.-vetted rebels with more sophisticated weapons, although not shoulder-fired anti-aircraft missiles, “which Washington fears could be used against Western airliners.” Like, for example, what happened above the Donestk region during the peak of the Ukraine proxy war in 2014.

    As Reuters adds, Friday’s planned meeting is the latest in a long series of internal debates – which have so far achieved nothing but escalate the situation which fast approaches a point of no return – about what, if anything, to do to end a 5-1/2 year civil war that has killed at least 300,000 people and displaced half the country’s population. According to insiders, the ultimate aim of any new action could be to “bolster the battered moderate rebels so they can weather what is now widely seen as the inevitable fall of rebel-held eastern Aleppo to the forces of Russian- and Iranian-backed Syrian President Bashar al-Assad.” The question is whether it was also “bolster” al-Qaeda linked jihadists whom the US has been supporting for the past several months as a result of the perverse merger of “moderate” rebel forces in Syria.

    Apparently, there is also an element of pride:

    It also might temper a sense of betrayal among moderate rebels who feel Obama encouraged their uprising by calling for Assad to go but then abandoned them, failing even to enforce his own “red line” against Syria’s use of chemical weapons.

     

    This, in turn, might deter them from migrating to Islamist groups such as the Nusra Front, which the United States regards as Syria’s al Qaeda branch. The group in July said it had cut ties to al Qaeda and changed its name to Jabhat Fatah al-Sham.

    In other words, having started the proxy war in Syria, with every passing day that Obama fails to resolve it – while ideally avoid a world war with Russia – is a day that more and more “moderate rebels” are likely to openly “migrate” to jihadist extremists, with all of the latest US military equipment so generously provided to them by the administration.

    There is also hope that just like in 2013, Kerry and Lavrov will somehow cobble together another last minute peace agreement. The U.S. and Russian foreign ministers will meet in Lausanne, Switzerland on Saturday to resume their failed effort to find a diplomatic solution, possibly joined by their counterparts from Turkey, Qatar, Saudi Arabia and Iran, but U.S. officials were said to have voiced little hope for success.

    Complicating matters, however, is that as we reported this morning, the US is now officially engaged in another regional conflict, after US warships fired ballistic missiles targeting Yemen radar stations in proximity to the critical Bab al-Mandab Straight.

    Earlier Thursday the United States launched cruise missiles at three coastal radar sites in areas of Yemen controlled by Iran-aligned Houthi forces, retaliating after failed missile attacks this week on a U.S. Navy destroyer, U.S. officials said.

    There is also the question of what to do in Iraq, where officials are debating whether government forces will need more U.S. support both during and after their campaign to retake Mosul, Islamic State’s de facto capital in the country. Some officials argue the Iraqis now cannot retake the city without significant help from Kurdish peshmerga forces, as well as Sunni and Shi’ite militias, and that their participation could trigger religious and ethnic conflict in the city.

    * * *

    For now, the best news is that according to Reuters, US officials said they consider it unlikely that Obama will order U.S. air strikes on Syrian government targets, and they stressed that he may not make any decisions at the planned meeting of his National Security Council. However, that will only be the case should the US not be further humiliated in Syria, and – of course – all bets are off if and when Obama is replaced, especially if his successor is a well-known warmonger, directly and indirectly responsible for much of the unstable geopolitical situation across most of the region.
     

  • Global Elites Are Getting Ready To Blame You For The Coming Financial Crash

    Submitted by Brandon Smith via Alt-Market.com,

    Those people that have any doubts about where the narrative is headed for global economic stability simply have not been paying attention lately.

    As I pointed out in my pre-Brexit referendum article, Brexit: Global Trigger Event, Fake Out Or Something Else?, the story being scripted by the globalists is one of the “failures and crimes" of conservative movements. I predicted that the Brexit would pass based on this language used by international financiers and elites leading up to the vote.

    The vast majority of analysts in the mainstream and in the alternative media refused to acknowledge the possibility that a successful Brexit actually works in FAVOR of the globalists, because it provides them a perfect scapegoat for a financial crisis that has been broiling for years and is now ready to burst into flames. I find still that many people will not dare to consider the idea that a successful conservative resurgence is actually part of the plan for globalist institutions. Many argue that the elites just don’t have that kind of pervasive control over the system, or that I am attributing “too much power and ability” to them.

    I find this argument rather naive but also interesting, because many of the people that claim the elites do not have such influence were also the same people that argued before the Brexit that the elites would “never allow” the U.K. referendum to pass. So, do they have extensive influence, or don’t they?  This kind of selective blindness to the game being played prevents a whole host of otherwise intelligent people from grasping reality.

    These folks need to finally admit to themselves that they were half right; the globalists would not allow the passage of the Brexit, UNLESS, a successful Brexit actually works in their favor.

    In my post-Brexit analysis I said that the meme of bumbling and destructive conservatives and “populists” would continue into the U.S. election, and so far it would seem this is exactly the case. In numerous mainstream articles globalists have been openly telling us exactly what is about to happen.

    I find that the same naivety that developed during the Brexit campaign has also developed around the Trump campaign. Too many in the liberty movement will not entertain the idea that a Trump win is in the cards. Yet, the elites are using the same language in reference to the Trump campaign that they used before and after the Brexit.

    Bloomberg’s latest report on the annual meetings of the IMF and World Bank showcase numerous warnings by the elites:

    The global economy has benefited tremendously from globalization and technological change,” the IMF’s top advisory panel said in a communique released on Saturday after meeting in Washington. “However, the outlook is increasingly threatened by inward-looking policies, including protectionism, and stalled reforms.”

     

    The IMF warned in its latest economic outlook that rising political tensions over open markets and free trade could undermine a recovery already lacking a growth engine.”

     

    In a rebuke to those advocating a turn away from trade, the members of the IMF panel redoubled their commitment to “maintain economic openness and reinvigorate global trade as a critical means to boost global growth.”

    Barron’s reiterates the predictive programming, insinuating that a loss of faith in globalism and the financial elites will lead to disaster.

    Leaders gathered at the International Monetary Fund/World Bank annual meeting didn’t mention Donald Trump by name this week, but they warned the anti-trade and populist movements fueling his presidential campaign, as well as Brexit, could further slow already anemic economic growth.”

     

    “…Populist movements have not fallen on deaf ears, with German Finance Minister Wolfgang Schaeuble noting during a panel on the global economy that: “More and more, people don’t trust their elites. They don’t trust their economic leaders, and they don’t trust their political leaders.”

    Globalists are telling us what is about to happen.

    I continue to hold to the position I always have — that Donald Trump is going to be ALLOWED into the White House, and that this will be a prelude to economic crisis. The stage is being set for a grand finale to our ongoing financial collapse. The great villain behind the whole disaster will be revealed, and we will be told that the villain is us.

    By “us" I mean conservative movements in general, though, the mainstream media and globalist spokesmen refer to us more often today as “populists", or maybe "deplorables". Those people who think this brand of “conspiracy” is too far fetched because it requires an inordinate level of political and economic control have not really thought the situation through.

    Fact – central banks and international financiers have already created the conditions necessary for economic instability. Fact – these same elites have staved off a larger or more immediate collapse over the past eight years through the use of fiat stimulus measures, market rigging and the manipulation of public perception. Fact – the elites can easily initiate an immediate collapse if they wish by simply refusing to prop up the system any longer. Fact – the elites have showcased the ability to stifle conservative movements in the past through interference and co-option (Tea Party, anyone?). Fact – they can also give conservative movements an opportunity to gain momentum by removing some of this interference.

    The truth is, at this point globalists do not need expansive or intricate control over the system in order to cause a crisis or to place conservatives in the historical hot seat. All they have to do is step aside and let the train wreck happen. And, of course, they have to position themselves as prognosticators and saviors once the crisis event occurs.

    The argument also arises that “people would never take the bait;” that the masses will not be fooled by the banking cabal into scapegoating conservatives for a crash the elites created. One can only hope. However, possession is nine-tenths of the law in the minds of many, and the mainstream has already conditioned the public with the notion that the mere presence of anti-globalist conservatives in positions of political authority will negatively affect market psychology.

    Of course, this notion relies on the admission of certain truths. For example, the globalists would have to admit that the fiscal system they have held together is so tenuous and fraudulent that it depends solely on false public perception and false investor assumptions. In order to blame conservatives for the destruction of the global economy, the elites will have to tell the truth about the frailty of the system before they can lie about who broke it.

    This may not matter. When people are facing national or international calamity with the potential to hurt them personally, critical thinking and logic tend to go out the window.

    There is also the power of distraction to occupy the minds of the masses while a crisis is taking shape, and what could be more distracting than the Trump vs. Clinton U.S. election? I have to say, I don’t think I have ever witnessed or seen a historical accounting of an election more psychotic than the election of 2016. It is truly the most divisive event in over a century, and this is why I consistently compare it to the Brexit referendum.

    The tone is very much the same, with citizens on the Left side of the political spectrum being lured into rallying in support of globalism as if it is a prerequisite to peace and harmony, while citizens on the Right side of the spectrum are portrayed as knuckle dragging isolationist barbarians hell-bent on urinating in the punch bowl and ruining everyone’s global prosperity party.

    Brexit supporters were painted as older, selfish, potentially racist and out of touch with the changing times. Brexit opponents were painted as young, educated and victimized by older generations taking away the supposed future benefits of globalism.

    Trump supporters are labeled as older, mostly white-centric, uneducated and fearful of the changing times. They just “don’t get” that it’s 2016. Trump opponents are elevated as the academic and worldly class battling to prevent another Hitler.

    During the lead up to the U.K. referendum, polls indicated a wide margin in favor of the anti-Brexit crowd and the assumption by almost everyone was that the Brexit would fail.

    The lead up to the U.S. election is also rife with polls indicating in most cases a margin of victory for Clinton over Trump. Of course, only a complete idiot would take polling numbers seriously in light of what happened during the Brexit.

    The Brexit campaign witnessed what appeared to some to be an unrecoverable black swan event – the killing of British MP Jo Cox. Almost everyone claimed that the murder of Cox by an apparently pro-Brexit assailant meant that the Brexit was doomed (I actually argued that the murder would be forgotten in a week and that the Brexit would pass anyway).

    The Trump campaign has witnessed its own kind of “black swan” event with the release of recordings from eleven years ago in which Trump is heard making “lewd remarks” about women. It is surprising to me how many conservatives (let alone liberals) have been declaring Trump’s candidacy effectively “over” due to the scandal. These people are dupes.

    Once again, I argue that the Trump tapes will be forgotten in a week and that they have no bearing whatsoever on the election. They are nothing more than bread and circus. Beyond the fact that really, almost no one cares what Trump said a decade ago, I argue that this election has already been decided. I argue that the globalists want Trump in office, just as they wanted the passage of the Brexit. I argue that they need conservative movements to feel as though we have won, so that they can pull the rug out from under us in the near future. I argue that we are being set up.

    Again, the elites are openly telling us what is about to happen. They are telling us that if “populists” (conservatives) gain political power, the system will effectively collapse. To what extent is hard to say, but let’s assume that the situation will be ugly enough to influence the masses to reconsider the ideal of globalism as a possible solution. The elites are fond of the Hegelian dialectic and the philosophy of “order out of chaos,” after all.

    The only way to counter this developing lie is for liberty champions to first accept the idea that our political victories might be ultimately meaningless and that we are being allowed to take charge of a ship that is already sinking. Only then can we distance ourselves from an exponential fiscal disaster by distancing ourselves from the narrative.

    Perhaps I am wrong, and in November we see a dismal Trump performance and a Clinton victory. But if we see a “surprise” Trump election win, just as we saw a surprise Brexit win, then it may be time to consider that the surface of this situation is not what it appears.

  • Trump Attacks FBI & DOJ For Corrupt Hillary Investigation – “It Was Crime At The Highest Level”

    After what clearly seems like a coordinated, multi-day attack by the mainstream media on the Trump campaign, culminating with the most recent New York Times article alleging sexual assault, the campaign has officially opened up new fronts in its war on the Washington establishment.  After attacking members of his own party, mostly Paul Ryan, earlier in the week for withdrawing their support, Trump has now directed his wrath towards the FBI and DOJ calling for an “investigation into the investigation” conducted by the FBI of Hillary’s private server. 

    The latest Trump “hit”, as the Hillary team referred to them in the Podesta emails, started at Sunday’s debate when Anderson Cooper, in the first question of the night, manipulated Trump’s now infamous “lewd” comments to Billy Bush to imply they were an admission to actual sexual assault.  As can be seen in the video below, Trump acknowledged the comments and apologized for them, but Cooper refused to moved on until he forced Trump to respond to a completely fabricated allegation that his words were necessarily an admission of actual sexual assault.  

    Then, not terribly surprisingly, within a couple of days, the New York Times released a follow-up “hit” in which they revealed women who claim to have been sexually assaulted by the Donald a couple of decades ago.  And, of course, Clinton spokeswoman, Jennifer Palmieri, immediately called out Trump for “lying” about the scandal at the debate.

     

    But Trump has used the coordinated “hits” against his campaign to declare an all out war on everyone from the mainstream media to Congressional leaders, on both sides of the aisle, and now the FBI and DOJ.  Per the Wall Street Journal, in statements at a rally in Florida yesterday, Trump furiously alleged corruption in the FBI’s investigation of Hillary’s email server describing it as “crime at the highest level.”

    Mr. Trump on Wednesday condemned the Washington establishment for letting Mrs. Clinton off without punishment for her use of a private email server while she was secretary of state.

     

    “I am so disappointed in Congress, and I mean both sides,” he said at a rally here. “What do you do when you hand it over to the FBI and the Justice Department and that’s the end of it?”

     

    The GOP nominee complained that Mr. Ryan didn’t congratulate him for his Sunday performance in the debate against Mrs. Clinton. “Wouldn’t you think that Paul Ryan would call and say, ‘Good going…Let’s go, Don, let’s beat that crook,’” he said. “There’s a whole sinister deal going on.”

     

    He repeated and built upon his threat to name a special prosecutor to investigate Mrs. Clinton if he becomes president, suggesting he would also probe the FBI and Justice Department for failing to bring charges against her for her handling of classified material and use of a private computer for email while secretary of state. “We have to investigate the investigation,” he said. “It was crime at the highest level.”

     

    Faulting Congress for not pressing more on the issue, he portrayed Capitol Hill and the political parties as a bipartisan back-scratching club that allows ethics problems to slide: “Did they make a deal where everybody protects each other in Washington?”

    Trump also directed his wrath at the “fraudulent” media which he called out for giving Hillary an advance look at debate questions and failing to report on the WikiLeaks emails.

     

    Meanwhile Trump also launched a new media ad blitz that will target key swing states with ads like the following.

     

    So buckle up folks, something tells us the next three weeks are going to be surreal.

  • THe YouNG DouCHe…

    DOUCHE

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Today’s News 13th October 2016

  • French Prime Minister Argues For United States Of Europe, With Its Own Military

    Submitted by Michael Shedlock via MishTalk.com,

    French Prime Minister Manuel Valls, wants to transform the EU into the United States of Europe, complete with its own European defense force.

    Curiously, Valls specifically says “We cannot build a United States of Europe”, but that is precisely what he wants to do.

    “Member states have a choice: give up on the EU or transform it,” writes Manuel Valls.

    Redefining Europe

    Please consider Brexit Vote Pushes Europe to Redefine Itself, by Manuel Valls.

    Let us face facts: the European project is in trouble. With the growing threat of terrorism, the refugee crisis, lacklustre economic growth and unemployment, the turmoil in Europe is unprecedented. Added to these, the Brexit vote deeply questioned the very meaning of Europe.

     

    The other 27 member states of the EU have two options (this was the subject of my debate with Jean-Claude Juncker at the Jacques Delors Institute last week): either we give up and leave the European project to a slow but certain death, or we transform the EU.

     

    Reasserting our European identity also means coming to terms with the fact that there are borders — that Europe starts and stops somewhere.

     

    Too often the EU has appeared to be preoccupied with unnecessary regulation. Transforming Europe also means that member states must henceforth focus on the essentials, primarily defence and security — in Europe, of course, but also in the neighbouring region of the Middle East. The French army is already doing more than its fair share: it cannot remain the de facto European army forever. France expects Europe to implement a common security strategy, with fully operational border guards and an electronic system for travel authorisation of the kind already operated by the US.

     

    Finally, transforming Europe means making a clear choice to foster growth that does not only depend on the European Central Bank’s monetary policy. Europe must finance new projects and invest in digital and environmental innovation more than it does already.

     

    These sectors must be enabled to grow and to face competition from countries that have no scruples about protecting their own industries. The time for naivety is over.

     

    For this reason, the negotiations over the Transatlantic Trade and Investment Partnership (TTIP) cannot carry on as they have been. If the EU is to grant market access to American companies, there has to be reciprocity.

     

    The European market must not be a social jungle, where people are set against one another. Nor can it be a tax jungle. It is unacceptable for multi­national companies to do everything in their power to avoid paying tax in the countries in which they make profits. The recent ruling of the European Commission on Apple’s tax affairs was courageous and welcome, therefore. At the same time, member states must progress towards common European tax rates.

     

    We cannot build a “United States of Europe”— each country has its own history, language and culture. But we can construct a sovereign Europe, a federation of nation states, strong and unashamed. We will not be the generation that buries the European project. We owe it to our young, who, for the most part, remain deeply attached to the European project. So are we.

    Valls Wish List

    1. Higher taxes
    2. Unified tax rates (striking at Ireland and Brexit)
    3. More tariff protections
    4. More government spending, especially on environmental projects
    5. A Sovereign Europe
    6. A Federation of Nation states (all having to do the same thing at the same time)
    7. Common defense system and an European army
    8. Fully operational border guards

    Hey, let’s just do all that and not call it the United States of Europe.

    The main thing Valls got correct was “Too often the EU has appeared to be preoccupied with unnecessary regulation.”

    Ironically, Valls proposed regulation in at least a half-dozen areas. and it won’t stop there.

    What about agricultural tariffs to preserve the French way of Life? Valls wants to keep those for the sole benefit of French farmers at the expense of everyone else.

    Great Nannycrat Transformation

    Brexit happened precisely because the EU has been progressing along the lines Valls wants. Citizens are fed up in the UK, Hungary, Poland, Italy, Austria, Greece, Portugal and France, over various things.

    Politicians like Beppe Grillo and the five-star movement in Italy, Marine Le Pen’s National Front in France, and Victor Orban in Hungary feed off nonsense like Valls presented.

    In Austria, anti-immigration presidential candidate Norbert Hofer of the Freedom Party (FPOe) is ahead in polls. The election, scheduled for October 2 was rescheduled to December 4 due to problems with glue.

    austria-election3

    Problems with Glue

    There are problems with glue all right.

    Ireland is upset over taxes, the UK, Hungary, France, and Austria over immigration, Greece and Portugal over austerity, and Italy questions the Euro itself.

    Valls did not address inane work rules in France, Greece, and Italy. Will those go away with more glue?

    Instead of addressing obvious productivity issues, Valls concludes the EU needs an army.

    The entire EU project is at risk of becoming unglued precisely because politicians like Valls, EC President Jean-Claude Juncker, and German chancellor Angela Merkel want to force more glue and more regulations into the system when the eurozone cannot remotely agree on a banking union, bailouts, a currency union, or a fiscal union.

  • Is A Short Squeeze Coming From This?

    By Chris at www.CapitalistExploits.at

    Market dislocations occur when financial markets, operating under stressful conditions, experience large widespread asset mispricing.

    Welcome to this week’s edition of “World Out Of Whack” where every Wednesday we take time out of our day to laugh, poke fun at and present to you absurdity in global financial markets in all it’s glorious insanity.

    kramer

    While we enjoy a good laugh, the truth is that the first step to protecting ourselves from losses is to protect ourselves from ignorance. Think of the “World Out Of Whack” as your double thick armour plated side impact protection system in a financial world littered with drunk drivers.

    Selfishly we also know that the biggest (and often the fastest) returns come from asymmetric market moves. But, in order to identify these moves we must first identify where they live.

    Occasionally we find opportunities where we can buy (or sell) assets for mere cents on the dollar – because, after all, we are capitalists.

    In this week’s edition of the WOW we’re covering volatility ETPs (Exchange Traded Products)

    Before we get into what exactly is Out Of Whack with volatility linked ETPs let’s cover what the heck a volatility ETP actually is.

    What are Volatility ETPs?

    Since it’s probably the most commonly known animal in the zoo we’ll turn to the iPath S&P 500 VIX Short-Term Futures ETN (VXX) for an explanation:

    The iPath® S&P 500 VIX Short-Term Futures™ ETN is designed to provide investors with exposure to the S&P 500 VIX Short-Term Futures™ Index Total Return. The S&P 500 VIX Short-Term Futures™ Index Total Return (the “Index”) is designed to provide access to equity market volatility through CBOE Volatility Index® futures. The Index offers exposure to a daily rolling long position in the first and second month VIX futures contracts and reflects the implied volatility of the S&P 500® at various points along the volatility forward curve.

    In English now:

    Any ETP including VXX is a derivative of some underlying asset so let’s take a look at the underlying “asset”. In this case it’s the VIX futures. The VIX itself is actually a calculation based on the implied volatility of a basket of options on the S&P 500. Included in the calculations are options which are about to expire and those with 30 days to expiry. The net result is what amounts to a best guess as to what the market believes is in store for the next 30 days trading.

    Attentive readers will realise that the VIX is therefore not the actual volatility of the S&P 500, but rather a forward looking best guess of what it is. For example it’s possible for actual volatility of the S&P to be low while traders are freaking out about something they see in a months time which would send VIX higher.

    You can buy futures contracts on the price of VIX and they’re actively traded but like any futures contract you’re betting on a where a price lands on a future date, in this case 30 days out.

    Volatility ETFs are particularly strange animals since you’re buying a derivative (ETF) on a derivative (the futures contract) which itself is based on a derivative (the implied volatility of options) and those options themselves of course are derivatives which themselves are based on the S&P 500.

    So what’s going on with Volatility ETPs?

    Volatility ETPs can provide investors the ability to be bullish or bearish. In other words those expecting low volatility can buy something like the ProShares S&P 500 Low Volatility Portfolio (SPLV) and those expecting high volatility can buy something like the VXX mentioned above.

    It’s one thing that investors are expecting continued complacency and thus buying the low volatility ETPs but there is a perverse craziness that makes it all the more dangerous (more on that in a moment).

    To explain why there has been such a rise in the popularity of low volatility ETPs just imagine driving the Eyre highway which takes you across the Nullarbor plain in Australia. For those unfamiliar with what this is, it’s a 1,675km stretch of road that is pretty much dead straight and has nothing to see – nada. It is I assure you, more boring than watching grass grow and takes 2 days at high speed.

    nullarbor1

    The thing is you land up clocking speeds that would get you arrested anyplace else, in large part because it doesn’t feel like you’re going that fast and certainly doesn’t feel like you’re getting anywhere at all. It’s why when accidents happen on the Eyre highway they’re more often than not fatal.

    Every 50km or so the road kinks a little and so one minute you’re hurtling along and the next thing you know, the roads not there anymore and you’ve got to control a ton of metal and rubber screaming through the outback at 180km/h. The rental car guy I spoke to told me that about 10% of all his cars are never resold, they’re rolled.

    What does this have to do with volatility ETF’s?

    Everything.

    Long periods of complacency are often interspersed with brief but frightening jolts of “holy sh** where did that come from?

    Betting on increased volatility has been a losing bet. Below is the VXX in blue (long Volatility) vs SPLV in red (Short Volatility). 

    vol

    VXX in Blue and SPLV in green/red

    Now there are structural reasons why VXX is such a pig of a long term ETF to buy, and I’ll cover why that is in a future article but the point I want to make is that going short volatility has been a winning trade.

    I’ve written about this so much that my fingers are going to bleed, more recently when discussing how bonds no longer trade based on yield but based on a future price but the hunt for yield has created some truly amazing set of circumstances and this brings us squarely to low volatility ETF’s.

    Enter the beast – When the Cure Becomes the Poison

    As reported recently by Market Watch:

    “More than $50 billion has poured into low-volatility indexed exchange-traded funds over the past five years or so, in the wake of the 2008-09 market meltdown. There are now 14 “lo-vol” ETFs with assets exceeding $100 million each, and many more with less. Whenever the market hits a pothole, these ETFs enjoy a bump-up in assets.”

    screen-shot-2016-10-12-at-2-16-26-pm

    Now this is where the perverse part comes in. Bear with me on this – it’s important.

    Every time you sell volatility you get paid by the counter-party who is typically hedging the volatility (going long) of a particular position and paying you for the privilege. This is not unlike paying a home insurance premium where the insurer takes the ultimate risk of your house burning down and you pay them for the privelage. The difference however between selling volatility in order to protect against an underlying position and selling volatility in order to receive the yield created is enormous. And yet this is the game being played.

    The central banks have managed to create a sense of calm in the markets exhibited by record lows in volatility and for their part Joe Sixpack investor has used linear thinking extrapolated well into the future assuming ever greater risk ignoring market cycles and extremes at their peril.

    ————————————–

    Kyle Bass Gold

    ————————————–

    Two things are happening here:

    1. When the proverbial house burns down the insurance company (ETF) can’t cover. It’s all in and was never designed to protect holders for the inevitable reversal.
    2. Investors have been selling volatility in order to achieve yield and thus treating these structured products like bonds, when they are in fact similar to bonds in the same way that the iPhone is similar to a water buffalo.

    Traders are aggressively hunting for yield and finding it in selling volatility. This works wonderfully… until it doesn’t.

    Remember equities are something like 7x more volatile than bonds (depending on what you’re looking at) and these ETPs are inherently more volatile than the underlying equities upon which they’re ultimately priced. Treating them like bonds and buying them for yield is quite simply INSANE.

    What’s interesting is that the VIX is trading near all time lows at the same time that short interest on low volatility ETFs is at record highs.

    While I’m not predicting it though we are due a recession purely based on the business cycle, a market crash would almost certainly wipe out the entire low volatility ETP complex, and a market correction (overdue) will see a scramble amongst those who’ve been treating an ETP as a bond. It could be more entertaining to watch than the current clown show US presidential race.

    The question is:

    Wow Poll 12 October 2016Cast your vote here and also see what others think

    Know anyone that might enjoy this? Please share this with them.

    Investing and protecting our capital in a world which is enjoying the most severe distortions of any period in mans recorded history means that a different approach is required. And traditional portfolio management fails miserably to accomplish this.

    And so our goal here is simple: protecting the majority of our wealth from the inevitable consequences of absurdity, while finding the most asymmetric investment opportunities for our capital. Ironically, such opportunities are a result of the actions which have landed the world in such trouble to begin with.

    – Chris

    “To buy when others are despondently selling and sell when others are greedily buying requires the greatest fortitude and pays the greatest reward.” — Sir John Templeton

    ————————————–

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  • German Foreign Minister and Former MI6 Boss: US-Russia Tensions Now More Dangerous than During the Cold War

    Preface: I will add quotes from U.S. intelligence officials and Russia experts as I receive them.

    Germany’s Foreign Minister – Frank-Walter Steinmeier – wrote earlier this month that tension between the US and Russia is worse than during the Cold War:

    It’s a fallacy to think that this is like the Cold War. The current times are different and more dangerous.

    The head of Britain’s intelligence service, MI6 – Sir John Sawyers – agreed yesterday:

    We are moving into an era that is as dangerous, if not more dangerous, as the cold war because we do not have that focus on a strategic relationship between Moscow and Washington.

    This is even more dramatic when you realize that the U.S. and Soviets came within seconds of all-out nuclear war on numerous occasions during the Cold War. And only the courage of U.S. and Soviet individuals to say no when their superiors told them to fire nuclear weapons – in the face of mistaken readings – saved the planet from nuclear war.

    And many experts warn that we’re drifting towards nuclear war today.  Indeed, former U.S. Secretary of Defense William Perry said in February:

    The likelihood of a nuclear catastrophe today is greater than it was during the Cold War.

    Postscript: The American government and mainstream media cast all of the blame on Russia. But many top U.S. diplomats and intelligence officials disagree (and see this).

  • Stocks, USDJPY Plunge After Dismal China Trade Data

    Following an unexpected plunge in China's trade balance (to 6 month lows), US equity futures and USDJPY are tumbling as Yuan turmoil ripples through markets once again.

    Misses across the board in China trade data…

    • China Yuan Exports -5.6% YoY (exp. +2.5%)
    • China Yuan Imports +2.2% YoY (exp. +5.5%)
    • China Trade Balance 278.35bn (exp. 364.5bn)
    • China USD Exports -10.0% (exp. -3.3%)
    • China USD Imports -1.9% (exp. +0.6%)
    • China USD Trade balance 41.99bn (exp. 53.00bn)

    *CHINA TRADE STILL FACES GREAT UNCERTAINTIES: CUSTOMS' HUANG

     

    Sparked chaotic trading in Yuan as offshore selling pressure accelerated post Golden Week…

     

    And spread to USDJPY and implicity US equity futures…

     

    USDJPY dropped a whole big figure erasing the gains of the day…

  • Thinking About Voting? Read This First

    Submitted by Dan Sanchez via TheAntiMedia.org,

    Colin Kaepernick has been abstaining from standing for the national anthem. Self-styled patriots have been losing their minds over it. That is because they are true believers in a cult. The cult is the State.

    All states are cults: religions. And like all religions, states have sacraments, including holy rituals. The national anthem is one of the holy ritual sacraments of the cult of the American State. Those fully initiated and indoctrinated in that cult have been programmed to go into attack mode when divergent cult members (heretics) fail to observe such sacraments, like the national anthem or the pledge of allegiance to the holy pole cloth. Such peer pressure is how cults maintain their numbers.

    Voting is another one of those sacramental rituals. As with the national anthem and pledge of allegiance, true believers are aghast when you advocate abstention from voting. School, which is our chief initiation into the State cult, thoroughly and universally indoctrinates its initiates into the sacrament of voting and democracy. We’ve all been brainwashed from the time we were tiny children into the holy myth of democracy: that democracy is what makes us special, what makes America exceptional; that patriots suffered and died for democracy, from the Suffragettes to the Civil Rights movement, from the Revolution to the Civil War to World War II to the War on Terror; that through voting we are empowered to fight for what’s right, to make our country, our very lives, better. You can see how important this sacrament is to the State cult from all of the voting propaganda pushed by the government and the establishment media.

    But here’s the thing. Like all mystic rituals, the ritual of voting is based on superstition. Like an incantation or a rain dance, it is based on the superstition that great good can come of a mere gesture. Just as the rain dancer thinks he can summon rain that will save his crops, the voter thinks he can summon reform that will save his country.

    But again, it’s a superstition. The individual act of voting is futile. Elections are virtually never decided by a single vote. You’re more likely to die on the way to the polling place than affect the outcome of an election. You know it’s futile. You know that in previous elections the outcome wouldn’t have been any different had you not voted. You know the same will be true for future elections.

    Yes, in aggregate voting makes a difference. But that’s a different question. When you’re deciding whether to vote, you’re making an individual decision, not an aggregate one.

    Perhaps you think that by voting at least you’re doing your small part, making your small contribution. But contributing toward what?

    Imagine a giant siege engine that takes millions of people to push. Imagine if millions of people together purposefully pushed the engine to run over a group of innocent people tied up on the ground. Did those people die accidentally or were they murdered? If they were murdered, they were murdered by somebody. So by whom? The millions who pushed, of course. Even though any given individual’s decision whether to push or not didn’t make a difference one way or the other, every individual who pushed bears as much guilt as anybody else who pushed. Such an action is non-decisive, yet culpable at the same time.

    Now imagine if there were two groups of tied-up victims. Millions are pushing the siege engine to the left, trying to steer it away from Group A and toward Group B. Millions of others are pushing to the right, away from Group B and toward Group A. One side prevails, and Group B is crushed to death. These helpless victims were murdered, just as much as the victims in the previous scenario were. By whom? By the millions who pushed the engine in their direction. This is true, even if their primary goal for pushing in that direction was to save the lives of Group A.

    That’s effectively what you’re doing when you throw your weight behind a candidate or behind most forms of legislation. Candidates are package deals. Any candidate will violate the rights of some, even if they respect or defend the rights of others.

    Objectors say it’s about going in the general right direction, making choices out of which the good outweighs the bad, that do a net amount of good, that is good “on balance.” But that is collectivist speak. There is no “good on balance” for the people whose lives are run over by the candidate you empowered: for the child who is bombed by Hillary’s foreign policy, for the man who shot is by Trump’s police state, or the people Gary Johnson and Bill Weld kept in cages when they were governors.

    Objectors call it self-defense. But anti-war people should know better than anybody that collateral damage is never justified by self-defense. Objectors also say they are not responsible for the crimes committed by the office holders they voted for. But you can’t have it both ways. Either your vote doesn’t matter and it’s futile, or your vote matters and you’re culpable. (Although, again, I argue that you’re also culpable even though your vote is futile.)

    Don’t fall for the lie that you’re limited to choosing the lesser of multiple evils. You’re not limited to pushing the engine in the direction of one group of victims or another, or even toward a third smaller group of victims. You can abstain from pushing at all. You can refuse to lend your weight to the State. It’s true that a single act of abstention alone won’t make a difference as to whether people get run over, or regarding who gets run over. But neither will pushing in one direction or another: neither will voting. So you may as well choose the option that doesn’t even negligibly contribute to injustice.

    Not only do you have the option of merely abstaining from pushing, you can actually work to obstruct the siege engine, or to even dismantle it. Even the mere act of abstaining from voting contributes to the grand project of obstructing and dismantling the State. That is because voting is not just a ritual. It’s a power ritual.

    In a sense, all cult rituals are power rituals. They are about building and maintaining the power of the cult’s leadership, or the religion’s priesthood, over the lives of the cult’s rank and file members. Rituals do this by solidifying the adherents’ faith in the cult’s god. The cult’s priesthood poses as representatives and agents for this god. In the case of modern, secular political religions, the cult god is the State itself, which is an incoherent notion of the “general will” made manifest: a mythical abstraction that somehow acts for the good of the people. The government poses as the priesthood of this deity.

    Sacraments like the anthem, the pledge, and voting are so important to the government because they are what continually reinforce our faith in the State. Voting is particularly similar to holy communion. Voters line up at the polling booth to partake of divinity, believing that by participating in their own rule, they become one with the saving State they so adore.

    This participation is a form of buy-in. It causes the voter to identify with the government — the captives to identify with their captors. The State is the Stockholm Syndrome institutionalized. And the higher the turnout, the greater the perceived legitimacy granted to the government priesthood.

    Objectors say they are voting merely out of pragmatism and don’t intend to convey legitimacy to the government. But your intention is not the issue. The issue is the actual effect. It’s a simple fact that the government is able to use high turnout to convince its subjects that it represents the popular will — even to the subjects who voted for a losing candidate. It doesn’t matter that only individuals have wills, and so “the popular will” is an incoherent concept. What matters is that many people believe in it, and believe that high turnout signifies that the voice of the popular will has spoken.

    Just think: how convincing would be a democratic government’s claim to legitimacy with a 1% turnout vs. a 99% turnout, even if that 99% turnout was split down the middle? And what’s true of the extremes is also true of the gradations.

    Again, by voting you lend your weight to the State. You lend your weight to directing it toward certain victims. You also lend your weight to its sheer power and mass. By abstaining from voting, you dwindle the plausibility of the government’s claim to legitimacy and thus dwindle its power.

    Obstructing and dismantling such a huge thing as the State is also an effort that takes millions. So your contribution toward even that is negligible in the grand scheme of things. But at least you would be making a negligible contribution, to a noble effort, a moral project, and not to an immoral, pernicious system.

  • As China Pops Its Housing Bubble, Car Sales Soar 29%

    Late in September, we showed a viral surveillance video from inside new construction in east Hangzhou, which captured the sheer buying frenzy and panic, prompted by the new purchasing restrictions set to be unveiled just days later which would prevent people born outside Hangzhou from buying more than one property. 

    The crackdown on China’s latest housing bubble takes place as local home prices rose 9.2% in August from a year earlier, while in places like Shenzhen, prices soared almost 37%, in Beijing more than 23% and in Shanghai topped 30%. Such hefty price rises have been common all year in these so-called Tier 1 cities.

    Now that the widely telegraphed restrictions have kicked, as expected China’s housing market now appears set for a sharp pullback after several months of record pricing gains. As Reuters reports, a wave of restrictions imposed on housing markets in major Chinese cities last week have cut the area of new homes sold in places such as Beijing and Shenzhen by more than half. More than 20 cities have imposed measures, including higher mortgage downpayments, to cool hot property markets that have raised official alarm in Beijing and fresh concerns about China’s ballooning debt.

    Last week was a public holiday to mark National Day, traditionally a high season for property sales. Property agents said prices of new homes sold in the southern city of Shenzhen and in Beijing dropped 20 percent last week to entice buyers, compared with the previous week.

    Beijing and Wuxi, a city near Shanghai, had no new launches last week, a survey of 10 major cities by property researcher CREIS showed. But the area of residential space sold, based on developments launched previously, plunged 86 percent and 72 percent, respectively, compared to the previous week. CREIS said cities including Shanghai, Hangzhou and Wuhan, launched new developments but the area put on the market declined more than 50 percent and the area sold dropped 35 percent to 60 percent.

    “The new tightening measures are quite stringent,” said Alan Cheng, general manager of realtor Centaline Shenzhen. “It’s a blow to confidence and people are worried that prices will drop, so they are observing from the sidelines now.” The latest restrictions varied from city to city, but included higher mortgage downpayments for second and third-time home buyers, in a bid to stem the flow of cash into the red-hot property market.

    * * *

    However, since this is China, where one zombie asset bubble dies (briefly) only for another bubble to be (re)born, at the same time as the housing bubble is set to pop, the local population has turned its attention to cars.

    According to Bloomberg, Chinese passenger-vehicle sales surged a gargantuan 29% last month, led by small-car makers Geely Automobile Holdings Ltd. and Mazda Motor Corp., as consumers seeking to beat an expiring tax cut helped clear inventory on dealer lots. Deliveries of sedans, minivans, sport utility and multipurpose vehicles to dealerships rose to 2.27 million units in September, the state-backed China Association of Automobile Manufacturers said Wednesday.

    Just like with the rush to buy housing ahead of purchasing restrictions, in the case of autos, consumers rushed to buy to take advantage of potentially expiring preferential tax terms. The government has so far stayed silent on whether it will extend a tax cut on purchases of vehicles with smaller engines beyond Dec. 31. As a result, sales could plunge next year if levies are allowed to double to 10 percent, said Cui Dongshu, secretary general of the China Passenger Car Association, a separate industry group. A slump in demand would worsen a capacity glut and dent profit margins, according to Steve Man, an analyst with Bloomberg Intelligence.

    “The expiration of the current purchase tax cut is encouraging consumers to catch the last bus and bring forward their car purchases,” said Huang Xiaowei, an analyst with Shenzhen-based WAYS Consulting Co. “Dealers are preparing stocks for the surging demand at the year-end.”

    The scramble to buy cars has left many carmakers with little to no inventory. A gauge of vehicle inventory fell for a third straight month in September to the lowest level in two years, according to the China Automobile Dealer Association. Dealers of Japanese brands in August saw profits increase by 27% from a month earlier to 1,851 yuan per vehicle after scaling back discounts due to strong demand, according to WAYS Consulting.

    Mazda said its sales in China jumped 49 percent in September from a year earlier, led by models including the Axela compact, which qualifies for the tax cut. Geely raised its full-year sales target after September deliveries surged 82 percent from a year earlier.

    Even General Motors’ car sales, which had recently slowed in China, surged 16% to 343,773 units, with deliveries of Cadillac sedans increasing 63%. Great Wall Motor Co.’s sales rose 49 percent to 97,685 units, with SUV deliveries reaching 87,627 units.

    What happens should both the housing and car bubbles pop? Well, buy stocks (again) or (even more) bitcoin, because in China, where the total amount of bank deposit is in the mid-$20 trillion range, the bubbles never actually die, they just get recycled.

  • Meet The "Real" Deplorables

    Submitted by Mike Krieger via Liberty Blitzkrieg blog,

    screen-shot-2016-10-10-at-4-23-45-pm

    Below are some excerpts from Michael Tracey’s latest article: The Real Deplorables.

    Enjoy.

    The real “deplorables” generally aren’t the people whom Hillary denounced as wholly “irredeemable,” or at whom economically secure commentators fulminate on a regular basis. More obviously “deplorable” are Hillary’s fellow financial, political, economic, and military elites who wrecked the economy, got us mired in endless unwinnable foreign wars, and erected a virtually impenetrable cultural barrier between everyday Americans trying to live fruitful lives and their pretentious, well-heeled superiors ensconced in select coastal enclaves. It is thanks to the actions of this “basket of deplorables” that we’re in the situation we’re in, where an oaf like Trump is perilously close to seizing the presidency.

     

    At a recent Trump rally in Lancaster County, Pa., I was bemused to encounter a coterie of local Amish people who’d traveled there together by bus. Asked why they backed Trump, the overwhelming response was that Amish folks just wanted to preserve their traditional way of life (which they saw as under siege) and perceived Trump as enabling them to carry on with it. Some told me they supported Trump not because of some overweening disdain for their nation’s fellowmen, or immigrants, or even coastal liberals, but because they felt that the federal government was intruding on their ability to properly run their small farms.

     

    One Amish gentleman, remarking on Trump’s apparent lack of strident religious belief, added of Trump: “He’s not a Christian, but he’ll protect the Christian cause.” Veteran religion reporter Bob Smietana later remarked that he could not recall a previous instance of Amish people showing up en masse to a presidential campaign event.

     

    Naturally, upon tweeting photos from the rally, I was inundated with indignant cries from ostensible liberals claiming that the people in question weren’t real Amish, or were desperately deluded, or similar snark. True: the Amish lifestyle isn’t for everybody. Nor do the Amish foist it on anyone else. One virtue of the United States is that it’s a huge, pluralistic democratic republic with lots of land and lots of room for people to practice their beliefs as they see fit.

     

    You don’t necessarily have to love these peculiar belief systems to tolerate their existence. Indeed, some of them undoubtedly contain facets that are bigoted and/or vulgar, and you are free to vociferously criticize them. Some even might be cut off from popular culture, as is the case with the Amish, who certainly are not attuned to the daily outrage avalanche dished out by mainstream-media organs—but this doesn’t mean that the people who practice old-fashioned lifestyles are somehow morally sullied or “deplorable.” It means they have different life trajectories.

     

    This also holds true in Lewiston, Maine, where Trump is favored to win the 2nd Congressional District and therefore at least one (potentially crucial) electoral vote. (Maine and Nebraska allocate their electoral votes by congressional district.) Lots of Franco-Americans populate this area, and many old-timers still speak French with a distinctive Central Mainer dialect. (Often it comes out when folks get inebriated at the bars in town.) When I visited recently, everyone basically had the same story: mills use to be the lifeblood of the local economy and by extension its civic institutions. Once the mills inexplicably shuttered, these workers lost their sense of location and community. Social-club memberships dwindled; parades and marches down the main thoroughfare became less of an attraction. There’s just not a hell of a lot going on nowadays, except Patriots games on TV, drinking, and drugs. Anybody with the means usually either bolts for relatively more prosperous Bangor to the north, or south to Boston and beyond.

     

    Are the people who live in Lewiston really “deplorables”? Most of them like Trump, but they’re not the ones who crashed the economy or agitated to invade Iraq, as Hillary did.

     

    Again: perhaps the true deplorables are the unaccountable elites whose decisions directly worsened life for millions of Americans. Oddly, you never hear Hillary running around to high-roller fundraisers condemning Goldman Sachs for their deplorable conduct; maybe that’s because they’ve directly given her and Bill hundreds of thousands of dollars for “speeches,” excerpts of which finally came out last Friday and are just as degenerate as you’d expect.

     

    (Goldman banned partners from giving money to Trump’s campaign, but handing over cash to Hillary is still perfectly fine.)

     

    Maybe the Amish of southeast Pennsylvania or the Franco-Americans of central Maine don’t use the correct Twitter hashtags or subscribe to Lena Dunham’s newsletter, but they’re still good people with normal ambitions for a happy, secure life. Screeching “deplorable!” at them is itself deplorable, especially because it lets the elites who bungled the country’s affairs off the hook.

    Read the entire piece here: The Real Deplorables.

  • State Department Asked What Is Difference Between Yemen And Syria Bombings, Awkward Moment Follows

    As we asked rhetorically yesterday, how Kerry can accuse Russia of committing war crimes in Syria with a straight face is unclear, as reports of atrocious crimes committed in Yemen continue to surface.

    It seems AP's Tom Lee questioned this hypocrisy also.

    As The Independent reports, a US government spokesperson has struggled to answer questions put to him on why the US condemns Russian bombing in Syria, and supports Saudi-led bombing in Yemen, both of which have killed thousands of civilians.

    During a media briefing in Washington DC on Tuesday, State Department spokesperson John Kirby was asked repeatedly about whether Saudi coalition bombing of Houthi rebels in Sanaa – facilitated by US arms sales to the Gulf state – deliberately targets civilian infrastructure.

     

    “Over the weekend there was this air strike on a funeral by the Saudi-led coalition,” Matt Lee of the Associated Press asked. “I was just wondering: does the administration see any difference between this kind of thing, and what you accuse the Russians, Syrians and the Iranians of doing in Syria, and particularly Aleppo?”

     

    Mr Kirby struggled to answer the question, pointing out that the Kingdom has launched an investigation into how the funeral hall was hit, whereas nothing of the sort has been carried out by the Syrian or Russian governments, which he accused of deliberately causing harm to civilians.

     

    Russia did call for an investigation into the bombing of an aid convoy near Aleppo on September 19th, which contributed to the suspension of talks on Syria between Washington and Moscow.

     

    Mr Lee, the AP’s diplomatic correspondent, continued to hold Mr Kirby’s feet to the fire on the Yemeni issue, pressing him for an answer on how “an increasing number of Yemeni civilians are at risk and being killed by weapons that the United States has furnished to the Saudis and their coalition partners.”

     

    “You don’t find any kind of issue with this? Because a lot of people do, including on [Capitol] Hill,” he added.

     

    Mr Kirby said that the situation was very different in Syria and Yemen, pointing out that Iranian-supplied Houthi rockets have killed Saudi citizens in recent months.

     

    “The Saudi-led coalition were invited in by the Yemeni government – now I know what you’re going to say, the Russians were invited by [Syrian President] Assad… but [the Saudis] are under real threat on their side of the border in that war,” he said.

    But as TheAntiMedia's Darius Shahtahmasebi details, it's not just some of the better-informed US press corps that is angry at this utter hypocrisy… Russia’s Foreign Affairs spokesperson, Maria Zakharova, lost her cool in response to a Western journalist who asked her the question: “Why is Russia supporting Assad, who is killing civilians?

    Apparently, one should remind themselves that American bombs, which have been launched in at least ten Muslim countries since 1980, do not kill civilians. Ever.

    If they do, these are mere accidents – always.

    And more often than not, the civilians were probably doing something bad, anyway, or they wouldn’t have been on the receiving end of American missiles.

    Despite these glaring contradictions in the journalist’s question, Zakharova focused more on the failures of the parties involved to bring peace to Syria. Her response provides us with some valuable insight into why the Syrian peace process continues to fail. It also raises some very critical questions and points for consideration.

    Zakharova said:

    “This is the crux of the issue – let’s sit down and agree which groups are terrorists, and which ones are not. Let’s begin to work together. What other way is there? Tell me. You want us to just exit Syria? Pack up and leave the terrorists there? That is not a way out. I am not going to repeat just how many UN Security Council documents and resolutions there are that call to fight against terrorism. And Al-Nusra is a terrorist group! [as per the UN list].”

    Washington and its allies would undoubtedly welcome a scenario in which Russia would be forced to abandon the Syrian regime. This could explain John Kerry’s recent statements that Russia should be investigated for war crimes, something the U.S. would never inflict upon itself despite its military ventures in an overwhelming number of sovereign nations.

    Zakharova added:

    Leaving is not an option for us because everyone now understands that something has to be done in order to curb this terror threat. This is the crux of the issue. And of course we understand that armed conflict is taking place and we see that the civilian population is suffering, there is no question about that. But this is why we created the center for cooperation with the U.S., so that we could work and decide together.

    Zakharova then proceeded to tell the journalist the real reasons behind the failing of the peace process in Syria — from Russia’s point of view:

    “There are parties that continually stop the US and Russia from working together on this matter. Despite arrangements in place for this to happen, they still got their way to ensure this did not happen.  This does not mean that positions can’t change tomorrow – but today it is advantageous for these parties to have interrupted this dialogue between US and Russia.”

     

    “This is the crux of the issue. And one more thing – the main message that [Western] mainstream media is delivering is that ‘the Russian air force is killing Syrian civilians.’ Or the Syrian army is doing that with the help of the Russian air force.”

    Zakharova apparently took issue with the fact the U.S. coalition has been in Syria longer than Russia has yet only Russia gets lambasted regularly by the corporate media.

    “One more question – 2 years ago, what on earth did the American coalition proceed to do there?

     

    “You know, if the civilians were not in danger, what were you doing there? Well, they were in danger, and the Americans went there, in their words, to help them. Do you understand that you can’t be selective and look at things in isolation? We have to agree that the civilian population is suffering, the blockade, the hostages and they are surrounded by al-Nusra. So let’s sit down and agree together, where are the civilians and where are the terror groups? And work together.”

    However — and this is where Zakharova’s response becomes incredibly insightful — the Minister actually designates two parties that have blocked the Syrian peace process from moving forward. Zakharova does not name them directly, but there are only a handful of countries she could be referencing, making this an issue worthy of investigation:

    “This is the work that we are being stopped from doing. The talks on Syria are about to begin again – but everyone understands that the two rotating member countries (from the UN Security Council) have a decisive capability and they are blocking our progress. This is because we have finally approached the crux of the problem – al-Nusra.” (emphasis added)

     

    “Al-Nusra are the new mujahideen. Do you understand this concept? Go and read some history – research how al-Qaeda came to be. It’s exactly the same thing. Point by point, it is exactly the same. The financing; the moral and ideological support. And what did your relationship with the mujahideen cause? It created al-Qaeda. And al-Qaeda – you all know what that is.”

     

    “So you can’t simplify [isolated events] like this, you have to understand what caused it. You can’t logically follow mainstream [garbage] ‘Russia is killing everyone and everyone is trying to stop Russia.’ This is rubbish.”

    Zakharova doesn’t let the journalist off lightly – nor Western media in general. Zakharova’s frustration, felt by many of us who are trying to follow the Syrian conflict as accurately as possible, is that the simplification of these issues, taken out of their historical context, presents a threat to the advancement of the human race. Without understanding why events are unfolding the way they are, the American people and the people of the world could be led down a dangerous path and would be none the wiser.

    “I’m very sorry for my expression but – such simplification means that [Western] stupidity is more dangerous than the threat itself. And when simplification of this scale happens in [Western] mainstream media, I think this is more scary than terrorism itself. Simplify everything to the extreme, and only show it from one angle it might work in.

    No one can morally justify potential Russian war crimes. However, the evidence continues to demonstrate that one side of the conflict has refused to cooperate pragmatically in Syria and has instead continued a number of policies that have merely exacerbated the conflict.

    If the U.S. were truly committed to fighting terrorism, they would work with Russia to determine which groups should be designated terror groups and which ones should be off-limits. So far they have not. Apparently, striking Syrian soldiers who are battling ISIS militants is a much more worthwhile venture – so worthwhile it seems that the U.S. wants to do it again.

    *  *  *

    We are reminded of Glenn Greenwald's clear tweet on the matter…

     

    This is not to say Russia and Syria should not be investigated for war crimes – but maybe, just maybe, we could live in a world where everyone responsible for committing these gross acts could be held accountable, instead of just those who pose an economic threat to the West.

  • CLiNToN DeLiVeRaNCe…

    CLINTON DELIVERANCE

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Today’s News 12th October 2016

  • The Eurasian Century Is Now Unstoppable

    Submitted by William Engdahl via Strategic-Culture.org,

    The transfer of the geopolitical center of gravity to Eurasia is something the West will have to get used to.

    I recently returned from a fascinating two week speaking tour in China. The occasion was the international premier of my newest book, One Belt, One Road–China and the New Eurasian Century.

    In the course of my visit I was invited by China’s Northwest University in Xi’an to give a lecture and seminar on the present global political and economic situation in the context of China’s New Economic Silk Road as the One Belt, One Road project is often called.

    What I’ve seen in my many visits to China, and have studied about the entirety of this enormously impressive international infrastructure project convinces me that a Eurasian Century at this point is unstoppable.

    The idiotic wars of the Washington war-hawks and their military industry–in Syria, in Ukraine, Libya, Iraq and now the South China Sea provocations against China–are not going to stop what is now clearly the most impressive and economically altering project in more than a century.

    The term “American Century” was triumphantly proclaimed in a famous editorial in Life magazine in 1941 in the early phase of World War II, before the United States had even entered the war, to describe the system publisher Henry Luce saw dominating the postwar world after the fall of the rival British Empire.

    The American Century has lasted a mere seven decades if we date from the end of the war. Its record has been one of dismal failure on balance. The industrial base of the United States, the predominant leading industrial nation and leading scientific innovator, today is a hollowed, rotted shell with once-booming cities like Detroit or Philadelphia or Los Angeles now burned-out ghettos of unemployed and homeless.

    The Federal Debt of the United States, owing to the endless wars its Presidents engage in, as well as the fruitless bailouts of Wall Street banks and Government Sponsored Enterprises like Fannie Mae, is well over 103% of GDP at an astonishing $19.5 trillion, or more than $163,000 per taxpaying American and Washington is adding to the debt this year at near $600 billion. Countries like China and Russia are moving away from subsidizing that debt at a record pace.

    America’s economic basic infrastructure–bridges, sewer and water treatment plants, electric grid, railways, highways–have been neglected for more than four decades for a variety of reasons.

    The American Society of Civil Engineers recently estimated that gross domestic product will be reduced by $4 trillion between 2016 and 2025 because of lost business sales, rising costs and reduced incomes if the country continues to underinvest in its infrastructure. That is on top of the fact that they estimate the country at present urgently requires new infrastructure investment of $3.3 trillion by the coming decade just to renew.

    Yet US states and cities are not able to finance such an investment in the future in the present debt situation, nor is the debt-choked Federal Government, so long as a cartel of corrupt brain-dead Wall Street banks and financial funds hold America to ransom.

    This is the sunset for the American Century, a poorly disguised imperial experiment in hubris and arrogance by a gaggle of boring old patriarchs like David Rockefeller and his friends on Wall Street and in the military industry. It is the starkest contrast to what is going on to the east, across all Eurasia today.

    Flowing the Thought to Transform

    The Eurasian Century is the name I give to the economic emergence of the countries contiguous from China across Central Asia, Russia, Belarus, Iran and potentially Turkey. They are being integrally linked through the largest public infrastructure projects in modern history, in fact the most ambitious ever, largely concentrated on the 2013 initiative by Chinese President Xi Jinping called the One Belt, One Road initiative or OBOR.

    The project and its implications for Europe and the rest of the world economy have been so far greeted in the west with a stone silence that defies explanation.

    It’s been now three years that have transpired since then-new Chinese President Xi Jinping made one of his first foreign visits to Kazakhstan where he discussed the idea of building a vast, modern network of high-speed train lines crossing the vast Eurasian land space from the Pacific coast of China and Russia through Central Asia into Iran, into the states of the Eurasian Economic Union, principally Russia and potentially on to the select states of the European Union.

    That initial proposal was unveiled in detail last year by the National Development and Reform Commission (NDRC), China’s economic planning organization, and the ministries of Foreign Affairs and Commerce.

    It’s a useful point to look now more closely at what has transpired to date. It reveals most impressive developments, more because the development process is creative and organic. The great project is no simple blueprint made by the Central Committee of the Communist Party of China and then simply imposed, top down, across the so-far 60 countries of Eurasia and South East Asia.

    An international conference was recently held in Xi’an, origin of the ancient version of One Belt, One Road, namely the Silk Road. The purpose of the international gathering was to review what has so far taken place.

    It’s fascinating, notably, in the care that’s being taken by China to do it in a different way, as indications so far are, different from the way American Robber Barons like Cornelius Vanderbilt, E.H. Harriman, Jay Gould or Russell Sage built rail monopolies and deluded and defrauded investors with railroad monopolies more than a century ago.

    The seminar, titled the Belt and Road Initiative (BRI): Shared Memory and Common Development, on September 26th, brought together over 400 participants from more than 30 countries including government officials, universities, corporations, think tanks and media.

    A key role is being played by Renmin University of China’s Chongyang Institute for Financial Studies to identify progress and problems of the OBOR project. Their report in Xi’an presented principles underlying the OBOR international project: It adheres to the principles of the UN Charter; it is completely open for new participant nations to cooperate; it will follow market rules and seek mutual benefit of participating countries.

    Those are noble words. What’s more interesting is the flow process underway to realize such words and to build the mammoth game-changing infrastructure.

    Notably, China’s Xi Jinping decided to encourage input from sources other than the state central planning agency or the Communist Party for the complex OBOR. He encouraged creation of private and independent think-tanks to become a source of new creative ideas and approaches.

    Today there is a Chinese Think Tank Cooperation Alliance group coordinating efforts around OBOR headed by the dean of the Renmin University. In turn they partner with think tanks along the OBOR route including think tanks in Iran, Turkey, India, Nepal, Kazakhstan and other countries.

    There will be two main routes of the OBOR. On land there are several routes or corridors in work. The Initiative will focus on jointly building what is being called a new Eurasian Land Bridge from China via Kazakhstan on to Rotterdam. Other OBOR land rail corridors include developing China-Mongolia-Russia, China-Central Asia-West Asia, China-Pakistan, Bangladesh-China-India-Myanmar, and China-Indochina Peninsula economic corridors.vThis is huge.

    It will build on international transport routes, relying on core cities along the OBOR route and using key economic industrial parks as “cooperation platforms.”

    At sea, the Initiative will focus on jointly building smooth, secure and efficient transport routes connecting major sea ports along the “Belt and Road” including modern upgraded super port construction that will link present China ports at Haikou and Fujian with Kuala Lumpur’s port in Malaysia at the Malacca Strait passage, Calcutta in India, Nairobi in Kenya and via the Suez Canal to Athens and beyond. Crucial is that land and sea parts of OBOR are seen as one whole circulatory system or flow of trade.

    The OBOR Initiative will link key Eurasian ports with interior rail and pipeline infrastructure in a way not before seen

    To date China has signed memoranda of understanding with 56 countries and regional organizations regarding OBOR. Since his initial proposal in 2013, President Xi Jinping has personally visited 37 countries to discuss implementation of OBOR. China Railway Group and China Communications Construction Company have signed contracts for key routes and ports in 26 countries.

    Power plants, electricity transmission facilities and oil and gas pipelines, covering 19 countries along the “Belt and Road” in some 40 energy projects have begun. China Unicom, China Telecom and China Mobile are speeding up cross-border transmission projects in countries along the “Belt and Road” to expand international telecommunication infrastructure.

    Already, taking the full sea and land routes of OBOR, some $3 trillion of China trade since June 2013 has flowed over the route, more than a quarter of China’s total trade volume.

    To date China has also invested more than $51 billion in the countries along the present OBOR route. The new land rail routes will greatly reduce transportation costs across Eurasia, enable formerly isolated regions to connect efficiently to sea and land markets and ignite tremendous new economic growth across Eurasia.

    0217-china-high-speed-rail

    The effects of the OBOR are already beginning to appear. Earlier this year an Iranian container ship arrived at Qinzhou Port in China with 978 containers from several countries along the 21st-Century Maritime Silk Road opening the first shipping route linking the Middle East and the Beibu Gulf or Gulf of Tonkin in Vietnamese.

    In February 2016 a container train with Chinese goods took only 14 days to complete the 5,900 mile (9,500km) journey from China’s eastern Zhejiang province through Kazakhstan and Turkmenistan.

    That was 30 days shorter than the sea voyage from Shanghai to the Iranian port of Bandar Abbas, according to the head of the Iranian railway company. China and Iran, now formally part of the OBOR, have targeted bilateral trade, none in US dollars by the way, to exceed $600 billion in the coming decade.

    China is presently in negotiations with 28 countries China is in talks with 28 countries including Russia, on high-speed rail projects, China’s train maker, China CNR reports.

    It includes a major joint China-Russia $15 billion high-speed Kazan to Moscow line. The 770 kilometers of track between Moscow and Russia’s Tatarstan capital, Kazan, will cut time for the journey from 12 hours now to just 3.5 hours. China has agreed to invest $6 billion in the project which would become a part of a $100 billion high-speed railway between Moscow and Beijing.

    Notably, for the new high-speed track being laid, China is developing a new generation of trains capable of reaching speeds of 400 kilometers per hour. And the new trains will solve the costly rail gauge switching problem between China rails and Russian.

    Trains in Russia run on a 1520mm track, compared to the narrower 1435mm track used in Europe and China. Jia Limin, the head of China’s high-speed rail innovation program told China Daily that, “The train… will have wheels that can be adjusted to fit various gauges on other countries’ tracks, compared with trains now that need to have their wheels changed before entering foreign systems.”

    Given its strategy of building thousands of kilometers of high-speed railways and developing its domestic Chinese rail sock manufacture as well as other rail technology, China today is the world’s leading producer of rail technology.

    Financing the moving

    Impressive is that China has secured capital commitment for the OBOR from various sources including the China Development Bank, Export-Import Bank of China, the China-initiated Asian Infrastructure Investment Bank, the BRICS New Development Bank and other sources including its Silk Road Fund to finance the huge undertaking.

    The Silk Road Fund has posted $40 billion to fund the OBOR projects. So far close to a quarter trillion US dollars of ready money and another half trillion in supranational institutional working capital is reasonably within reach.

    The Western doomsday reports of China’s economy going down the tubes are simply either self-serving propaganda of hedge funds or speculators or fed by lack of understanding of the profound transformation in the entire structure of not only China’s but all Eurasia’s economy through the One Belt One Road initiative. China is undergoing a major transformation from a cheap-labor screwdriver assembly nation to a high-value-added high-tech manufacturer.

    Geopolitical transformation

    The One Belt, One Road initiative of Xi Jinping and the Eurasian partners, especially Russia, also has strategic dimensions of major import. The construction of new infrastructure corridors spanning across the Eurasian landmass in the form of highways, railways, industrial parks, and oil and gas pipelines, OBOR is connecting for the first time in the modern era landlocked regions of hinterland China and Russia and Central Asia republics with the sea ports.

    Linking key Eurasian industrial hubs to ports with efficient transportation will revolutionize connectivity of hinterland industrial products and raw materials of every kind. The Russian and Eurasian lands, including China, contain perhaps the richest untapped concentration of every raw material known.

    The One Belt, One Road also includes oil and gas pipeline transportation corridors. In January 2015 the Myanmar-China Pipeline project, 2400 km long, was completed, linking Myanmar’s deep-water port of Kyaukphyu on Maday Island in the Bay of Bengal with Kunming in Yunnan province in southeast China near Myanmar’s border.

    It’s a joint project of the China Development Bank and Myanmar Foreign Investment Bank. The new pipeline allows China to import up to 400,000 barrels a day of Middle East oil over a route 1100 km shorter than the previous Malacca Strait sea route, reducing time to reach the large industrial hub city of Kunming by 30%, major economic gains, and avoiding the strategic chokepoint of the Malacca Strait where the US Navy’s Sixth Fleet dominates.

    Previously, 80% of Chinese oil and gas imports crossed the Malacca straits and were subject to US controls. Were the present escalating tensions between Washington and China over the South China Sea or other issues to escalate, China would be brought to her knees much like Japan prior to declaring war in 1941, when the USA embargoed her oil. A second pipeline brings natural gas from Qatar and Myanmar gas fields to China.

    The OBOR includes oil and gas pipelines that reduce time and distance to imports of Middle East oil and gas

    China will pay $53 billion to Myanmar in pipeline royalties over 30 years. They will also invest $25 million in schooling and other social development projects along the pipeline and 10% of the gas will stay in Burma.

    Mackinder Outflanked?

    The totality of the strategy behind Xi Jinping’s Eurasian One belt, One Road rail, sea and pipeline initiative, which is moving quietly and impressively forward, is transforming the world geopolitical map. In 1904 a British geographer, Sir Halford Mackinder, a fervid champion of the British Empire, unveiled a brilliant concept in a speech to the London Royal Geographical Society titled the Geographical Pivot of History.

    That essay has shaped both British and American global strategy of hegemony and domination to the present. It was complemented by US Admiral Alfred Thayer Mahan’s 1890 work, The Influence of Sea Power Upon History, which advocated “sea power,” stating that nations with domination of the seas, as the British Empire or later the USA, would dominate the world.

    The One Belt, One Road, by linking all the contiguous land areas of Eurasia to the related network of strategic new or enlarged deep-water ports of OBOR’s Maritime Silk Road, has rendered US geopolitical strategy a devastating blow at a time the hegemony of America is failing as never in its short history.

    The Eurasian Century today is inevitable and unstoppable. Built on different principles of cooperation rather than domination, it just might offer a model for the bankrupt United States and the soon-bankrupt European Union, to build up true prosperity not based on looting and debt slavery.

    *  *  *

    William Engdahl is strategic risk consultant and lecturer, he holds a degree in politics from Princeton University and is a best-selling author on oil and geopolitics, “New Eastern Outlook”

  • The Search for the Perfect Trading Mouse (Video)

    By EconMatters


    We discuss some of the important requirements for a solid trading mouse in this video. I had some trial and error along the way in finding the best possible trading solution for my mouse requirements.
    Think brain surgery when looking for a trading mouse. Miss clicks are not your friend in trading.

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

  • HiLLaRY MuFFDiVeRS…

    DOUCHEBAGGERY 101

  • Illegal Clinton victory can mean USA Balkanization or Revolution

    How quickly we are sliding down the rabbit hole! As we explain in Splitting Pennies – Understanding Forex – Forex is the means to which one can understand how the world works.  This book isn’t about FOREX so much as it’s about the workings of the ‘real world’ – and no better time than now to understand these nuances! Scots refer to this time as “The Quickening:” 

    Many have noted that time seems to be accelerating. The hours, days, seasons, and
    years appear to fly by faster than ever before. An hour no longer feels like 60 minutes
    (unless you’re waiting in line!). One week seems to run into the next. It’s as if we’re
    watching the blur of a speeding train pass by.

    It seems that it’s not possible to even digest and assimilate the information as quickly as it’s passing now.  Wikileaks released more HRC emails, of all people Bill OReilly exposes a massive conspiracy against Trump, A Libertarian tracking to get 10% of the vote, an election official was caught on camera saying ‘the fix is in’ for HRC, Russia is in fallout mode; whats next?  I’ll tell you what’s next…  First, a quick lesson..

    The current social control paradigm doesn’t control people 100%.  It’s not as if there’s a button they can press in Washington, and Joe Plumber will lift his right arm and salute.  It’s an inefficient, outdated, but effective – propoganda system that functions on multiple levels.  Television with its HZ waves, chemicals in the food, drugs like Prozac, Zoloft, Viagra, Valium, and now in the west Marijuana, all designed to make you very happy fat idiots.  Well, not everyone is on prescription meds, and not everyone has a TV, so that’s one proof that this ‘system’ isn’t 100% effective!  Also, even for those ‘inside’ the system, it doesn’t control them 100%.  It controls the ‘group mind’ or ‘groupthink’ – that means, in subtle ways, the establishment can be against TRUMP but in such a way that at first he’s elected, but PENCE is the real play.  This game scenario, pacifies the real ‘awake’ people, with a TRUMP victory, but having a real establishmentarian in the White House shortly after.  Just sayin’ – it’s one of the possible considered scenarios – and you can bet the farm that the DOD’s supercomputers are running at full capacity gaming this situation, because a failure to coalecse the people when they are angry and armed can mean one thing: REVOLUTION.  Replace that word properly with ANARCHY or CHAOS because this isn’t really a REVOLUTION, as the Bolshevik revolution which was planned and stood for intellectual concepts.  This would be more of a REVOLT, against a broken establishmentarian system that hasn’t evolved with the times, and has done a poor, poor, poor job of management.  

    Note to Elite – if you want to engratiate yourselves, be sure to keep the people fat and happy completely, so they don’t notice what you’re doing.  Happy people means people sheeple.

    The Establishment is so against Trump that it’s scary.  It’s proof that he really is an independent ‘candidate’ and that he hasn’t been ‘bribed’ by the powers to be.  But in any case, even for fervent TRUMP supporters, an establishment HRC victory by election fraud as described by the election official ‘busing around voters from voting booth to booth’ might even be BETTER than a TRUMP victory.  Because, TRUMP winning the election is the POSSIBILITY, not the GUARANTEE, of change.  Once TRUMP is in the White House, they will do everything and anything to make his job impossible.  It’s not known how TRUMP would act in such situation – not even he knows.  He thinks he knows – but he will encounter things that he didn’t expect once he’s there.  

    Regardless of the outcome, it seems that if there is any funny business at election time, which it seems there most certainly will be, it will ‘wake up’ a huge amount of voters to the fact that America has long ago been bought and sold just like almost every other country on the planet.  This may start them down a path where they may ask questions about the status quo, and it may change them.  They may want to learn things, such as how the financial system works – where does all the ‘money go’ – why is our money less and less valuable each year?  So, as hearbreaking as it may be to see a real swine steal the election via voter fraud, it certainly wouldn’t be a first in America (see results of 2000 elections), and it might actually be a good thing, in the long run, as those who are naive who believe ‘it can’t happen in America’ will be doused with a huge barrel of hot oil in the rest of the world they call ‘reality.’

    BALKANIZATION

    Here’s a topic that we should elaborate on so that people are prepared, those who are not aware of America’s history, or the structure of law, and how the states have an elective relationship with the Federal Government.  The United States of America is a superstate, it’s not a country, like Switzerland is a country, it’s a CORPORATION, a Federal multi-national conglomorate comprised of 50 primary dealer-states, and a few ‘almost’ shareholders that can vote but don’t pay taxes or have Senators, like Puerto Rico.  Due to the massive POWER enjoyed by the USA, this structure is thought of as strong, but do not confuse these traits. In fact, USAs history was very haphazard, it wasn’t planned well, at least on a Federal level.  Many aspects of how the USA operates happen as a ‘problem-reaction-solution’ and all of a sudden we have FEMA, an agency which many think is an Apocalyptic dark horse ready to administer end of times, when in the reality it’s a welfare agency to help people after storms who don’t have insurance or cars to drive out of emergency areas or even money for a bus ticket.  The Federal government has become just something unique that will be studied for a long time.  

    What is ‘balkanization’ – simply, a term meaning the unwinding of USA as an entity, in its current form – such that we could see many countries or ‘states’ – US states are called ‘states’ but actually a ‘state’ is a COUNTRY.  France, is a STATE.  Although, France is part of the European Union.  The EU was significantly more properly organized as a Federation, as they had an example of USA and UK, and technology, and other tools at their disposal.  The EU is perfect example of why a superstate doesn’t work, or if you want a failed example, how about Yugoslavia?  A great idea, and while Tito was alive – worked great!  But, then the jackals emerged and the situation ‘balkanized’ – which is what’s happening now in America.  

    Take a look at Texas secession voting polls as example:

    Note the * – and this was conducted in August, before all recent events.  An angry critical mass could easily push this sentiment well above 50%, and remember these polls are of the politicians, the people probably already feel 80% about secession.  Trump uses good example of Obamacare and drawing lines around the states.  People in Texas, don’t care to be part of USA.  The republic of Texas will be happy to be out.  And New York, finally will say ‘we don’t want them, in OUR America’ – which will not include of course, the South (The Deep South) – and Mormon controlled Utah, California off in its own LALA land, and it remains to be seen how the midwest can partner with New England in this regard – possibly this can be the ‘real America’ – New England west until North Dakota line, including the upper Mississippi region, Wisconsin, Michican, Ohio, Illinois, Indiana, etc.  

    Is it so far fetched – is it such a bad thing?  Driving around in this new “Many America’s” one wouldn’t know the difference.  Anyway, few Americans now even know who the president is NOW.  We aren’t fighting anymore for Democracy, we’re fighting over who gets what.  What energy companies will get tax breaks.  Where the next Amazon factory will be built.  In South Carolina?  Or in Mexico?  Or Canada?  Or .. not?

    Balkanization of USA can be a good thing, it will be good for the markets, good for business – so those who are worried about such a scenario – don’t be!  It can be like living in Europe – only we’ll all speak English.  Well, if you’ve ever been to the Deep South, or Boston, you can say that it’s not easy to clearly understand native Americans from all parts of USA.  

    Revolution – will lead to balkanization.  Because states will react, to protect their interests.  Big business will fall back on the local government when the Feds fail.  It will be amazing how quickly interest pulls out of Washington and back into counties, cities, and states – when they see it doesn’t work.  

    There’s one huge PLUS in the current pay for play – lobbying system in Washington today.  The ‘real owners’ of USA – Corporations, UHNWi, foreign governments, special interests, and others – they can pull the plug at any time.  Without their support, Washington would be like a wet noodle.  Yes, the Army has nukes – but Facism has taken over so exclusively, nearly 60% of the CIA operations are OUTSOURCED!  That means a rogue general, without the support of Raytheon, Lockheed, and Boeing, would be a target not only of the Army but of foreign armies as well.  Unlike previous times, war cannot be started by assasinating the Archduke.

    But – going back to the original point – the powers to be have gone so far in this election to push this system to the brink of collapse – an Illegal HRC victory can break the system.  People can simply lose faith.  Not go to work.  Not buy coca-cola.  Throw their garbage on the street.  Park their cars on interstate highways.  Throw TVs out of windows.  Stop drinking beer.  Don’t pay taxes.  Don’t take loans.  Learn foreign languages.  Create free puppet shows.  Write books.  Use their local libraries.  Stop driving on interstate highways.  Stop using social media.  Deleting bad files from their computers.  Digging gardens.  Reforming land for use.  Painting pictures.  Creating art with 3d printers.  

    The world is such a big, interesting place – this whole debate doesn’t deserve our time.  Who cares if Trump is a bad person, an egoist, whatever.  He’s not in prison.  He represents what America REALLY IS – like it or not.  If he loses fair and square, we can wait another 8 years.  But if HRC is elected due to voting fraud, machines that will ONLY vote for HRC (as we saw in the 2000 presidential election, and countless local elections) – we can expect huge social fallout, and probably, most likely, the beginning of America’s own BREXIT, where states will one way or another drop out of this “USA” system.  

    US taxpayers spend hundreds of billions of dollars paying taxes to keep this system going, by blind faith.  USA is a modern religion.  If only a small fraction of that tax money was spent on useful things, such as planting trees, building roads or paving roads, building schools and other various buildings, planting crops for consuming, heck even making beer – would be better than giving it to the federal government – economically speaking (you should always pay your taxes!).

    Take a look at this overlay of a new ‘potential’ America, overlay on Federal Reserve ‘districts’ – interesting why the Fed has these ‘districts’ isn’t it, 12 of them.. how biblical of them… 

    To learn more about the way the world works, checkout Splitting Pennies – which explains politics from the perspective of REALITY (which in the case of politics = money, or FOREX).  Forex = money value.

  • LaTeST CIA PoLL…

    LATEST POLL

  • Visualizing The Slow Death Of Traditional Media

    Bill Gates once famously said that we systematically overestimate the change that will occur in two years, while underestimating the change that will come in the next ten. As Visual Capitalist's Jeff Desjardins notes, the ongoing conversation about the death of legacy media definitely fits that mold.

    The ongoing conversation about the death of legacy media definitely fits that mold.

    Over the last five to ten years, people have been talking about how the newspaper, magazine, or radio station would become all but obsolete. And while certainly things have changed in all of these industries, it’s clear that there has not been a full paradigm shift yet.

    Here is the evidence that we have finally reached that inflection point…

    Courtesy of: Visual Capitalist

     

    Fixing the Plane

    In a recent interview at the City University of New York’s journalism school, Ken Lerer described the challenges of traditional media as follows:

    You have to fix the plane while you’re flying it.

    Lerer, a co-founder of the Huffington Post and currently the Chairman for Buzzfeed, is alluding to the fact that legacy media has to maintain old business models based on subscription and print ad revenue, while successfully venturing into the digital world. The latter category is already hard enough, even without taking into account the balancing act of the former.

    The moral of the story? Some of these “planes” are going to land safely, but most of them are going to crash and burn.

    The cost structure of legacy media just doesn’t make sense in today’s digital world. Overhead is high, and revenue is harder to find due to the limited success of paywalls, rampant ad blocking, and the steady fall in display ad prices due to the emergence of programmatic bidding.

    Legacy Revenues

    Why has legacy media been so slow to adopt change? Why don’t they just lay off half of their staff, ditch print operations, and start from scratch?

    It’s because their major revenue sources are as slow at adopting as they are.

    In 2015, there was only one age demographic with more than half of its constituents reading a daily newspaper, and that was “65 years old and up”:

    Daily Readership of Newspapers

    That said, the people that still read newspapers are among the wealthiest people in the country. Warren Buffett, for example, reads five a day. But even he does not know how to save the print industry from its woes.

    Meanwhile, Madison Avenue has been notoriously slow at evolving to meet the needs of the digital revolution. If the biggest advertisers are still demanding the status quo, it makes it very difficult to “fix the plane”.

    New Models

    The most noticeable signal of change, however, is the relative success of new media companies such as Vice, Buzzfeed, and Vox – and the fact that some of their largest backers are from the old guard.

    All of the above companies are “unicorns” valued at $1 billion or more by private investors, which include venture capital stalwarts such as Andreessen Horowitz, Accel Partners, Khosla Ventures, RRE Ventures, or Lerer Hippeau.

    More importantly, however, they’ve also posted strategic investments from legacy media companies that are trying to wisely hedge their bets. Some of these include NBC Universal, The Walt Disney Company, 21st Century Fox, and Hearst.

    Digital will become the largest channel for ad revenue globally by 2019 – investors and companies that believe in the media business should position themselves accordingly.

  • Nuclear War Is On The Horizon: "This Is Not Just Talk… Action Has Been Taken"

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

    As the U.S. elections draw nearer, the amount of bellicose rhetoric from politicians and key military commanders (in truth, “politicians” as well) has been increasing.  The main focus of that rhetoric has been directed toward Russia, and is also “blathered” in the direction of China, North Korea, and Iran when it suits U.S. political interests.  The problem is that all of it is not just talk: action has been taken, especially regarding Russia and the Syrian theatre of operations.

    Within the past several weeks, the U.S. has bombed Syrian troops, killing 62 outside of Deor ez-Zor in airstrikes and then admitting to doing so “mistakenly.”  The Russians responded by firing up a UN/coalition convoy almost immediately after.  Russian naval artillery then took out a command post with approximately 30 “coalition” officers, some of them being Americans.  The U.S. then made itself responsible (indirectly) for an attack on the Russian Embassy in Damascus, Syria: anti-Assad Islamic militants did the job, and these have support with funding and materials of the U.S.

    These “cat-and-mouse” exchanges have not been new by any means, as evidenced by the aerial “Top-Gun” provocative fly-by’s that have been occurring all year long, in Syria as well as in Eastern Europe.  The U.S. has retracted the cease fire agreement and suspended all operations and discussions with Russia pertaining to Syria.  What is new is the level that the rhetoric has reached…rhetoric that is no longer rhetorical but actually constitutes direct threats against Russia.

    On September 29, 2016 the Washington Post reported these words from U.S. Secretary of Defense Ash Carter:

    “Across the Atlantic, we’re refreshing NATO’s nuclear playbook – to better integrate conventional and nuclear deterrence, to ensure we plan and train like we’d fight, and to deter Russia from thinking it can benefit from a nuclear use in a conflict with NATO.”

    The irony of that statement is evident.  While the U.S. emplaces missile batteries in Germany, Romania, and Moldova, Russia has not responded by placing missiles in either Cuba or Venezuela, two countries she holds strong ties with both militarily and economically.  Carter champions deterrence while simultaneously works to increase U.S. nuclear and conventional buildups in Eastern Europe.  But it doesn’t stop there with his words.  This was reported by George Ourfalian of AFP in an article entitled US Using Syrian Crisis to ‘Wage a Surrogate War’ Against Russia, on October 4, 2016:

    “US State Department spokesman John Kirby has made strong statements regarding Russia’s involvement in Syria, claiming that if Russia will not cooperate with the US, Moscow will keep sending troops home in body bags.”

    Strong words, and quite bellicose originating with a State Department spokesman completely removed from harm’s way.  Then this came out today, the date of this writing on October 5th as reported by Alex Jones’ Prison Planet:

    “I want to be clear to those who wish to do us harm…. the United States military – despite all of our challenges, despite our [operational] tempo, despite everything we have been doing – we will stop you and we will beat you harder than you have ever been beaten before. Make no mistake about that.” 

    General Mark Milley, U.S. Army Chief of Staff

    Milley was directing these words toward Russia.  He went on to describe the next coming war, as such:

    “[The next war will] be highly lethal, unlike anything our Army has experienced at least since World War II,” and would involve fighting in “highly populated urban areas.”

    Did the General mean overseas, or in the United States?  The Russians are currently (until the 7th of October) conducting nuclear evacuation drills involving over 40 million people.  Everyone from Putin and his general staff to local Moscow reporters believe that a nuclear war started by the United States is just on the horizon.  Just this week, Putin shelved an agreement between Russia and the U.S. to reduce the amount of Plutonium that can be converted into nuclear warheads.

    That agreement had been forthcoming since Obama initiated it in 2012, but Putin was straightforward in his reasoning behind cancelling things on Russia’s end from PrepBlog on 10/3/16 that because of U.S. belligerence, Russia needs:

    “…urgent measures to defend the security of the Russian Federation.”

    Putin and the Russian people believe the U.S.’s actions are going to lead to a nuclear conflict initiated by the United States.  The leadership of the U.S. is made up of politicians who began their careers as Marxist-Socialists.  Traitors now have their fingers on the triggers of the nuclear warheads, aided by “yes-men” of the general staffs who will not remember their oaths to the Constitution of the United States and the American people.  They will ignore that these charges take precedence above any orders given by a petty, dope-smoking, Marxist community organizer of dubious citizenship who was “emplaced” into office to destroy the country.

    Instead of statesmen and diplomats, we now have self-interested, politically-motivated belligerents backing Russia and other nations into corners and pushing them toward war.  How long the war of words will be continued is unknown; however, when the missiles begin to fly you can be certain of something.  You can rest assured that the men who spoke those words will be in bunkers and other safe places and out of harm’s way…paid for by the American taxpayer.

  • Russian Government Officials Told To Immediately Bring Back Children Studying Abroad

    In Europe, when it gets serious, you have to lie… at least if you are an unelected bureaucrat like Jean-Claude Juncker. In Russia, however, when it gets serious, attention immediately turns to the children.

    Which is why we read a report in Russian website Znak published Tuesday, according to which Russian state officials and government workers were told to bring back their children studying abroad immediately, even if means cutting their education short and not waiting until the end of the school year, and re-enroll them in Russian schools, with some concern. The article adds that if the parents of these same officials also live abroad “for some reason”, and have not lost their Russian citizenship, should also be returned to the motherland. Znak cited five administration officials as the source of the report.

    The “recommendation” applies to all: from the administration staff, to regional administratiors, to lawmakers of all levels. Employees of public corporations are also subject to the ordinance. One of the sources said that anyone who fails to act, will find such non-compliance to be a “complicating factor in the furtherance of their public sector career.” He added that he was aware of several such cases in recent months.

    It appears that the underlying reason behind the command is that the Russian government is concerned about the optics of having children of the Russian political elite being educated abroad, while their parents appear on television talking about patriotism and being “surrounded by enemies.”

    While we doubt the impacted children will be happy by this development, some of the more patriotic locals, if unimpacted, are delighted. Such as Vitaly Ivanov, a political scientist who believes that the measure to return children of officials from studying abroad, is “long overdue.” According Ivanoc, the education of children of the Russian elite abroad is subject to constant ridicule and derision against the ruling regime. “People note the hypocrisy of having a centralized state and cultivating patriotism and anti-Western sentiment, while children of government workers study abroad. You can not serve two gods, one must choose.”

    On the other hand, political analyst Stanislav Belkovsky quoted by Znak, believes that such decisions should be approached with more pragmatism. Such a recommendation is more likely to lead to an outflow of officials from the state, rather than allow the return of the children studying at elite foreign universities. He also warned of attempts to recreate an echo chamber such as that experienced after the failed July coup attempt on Turkey’s President Erdogan.

    But what he said next was more disturbing: “On the one hand, this is all part of a package of measures to prepare the elites for some ‘big war’ even if it is rather conditional, on the other hand – this is another blow to the unity of President Putin with his own elite” Belkovsky said. He adds that the Western sanctions launcedh in March 2014, had sought to drive a wedge between Putin and elites. In response, the Kremlin began to act precisely according to the logic of these sanctions. “But while a ban for having assets in the West is one thing, and understanable, when it comes to a ban for offshore health and education services, the blowback will be far greater, as it represents a far more important element of the establishment’s life strategy.”

    Ultimately the motivation behind Putin’s decision is unclear: whether it is to show Russia’s high-ranking oligarchs who is boss, to boost a sense of patriotism among the nation by sending a symbolic message that the west is no longer a welcome destination for Russia’s rich kids, or just a preemptive move of repatriating of any individuals affiliated with Russian politics for other unknown reasons; however it underscores the severity of the ongoing diplomatic crisis and just how significant the upcoming isolation between Russia and the West is likely to become in the coming months – unless of course tensions deescalate dramatically in the very near future – resulting in even greater collapse in global commerce and a further slowdown to world economic growth, which may ultimately lead to an armed conflict, whether regional or global, as the only possible outcome.

  • Reuters Thinks Hillary's Key Vulnerability Is That She's Just Too Awesome

    After taking a substantial lead in the latest NBC/WSJ poll, Reuters is now apparently worried that Clinton’s only remaining vulnerability, if any, might just be that she’s a bit too awesome.  As Reuters notes, if Trump continues to tank in the polls then Clinton supporters might just fail to show up on election day leaving Clinton without the “political capital she would need to drive through her agenda.”  Or, in a worst case scenario, Reuters figures Clinton could still lose the race if Republican voter turnout is substantial. 

    While voter turnout might be a problem for Hillary in November (more on this later) we suspect this has more to do with her criminal investigation by the FBI, pay-for-play scandals surrounding the Clinton Foundation and/or the latest email leaks from WikiLeaks, all of which are leading to massive distrust of the Democratic nominee, and not so much because of her extreme awesomeness.  That said, it was a really nice try at impartial reporting…Reuters definitely scores great style points for the unique approach.

    We would also point out that media cycles tend to be very short in modern politics.  As an example, Hillary’s “medical episode” on 9/11 only impacted her polling numbers for about 10 days (see chart below).  Now, while there could certainly be more Trump bombshells in the coming weeks, it’s probably a bit presumptuous of Reuters to think that this election is over, 30 days before election day, because of a single “hit piece” from the Clinton camp.   

    RCP

     

    The poll that seems to be causing some angst for the “journalists” at Reuters is the following NBC/WSJ poll that showed Clinton with a 9-point lead over Trump.  As Reuters notes, much of Hillary’s “support” simply comes from the “Never Trump” camp of voters who are much less likely to show up on election day if things look bleak for Trump in the polls.

    Opinion polls show that many voters are backing Clinton primarily to stop Trump, the Republican nominee, from getting into the White House. If they believe he has no hope of winning, then what would their motivation be to turn up at the polls?

     

    In a recent Reuters/Ipsos poll about half of all Clinton supporters said they were backing her to keep Trump from winning. By contrast, just 36.5 percent said it was because of Clinton’s policies and just 12.6 percent said it was because they like her personally.

     

    “This election cannot be just a referendum on Donald Trump,” said Arun Chaudhury, creative director of Revolution Messaging, a left-leaning consulting firm that oversaw the online media operation of former Clinton rival, Senator Bernie Sanders.

     

    Clinton’s central message, he said, has been that “everyone has to step up and stop Donald Trump from being president, not step up and make Hillary Clinton president.”

     

    Of course, as we pointed out earlier today, there were a lot of “issues” with the above poll which calls into question it’s credibility (see “First Post-Debate Poll Gives Hillary A Significant Lead… And A Familiar Problem Emerges“). Recall that in the last NBC/WSJ poll conducted over the weekend, the representation of those polled was notably skewed, leaning significantly to the left, with 43% Democrat and Democrat leaners, 36% Republican and Republican leaners, and 12% strictly Independents.

    Well, a quick look at the just released NBC poll reveals precisely the same issue:

    In yet another poll the distribution of the of those questioned leans substantially to the left, as follows:

    • Democrat and Democrat leaners 44%    
    • Republican and Republican leaners 37%    
    • Independents 12%

    (polling details and methodology here)

    But the skewed sample wasn’t the only issue as we also pointed out that the poll was conducted by Geoffrey Garin who works for a Hillary Super PAC.

    NBC/WSJ Poll

     

    But wait, it gets better.

    If you take a quick look at the recent financial connection between, Geoff Garin, Hart Research Associates and Hillary Clinton’s Priorities USA Super-PAC you’ll find that $220,500, in the month of September alone, was paid by Hillary Clinton’s Priorities USA Super-PAC to Hart Research Associates (FEC filings -HERE-). 

    NBC/WSJ Poll

    NBC/WSJ Poll

     

    Of course, voter turnout should also be a huge concern for the Hillary team but not for the reasons that Reuters points out.   

    Unprecedented black voter turnout was a huge component of Obama’s victories in 2008 and 2012.  Per the chart below from the New York Times, after running in the low-to-mid 50% range for decades, black voter participation surged to over 60% for Obama in 2008 and 2012, the highest ever recorded

    Meanwhile, black voter turnout in the midterm elections remained fairly constant through 2012 indicating that people were really just showing up to vote for Obama and not necessarily because of a new level of political engagement overall. 

    So, the question is, should Hillary expect the same level of unprecedented black voter turnout that Obama was able to garner?  Apparently, her campaign is not convinced and that’s why, according to Leslie Wimes, President of the Democratic African-American Women Caucus, they’re in “full panic mode.”

    Black Voter Turnout

     

    According to the numbers, Hillary has every reason for concern.  Per Politico, in 2008 and 2012, Obama received 95% of the 1.7mm votes cast by black voters in Florida.  Unfortunately for Hillary, a recent poll from Florida Atlantic University found that she is only polling at 68% among black voters while Trump is polling at 20%.  Now, if you assume that black voter turnout drops just 5% in 2016 and that Hillary’s support drops from 95% to 70% that could cost her over 500,000 votes in a state that Obama only won by roughly 75,000.  When factoring in the higher support for Trump this could swing the overall Florida race by 7 points…not a good sign when Obama narrowly won the state by less than 1%.

    In conclusion, for all the worried Reuters journalists, while their might be legitimate reasons to be concerned for your chosen candidate, we’re fairly certain that you can take, “she’s just too awesome,” off your list of concerns.

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Today’s News 11th October 2016

  • The Demise Of The EU

    Submitted by Jeff Thomas via InternationalMan.com,

    Back in the ‘90s, when the EU had ceased to be a mere trade agreement and had become a full-blown oligarchy that would eventually gobble up most of Western and Eastern Europe, my belief was that it had not only been a doomed concept, it had additionally been rushed into being far too quickly. Although, at that time, the governments of Europe were gleefully joining up. I said, “I give it twenty years, tops.”

    It was an offhanded remark and, in truth, I was throwing a dart at a board regarding the time period, but twenty years did seem about right to me. And this shouldn’t have been a difficult prophecy. There were three major reasons for its validity.

    “Good Fences Make Good Neighbors”

    First off, the countries of Europe had perennially been at war with each other since long before gunpowder was invented. Europe is basically tribal and there is simply no way that the mindsets and objectives of, say, the British are going to be the same as, say, the French. If under the EU diktat, British fishermen were then told that they could no longer fish their own waters because Brussels had decided to give British territorial waters to the French so that they could fish, there would be greater cause for enmity between countries than ever before in history. (The quote above from Robert Frost was meant to pertain to individual property owners, but it applies equally to modern-day tribes.)

    Sudden Change Breeds Resentment

    Second, the rulings from Brussels came in a torrent after its formation. Nearly every country in Europe was shoehorned into fitting in with Union objectives. As a result, whilst some countries gained some advantages, all countries lost the basic freedom that comes with self-determination. Those who objected were threatened that they’d better behave. Those who suggested departing from the union were further threatened that they’d be shut out of EU trade and destroyed economically.

    Most people behave like sheep in most situations. That’s a basic trait of mankind, in any culture, in any age. However, sudden change (in either events or public opinion) often sparks revolt. Certainly King George of Britain discovered this when he chose to make up for a wartime monetary shortfall by imposing a stamp tax on his colonies in America. A decade later, the French people, when they heard (falsely) that Queen Marie Antoinette had replied to the shortage of bread amongst her minions, “Let them eat cake,” it served as a jolt to public opinion that would send many Frenchmen over the edge to the point of rebellion.

    The elite in Brussels have grossly overplayed their hand, time and time again, by imposing sudden and dramatic change on the countries of Europe, whilst behaving arrogantly, bringing many of Europe’s people to the boiling point.

    It Wasn’t the People that Joined the Union

    To add to the tyranny, no country’s population voted in a majority to join the union. Half-hearted referenda were undertaken by some countries, but voter turnouts were often poor. In other countries, the referenda were not binding. In the end, each government went ahead with only minority support and plunged headlong into a union that would benefit them, the leaders, but would not serve their people well.

    The EU was, from its inception, the antithesis of “government of the people, by the people, for the people.” It was, instead, an “uber-government of the political leaders, for the political leaders, by the political leaders.”

    All the above contributed to the likelihood (at least in my view) of a short-lived EU.

    But the easy task is to predict the event. The more difficult task is to predict an approximate date, so that investment decisions and major life decisions may be timed to avoid the individual becoming collateral damage. The important question therefore would then be, “What will be the trigger to begin the collapse?”

    As the years passed and the cracks in the EU started to appear, the race was on as to whether the undoing would be as a result of the economic failure of the southern member-states, or by the social strains of immigration that Brussels forced onto its member-countries. In each case, it was predictable that the political leaders would defend the EU policies at all costs, although each would increasingly lose the support of constituents by doing so.

    On the economic front, all eyes were on Greece and the other Mediterranean members, as they clung stubbornly to their collectivist economic policies. They would continue to bleed red ink at the expense of their more economically responsible Northern brethren. Along the way, in order to appease her voters, German Chancellor Angela Merkel stated firmly that the EU would not bail out the Italian banks; that they would have to rely on bail-ins (a measure that had been approved in 2014 for all EU countries). Then the news came that the German Deutsche Bank was on the ropes, threatening to cause a bloodbath for the German people. Germany, having lost billions of its money to the other EU countries, would need $14 billion to pay for Deutsche Bank’s mis-sold mortgage-backed securities and that would just be the beginning.

    The German people had paid through the nose to support other EU members, but a line had been drawn in the sand as to future bail-outs, just before Germany realised its own crisis.

    Suddenly, Mrs. Merkel has been caught between her obligation as Chancellor to the German people and her personal commitment to the EU. Her problem is exacerbated by the fact that she is up for re-election in 2017.

    Ironically, in the race for the collapse of the EU, it may be that the trigger that begins the process is Germany, the country that was most responsible for its creation.

    The comparison with the Titanic is an apt one. Like the Titanic, the EU was presented as a “super-state”, one that would be bigger and better than all the others in Europe. It was declared unsinkable. Yet, soon after it was launched, it hit an unexpected iceberg from which it could not recover.

    Years from now, historians and economists will debate the identity of the EU iceberg. Some will say Brexit, others will say Deutsche Bank. Still others will cite events that we have not yet seen. However, for our purposes, it matters little. The dominoes have begun to fall and all of us that may be impacted by an EU collapse should make sure that we have all our own ducks in a row – to assure that we are impacted as minimally as possible.

  • Behold, The Trumpening

    Submitted by Raul Ilargi Meijer via The Automatic Earth blog,

    If the US presidential debate last night showed anything, it must be that just about everyone has dug themselves into their trenches and had no desire whatsoever to ever come out.

    This seemed especially clear on the Hillary side, which appeared to include -to an extent- ‘moderators’ Anderson Cooper and Martha Raddatz, judging from their interruptions. But, granted, they were the only biased side in the discussion, so we don’t really know what trenches the Republicans have dug.

    The biggest problem with biased moderators is that people notice their bias. Not those who are on one side already, it passes them by. But others do. And perhaps more importantly, -in this case-, Hillary’s team loses its ability to adopt a neutral view. And she will therefore hear so much praise that she can’t figure out if she’s not done too well.

    To illustrate that point: the main takeaway must be that Trump won the debate hands down, but that’s the opposite of what Hillary sympathizers concluded and what various polls said. It’s still true though, if only for one simple reason. That is, for 48 hours straight all talk and ‘reporting’ had been about Trumps lewd ‘words’ on the Access Hollywood tapes.

    Trump really was cornered, and he knew it, everyone knew it. But after the second debate, and within 90 minutes, most of the talk turned towards how he ‘threatened’ to jail Hillary. Now, that’s not what he said, but even if he had, it’s something a lot more people sympathize with than with his language on the tapes. That’s a lot of territory ‘conquered’.

    Meanwhile, even the likes of Paul Ryan don’t seem to grasp what happened overnight (he apparently think Hillary already won). What he doesn’t appear to see is, again, that Trump looked completely lost for 48 hours, but doesn’t look so lost now. There are 4 weeks and a day left in the campaign, and a lot can still happen.

    Look, Trump is a buffoon. The word could have been invented specifically to define him. And it would be a very bad idea to make him president of the US. But that doesn’t mean the idea of making Hillary president is any better. It may well be worse, for a variety of reasons.

    What the debate made clear once more is that America stands face to face with itself, it’s looking in a giant mirror, one which -only- in choice moments does not contort its own image, and America finds there’s nothing to like about what it sees in those brief moments in that mirror. And then therefore immediately proceeds to contort that image like it’s used to doing.

    America may not like to look at its own stone cold hard reality, but it’s better than any culture ever in painting a picture of itself that it does like. In fact, it’s the first nation ever that made exactly that its main goal in life.

    The Brits, the French and the Dutch try to hide their dark colonial and slave trading pasts, but America built an entire culture around contorting its history, right there in Hollywood, with ‘stars’ like John Wayne and John Ford being celebrated for movies that celebrate the annihilation and violent submission by the white man of both Native Americans and African slave populations.

    In that same vein, the ‘heroic exploits’ of US soldiers in Muslim countries from Libya to Afghanistan in the past decades are now a major topic for the next generation of twisted history in movies and other media, in which invasions, drone killings and carpet bombings are portrayed as acts of bravery that warrant Purple Hearts. While the people whose lives and cultures are destroyed are swept under the first available carpet.

    But that’s another story for another time. Back to last night’s debate. Trump may have won big, but he left some substantial scraps on the table that he may yet come to regret. Perhaps he was too focused on digging himself out of the ‘grab that pu**y’ hole -and yes, that is foul- to notice he was already out. Hard to say. He has the intuition, but does he have the brain?!

    The first thing either The Donald or one of his team members must hammer down, urgently, is the way past stupid narrative of Russia’s involvement in US politics. Hillary repeatedly brought it up again, and it’s cheap fare for her, she can say anything she likes on the issue, no-one will contradict her or check any facts.

    There were all these alleged fact-checkers ‘active’, but they dare not check the facts on this (there are none). Anything the Democratic Party wants to hide, it is free to hide behind Putin. No questions asked. That is insane at best, and Trump should have halted the narrative.

    As should Cooper and Raddatz, and the army of fact checkers, but the fix was in. The low point must have been the allegation that Wikileaks is linked to Putin. Really? Come with facts, or forever hold your tongue. Too much cheap fare, hollow as can be, and Hillary build much of her story on it. Not good on the part of the Trump people.

    I was reading an August 2 piece by Timothy O’Brien at Bloomberg the other day on Trump’s Russian connections, and Tim seems to start off with good hope of ‘inking the deal’, but ends up admitting there’s no there there.. The entire narrative of Trump’s Russian connections is as false as John Wayne’s heroism in slaughtering Native Americans. He should have cut that tale short in the debate, He didn’t.

    Hillary gets to say, without any interruption or fact checking that “Russia has decided who it wants to be president, and it’s not me.” and that is way beyond any comprehension, really. There is zero proof of that, as there is of everything the US claims about Russia.

    For all we know, Putin would much prefer Hillary to be president, because he sees Trump as a much stronger opponent when the chips are down. Hillary’s allegations are just a narrative she thinks will appeal to voters. She’s wrong. At least when it comes to those who wouldn’t have voted for her regardless of the narrative.

    The second issue Trump desperately needs to put to bed is the one of his taxes. And mind you, I did say Trump should not ever be president of the US. That’s my perspective.

    Hillary again last night painted a picture of Trump leaving US veterans out in the cold by not paying enough taxes. Trump retorted by saying Buffett (not Jimmy) and Soros do the same. But that’s a huge missed opportunity.

    Paying taxes in America, and in any western nation, is not some voluntary exercise; there are laws, and they are some of the most stringent and most punishable there are. You cheat on your taxes, and the IRS or their equivalent in other countries have the power to go after you like no other government institution. Tax cheats very often go to jail.

    That none of this has happened to Trump means, it’s that simple, that he did not break the law. He has used to the law to his advantage, just like everyone else who could, sure, But there’s not an inch of evidence, not even a hint, that he did anything illegal.

    Hillary’s campaign is well aware of this, so the issue gets presented as some -pretty opaque- moral issue: ‘You didn’t do well by our veterans’. But what could he have done? Should Trump be the only American, or only western citizen, to tell the IRS to please take another extra $10 million or so, or $100 million, after they were done auditing him? So he wouldn’t be attacked 20 years on when running for office? It makes no sense in any sense.

    And yes, the situation is very different if you’re on a payroll for some company, you can’t deduct what Trump could. But he’s not alone in that; in fact, all American entrepreneurs are in the same boat, and they will all try to swing that boat in the direction that fits them best. And Hillary loves these entrepreneurs as much as anyone when it suits her purposes. And her accountants do the same thing, they follow the same principle. Perhaps for lesser amounts, but that’s not the point.

    Trump’s taxes are a non-issue, a brainless narrative. Not something for Hillary or anyone else to use as some innuendo-laden topic, anymore than Trump can use Hillary’s tax files against her in an ‘innuendo illegal’ way. Any judgment on that is up to the IRS, not either the Republican or Democratic campaigns. It’s ridiculous that Hillary can use that in a debate, and Trump and his people should have shut that venue down long ago.

    But anyway, we have that 4 weeks and a day to go, and there’ll by much more to ‘enjoy’. Still, Trump came back last night from very very far away. No matter what CNN and other polls may say. Those polls are as biased as the night’s moderators.

    It might be a good idea to realize that a year ago nobody ever gave Trump a shot at the gold medal, and his support never came from the people who conform with CNN (which nobody watches stateside anyway) or ABC.

    We’ll talk again soon. Meanwhile, I’m with Susan Sarandon, who says bring it on, bring on Trump, because she despises Hillary, and because:

    Donald Trump will bring the revolution immediately; if he gets in then things will really explode.”

    Sort of like what I wrote before, that if you must choose between two very bad options, might as well pick the worst and get it over with:

  • U.S. Intelligence Meddles In US Presidential Election: Backs Hillary Clinton

    Submitted by Alexander Mercouris of The Duran

    U.S. Intelligence meddles in U.S. Presidential election: backs Hillary Clinton, tries to stop Donald Trump

     

    The fact and evidence-free statement by US intelligence that Russia was behind the DNC leak is an attempt to swing the US Presidential election in Hillary Clinton's favour and amounts to the direct interference of US intelligence in a democratic US election.

    The single most important event of the US Presidential election took place last week and to my knowledge it has gone completely unreported.

    This was not the video tape of Donald Trump’s grotesque and deeply offensive sexual banter from 2005. 

    It was the public confirmation that an intelligence agency is directly interfering in an ongoing US Presidential election. 

    The intelligence agency in question is not however that of Russia as is being reported.  It is that of the United States itself.

    To understand why this is so, consider the statement US intelligence published last week on the subject of alleged Russian hacking of the Democratic National Committee and of other US agencies involved in the election.  It reads as follows:

    “The U.S. Intelligence Community (USIC) is confident that the Russian Government directed the recent compromises of e-mails from US persons and institutions, including from US political organizations. The recent disclosures of alleged hacked e-mails on sites like DCLeaks.com and WikiLeaks and by the Guccifer 2.0 online persona 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.”

    (bold italics added)

    The statement is an implicit admission that US intelligence has no evidence to back its allegations of Russian hacking. 

    It is merely “confident” – not “sure” – that it is the Russians who are behind the hacking, and it is clear from the statement that it arrived at this conclusion purely through inference: because the hacks supposedly were “consistent with the methods and motivations of Russian-directed efforts”.

    US intelligence assumes the Russians were behind the hack not because it knows this to be so but in part because of what it believes Russian motives to be.

    The statement backs its claim with a textual trick.  It says “the Russians have used similar tactics and techniques across Europe and Eurasia”.  It then immediately follows these words with the words “for example”. 

    These lead to the expectation that an actual example of such Russian “tactics and techniques” is about to follow.  Instead what is provided are the fact free words “to influence public opinion there”. 

    The words “for example” lend nothing to the meaning of the statement, which would be exactly the same without them.  These two words as used in the statement are actually meaningless.   That is a sure sign that their presence in the statement is intended to confuse the casual reader, and that this is true of the statement as a whole.  

    The words are designed to create a subliminal impression to a casual reader that the Russians have been caught doing this sort of thing before, without however providing a single actual example when this was the case.

    Demonstrating how thin the case of Russian government actually is, the statement then goes on to say

    “Some states have also recently seen scanning and probing of their election-related systems, which in most cases originated from servers operated by a Russian company. However, we are not now in a position to attribute this activity to the Russian Government.”

    (bold italics added)

    In other words US intelligence admits the mere fact servers operated by a Russian company may have been used for “scanning and probing” – and presumably also for hacking – is not in itself proof of the involvement of the Russian government.

    This is consistent with what I have heard, which is that skilled and well-resourced hackers can use compromised machines to carry out hacks by remote access, and that the mere discovery that a particular machine has been used in a hack does not in and of itself implicate the owner.   (I should stress I am not an expert in this field and I may have misunderstood this.  However it appears to be what US intelligence is saying).

    This part of the statement seems to me intended to prevent challenges to the eventual outcome of the election based on US intelligence’s claims of Russian hacking.  US intelligence does not want to be drawn into post-election arguments about the validity of the election outcome, which might lead to demands that it make public its “evidence” of Russian hacking.  In the process US intelligence however casts doubt on what is almost certainly the only actual evidence it has of Russian state involvement in the hacking.

    In summary, the statement is a mere statement of opinion, it is not a statement of fact, and the evidence upon which it is based is threadbare. 

    Moreover since the DNC hack is a criminal offence, it is a statement of opinion made about a matter which is presumably being investigated by the police. 

    The relevant police agency is presumably the FBI, which significantly is not a co-author of the statement. 

    That in turn begs a host of questions: has the FBI been shown the “evidence” upon which US intelligence expresses its opinion and has made the statement?  Has it asked to see this “evidence”?  Was it invited to co-author the statement?  What does the FBI think of the public involvement of US intelligence in a domestic criminal matter which falls within the FBI’s exclusive competence?

    If the statement is merely a statement of opinion based on inference of which guesses about Russian “motivations” apparently form a major part, and one which moreover concerns a matter which is or ought to be the subject of investigation by the police and not therefore the subject of this sort of comment, why was it published at all?

    The short answer is in order to help Hillary Clinton win the US Presidential election. 

    To that end the statement fulfils two purposes: firstly, it discredits the content of any leaks that might otherwise damage Hillary Clinton’s campaign by lending credence to her claim that they are part of a Russian ‘dirty tricks’ campaign against her; and secondly, it lends credence to the claim popularised by Hillary Clinton’s campaign and by Hillary Clinton’s supporters in the media that Donald Trump is Putin’s candidate and that Putin is trying to help him win the election. 

    That the second is one of the purposes of  statement is proved by its reference to US intelligence’s “belief” that the leak was authorised by “Russia’s senior-most officials”.  This is clearly intended to refer to Putin, and is intended to give the impression that Putin himself personally authorised the DNC leak in order to damage Hillary Clinton and to help Trump win the election and become President.

    US intelligence has meddled in elections in other countries on numerous occasions starting with the Italian parliamentary elections of 1948

    To my knowledge this is however the first occasion that US intelligence has directly and publicly meddled in a US national election, acting to help one candidate defeat another. 

    It matters not whether this was done by US intelligence on its own initiative, or whether it was pressured to do so by officials of the Obama administration or of Hillary Clinton’s campaign.

    Either way the disturbing truth must now be faced: the practice of US intelligence meddling in and trying to influence national elections has now been imported home to the US.

  • "The World Has Reached A Dangerous Point" – Gorbachev Sees Rising Threat Of Nuclear War

    As Russia and America creep ever closer to outright conflict, now that the diplomatic facade of the proxy war in Syria falls away with every passing day, one voice if calling for the world to stop and reassess what it is doing. Former USSR leader Mikhail Gorbachev warned on Monday that the world has reached a “dangerous point” as tensions between Russia and the United States surge over the Syria conflict; a conflict which if escalated even fractionally further, could result in all out war between the two superpowers according to General Joseph Dunford.

    Gorbachev blamed the current state of affairs between Russia and US on the “collapse of mutual trust” and urged the sides to resume dialogue and push towards demilitarization and complete nuclear disarmament.

    “I think the world has reached a dangerous point. I don’t want to give any concrete prescriptions but I do want to say that this needs to stop. We need to renew dialogue. Stopping it was the biggest mistake.  Now we must return to the main priorities, such as nuclear disarmament, fighting terrorism and prevention of global environmental disasters. Compared to these challenges, all the rest slips into the background.” Gorbachev said in an interview with RIA Novosti.

    Relations between Moscow and Washington, already at their lowest since the Cold War over the Ukraine conflict, deteriorated sharply in recent days as the United States pulled the plug on Syria talks and accused Russia of hacking attacks.


    Soviet President Mikhail Gorbachev (L) and U.S. President Ronald Reagan
    begin their mini-summit talks in Reykjavik October 11, 1986.

    As a result, last week Russia moved nuclear-capable Iskander missiles in Kaliningrad, near the hear of central Europe, an indication that a nuclear disarmament is the last thing on the mind of either Putin or Obama; quite the contrary a new nuclear arms race has begun. That, however, did not stop Gorbachev to preach the need for nuclear disarmament.

    “Of course, at this moment it is difficult to talk about moving towards a nuclear-free world, we must honestly admit it. But we should not forget: as long as there are nuclear weapons there is the threat of their use. It could be an accident, a technical malfunction of someone’s evil will – a madman or a terrorist,” the former Soviet leader said. Or a perfectly sane, administration official intent on starting a new world war to benefit his or her financial backers.

    In the interview, Gorbachev also reminded that in line with the nuclear non-proliferation agreement all of its signatories must hold talks on nuclear disarmament uniting the eventual full destruction of nuclear weapons.

    “The nuclear-free world is not a utopia, but rather an imperative necessity. But we can achieve it only through demilitarization of politics and international relations.”

    Gorbachev added that veterans of international politics, such as the “council of sages” chaired by former UN leader Kofi Annan, understood these problems and expressed hope that their voices would be heard by modern leaders. At the same time he emphasized that the main responsibility for global security lies on these modern leaders who would make the greatest mistake if they do not use the last chance to return international politics to a peaceful course.

    The former Soviet leader’s interview was published on Monday to coincide with the 30th anniversary of the USSR-US summit in Reykjavik, which eventually allowed the nuclear arms race to slow down and greatly contributed to the end of the Cold War. Ironically, it comes out at a time when the nuclear arms race is back front and center.

    Looking back to a more sensible time, Gorbachev reiterated that the Reykjavik summit was a major breakthrough. “First, we agreed on many issues and second, we managed to look over the horizon, see the perspective of a nuclear-free world,” he said.

    “It was very appealing that in the course of our negotiations President Ronald Reagan sincerely spoke about the necessity to rid the world of the weapons of mass destruction. We shared a common position on this issue.”

    Sadly, today that is no longer the case, and as we said over the weekend when we profiled the latest Russian nuclear escalation, the next move will be one by NATO and it will be proportional, as the west delivers even more nuclear weapons in close proximity to Russia in what will become a tit-for-tat “defection” from the game theoretical equilibrium, until the “accident, technical malfunction, madman or  terrorist” emerges and unleashes an unthinkable scenario.

  • Obama Econ Advisor Blames Back Pain And Video Games For Bad Labor Market

    Princeton professor and former Obama White House economist Alan Krueger would like for you to know that low labor force participation rates likely have nothing to do with Obama’s awful “jobs recovery”, stagnant real wages or soaring entitlements that provide massive disincentives to work.  Rather, his “thorough research” indicates that men are more likely dropping out of the labor force due to excessive back pain and/or because video gaming technology has become so amazing that young adults are just choosing to stay home instead.  Sadly, this is a true story.

    According to The Washington Examiner, Krueger’s “research” indicated that 47% of men, between the ages of 25 and 54, reported taking pain medication during the previous day.  Of those men, 40% said their pain prevented them from working.  To summarize, the awful labor market under Obama has nothing to do with his failed economic policies…it’s pure coincidence that as soon as Obama took office a massive percent of the overall working-age male population came down with severe back pain.  That seems reasonable.

    Nearly half of working-age men who aren’t in the labor force take daily pain medication, according to new research that highlights one alarming possible reason for weak labor force participation in the U.S.

     

    Of men between the ages of 25 and 54, 47 percent said that they took pain medication during the previous day in a survey commissioned by Princeton professor and former Obama White House economist Alan Krueger. For two-thirds of those men, the medication was prescribed.

     

    Those results line up with what Krueger found in government-conducted surveys, and they add a new explanation for low male labor force participation, namely that many men may be too sick or injured to work.

     

    Of the men who reported taking medication, 40 percent said that pain prevented them from working.

    Kreuger

     

    But back pain apparently isn’t the only thing keeping young men out of the work force.  Krueger also asserts that the improved quality of video gaming consoles has caused young people to increasingly choose “idleness” over work.  Yes, we’re sure it has nothing to do with minimal job growth and stagnant or declining real wages for America’s youth…video games makes a lot more sense.

    The analysis downplays some of the reasons that have been suggested for the drop. For instance, Krueger reports little evidence that disability insurance is increasingly a disincentive to work, as some economists have suggested.

     

    Instead, he focuses on the possibility that some working age people, especially men, have health problems, and that getting them back to work might necessitate increasing their access to healthcare.

     

    For younger working-age men, aged 21-30, video games also may be part of the problem, Krueger finds. While falling labor force participation for that group mostly reflects school attendance, idleness is also up. And that might be because, he finds, playing video games is more attractive than older forms of idleness, such as watching television. He discovers that young men out of the labor force spent 6.7 hours a week on average playing video games in the years 2012-2015, up from 3.6 hours a week in 2004-2007.

    Sounds like a simple little video gaming tax should clear up the unemployment problem among America’s youth. This could be a huge win for Democrats as they could raise taxes and solve unemployment with one simple bill…best of both worlds.

    And parents are actually paying Princeton nearly $100k a year for their kids to be taught this garbage.

  • "Why Do They Hate Us So?": One Western Scholar's Reply To A Worried Russian Student

    Submitted by Michael Jabara Carley via Strategic-Culture.org,

    I gave a lecture in Moscow during the spring about western-Soviet relations over the last century. With the partial exception of World War II, it is a narrative of unrelenting hostility. After I had finished, a student asked, «why do they hate us so?» The answer is not complicated. You cannot cross «da man» in the United States, that is, the powerful, wealthy US «deep state», which sets the rules for everyone else and enforces its worldwide hegemony against disobedient states and leaders.

    You could not get more disobedient than the Bolsheviks. In November 1917, or October according to Julian calendar, they seized power in Russia and declared their intention to make a world socialist revolution. You can imagine the indignation and anger of the western powers, all at war with Imperial Germany, looking over their shoulders to see that revolution had erupted in Russia. It’s a complicated story but not everyone in the west reacted blindly to the Bolshevik seizure of power; none other than the British Prime Minister David Lloyd George thought the Entente should back the Bolsheviks against the Germans. His idea was an early prototype of the eventual Grand Alliance.

    In 1918 there were few takers for that eccentric idea especially when the Bolsheviks annulled the tsarist state debt and nationalised banks and industries in which foreigners held billions in investments. In the west these actions struck at the heart of the capitalist world order, and for the next three years, the Entente sent money, arms and troops to overthrow the Soviet government.

    The Bolsheviks acted as defenders of the revolution but also as defenders of Russia. It was an easy transition since the so-called Allies, had they succeeded in reversing Soviet power, would have established a Russian semi-colony, much as they sought to do in the 1990s. The Poles too were mobilised against Soviet Russia, launching an offensive in April 1920, with tacit French support, to re-establish their 18th century eastern frontiers, including the city of Kiev. The Polish plan did not work out as intended, the Bolsheviks fought back, portraying themselves as defenders of the traditional Russian state. Admittedly it was an incongruous role for world revolutionaries, but if you scratched the skin of most Bolsheviks, you would find defenders of Russian national security interests.

    During the interwar years Soviet-western relations were almost always bad. The former Entente powers punished Soviet Russia for its refusal to pay the tsarist debts and compensate foreigners for nationalised property and equities. They applied economic sanctions to break the Soviet state where military force had not succeeded. The red scare, anti-Soviet electoral politics, and containment characterised US, British and French conduct during the 1920s. Those policies did not work. The Soviet government relied on its own resources to modernise its economy. Joseph Stalin’s policies were brutal and ruthless, but they led to the building of a powerful, industrialised state by the end of the interwar period.

    During the 1930s the Soviet government, recognising early on the menace of Hitlerite Germany, proposed collective security to the western powers, in fact, a defensive anti-Nazi alliance. At first there was some western interest in Soviet ideas, but not for long. One by one, the USSR’s putative allies reverted to what one Soviet diplomat, Ivan M. Maisky, called Sovietophobia and Russophobia. Adolf Hitler portrayed Germany as a bulwark against communism, and the French and British elites played into his hands. As Maisky put it, the great question of the decade was «Who is enemy no. 1, Nazi Germany or the USSR?» With notable exceptions, ruling elites in Europe got the answer wrong.

    You have to give Stalin credit for he stuck to collective security for six years, in spite of all the failures. Only in August 1939 did he abandon this policy when it became obvious that France and Britain were not serious about a war-fighting alliance against Nazi Germany. It was then that the Nazi-Soviet non-aggression pact was concluded. Western opinion was generally indignant, conveniently forgetting the Munich accords in 1938 and all the other western attempts to compose with Hitler. Even today Russophobic politicians, journalists and historians harp on the non-aggression pact to blacken Russia and its president Vladimir V. Putin. Such manipulations remind me of the Biblical parable of the mote and the beam. The west, then as now, should pull the beam out of its own eye before criticising the mote in the eye of Russia, Soviet or otherwise.

    Unable to count on France and Britain, Stalin concluded a modus vivendi with Hitler, not to make an «alliance» with him, but rather as one scorpion wary of another might do, circling and raising its tail high, ready to strike. Stalin did not want to fight alone against the NaziGermany, but he outsmarted himself because, as it turned out, the USSR was obliged to fight almost alone against the Wehrmacht for three years from 1941 to 1944. This was the period of the Grand Alliance against the Axis powers.

    I watched recently a Russian film about the Great Patriotic War. After some bloody fighting, one Red Army soldier asks another «what kind of allies are they, who let us do all the fighting against the Wehrmacht?» Not a bad question to ask. Perhaps it was unfair to Franklin Roosevelt, but not to Winston Churchill. FDR was a rare president who was able to keep at bay the Sovietophobic US «deep state». Churchill blew hot and cold about his Soviet allies, but as soon as the tide of battle turned against Hitler, he erupted about Russian «barbarians» and communist «crocodiles» even though some of his cabinet colleagues were scandalised.

     

    In April 1945, it took the US «deep state» only a fortnight after the death of FDR to persuade his successor, Harry Truman, to call into question the Grand Alliance. It was also a fortnight after VE Day in May 1945 that Churchill received a copy of «Operation Unthinkable», a plan he requested to make war against the USSR, stiffened with ten German divisions.

     

    The United States was quick to follow up with more realistic ideas on building up a West German «partial state» as the best way to contain or even roll back the Soviet presence in Europe. With the Marshall Plan in 1947, the United States was able to buy the loyalty of Western Europeans, transformed into dependent compradors. Stalin could not compete in that game of rich Uncle Sam, poor Uncle Joe.

     

    Having greased the rails with the Marshall plan and CIA money, NATO was established in 1949. Soviet propaganda portrayed the NATO «allies» as mere US ciphers. Little has changed since then. Present day NATO members remain compradors, obedient vassals of the United States, rather than defenders of the national interests of the countries they represent.

     

    It took another forty years for the USSR to collapse and disappear. That period was marked by visceral hostility, interrupted only by a brief period of cosmetic détente after the Cuban missile crisis in 1962. World War II had scarcely ended before the red scare and containment policies returned to the fore. It was Act II of the Cold War. In the 1980s the USSR tried to defeat an Islamic insurgency in Afghanistan supported by the United States. The Americans allied themselves with Islamist fundamentalists, most notably Osama bin Laden, portrayed as a hero then, who became a villain later. «Blowback», one American professor called it. Bin Laden was eventually shot by US Navy Seals in Pakistan. There were many other Wahhabis, however, to take his place.

    After the disappearance of the USSR, you might think the Americans would have declared victory and then offered a hand to the Russian rump state under Boris Yeltsin,. who played court jester in President Bill Clinton’s White House. Yeltsin claimed he had no choice but to submit to the Americans, but of course he had a choice. In 1991 he and two other Soviet politicians plotted the dissolutionof the USSR for their own political purposes. They sold out the country which the Bolsheviks had defended, and for which 26 million soldiers and civilians died during the Great Patriotic War.

    Yeltsin’s grovelling in Washington and his encouragement of his oligarchs’ looting of Russian national resources earned only American contempt. «Keep ‘em down» was the US policy; generosity was out. «We won, you lost,» the Americans proclaimed. Contrary to commitments made to the fatuous Mikhail S. Gorbachev about no NATO eastward expansion, NATO drove right up to Russia’s western frontiers.

     

    In 2000 when Putin was elected president, he publically promoted security and economic cooperation with Europe and the United States. After 9/11, he offered real assistance to Washington. The United States accepted the Russian help, but continued its anti-Russian policies. Putin extended his hand to the west, but on the basis of five kopeks for five kopeks. This was a Soviet policy of the interwar years. It did not work then and it does not work now.

    In 2007 Putin spoke frankly at the Munich conference on Security Policy about overbearing US behaviour. The «colour revolutions» in Georgia and the Ukraine, for example, and the Anglo-American war of aggression against Iraq raised Russian concerns. US government officials did not appreciate Putin’s truth-telling which went against their standard narrative about «exceptionalist» America and altruistic foreign policies to promote «democracy». Then in 2008 came the Georgian attack on South Ossetia and the successful Russian riposte which crushed the Georgian army.

     

    It’s been all down-hill since then. Libya, Syria, Ukraine, Yemen are all victims of US aggression or that of its vassals. The United States engineered and bankrolled a fascist coup d’état in Kiev and has attempted to do the same in Syria reverting to their «Afghan policy» of bankrolling, supplying and supporting a Wahhabi proxy war of aggression against Syria. Backing fascists on the one hand and Islamist terrorists on the other, the United States has plumbed the depths of malevolence. President Putin and Russian foreign minister Sergei Lavrov have made important concessions, to persuade the US government to avert catastrophe in the Middle East and Europe. To no avail, five kopeks for five kopeks is not an offer the United States understands. Assymetrical advantages is what Washington expects.

    One cannot reproach the Russian government for trying to negotiate with the United States, but this policy has not worked in the Ukraine or Syria. Russian support of the legitimate government in Damascus has exposed the US-led war of aggression and exposed its strategy of supporting Al-Qaeda, Daesh, and their various Wahhabi iterations against the Syrian government. US Russophobia is redoubled by Putin’s exposure of American support for Islamist fundamentalists and by Russia’s successful, up to now, thwarting of US aggression. Who does Putin think he is?

    From my observations, I would reply that President Putin is a plain-spoken Russian statesman, with the support of the Russian people behind him. For five kopeks against five kopeks, he will work with the United States and its vassals, no matter how malevolent they have been, if they adopt less destructive policies. Unfortunately, recent events suggest that the United States has no intention of doing so. After one hundred years of almost uninterrupted western hostility, no one should be under any illusions.

    *  *  *

    So then, the question is «Why do they hate us so?»

    Because President Putin wants to build a strong, prosperous, independent Russian state in a multi-polar world.

     

    Because the Russian people cannot be bullied and will defend their country tenaciously.

    «Go tell all in foreign lands that Russia lives!» Prince Aleksandr Nevskii declared in the 13th century: «Those who come to us in peace will be welcome as a guest. But those who come to us sword in hand will die by the sword! On that Russia stands and forever will we stand!»

  • More Leaks: "Hillary Should Stop Saying Things That Are Untrue, Which She Often Does"

    This morning saw Wikileaks dump another 2,086 John Podesta emails as the world nurses its post-debate hangover.

    We suspect the following ‘hacked and therefore entirely inadmissible and probably completely made up by devil-worshipping Russia-lovers’ will make a bad day for Hillary a little worse

    In an email from March 2016, Brent J. Budowsky – a liberal / progressive American political opinion writer and blogger for publications including The Hill, the LA Progressive, and The Huffington Post – explains to John Podesta his biggest fears about Hillary Clinton’s liabilities…

    From:brentbbi@webtv.net

    To: john.podesta@gmail.com, roy.spence@gsdm.com

    Date: 2016-03-13 09:43

    Subject: Bernie, Elizabeth and de Blasio

     

    Sometime soon I am going to suggest that Bernie, Elizabeth Warren and Bill de Blasio create the equivalent of a People’s PAC to raise huge amounts of money from small donors—after the convention—to support electing liberals at all levels….including but far beyond Hillary assuming she is nominated…..

     

    Beyond this Hillary should stop attacking Bernie, especially when she says things that are untrue, which candidly she often does. I am one of the people with credibility to suggest Bernie people support her in November, and she and Benenson and others have no idea of the damage she does to herself with these attacks, which she does not gain by making. 

     

    Instead the smart move would be to look for issues where she can dovetail with Bernie. One I am definitely going to suggest would be to take his proposal for a free public college education paid for by a transaction tax on Wall Street speculation and add one new dimension….that to receive this benefit young people should devote one year to some form of community or public service…. There is no reason Hillary cannot not support this…. 

     

    Right now I am petrified that Hillary is almost totally dependent on Republicans nominating Trump….she has huge endemic political weaknesses that she would be wise to rectify…..even a clown like Ted Cruz would be an even money bet to beat and this scares the hell of out me…..

    Of course, one should not read the message since the messenger – the satanic hands of Putin-spawned hackers – invalidates any and every comment made in these emails, which are clearly manufactured to ‘rig’ the American elections… or perhaps, just perhaps, for the first time in history, Americans are being de-lobotomized and given the chance to decide what ‘news’ they pay attention to  – as opposed to being spoon-fed by establishment propagandists.

  • How The "Perverse Economic Effects Created By ETFs" Are Setting Up The Next Crash

    One of our favorite topics over the years has been observing the inversion of fundamental cause and effective, or rather, the reflexivity of synthetic, “passive” products such as ETFs and VIX, which in a normal world are driven by the value of their underlying securities, yet which in recent years have seen the direction of causality inverted, and where it is the value of the synthetic product that inluences the market price of its underlying constituents, or said simply, the “tail wags the dog.” We have observed this phenomenon in both ETFs and VIX, the result of which has been even more confusion about whether fundamental causal links are even applicable any more.

    This “inversion” is also one of the main points discussed by RBC’s head of US cross-asset strategy, Charlie McElligott, who points out a recent FT article, and makes two stark observations.

    To wit:

    FINANCIAL TIMES ON “…THE PERVERSE ECONOMIC EFFECTS CREATED BY ETF’s”:  Two points:

    1. In a world of manic factor crowding via the exponential growth of cheap passive index and smart beta products, get ready for the class-action lawsuits in a future-state. And:
    2. this is BEYOND GOLD as an example of “tail wagging dog” / “echo chamber” / “feedback loop amplification” from the market structure shift experienced within the industry over the past 10+ years:

    “Steve Bregman, president of Horizon Kinetics, the New York investment adviser, points out that ExxonMobil, the oil company, is included not only in S&P index products, but in ETFs for active beta, momentum, dividend growth, deep value, quality and total earnings.

     

    Between the second quarters of 2013 and 2016, Exxon had a revenue decline of 46 per cent, and earnings per share decline of 74 per cent and a debt increase of 129 per cent, which led to a share price increase of 4 per cent. Anything could happen to the energy industry or Exxon’s fortunes, but a liquid index component can only go up.”

     

    Seriously…standing ovation.  Citizen Kane style. 

    Fund Management: On the perverse economic effects created by ETFs (Financial Times)

    By John Dizard

    Oct. 10 (Financial Times) — We have a consensus now in America that everyone deserves above-average investment returns, low risk and high liquidity.

    These benefits, or rather, entitlements, should be delivered continuously at low cost, with no real or even apparent conflicts of interest on the part of portfolio managers.

    If these benefits are not delivered, then the responsible portfolio managers, and any other complicit Wall Streeters, should be punished civilly and criminally, not only as institutions but as individuals.

    If you think that is an exaggeration, wait until there is a severe or sudden decline in the value of equities, specifically exchange traded funds, and watch the consequent Congressional hearings. We still have some time before that happens, and before then every plausible form of indexed investing is going to take market share from active human managers.

    I am opposed to this trend, because algorithms do not read newspaper columns or the advertising displayed next to them. So you should probably discount some of the doubts I raise as nothing more than arguments for my profession’s interests.

    The most serious risks arising from ETFs are the macro consequences of too much capital committed in too few places at the same time. The vehicles for over-concentration change over time, but the outcome is the same. Investors’ cash goes to money heaven, and there is a pro-cyclical decline in productive investment.

    Risk concentration always seems rational at the beginning, and the initial successes of the trends it creates can be self-reinforcing. Since US growth stocks such as Avon, the cosmetics company, Polaroid, the photography group, and IBM, the computer company, outperformed the market, growth-orientated portfolio managers raised more money in the early 1970s, which then led to more cash going to buy the same stocks.

    There was some truth at the beginning of those story arcs, and so it is with indexed investing. Many “active” managers who are really formulaic hacks charge a lot of money to create the same herding risks, and provide little, if any, value added in the form of considered and effective capital allocation or liquidity provision.

    Since the August 2015 flash crash of some ETFs, the SEC, the US regulator, and Wall Street have paid a lot of attention to market-structure problems created or exacerbated by the funds.

    There has been less analysis, though, of some of the perverse economic effects created by ETFs or other forms of indexation. Index sponsors need stocks with a large float-adjusted market capitalisation, so index managers have a structural bias to a short list of large-cap S&P 500 stocks.

    Steve Bregman, president of Horizon Kinetics, the New York investment adviser, points out that ExxonMobil, the oil company, is included not only in S&P index products, but in ETFs for active beta, momentum, dividend growth, deep value, quality and total earnings.

    Between the second quarters of 2013 and 2016, Exxon had a revenue decline of 46 per cent, an earnings per share decline of 74 per cent and a debt increase of 129 per cent, which led to a share price increase of 4 per cent. Anything could happen to the energy industry or Exxon’s fortunes, but a liquid index component can only go up.

    Mr Bregman says: “The normal valuation for a lapsed growth company might be 12 to 15 times earnings. But all of the companies at the top of the S&P 500 have a valuation of 22 to 25 times earnings. If the indexation money comes out of them, they would be driven 25 to 50 per cent lower, relative to the market.”

    Such an unwind in the indexation/ETF regime will have political as well as financial consequences. Wall Street’s probable next regulators from the Senator Elizabeth Warren wing of the Democratic party will not take long to make an aggressive move on asset managers.

    As one Democratic activist reformer says: “This is why it is so critical to have the right person as chair of the Securities and Exchange Commission. Even though there are critical differences between the large asset managers and the banks, [companies] such as BlackRock do control and manage crucial parts of the financial infrastructure.”

    If, or when, indexed product sponsors have to face the consequences on the other side of monetary easing and a rising market, there are a lot of nominally active but low-performing managers who will also lose market share. Automated or semi-automated portfolio management offerings will be there to pick up that business.

    Reportedly, Interactive Brokers, the brokerage, via its Covestor subsidiary, will be offering a set of five strategies for automated portfolio management, rebalanced quarterly, for a fee of 8 basis points.

    So how much more value are human portfolio managers offering when they charge a premium to those machines?

  • "Can We Stop This Nonsense, Please?"

    Submitted by Lance Roberts via RealInvestmentAdvice.com,

    market-corrections-worry

    Can we stop this nonsense? Please.

    One of the biggest reasons why investors consistently underperform over the long-term is primarily due to the extremely flawed advice promoted by Wall Street, because they have a product or service to sell you, and the media, because they don’t know better.

    The latest bit of advice that you should immediately hit the “delete” key on is from Simon Moore via Forbes. The article, while it certainly fits the “buy and hold” narrative, is rife with flawed assumptions and analysis. To wit:

    “You shouldn’t worry about market corrections. Not because they won’t come — they will. There is just no way of knowing when. Consider the data. It turns out that since corrections can’t be predicted, the best strategy is to remain invested for the long haul.

    Yes, as I will explain in just a moment, you should definitely worry about corrections as the destruction of capital is far more important than chasing returns.

    However, the point of saying “corrections can’t be predicted” is inherently flawed. Yes, you definitely can not pinpoint the exact date and time of corrections, but THEY CAN be avoided.

    There is a simple reason why every great investor has a simple rule that varies in form: “buy low, sell high.”  Purchasing an investment is only ONE-HALF of the investment process, without the “sell” no money is ever actually made. Furthermore, it is the “sell” process that ultimately minimizes the effect of the correction and, most importantly, if you don’t “sell high,” you can’t “buy low.”

    However, there are some basic premises around understanding the “when” corrections are most likely to present themselves. As shown in the chart below, a simple analysis of moving-average crossovers on a longer-term time frame can help investors avoid corrective processes in the market.

    sp500-movingaverage-xver-study-100916

    Did it work every time?

    Of course, not. No investment discipline works 100% of the time. But that is not the point of investing to begin with. Missing a majority of the corrective processes, over the long-term, significantly improves returns. The chart below is $1000 invested on a “buy and hold” basis as Simon suggests versus using the simple moving-average crossover analysis in the chart above.

    sp500-movingaverage-return-study-100916

    Not only did the risk managed portfolio achieve better long-term returns, it did so with significantly less volatility. That lower level of volatility allowed investors to remain adhered to their investment discipline versus eventually being flushed out at the bottom of major market corrections due to the inherent emotional biases we all possess. 

    Okay, let’s get on with the rest of the nonsense.

     

    The Fallacy Of Long-Term Returns

    Simon states:

    “One of the best datasets on long-term returns comes from Elroy Dimson and colleagues at London Business School. They look at 116 years of data and find that a dollar invested in 1900 becomes $300 in 2015.

     

    That’s a real return before any fees and commissions that equates to 5% per year.

     

    Furthermore, that time period includes 2 markets that experienced a total loss during the period – Russia and China when they moved to Communism. The period also includes 2 World Wars, the assassination of 2 sitting Presidents (McKinley and Kennedy), 23 US recessions, and at least one hundred revolutions or major insurrections in many countries around the world.”

    First, let me just say for the record everything in the statement above is absolutely correct.

    The problem is you DIED long before ever achieving that 5% annualized long-term return.

    Let’s look at this realistically.

    The average American faces a real dilemma heading into retirement. Unfortunately, individuals only have a finite investing time horizon until they retire.

    Therefore, as opposed to studies discussing “long term investing” without defining what the “long term” actually is – it is “TIME” that we should be focusing on.

    Think about it for a moment. Most investors don’t start seriously saving for retirement until they are in their mid-40’s. This is because by the time they graduate college, land a job, get married, have kids and send them off to college, a real push toward saving for retirement is tough to do as incomes, while growing, haven’t reached their peak. This leaves most individuals with just 20 to 25 productive work years before retirement age to achieve investment goals. 

    This is where the problem is. There are periods in history, where returns over a 20-year period have been close to zero or even negative.

    SP500-20-Year-Real-Returns-071116

    SP500-Real-RollingReturns-20-Years-051916

    This has everything to with valuations and whether multiples are expanding or contracting. As shown in the chart above, real rates of return rise when valuations are expanding from low levels to high levels. But, real rates of return fall sharply when valuations have historically been greater than 23x trailing earnings and have begun to fall.

    Long-term investment success depends more on the WHEN you start investing. This is clearly shown in the chart below of long-term secular full-market cycles.

    SP500-Historical-Bull-Bear-FullMarket-Cycles-082216

    Here is the critical point. The MAJORITY of the returns from investing came in just 4 of the 8 major market cycles since 1871. Every other period yielded a return that actually lost out to inflation during that time frame.

    So, yes, major events do matter.

    If you were unlucky enough to start investing in 1929, given life expectancies during that period, it is likely you died long before getting back to even.

    For those who were about to retire heading into the turn of the century, it is unlikely they are any closer to retiring today than they were 16-years ago. Maybe that is why the number of individuals over the age of 65 still in the labor force is at its highest level on record.

    employment-12mo-avg-65-over-092516

    The bottom line is that YOU don’t have 100+ years to invest in order to achieve those “average” long-term returns you have been repeatedly promised. Well, that is unless you have contracted “vampirism” during your recent visit to Transylvania.

    Second, your “long-term” investment horizon is simply the time you have between today and when you retire. And spending a bulk of that time horizon “getting back to even” is not an investment strategy that tends to work out well.

     

    No, Stocks Don’t Do Well During Negative Events

    “Also, consider that even in recent history bad events can be associated with positive returns. 2013 was a year that included a US government shutdown causing almost a million government workers to be furloughed, a $13 billion fine for a major bank (JP Morgan), major revelations on government data collection from Edward Snowden, and an attack at the Boston Marathon. Internationally, there was turmoil in Egypt and Syria, a major typhoon in the Philippines and a terrorist attack that killed 69 people in Kenya. The US economy grew at a relatively meager rate of 2.2% and unemployment held above 7% for most of the year.

     

    Yet in this rather bleak environment with many bad news stories the S&P 500 grew 32% for the year. It was the best return for the S&P 500 in 18 years.”

    Really! 

    Uhm…you kind of forgot that 2013 was likely an anomaly driven by $85 billion dollars of liquidity injected each month by the Federal Reserve to offset the potential ramifications of the “fiscal cliff.” 

    fed-balance-sheet-qeprograms-100916

    It would have likely been a far different outcome ex-QE.

    Historically speaking, stocks do NOT do well during negative events. Do events such at “Long-term Capital Management,” “Asian Contagion,” “Financial Crisis,” etc. ring any bells?

     

    2008 Was a 30-Year Event?

    “In fact, since 1928 there has been only one worse year for the S&P 500 than 2008. On average, a negative year for the S&P 500, which has occurred on average about every 3-4 years, means a decline of just under 14% on average.

     

    It’s important to remember that 2008 was extreme, and more than double the average decline we have seen in a bad year for the market. We should consider it the sort of event we’d experience once every 30 years if history is any guide, rather than a standard bad year for the markets.

    Well, there are just a lot of things wrong with that statement.

    First, as shown in the table below, average corrections, particularly when associated with recessions, tend to be far worse than 14% on average. Try closer to 30%.

    sp500-table-recessions-returns-100916

    Second, if 2008 was a “once-in-30-year event,” then what are we calling the near-32% decline during the “dot.com” crash just seven years prior?

     

    Yes, Please Worry About Corrections

    In all fairness, Simon is only reiterating the “buy and hold” nonsense that continues to flood the mainstream media. This is the problem that occurs when people who don’t actually manage money for a living, write commentary about how you should manage your money. 

    With retirement plans having a finite time span for both accumulation and distribution of assets, the time lost in“getting back to even” following a major market correction is the primary consideration.

    The chart below, which shows the difference between the inflation-adjusted returns on a $100,000 investment in the S&P 500  growing at 8% annually as opposed to the impact of gains and losses in market returns over time, illustrates the difference between expectations and reality. 

    The reason the chart begins in 1990 is, despite analysis showing 116-year investment returns, roughly 80% of all investors today began investing. Of that 80%, roughly 80% of those began after 1995. If you don’t believe me, go ask 10 random people when they started investing in the financial markets and you will likely be surprised by what you find.

    Investor-Psychology-100k-Returns-061316

    Unfortunately, most investors remain woefully behind their promised financial plans. Given current valuations, and the ongoing impact of “emotional decision making,” the outcome is not likely going to improve over the next decade or possibly two.

    For investors, understanding potential returns from any given valuation point is crucial when considering putting their“savings” at risk. Risk is an important concept as it is a function of “loss”. The more risk that is taken within a portfolio, the greater the destruction of capital will be when reversions occur.

    Many individuals have been led believe that investing in the financial markets is their only option for retiring. Unfortunately, they have fallen into the same trap as most pension funds which is believing market performance will make up for a “savings”shortfall.

    However, the real world damage that market declines inflict on investors, and pension funds, hoping to garner annualized 8% returns to make up for the lack of savings is all too real and virtually impossible to recover from. When investors lose money in the market it is possible to regain the lost principal given enough time, however, what can never be recovered is the lost “time” between today and retirement.  “Time” is extremely finite and the most precious commodity that investors have.

    In the end – yes, market corrections are indeed very bad for your portfolio in the long run. However, before sticking your head in the sand, and ignoring market risk based on an article touting “long-term investing always wins,” ask yourself who really benefits?

    This time is “not different.” The only difference will be what triggers the next valuation reversion when it occurs. If the last two bear markets haven’t taught you this by now, I am not sure what will. Maybe the third time will be the “charm.”

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Today’s News 10th October 2016

  • Here's Where The Next Bank Deposit "Bail-In" Will Strike…

    Submitted by Nick Giambruno via InternationalMan.com,

    One shot from a pistol pierced the night right before Antonio Bedin collapsed, dead.

    Antonio, a 67 year-old retired Italian, had just committed suicide. He was plagued by health problems and by the loss of his savings.

    Last year, four small Italian banks became insolvent and immediately needed capital. They turned to a bail-in.

    Antonio was one of thousands of small savers who were wiped out. Antonio lost everything. Then he shot himself.

    He wasn’t alone.

    There was another pensioner who hung himself at his home near Rome after he lost more than $100,000.

    Their stories became national news sensations. It generated intense anger at the bail-ins.

    A bail-in is when a bank recapitalizes itself by tapping its creditors, including depositors.

    Most people think of the money they deposit into the bank as a personal asset they own.

    But that’s not true.

    Once a deposit is made at the bank, it’s no longer your property. It’s the bank’s. What you own is a promise from the bank to repay. It’s an unsecured liability. That’s a very different thing from owning physical cash stuffed under your mattress. Money deposited into the bank technically makes you a creditor of the bank. You’re liable to get burned from a bail-in should the bank get into trouble.

    People in Cyprus had to find this out the hard way in early 2013. People awoke on an otherwise normal Saturday morning to the shock that the money in their bank accounts had been taken by a bail-in to recapitalize the banks.

    Not surprisingly, many Italians aren’t just waiting around to get “Cyprused.”

    I recently spent weeks on the ground in Italy investigating the ongoing banking crisis. I spoke with a prominent lawyer who told me that most Italians are now distrustful of the banks. They’re keeping a substantial portion of their savings in cash under their mattresses. They’re also buying lots of gold.

    I’ve been to Italy numerous times over the years. But this time, I saw something new. There were signs everywhere advertising gold bullion, like the one below.

     

    I think it indicates a strong demand for gold and a strong distrust of the banks. It seems to me like a slow motion bank run is already happening. This is the last thing Italy’s banking system needs. It’s further bleeding the capital in the banking system.

    I only see the situation getting worse…

    Italians are rightly afraid of bail-ins. That fear is leading them to withdraw their savings as cash and also to buy gold. This further drains the banks’ capital, making it more likely they’ll need to do a bail-in to remain solvent, which fuels even more withdrawals. It’s like a self-fulfilling prophecy.

    This means that the chances are good that a large number of unsuspecting Italian savers are going to get wiped out.

    The thought of potentially many more old, struggling pensioners committing suicide because they got wiped out from bail-ins has enormous emotional power in Italy. It’s like political nitroglycerin.

    It would have a catalyzing political effect.

    Bottom line, if Italians get Cyprused before the referendum later this year it’s a virtual certainty it will fail.

    That’s the unenviable conundrum the current, pro-EU Italian government is facing. They can stall and save the banks through a bail-in, or they can let the whole house of cards come down. Either option is political suicide.

    It’s hard to imagine that the frustrated Italian populace won’t vote to give the establishment the finger in the referendum, and humiliate the pro-EU government.

    Prime Minister Matteo Renzi has promised to resign if that happens.

    If he does, the anti-euro, populist Five Star Movement will almost certainly come to power. They’ve promised to promptly hold another referendum. This one would be on whether Italy should leave the euro and go back to its old currency, the lira.

    If Italy—the third-largest member of the eurozone—leaves, it will have the psychological effect of someone yelling “Fire!” in a crowded theater. Other countries will quickly head for the exit, and return to their national currencies.

    Economic ties and integration are what hold the EU together. Think of the currency as the economic glue. Without the euro, economic ties will weaken, and the whole project could unravel.

    It would be a deathblow to the EU, the world’s largest economy… And it would explode into a global stock market crash like the world has never seen.

    The Financial Times recently put it this way:

    An Italian exit from the single currency would trigger the total collapse of the eurozone within a very short period. It would probably lead to the most violent economic shock in history, dwarfing the Lehman Brothers bankruptcy in 2008 and the 1929 Wall Street crash.

    That’s how important the upcoming referendum in Italy is. It would be the first domino to fall in the collapse of the EU.

    Not surprisingly, the unsavory George Soros is keenly aware of what’s going on. He recently said, in reference to the Brexit and events in Italy, “Now the catastrophic scenario that many feared has materialized, making the disintegration of the EU practically irreversible.”

    Soros Fund Management has been picking up gold assets and placing bets that stocks will crash.

    He’s positioning to make big profits from the coming crisis. And I think we should, too.

    That’s exactly why I recently spent weeks on the ground in Italy.

    There are potentially severe consequences in the currency and stock markets.

  • INSiDe THe MeN'S LoCKeRooM…

    INSIDE THE MEN'S LOCKER ROOM

  • Debate Post-Mortem: Trump Crushes Clinton – "You Should Be In Jail"

    From the no-handshake start, following the most awkward Bill-Melania pre-debate greeting, it was clear the gloves were off. While Trump started apologetically, once Clinton opened up ad hominem character attacks, The Donald turned it up to '11'. Lashing out at Bill's indiscretions "his actions are worse than words", Hillary's lying "you should be in jail… I will call for a special prosecutor", and the biases of the moderators"it's one of three here" even the crowd cheered.. before being quickly shushed. Online polls, unbiased commentators, and the Mexican Peso agreed Trump won.

     

    A picture paints a thousand words…

    *  *  *

    Melania meets Bill…

     

     

     

    No handshake at the start…

     

     

     

    Hillary appeared to attract a fly…

    "You should be in jail"

     

     

     

    "I will bring a special prosecutor"

     

     

    Brief Transcript:

    TRUMP: "Bernie Sanders and between super delegates and Debra Wassermann Schultz and I was surprised to see him sign on with the devil. The thing that you should be apologizing for are the 33,000 e-mails that you deleted and you acid washed and the two boxes of e-mails and other things last week that were taken from an office are are now missing. I didn't knowledge I would say this, but I'm going to and I hate to say it. If I win, I am going to instruct my attorney general to get a special prosecutor to look into your situation. There has never been so many lies, so much exception. There has never been anything like it. We will have a special prosecutor. I go out and speak and the people of this country are furious. The long time workers at the FBI are furious. There has never been anything like this with e-mails. You get a subpoena and after getting the subpoena you delete 33,000 e-mails and acid watch them or bleach them. An expensive process. We will get a special prosecutor and look into it. You know what, people have been — their lives have been destroyed for doing 1/5 of what you have done. You should be a shamed."

     

    COOPER: "Secretary Clinton, I will let you respond."

     

    CLINTON: "Everything he said is absolutely false. It would be impossible to be fact checking Donald all the time. I would never get to talk and make lives better for people. Once again, go to Hillary clinton.com. You can fact check trump in realtime. Last time at the first debate we had millions of people fact checking and we will have millions more fact checking. It's just awfully good that someone with the temperament of Donald Trump is not in charge of the law in our country."

     

    TRUMP: "Because you would be in jail."

     

    COOPER: "We want to remind the audience to please not talk out loud. Do not applaud. You are wasting time."

    And, AG Holder chimed in…

     

    "I was surprised to Bernie sign on with you the devil…"

     

     

     

    "It's just words, folks"

     

    "I don't know Putin"…

     

    Trump slams Clinton over "Deplorables" comment…

     

    They shook hands at the end…

     

    Clinton's campaign responded…

    *  * *

    The Interruption count remained high…..

     

    *  *  *

    Online polls show it as an overwhelming win for Trump… (DrudgeReport.com)

     

    CNBC…

     

    Ohio…

     

    Fox St.Louis…

     

    And then – 90 minutes after the debate ended – CNN finally releases their poll of 537 Voters!!!!!

    What a total embarrassment!

    *  *  *

    Finally, the most real-time indicator of performance…

    It's on like Donkey Kong.

  • Deutsche Bank Tells Investors Not To Worry About Its €46 Trillion In Derivatives

    Having first flagged Deutsche Bank enormous derivative book for the first time back in 2013, it wasn’t until last week that JPMorgan admitted just what the biggest risk facing Deutsche Bank was. In a note by JPMorgan’s Nikolaos Panigirtzoglou, the strategist warned that, “in our opinion it is not so much funding issues but rather derivatives exposures that more likely to trouble markets going forward if Deutsche Bank concerns continue. This is especially true if these concerns propagate into a confidence crisis inducing more rapid unwinding of derivative contracts.”

    For those new to the story, Deutsche has one of the world’s largest notional derivatives books — its portfolio of financial contracts based on the value of other assets. As we first noted in 2013, It peaked at over $75 trillion, about 20 times German GDP, but had shrunk to around $46 trillion by the end of last year. That’s around 12% of the total notional value of derivatives outstanding worldwide ($384 trillion), according to the Bank for International Settlements.  It was €46 trillion as of Q2 measured by notional outstanding.

    JPMorgan bank analysts confirmed the size of DB’s book, and note that BIS data provide an alternative but indirect way to gauge the size of derivatives exposures. According to BIS data the exposure of foreign banks to German counterparties via derivatives contracts stood at $312bn as of Q1 2016.


    Source: BIS

    While the topic of DB’s derivative book size emerges any time the bank’s stock slides, it tends to be swept under the rug whenever due to fake rumors or otherwise, the stock rebounds.

    And in light of yesterday’s latest news, in which Germany’s Bild reported that Deutsche bank CEO John Cryan “failed to reach an agreement with the US Justice Department“, it is possible that on Monday the stock will have an adverse reaction, which also means that attention will once again turn to what JPM believes is the biggest concern for investors for the world’s most systematically risky bank.

     

    So what is the embattled German lender, the same one which two weeks ago at the depth of its stock plunge blamed its woes on market “speculators“, to do?

    As the Chief Risk Officer Stuart Lewis told Welt am Sonntag in an interview published on Sunday, it was to take a preemptive stance on market concerns about Deutsche Bank’s staggering derivative position.

    Speaking to the German publication, Lewis said that Deutsche Bank continues to cut back the size of its derivatives book, “which is not as risky as investors may believe.” Well, not just investors: it also includes that “other” bank with some $53.3 trillion in derivatives, JPMorgan.

    “The risks in our derivatives book are massively overestimated,” Lewis told the paper cited by Reuters. He said 46 trillion euros in derivatives exposure at Deutsche appeared large but reflected only the notional value of the contracts, while the bank’s net exposure to derivatives was far lower, at around €41 billion.

    “The 46 trillion euros figure sounds gigantic, but it is completely misleading. The real risk is far lower,” Lewis said, adding that the level of risk on Deutsche Bank’s books was in line with that seen at other investment banking peers. While he is largely correct about gross notional netting down to a vastly smaller number in a functioning, stable derivatives market in which there is no contagion and all counterparties continue to function during a Deutsche Bank “stress event”, that assumption falls out of the window the moment a counterparty fails, and becomes even worse whould any of the underlying derivative collateral be found to have been rehypothecated more than once, something not just we, but the BIS itself warned about in 2013.

    But back to Deutsche Bank, whose Chief Risk Officer tried to further belay concerns of a derivative fiasco when he said that “we are trying to make our business less complex and are paring back our derivatives book. Parts of it were transferred into a non-core unit some years ago.” While that is true, most of its exposure remains in the core unit (where the deposits are to be found), and what’s worse, one wonders why DB hasn’t had more success with derisking its gross notional derivative holdings, which still remain a substantial outlier within the European banking system.

    More to the point, it is worth recalling that only two short months ago, on July 31, the same Stuart Lewis, when interviewed by Frankfurter Allgemeine said exactly the same thing, in an article titled “We are not dangerous“… 

    … and promising that concern for the bank in the aftermath of the IMF report labeling it the most systematically risky bank in the world, was unfounded.

    When asked if Deutsche Bank is indeed the most important net contributor to systemic risks,  he replied:

    “No, not at all. Only one IMF report has recently muddled up the situation: We are not dangerous. We are very relevant. Deutsche Bank is interwoven with the entire financial sector. We are one of the largest universal banks in the world. But to make it clear: Our house is stable. The balance sheet is healthy.”

    When further asked if he can make this claim in good conscience, he said:

    “Absolutely. Look at how we have capitalized the bank since the Financial Crisis. We have taken €115 billion in risks off the balance sheet and have €220 billion of liquidity. Concern for us is unfounded.”

    Two months later it turned out that concern for us was, in fact, “founded.”

    Amusingly, when Wolf Richter pointed out Lewis’ comments, he noted that “wisely, Deutsche Bank’s elephantine exposure to derivatives didn’t even come up. It’s better to silence the topic to death than to cause a panic with it.”

    Now, just over two months later, the topic has come up, and this time Stuart Lewis is scrambling to preempt concerns about the dozens of trillions in derivatives, using the same exact rhetoric: please ignore the elephant in the room; Deutsche Bank is fine.

    But the biggest irony from Lewis’ August appeal to investors was the following: “The good news is: the taxpayer does not have to step in; according to the new regulations for banks, bondholders will get hit first.” If anything, events over the past two weeks confirmed that this will not happen.

    * * *

    Still, perhaps an even more important story ahead of Monday’s open is not Deutsche Bank’s latest attempt to ease investor concerns about its balance sheet and trillions in derivatives, but Friday’s report that global banking regulators are sticking to their guns on capital standards in the face of intense European pressure to soften planned rule-changes.

    As Bloomberg reported on Friday, the Basel Committee on Banking Supervision will wrap up work on the post-crisis capital framework, known as Basel III, on schedule by the end of the year, William Coen, the regulator’s secretary general, said on Friday. Key elements criticized by European Union policy makers will be retained, according to the text of Coen’s remarks in Washington.

    One flashpoint is a proposed new capital floor that caps the benefit banks can gain by measuring asset risk using their own models compared with a formula set by regulators. Coen said “discussions are still under way” on the floor, though Valdis Dombrovskis, the EU’s financial-services chief, called last month for it to be scrapped.

    What this means is that as it wraps up Basel III, the regulator is under instructions not to increase overall capital requirements significantly in the process. That promise, first made in January, left open the possibility that individual countries or banks could face a marked increase.

    “This is not an exercise in increasing regulatory capital requirements,” Coen said. “However, this does not mean that the minimum capital requirement for all banks will remain the same; variability in risk-weighted assets can only be reduced if there is some impact on the outlier banks. So some banks which are genuinely outliers may face a significant increase in requirements as a result.”

    Banks such as Deutsche Bank, which while not named can be inferred: among the most vocal opponents to a boost in overall capital levels is German Finance Minister Wolfgang Schaeuble who has insisted that the Basel Committee not only keep any overall increase in capital requirements to a minimum, but also ensure the rules have no “particularly negative consequences for specific regions,” such as Europe. Or rather, Germany.

    In the current round of talks, Europe and Japan are keen to retain risk-sensitivity in the capital rules, including the use of models where appropriate.  The European Commission, the EU’s executive arm, doesn’t believe capital floors are an “essential part of the framework,” Dombrovskis said. Europe also opposes the Basel Committee’s proposal to bar some asset classes from modeling entirely, and objects to the calibration of risk-weights in the standardized approach to credit risk.

    Why is Europe, and its biggest bank, “keen” on retaining the existing model-based framework which would not require substantial capital increases for risky banks, of which Deutsche Bank is at the very top? Simple: the largest German lender is already notably undercapitalized, and any further capital needs would only lead to further pressure on its stock, forcing it to seel even more equity when the inevitable capital raising moment arrives; it also means that the models used by DB’s risk managers are likely to materially misrepresent the bank’s true value at risk, not only when it comes to its loan book, and especially Level II and III assets, but more importantly, its derivative book, where while we appreciate Mr. Lewis’ assertion that the bank’s €46 trillion in gross notional derivatives collapse to just €41 billion, we would be far more interested in seeing the math and assumptions behind this calculation.

  • Two Words Suddenly Strike Fear In Silicon Valley Hearts…"Price Reduced"

    Authored by Mark St.Cyr,

    Remember way back in the glory days when the combination of “everything social” and “IPO” meant near instant stardom and riches? For those who might be having a little trouble remembering; it was way back in days past just a little under 24 months ago. Yes, that’s months, not years.

    Yet, as far as the many still clinging to IPO cash-outs, or stock option redemption in lieu of salary? It’s bordering on an eternity. And, believe it or not, that waiting game may have just been extended. The reason?

    Look no further than the once hailed songbird of both “social,” and in a larger context, much of what being a tech firm in “Silicon Valley” encapsulated: Twitter™

    Twitter has truly morphed into the literal “canary in the coalmine” of what I believe portends in the not so distant future for much of “The Valley” and “social media” in general. i.e., Laying on their backs, in the bottom of their cages, with nothing more than rumors and innuendo of either an offer to buy, or worse, an offer to just look. The latter having the worst of consequences once the “Thanks, but no thanks!” formality becomes public.

    It would seem, in my opinion, Twitter™ received the equivalent of both in the very same week. Can anyone say (or should I say tweet?) Ouch!

    As I stated earlier: “way back” was just under 24 months ago. And what truly took place as to hinder, or tarnish the implied “genius” status of founders, or the brilliance of the “it’s different this time” defense as it pertained to actual fundamental business metrics was The Fed’s ending of QE (quantitative easing.)

    And with that has come the realization (albeit very slowly) that “unicorn and rainbow” thinking belongs where it should – in fairy-tales and folklore.

    Want proof? Just look back to the ancient texts circa 1990-2000 in the “dot-com mania and crash section” via your search engine of choice. And for those of you old enough to had been “invested” back then? Just remember to have a tissue at the ready is all I’ll say.

    For those not familiar, or those painfully trying to forget, the condensed version is this…

    First there were cracks in the meme (think “it’s different this time”) then, one by one, once heralded IPO high flyers (think Twitter, LinkedIn™, etc.) began losing value from their peaks. At first it was slowly, then suddenly, and all at once, where they never regained their former lofty valuations. Till finally, the revenue models (think “eyeballs for ads”) along with their assumptions (think “billions upon billions of potential customers!”) were completely destroyed, taking even the largest of players down only a few years later of what was seen at that time as “unimaginable” with the demise of the then king of “new media” AOL™, yesterday’s equivalent of Facebook™ today.

    But not too worry, after all, it’s different this time, yes?

    Although I’m not as old as Methuselah (if you don’t ask the kids) I penned an article way back when in Sept. of 2014 titled “The Shot Heard Round The Valley World.”  right before the official ending of QE. And in it I made the following argument. To wit:

    “But, one shouldn’t read into this as “confirmation” the risk appetite story is not only alive but growing. For that is all about to change.

     

    Once the Fed shuts down the section of QE that has been pumping Billions upon Billions of dollars every month – it’s over for a great many of today’s Wall Street darlings.

     

    Think of it this way: Who is going to fund your next round when they no longer have access to the Fed.’s piggy bank? Let alone pump more money into older start-ups that just haven’t produced any real money (as in net profit,) but have produced nothing more than great new employee digs or benefits?

     

    Tack along side this the culture shock in what will seem near instantaneous with the shunning that will take place of any business resembling the, 3 employee, menial customer base, Zero if not negative profit margin businesses formed with the implicit intent as to be bought up or “acquired” for Billion dollar pay days.

     

    These will be the first to go. That formulation is going way of the now infamous Pets dot-com sock puppet. This will be the first true shock to Silicon Valley culture that hasn’t been seen in many years. And it will be far from the only one.”

    Along with this assertion:

    “And that won’t be the only monumental shift coming. Maybe, one at an even faster pace: The meaning of IPO.

     

    IPO is not going to have the same term of endearment it now has. I believe it will turn into the last and most dreaded three-letter acronym no one ever imagined in Silicon Valley.

     

    The IPO screams of joy will turn into wails of terror when those VC “angels” meet at many “treps” desk and state – they’re IPO-ing.

     

    No, not getting one set up for the big pay-day. No IPO will mean: “I’m pulling out.” i.e., “Have a nice day. Where’s the rest of my money?”

     

    The once renowned purchases of “Billion dollar babies” will prove out not to be worth two cents in this environment.

     

    Valuations will get crushed and people will be shocked at just how fast a company touted across the financial channels and other media as “fantastic buys” are flogged and fleeced when Wall Street comes back for their “investment.”

     

    If the story or the numbers aren’t there – neither will these once darlings of Wall Street. Regardless of size or stature.”

    You saw the ensuing cracks begin during the initial months of 2015 as the IPO market began drying up faster than a puddle in the Sahara as once Wall Street IPO darling stock prices went from “high flyer” to “dropped like a lead balloon” status – and never, repeat, never ascended within earshot of those once “totally worth it!” valuations.

    Twitter is just the latest, LinkedIn showed just how much “hype” there was to all these valuation metrics. For without a Microsoft™ buy-out? It appeared when it came to getting more LinkedIn shares? There were more people looking to Link-out.

    But not too worry! 2016 was said to be “The year for a rebirth of the IPO market.” That was said during the closing months of 2015. It’s now mid October 2016. How’s that all working out? (insert crickets here)

    However, many will state this is all a bunch of “hyperbole” or “uninformed assertions” or better yet, as is portrayed among the main stream financial media crowd as “the doom and gloom-ers looking only to be proved wrong again, i.e., “For just look at these markets!” I leave you with 2 words that were near unconscionable over the last few years.

    Two very small words that have monumental implications and should bring panic to anyone in tech, “Silicon Valley,” or still holding dreams of cashing out large on the basis of an IPO built on the “Eyeballs for ads” model. And it’s right there in Palo Alto, California for all to see. That is – if one dares look.

    Those two words?

    Price Reduced!

    And no, that’s not in reference to a Silicon Valley darling such as a start-up. No, those two words belong to that other seemingly invincible meme which was seen as far more stable than the IPO’s that afforded them.

    Real estate.

  • Russian Options Against A US Attack On Syria

    Via The Saker,

    This article was written for the Unz Review: http://www.unz.com/tsaker/russian-options-against-a-us-attack-on-syria/

    The tensions between Russia and the USA have reached an unprecedented level. I fully agree with the participants of this CrossTalk show – the situation is even worse and more dangerous than during the Cuban Missile Crisis. Both sides are now going to the so-called “Plan B” which, simply put, stand for, at best, no negotiations and, at worst, a war between Russia and the USA.

    The key thing to understand in the Russian stance in this, an other, recent conflicts with the USA is that Russia is still much weaker than the USA and that she therefore does not want war. That does not, however, mean that she is not actively preparing for war. In fact, she very much and actively does. All this means is that should a conflict occur, Russia you try, as best can be, to keep it as limited as possible.

    In theory, these are, very roughly, the possible levels of confrontation:

    1. A military standoff à la Berlin in 1961. One could argue that this is what is already taking place right now, albeit in a more long-distance and less visible way.
    2. A single military incident, such as what happened recently when Turkey shot down a Russian SU-24 and Russia chose not to retaliate.
    3. A series of localized clashes similar to what is currently happening between India and Pakistan.
    4. A conflict limited to the Syrian theater of war (say like the war between the UK and Argentina over the Malvinas Islands).
    5. A regional or global military confrontation between the USA and Russia.
    6. A full scale thermonuclear war between the USA and Russia

    During my years as a student of military strategy I have participated in many exercises on escalation and de-escalation and I can attest that while it is very easy to come up with escalatory scenarios, I have yet to see a credible scenario for de-escalation. What is possible, however, is the so-called “horizontal escalation” or “asymmetrical escalation” in which one side choses not to up the ante or directly escalate, but instead choses a different target for retaliation, not necessarily a more valuable one, just a different one on the same level of conceptual importance (in the USA Joshua M. Epstein and Spencer D. Bakich did most of the groundbreaking work on this topic).

    The main reason why we can expect the Kremlin to try to find asymmetrical options to respond to a US attack is that in the Syrian context Russia is hopelessly outgunned by the US/NATO, at least in quantitative terms. The logical solutions for the Russians is to use their qualitative advantage or to seek “horizontal targets” as possible retaliatory options. This week, something very interesting and highly uncharacteristic happened: Major General Igor Konashenkov, the Chief of the Directorate of Media service and Information of the Ministry of Defence of the Russian Federation, openly mentioned one such option. Here is what he said:

    “As for Kirby’s threats about possible Russian aircraft losses and the sending of Russian servicemen back to Russia in body bags, I would say that we know exactly where and how many “unofficial specialists” operate in Syria and in the Aleppo province and we know that they are involved in the operational planning and that they supervise the operations of the militants. Of course, one can continue to insist that they are unsuccessfully involved in trying to separate the al-Nusra terrorists from the “opposition” forces. But if somebody tries to implement these threats, it is by no means certain that these militants will have to time to get the hell out of there.”

    Nice, no? Konashenkov appears to be threatening the “militants” but he is sure to mention that there are plenty of “unofficial specialists” amongst these militants and that Russia knows exactly where they are and how many of them there are. Of course, officially, Obama has declared that there are a few hundred such US special advisors in Syria. A well-informed Russian source suggests that there are up to 5’000 foreign ‘advisors’ to the Takfiris including about 4’000 Americans. I suppose that the truth is somewhere between these two figures.

    So the Russian threat is simple: you attack us and we will attack US forces in Syria. Of course, Russia will vehemently deny targeting US servicemen and insist that the strike was only against terrorists, but both sides understand what is happening here. Interestingly, just last week the Iranian Fars news agency reported that such a Russian attack had already happened:

    30 Israeli, Foreign Intelligence Officers Killed in Russia’s Caliber Missile Attack in Aleppo:

     

    The Russian warships fired three Caliber missiles at the foreign officers’ coordination operations room in Dar Ezza region in the Western part of Aleppo near Sam’an mountain, killing 30 Israeli and western officers,” the Arabic-language service of Russia’s Sputnik news agency quoted battlefield source in Aleppo as saying on Wednesday. The operations room was located in the Western part of Aleppo province in the middle of sky-high Sam’an mountain and old caves. The region is deep into a chain of mountains. Several US, Turkish, Saudi, Qatari and British officers were also killed along with the Israeli officers. The foreign officers who were killed in the Aleppo operations room were directing the terrorists’ attacks in Aleppo and Idlib.

    Whether this really happened or whether the Russians are leaking such stories to indicate that this could happen, the fact remains that US forces in Syria could become an obvious target for Russian retaliation, whether by cruise missile, gravity bombs or direct action operation by Russian special forces. The US also has several covert military installations in Syria, including at least one airfield with V-22 Osprey multi-mission tiltrotor aircraft.

    Another interesting recent development has been the Fox News report that Russians are deploying S-300V (aka “SA-23 Gladiator anti-missile and anti-aircraft system”) in Syria. Check out this excellent article for a detailed discussion of the capabilities of this missile system. I will summarize it by saying that the S-300V can engage ballistic missiles, cruise missiles, very low RCS (“stealth”) aircraft and AWACS aircraft. This is an Army/Army Corps -level air defense system, well capable of defending most of the Syrian airspace, but also reach well into Turkey, Cyprus, the eastern Mediterranean and Lebanon. The powerful radars of this system could not only detect and engage US aircraft (including “stealth”) at a long distance, but they could also provide a tremendous help for the few Russian air superiority fighters by giving them a clear pictures of the skies and enemy aircraft by using encrypted datalinks. Finally, US air doctrine is extremely dependent on the use of AWACS aircraft to guide and support US fighters. The S-300V will forces US/NATO AWACS to operate at a most uncomfortable distance. Between the longer-range radars of the Russian Sukhois, the radars on the Russian cruisers off the Syrian coast, and the S-300 and S-300V radars on the ground, the Russians will have a much better situational awareness than their US counterparts.

    It appears that the Russians are trying hard to compensate for their numerical inferiority by deploying high-end systems for which the US has no real equivalent or good counter-measures.

    There are basically two options of deterrence: denial, when you prevent your enemy from hitting his targets and retaliation, when you make the costs of an enemy attack unacceptably high for him. The Russians appear to be pursuing both tracks at the same time. We can thus summarize the Russian approach as such

    1. Delay a confrontation as much as possible (buy time).
    2. Try to keep any confrontation at the lowest possible escalatory level.
    3. If possible, reply with asymmetrical/horizontal escalations.
    4. Rather then “prevail” against the US/NATO – make the costs of attack too high.
    5. Try to put pressure on US “allies” in order to create tensions inside the Empire.
    6. Try to paralyze the USA on a political level by making the political costs of an attack too high-end.
    7. Try to gradually create the conditions on the ground (Aleppo) to make a US attack futile

    To those raised on Hollywood movies and who still watch TV, this kind of strategy will elicit only frustration and condemnation. There are millions of armchair strategists who are sure that they could do a much better job than Putin to counter the US Empire. These folks have now been telling us for *years* that Putin “sold out” the Syrians (and the Novorussians) and that the Russians ought to do X, Y and Z to defeat the AngloZionist Empire. The good news is that none of these armchair strategists sit in the Kremlin and that the Russians have stuck to their strategy over the past years, one day at a time, even when criticized by those who want quick and “easy” solutions. But the main good news is that the Russian strategy is working. Not only is the Nazi-occupied Ukraine quite literally falling apart, but the US has basically run out of options in Syria (see this excellent analysis by my friend Alexander Mercouris in the Duran).

    The only remaining logical steps left for the USA in Syria is to accept Russia’s terms or leave. The problem is that I am not at all convinced that the Neocons, who run the White House, Congress and the US corporate media, are “rational” at all. This is why the Russians employed so many delaying tactics and why they have acted with such utmost caution: they are dealing with professional incompetent ideologues who simply do not play by the unwritten but clear rules of civilized international relations. This is what makes the current crisis so much worse than even the Cuban Missile Crisis: one superpower has clearly gone insane.

    Are the Americans crazy enough to risk WWIII over Aleppo?

    Maybe, maybe not. But what if we rephrase that question and ask

    Are the Americans crazy enough to risk WWIII to maintain their status as the “world’s indispensable nation”, the “leader of the free world”, the “city on the hill” and all the rest of this imperialistic nonsense?

    Here I would submit that yes, they potentially are.

    After all, the Neocons are correct when they sense that if Russia gets away with openly defying and defeating the USA in Syria, nobody will take the AngloZionists very seriously any more.

    How do you think the Neocons think when they see the President of the Philippines publicly calling Obama a “son of a whore” and then tells the EU to go and “f*ck itself”?

    Of course, the Neocons can still find some solace in the abject subservience of the European political elites, but still – they know that he writing is on the wall and that their Empire is rapidly crumbling, not only in Syria, the Ukraine or Asia, but even inside the USA. The biggest danger here is that the Neocons might try to rally the nation around the flag, either by staging yet another false flag or by triggering a real international crisis.

    At this point in time all we can do is wait and hope that there is enough resistance inside the US government to prevent a US attack on Syria before the next Administration comes in. And while I am no supporter of Trump, I would agree that Hillary and her evil cabal of russophobic Neocons is so bad that Trump does give me some hope, at least in comparison to Hillary.

    So if Trump wins, then Russia’s strategy will be basically justified. Once Trump is on the White House, there is at least the possibility of a comprehensive redefinition of US-Russian relations which would, of course, begin with a de-escalation in Syria: while Obama/Hillary categorically refuse to get rid of Daesh (by that I mean al-Nusra, al-Qaeda, and all their various denominations), Trump appears to be determined to seriously fight them, even if that means that Assad stays in power. There is most definitely a basis for dialog here. If Hillary comes in, then the Russians will have to make an absolutely crucial call: how important is Syria in the context of their goal to re-sovereignize Russia and to bring down the AngloZionist Empire? Another way of formulating the same question is “would Russia prefer a confrontation with the Empire in Syria or in the Ukraine?”.

    One way to gauge the mood in Russia is to look at the language of a recent law proposed by President Putin and adopted by the Duma which dealt with the issue of the Russia-US Plutonium Management and Disposition Agreement (PMDA) which, yet again, saw the US yet again fail to deliver on their obligations and which Russia has now suspended. What is interesting, is the language chosen by the Russians to list the conditions under which they would resume their participation in this agreement and, basically, agree to resume any kind of arms negotiations:

    1. A reduction of military infrastructure and the number of the US troops stationed on the territory of NATO member states that joined the alliance after September 1, 2000, to the levels at which they were when the original agreement first entered into force.
    2. The abandonment of the hostile policy of the US towards Russia, which should be carried out with the abolition of the Magnitsky Act of 2012 and the conditions of the Ukraine Freedom Support Act of 2014, which were directed against Russia.
    3. The abolition of all sanctions imposed by the US on certain subjects of the Russian Federation, Russian individuals and legal entities.
    4. The compensation for all the damages suffered by Russia as a result of the imposition of sanctions.
    5. The US is also required to submit a clear plan for irreversible plutonium disposition covered by the PMDA.

    Now the Russians are not delusional. They know full well that the USA will never accept such terms. So what is this really all about? It is a diplomatic but unambiguous way to tell the USA the exact same thing which Philippine President Duterte (and Victoria Nuland) told the EU.

    The Americans better start paying attention.

  • JPM Explains How HFTs Caused Friday's Sterling Flash Crash

    On Friday, in the aftermath of the historic pound sterling flash crash, we presented Citi’s forensic take of how in just 30 seconds, bid/ask spreads in cable exploded as wide 600 pips.

    Today, we provide another take, that of JPM’s Nikolaos Panigirtzoglou, who looks at the “gapping market” that emerged on Friday morning Asia time, and shares some color on the role of high frequency traders behind the sudden, dramatic plung in sterling.

    Below is his full note:

    Friday’s flash crash in sterling reinvigorates the debate about market liquidity and the role of High Frequency Traders (HFTs) as providers of liquidity. Similar to previous flash crashes such as the August 24th 2015 flash crash in US equities or the October 15th 2014 flash crash in USTs, market gapping, a step change in prices from one level to another without much trading in-between, raises questions about market structure and liquidity in FX markets. This is also because FX markets are perceived to be a lot more liquid than equity or bond markets, so the conventional view is that FX markets are unlikely to experience flash crashes or market gapping in the absence of high impact news.

    The flash crash in a major currency like sterling questions the above perception and perhaps shows there are liquidity vulnerabilities in FX markets that are more similar to those seen in equity or bond markets. A step change following a significant event such the Brexit referendum or the SNB’s abandonment of its peg is not problematic as it represents a natural market resetting. But a step change triggered by an order flow is more problematic and in our opinion reflective of how vulnerable market liquidity is in FX markets also.

    Liquidity vulnerabilities in equity or fixed income markets as a result of changing market structures are well documented. In equity markets the shift away from principal trading towards agency trading, where markets makers simply match buyers with sellers without holding inventory beyond a short period of time, took place well before the Lehman crisis. But the Lehman crisis caused a similar shift within fixed income markets. Regulatory and other forces have made it a lot more costly for traditional dealers to act as principal traders in fixed income markets, inducing them to change towards a more order-driven trading model of matching buyers and sellers with minimal inventory risk, or to retrench and be replaced by agent traders.

    At the same time electronic trading and advances in technology has encouraged the emergence of HFTs as liquidity providers in the most liquid segments of equity, FX and to some extent income markets. These HFTs use sophisticated quantitative models coupled with speed and high trading frequency, to exploit small price moves. They do so by arbitraging price differences across venues or by detecting and taking advantage of order shifts or imbalances or by simply exploiting very short term momentum or mean reversion signals.

    However, different to traditional market makers, HFTs tend to operate with a much shorter inventory cycle, meaning that they conduct offsetting trades within seconds or even shorter, in order to neutralize  their original position. As a result they tend to quote for smaller sizes and for a very short period of time. This in turn reduces market depth, i.e. the ability to trade in size in markets, especially in those markets where HFTs are important liquidity providers like equity markets. So we note that while the emergence of HFTs has been beneficial for bid ask spreads and small investors, it has likely had a negative impact on the ability of big institutional investors to trade in size. This is one of the reasons big institutional investors have resorted to dark pools for implementing large equity trades.

    More importantly, because HFTs’ models are typically adapted to exploit small price moves, HFTs have a higher incentive to withdraw from their market making role in periods when volatility rises abruptly as  they are reluctant to subject themselves to the risk of large price moves. In addition, there is a similar incentive to withdraw from market making when they detect a big order imbalance, i.e. when they detect markets becoming one-sided, as they are reluctant to subject themselves to the risk of not being able to close their position in a very short period of time.

    In addition, given HFTs employ similar models, this creates the risk of a simultaneous withdrawal by HFTs in periods of high volatility or stress or in periods when market become more one-sided. A simultaneous withdrawal by HFTs not only amplifies the initial market move, but also creates step changes or gapping markets as liquidity provision gets impaired and quotes are withdrawn.

    How big is the role of HFT in FX markets relative to other markets? A previous report by the BIS “Highfrequency trading in the foreign exchange market”, September 2011 concluded that around a quarter to one third of spot FX trading volumes are due to HFTs. But given that this study was conducted five years ago, we suspect that this share has risen since then.

    Indeed, the latest 2016 Euromoney FX rankings survey is consistent with a rising share by HFTs as liquidity providers. The biggest change in this year’s rankings has been the advent of non-bank liquidity providers led by XTX Markets who was ranked third for electronic spot FX trading with a market share of more than 10% and third for FX trading platforms. In contrast, the combined market share of the top five global banks dropped to just 44.7% for overall FX trading in this year’s survey. This market share had peaked in 2009 at 61.5% and was above 60% as recently as 2014.

    Moreover, many of the banks ranked outside the top 10 for overall FX trading are understood to be sourcing liquidity from non-bank liquidity providers. According to Euromoney, these non-bank liquidity providers or HFTs are set to gain more market share in the future, helped by advances in technology, more defined business models and a lower-cost infrastructure base than traditional FX banks. HFTs are already very important in FX spot markets as mentioned above, but they look to build capability in forwards and other products in the near future.

    In all, the FX market appears to be going through structural changes similar to those experienced by equity markets in the past. The advent of non-bank liquidity providers such as HFTs has reduced bid ask spread and increased market efficiency in FX markets, but at the cost of lower market depth and withdrawal of liquidity provision in periods of stress.

     

  • Hillary, Trump Refuse To Shake Hands At Start Of Debate

    If the pre-debate intro was dramatic, the actual debate was right out of Rocky IV, when in an unprecedented moment, Hillary and Trump both refused to shake hands, leading to a social media frenzy as “no handshake” promptly became what may have been the most tweeted phrase on twitter. 

    This is what it looked like.

  • Trump vs Clinton Part 2 – The Gloves Come Off: Live Feed

    Update: As we noted previously, Willey, Broaddrick, Jones and Shelton will be in the debate audience…

    As we detailed earelier, tonight's town-hall style presidential debate from St.Louis promises to be an eyeball-scorcher. With the bout scheduled for 90 minutes with questions from the web, the crowd, and moderators, parents are strongly advised to lock up small chidren (and pets) as the chances of the words 'pussy', 'liar', 'monica', and 'rape' emerging during the battle are high. Luckily CNN's Anderson Cooper and ABC's Martha Raddatz are moderating so everything should be 'fair'.

    The War Of The Noses escalates…

    One thing to watch will be whether Clinton, an audience member or one of the moderators addresses the Trump tape first.

    Some of the questions "you" want answered, include:

    The body language between the two will also be scrutinized — some liberal voices on social media have suggested that Clinton should decline to shake hands with Trump.

    As we noted earlier, previewing a hard-line attack on Clintons' sexual past, Trump on Sunday morning tweeted an interview given by Juanita Broaddrick, who claimed Mr. Clinton sexually assaulted her in the late 1970s…. Ms. Broaddrick tearfully recounts the episode in the videotaped interview and said "I'm afraid of him."

    As the WSJ adds, "Trump, facing fierce blowback for his lewd comments about women, is signaling that he will target Mr. Clinton's behavior as he tries to stabilize a campaign coping with its biggest crisis to date."

    In weekend apologies for his remarks, the Republican nominee invoked Mr. Clinton repeatedly, saying he had "abused women" and talked about them in ways that were more offensive than his own in a 2005 video in which he boasted of sexual aggression.

     

    He also claimed Mrs. Clinton attacked the women who accused her husband of sexual misconduct.

     

    "I've said some foolish things, but there's a big difference between the words and actions of other people," Mr. Trump said in a Saturday morning video. "Bill Clinton has actually abused women and Hillary has bullied, attacked, shamed and intimidated his victims. We will discuss this more in the coming days."

     

    That line of attack threatens to yank Mr. Clinton directly into the campaign scrum, a space the former two-term president has largely avoided since his wife launched her campaign a year and half ago.

    The WSJ notes that according to strategists in both parties, a tactic where Trump goes for Clinton's past infidelities may backfire… but then again, what's his downside?

    *  *  *

    Live Feed:

    *  *  *

    Bring your popcorn…

    *  *  *

    Finally, the drinking game… (via DebateDrinking.com)

     

    And the scorecard…

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Today’s News 9th October 2016

  • Deutsche Bank CEO Returns Home Empty-Handed After Failing To Reach 'Deal' With DOJ: Bild

    Following the seemingly endless procession of short-squeeze-fueling trial balloons last week – from settlement rumors to German blue-chip bailouts to Qatari investorsGermany's Bild newspaper confirms the rumors that sparked weakness on Friday: Deutsche bank CEO John Cryan has failed to reach an agreement with the US Justice Department.

    Having soared over 25% off the briefly single-digit price levels thanks to well-chosen rumor headlines of an "imminent settlement", news and facts on Friday started to eat away at that confidence…

     

    And now, as Bloomberg reports, Deutsche Bank's Chief Executive Officer John Cryan failed to reach an agreement with the U.S. Justice Department to resolve a years-long investigation into its mortgage-bond dealings during a meeting in Washington Friday, Germany’s Bild newspaper reported.

    The meeting was meant to negotiate the multi-billion-dollar settlement the bank will have to pay to resolve alleged misconduct arising from its dealings in residential-mortgage backed securities that led to the 2008 financial crisis, according to a Bild am Sonntag report.

     

    The German lender is still considering seeking damages against Anshu Jain and Josef Ackermann, who are both former CEOs of the bank, the newspaper reported. Bild said the bank froze part of the millions in bonus payments to Jain and other former top managers.

     

    A Deutsche Bank spokeswoman declined to comment to Bild about the outcome of Cryan’s Friday discussion or about clawing back former executives’ compensation. Mark Abueg, a Justice Department spokesman, declined to comment.

    Cryan, a Briton who speaks fluent German, has sought for the last three weeks to reassure investors that Deutsche Bank can weather the formidable obstacles to its financial health. His arsenal of strawmen include: denials of bailouts, blaming speculators, rumors of informal capital raising talks with Wall Street firms, rumors of capital injections from Germany's blue-chip corporations, rumors (denied) of Qatari sovereign wealth fund investments, and the sale of key assets and elimination of thousands of jobs.

     

    So what happens next?

    Three things:

    1) The "settlement-imminent"-driven 25% short-squeeze in stocks – completely decoupled from credit market's less optimistic perspective – is going to end badly

     

    2) Deutsche Bank will need to raise more capital and that just became more problematic after the bank quietly raised $3bn in a senior unsecured bond issue on Friday at a very wide concession…

    Some have wondered why the need to sell new paper at such a wide concession: after all as we reported before, DB has no current liquidity constraints courtesy of substantial ECB generosity, which backstop DB's existing liquidity reserves of just over €200 billion.

     

     

     

    … while issuing debt does nothing for the bank's net leverage, and in fact could lead to an erosion of certain credit metrics.

     

    If anything, the push to obtain cash may be seen by some as an indication that management is taking advantage of the recent stock price rebound window to offload securities to investors, which alone could lead to more pressure on the bank.

     

    After all, the question immediately emerges: "does DB know something investors don't?."

    3) A "bail-in" is more likely than a 'bailout', and as we detailed earlier, and here's how it can be done… Jonathan Rochford, PM of Australian hedge fund Narrow Road Capital, explains that despite all the recent confidence-building rhetoric and posturing, Deutsche Bank will need a bail-in. In the following analysis he explains how it would (and should) be done.

    Following the confirmation that hedge funds have started to reduce their capital and trading with Deutsche Bank its position is now perilous. It is correct to say that Deutsche Bank doesn’t have a liquidity crisis and that even if it did the Bundesbank could provide it with unlimited liquidity. But liquidity alone doesn’t guarantee a bank can continue to operate in the long term, solvency and profitability are essential as well. Deutsche Bank is at best borderline for both solvency and profitability with little prospect of either improving materially in the medium term. Deutsche Bank needs to substantially restructure its business activities and balance sheet, both of those will take time and capital neither of which Deutsche Bank has.

     

    Insufficient Capital

     

    Unlike other global banks Deutsche Bank has failed to adequately lift its capital levels since the collapse of Lehman Brothers eight years ago. It has been allowed to remain undercapitalised due to weak European regulators, which are fighting against global efforts to have all banks increase capital levels. Whilst German and Italian regulators are fighting for lower capital levels and avoiding dealing with their problem banks Switzerland and the US are implementing much higher capital levels, particularly for the largest banks.

     

    On Deutsche Bank’s preferred measure, risk weighted assets, it sits behind most of its peers. That’s after it has gone through a capital optimisation exercise which reduced risk weighted assets without reducing their balance sheet by the same proportion. On the more rigorous leverage ratio shown below, Deutsche Bank is dead last at less than half of its peer group average. When Europe’s most systemically important bank is the most poorly capitalised of its peer group that is a major problem that needs to be corrected as soon as possible.

    Source: FDIC

     

    Deutsche Bank’s current equity at book value is €61.9 billion but its market capitalisation is only €15.8 billion. Its total assets are 114.3 times its market capitalisation and its price to book ratio is 25.5%. The only peers with ratios this bad are Italian banks who have dubious solvency and very high levels of non-performing loans. To get from the 2.68% tier one capital ratio shown above to the 5% leverage ratio many consider the minimum acceptable level requires €40.1 billion of new equity.

     

    Not Profitable

     

    There are three primary ways for a bank to increase its capital. Firstly, profits can be retained rather than paid out as dividends. Deutsche Bank hasn’t been meaningfully profitable since 2011. The table below shows the net income after taxes for Deutsche Bank since 2009. The combined total of the last seven and half years is €7.8 billion, an average of €1.04 billion per year. That equates to a return on equity of 1.68% since 2009. Over the last four and a half years the cumulative loss is €3.8 billion with the average return on equity -1.38%.

    The CEO has stated that 2016 will be a peak year for restructuring, meaning investors should expect a loss for 2016. The fine being negotiated with the US Department of Justice will have a significant impact this year. Further fines for new scandals, the difficulties of operating in a negative interest rate environment and the potential for another European or global downturn mean there is a material risk of losses continuing in future years. Given sufficient time and capital Deutsche Bank would restructure substantially, ridding itself of unprofitable and low return activities. Unfortunately, it has squandered the opportunities it had over the last eight years and now doesn’t have either the time or capital needed to facilitate the necessary cuts.

     

    Assets Sales Not Sufficient

     

    The second way to raise capital is to sell assets and Deutsche Bank is making a great deal of noise about its asset sale plans. The sales of the UK and Chinese insurance businesses will together raise approximately €4.5 billion. A sale of the asset management business might raise €10 billion. Altogether that’s €14.5 billion which is helpful but not nearly enough. The flipside of asset sales is that future profits are reduced, exacerbating the profitability issues already outlined.

     

    Sufficiently Large Capital Raising Near Impossible

     

    The third way a bank can strengthen its balance sheet is by conducting a capital raising. The problem for Deutsche Bank is that the amount needed is simply too high based on the current metrics. Any investment banker will tell you raising 254% of market capitalisation is extremely optimistic. To achieve that for a business with a history of being marginally profitable is near on impossible.

     

    A Bailout or Bail-in is Needed

     

    Taking into account the lack of capital and the very unlikely prospects for an equity raising or asset sales to be sufficient, Deutsche Bank needs either a bailout or a bail-in. A bailout by the German government is legally possible given the gaps in the regulation that can be exploited. The key question is whether the German government would be willing to do so. In recent years Angela Merkel and her key ministers have consistently denounced the possibility of the Italian government providing a bailout to Italian banks. In recent months they have been adamant they won’t bailout Deutsche Bank.

    I’m cynical enough to know that politicians can change their minds extremely quickly when the pressure is on. I acknowledge there is a decent chance that the German government will do that soon. What the rest of this article aims to show is that there is a way to recapitalise Deutsche Bank without taxpayer funds. If there’s a decent solution that doesn’t involve taxpayer funds I think that solution can win out.

     

    Bail-in Mechanics

     

    The recently introduced European regulations lay out a framework for how a bail-in would work. Equity, additional tier 1 securities (Coco’s or hybrids) and subordinated debt can be written off completely if the bank is declared non-viable. Senior debt, particularly that provided by large institutions can also be converted to equity in order to lift reserves. By undertaking a combination of those two processes Deutsche Bank’s undercapitalisation could be quickly rectified.

     

    The table below lays out the liabilities and equity on Deutsche Bank’s balance sheet. Equity, additional tier 1 and subordinated debt securities are broken out. Senior debt has been broken into two categories, the portion which could be expected to be bailed-in and that where it is uncertain. For the purpose of this exercise a conservative approach has been taken, the amount that could be bailed-in is likely much larger.

    How Much More Capital is Needed?

    In determining how much additional capital is needed a target capital level must be chosen. If a bail-in is executed it needs to be a one-time exercise that removes all concerns about Deutsche Bank’s solvency. Lifting the core equity tier 1 ratio just to the average level of its peers is not enough, it must go much further.

     

    A core equity tier one leverage ratio of 9% would lift Deutsche Bank to the top of the list amongst its global peers. This would provide strong reassurance that another bail-in won’t be needed. It would also provide breathing room to undertake the overdue restructuring of unprofitable and marginal businesses. At a 9% level, another €111.5 billion of tangible equity is required. This would come from the write-off of additional tier 1, subordinated debt and €98.5 billion of senior debt being converted to equity. This implies that 63.1% of the senior debt able to be bailed-in needs to be converted to equity.

    For every €100 they are currently owed bailed-in senior debt holders would receive €36.90 in new senior debt as well as material value in new equity. To assist the transition, the regulators and Deutsche Bank should work together to see that those who receive new equity can be offered a transparent and orderly means to sell down those shares. Whilst Deutsche Bank could theoretically just restart trading after the new shares were issued, relisting without an opportunity for new shareholders to sell down to more natural equity owners could be substantially disorderly and may result in much greater losses in value and confidence in banks than would otherwise be the case.

     

    Potential Capital Sell-Down Process

     

    There’s two types of approach that could help facilitate the sale of shares by those who are seeking to exit; a rights issue model and an IPO model. The table below summarises some of the different features of each that could apply in the case of a Deutsche Bank bail-in.

     

    The rights issue model is the most efficient, but it doesn’t allow for Deutsche Bank management to prepare a solid pitch to potential new investors. Management would have only a few days to develop their strategy for making the bank profitable again and limited time to explain that to the many large global investors that may want to buy shares. The IPO model takes longer, but would allow management to put forward a clear plan on what businesses it will exit, what that will cost and the additional profitability that could be generated over time. The downside of the additional time is that it increases the potential for contagion to other banks as investors remain unsure of what recovery they will receive on their new shares for a longer period. Allowing over the counter trading to continue on senior debt would allay some of these concerns.

     

    As a guide to the possible recovery for bailed-in senior debt, other European banks were generally trading at 0.5 to 1.0 times book value in early September. This implies the new equity is worth €89.2 – €178.4 billion. When combined with the new senior debt of €57.5 billion this a total recovery of 94.0% – 151.1% on the old senior debt. If an IPO process was used this would open up the opportunity for the old subordinated debt, additional tier 1 and equity owners to receive some value. If a bookbuild ended up realising more than a 100% recovery for senior debt holders, which is reached if the price to book is 0.55 or above, the additional value could be allocated to the subordinated capital owners via the natural order of priority. This process would largely eliminate arguments that value wasn’t maximised, neutering the possibility of ongoing litigation as has been the case with Fannie Mae and Freddie Mac.

    Conclusion

    Deutsche Bank’s position is currently marginal as it is woefully undercapitalised and has no clear prospect of becoming meaningfully profitable. As the world’s largest derivative trader and Europe’s most systemically important bank this is untenable. Deutsche Bank is three times larger than Lehman Brothers, making the possibility of an unexpected and uncoordinated failure completely unacceptable. Deutsche Bank needs substantial time and capital to execute a turnaround, neither of which it now has. It does not have the profitability to grow its capital base quickly or to support a capital raising of the size it needs. Deutsche Bank needs either a bail-in or a bailout.

    An orderly bail-in process would deliver Deutsche Bank the additional time and capital it needs. In the first instance, the bank should be declared non-viable with all equity, additional tier 1 and subordinated debt written off. By converting 63.1% of long term senior debt to new equity the leverage ratio would increase to an unquestionably strong 9%. Based on recent peer comparisons, bailed-in senior debt holders would receive a recovery of at least 94% of their current position. Using an IPO model, where management develops and presents a new strategy to potential investors over a 2-3 month period, would allow the recipients of newly issued equity an orderly process to sell-down their equity. It also creates the possibility of a substantial recovery for subordinated debt, additional tier 1 and equity investors.

    *  *  *

    If the Lehman playbook continues to play out as it has done – denials of any problems… blame speculators… unleash short-squeeze on heels of rumors of foreign sovereign wealth fund investments… and finally acceptance – this will not end well…

     

    Perhaps it's time once again to listen to DoubleLine's Jeff Gundlach, whose advice was simple: don't touch it. "I would just stay away. It's un-analyzable," Gundlach said about Deutsche Bank shares and debt. "It's too binary."

  • Ray Dalio Warns A 1% Rise In Yields Would Lead To Trillions In Losses

    Last week, we shared with readers a fascinating presentation that Bridgewater’s Ray Dalio made to NY Fed staffers at the 40th Annual Central Banking Seminar held on Wednesday, October 5, 2016. In it, Dalio pointed out that thoughts which dared to question the economic orthodoxy, and which were once relegated to the fringe blogs, have become the norm, pointing out that it is no longer controversial to say that:

    • …this isn’t a normal business cycle and we are likely in an environment of abnormally slow growth
    • …the current tools of monetary policy will be a lot less effective going forward
    • …the risks are asymmetric to the downside
    • …investment returns will be very low going forward, and
    • …the impatience with economic stagnation, especially among middle and lower income earners, is leading to dangerous populism and nationalism.

    He further notes that the debt bubble which was not eliminated during the financial crisis of 2008, has since grown to staggering proportions, and notes that “the biggest issue is that there is only so much one can squeeze out of a debt cycle and most countries are approaching those limits.”

    Alas, while the underlying symptoms are clear, that does not make the solution of the problem any easier. Quite the contrary. As Dalio further adds, “when we do our projections we see an intensifying financing squeeze emerging from a combination of slow income growth, low investment returns and an acceleration in liabilities coming due both because of the relatively high levels of debt and because of large pension and health care liabilities. The pension and health care liabilities that are coming due are much larger than the debt liabilities in most countries because of demographics – i.e., due to the baby-boom generation moving from working and paying taxes to getting their retirement and health care benefits.”

    Here the Bridgewater head provides a simple explanation for why the system is unsustainable: debt is fundamentally a liability even though it is treated as an asset by those who “own” it. As a result, “holders of debt believe that they are holding an asset that they can sell for money to use to buy things, so they believe that they will have that spending power without having to work. Similarly, retirees expect that they will get the retirement and health care benefits that they were promised without working. So, all of these people expect to get a huge amount of spending power without producing anything. At the same time, workers expect to get spending power that is equal in value to what they are giving. They all can’t be satisfied.”

    How does the Fed react to this inconsistency?  By a familiar tool: financial repression.

    As a result of this confluence of conditions, we are now seeing most central bankers pushing interest rates down to make them extremely unattractive for savers and we are seeing them monetizing debt and buying riskier assets to make debt and other liabilities less burdensome and to stimulate their economies. Rarely do we investors get a market that we know is over-valued and that approaches such clearly defined limits as the bond market now. That is because there is a limit as to how negative bond yields can go. Their expected returns relative to their risks are especially bad.

    What does that mean in practical terms? Well, in short: lots of pain for holders of duration: “If interest rates rise just a little bit more than is discounted in the curve it will have a big negative effect on bonds and all asset prices, as they are all very sensitive to the discoun  rate used to calculate the present value of their future cash flows. That is because with interest rates having declined, the effective durations of all assets have lengthened, so they are more price-sensitive.”

    And the punchline”

    … it would only take a 100 basis point rise in Treasury bond yields to trigger the worst price decline in bonds since the 1981 bond market crash. And since those interest rates are embedded in the pricing of all investment assets, that would send them all much lower.

    Consider that Ray Dalio’s most stark crash warning to date.

    Of course, it is not new to regular readers becuase this is precisely what we warned about back in June, when we showed the massive duration exposure on the market, and explaining Why The Fed Is Trapped: A 1% Increase In Rates Would Result In Up To $2.4 Trillion Of Losses

    As we showed using Goldman calculations, in 1994, the average yield on the bond index was 5.6%, vs. 2.2% currently. Lower bond coupons means that proportionately more of the bond cashflows now comes from principal, which tends to be distributed towards the end of the bond lifetime.

    Here is the math of how much in just bond losses a 1% increase in rates would lead to:

    The total face value of all US bonds, including Treasuries, Federal agency debt, mortgages, corporates, municipals and ABS, is $40 trillion (Securities Industry and Financial Markets Association). The Barclays US aggregate is a smaller number, $17 trillion, as the index excludes some categories of debt, such as money markets, with low duration. Using either measure, total debt outstanding has grown by over 60% in real Dollars since 2000.

    For conservative purposes, we use the lower debt estimate, and get that when combining a duration estimate of 5.6 years with a total notional exposure of $17trn, and current Dollar price of bonds of $105.6, indicates that, to first order, a 100bp shock to interest rates – the same one that Dalio envisions – would translate into a $1trn market value loss. That is using the more conservative estimate of the bond market. Using the broader, and more accurate, bond market sizing of $40trn, the market value loss estimate would be $2.4 trillionWhile the largest number would be stunning, even the smaller $1 trillion loss estimate is massive:

    it would amount to over 50% larger than the market value lost in the 1994 bond market selloff in inflation-adjusted terms, and larger than the cumulative credit losses experienced to date in the non-agency residential mortgage backed securities market. 

    This is what Goldman concludes in early June when delivering its own stark forecast of massive losses should rates spike:

    “even if there is not a large net social loss from a rise in rates, the $1 trillion gross loss estimate suggests that some investor entities would likely experience significant distress. In the 1994 bond market decline, for example, losses on a mortgage derivative portfolio were a major factor contributing to the Orange County, California bankruptcy event. All in, the increase in total gross debt exposure, combined with lengthening bond durations and an arguably expensive bond market, suggest that rising yields should be on the short list of scenarios to be monitored by risk managers.”

    Now we know that it certainly is on the very short list of scenarios monitored by the world’s biggest hedge fund.

    So what, if any, recommendations does Dalio have now that virtually all the “smartest men in the room” admit the Fed is not only trapped, but that a spike in yields would lead to the worst crash in 35 years:

    Right now, a number of the riskier assets look attractive in relationship to bonds and cash, but not cheap in relationship to their risks. If this continues, holding non-financial storeholds of wealth like gold could become more attractive than holding long duration fiat currency flows with negative yields (which is what bonds are), especially if currency volatility picks up.

    Needless to say, we are eagerly waiting for precisely that inflection point.

  • Bernie Sanders Supporters Furious Over Hillary's Leaked Wall Street Speeches

    With the media exclusively attuned to every new, or 11-year-old as the case may be, twist in the Trump “sex tape” saga, it appeared that everyone forgot that a little over 24 hours ago, Wikileaks exposed the real reason why Hillary was keeping her Wall Street speech transcripts – which we now know had always been within easy reach for her campaign – secret. In her own words: “if everybody’s watching, you know, all of the back room discussions and the deals, you know, then people get a little nervous, to say the least. So, you need both a public and a private position.” In other words, you have to lie to the general public while promising those who just paid you $250,000 for an hour of your speaking time something entirely different, which is precisely what those accusing Hillary of hiding her WS transcripts had done; and as yesterday’s hacked documents revealed, they were right.

    The Clinton campaign refused to disavow the hacked excerpts, although it quickly tired to pin the blame again on Russia: “We are not going to confirm the authenticity of stolen documents released by Julian Assange, who has made no secret of his desire to damage Hillary Clinton,” spokesman Glen Caplin said in a prepared statement. Previous releases have “Guccifer 2.0 has already proven the warnings of top national security officials that documents can be faked as part of a sophisticated Russian misinformation campaign.”

    Ironically, it was literally minutes before the Wikileaks release of the “Podesta Files” that the US formally accused Russia of waging a hacking cyber attack on the US political establishment, almost as if it knew Wikileaks was about to make the major disclosure, and sought to minimize its impact by scapegoating Vladimir Putin.

    And while the Trump campaign tried to slam the leak, with spokesman saying “now we finally get confirmation of Clinton’s catastrophic plans for completely open borders and diminishing America’s influence in the world. There is a reason Clinton gave these high-paid speeches in secret behind closed doors – her real intentions will destroy American sovereignty as we know it, further illustrating why Hillary Clinton is simply unfit to be president”, Trump’s campaign had its own raging inferno to deal with.

    So, courtesy of what Trump said about some woman 11 years ago, in all the din over the oddly coincident Trump Tape leak, most of the noise created by the Hillary speeches was lost.

    But not all.

    According to Reuters, supporters of former Democratic presidential candidate Bernie Sanders on Saturday “seethed“, and “expressed anger and vindication over leaked comments made by Hillary Clinton to banks and big business that appeared to confirm their fears about her support for global trade and tendency to cozy up to Wall Street.

    Clinton, who last it emerged had slammed Bernie supporters as “basement dwellers” in a February fundraiser, with virtually no media coverage, needs Sanders’ coalition of young and left-leaning voters to propel her to the presidency, pushes for open trade and open borders in one of the speeches, and takes a conciliatory approach to Wall Street, both positions she later backed away from in an effort to capture the popular appeal of Sanders’ attacks on trade deals and powerful banks.

    Needless to say, there was no actualy “backing away”, and instead Hillary did what he truly excels in better than most: she told the public what they wanted to hear, and will promptly reneg on once she becomes president.

    Only now, this is increasingly obvious to America’s jilted youth: “this is a very clear illustration of why there is a fundamental lack of trust from progressives for Hillary Clinton,” said Tobita Chow, chair of the People’s Lobby in Chicago, which endorsed Sanders in the primary election.

    The progressive movement needs to make a call to Secretary Clinton to clarify where she stands really on these issues and that’s got to involve very clear renunciations of the positions that are revealed in these transcripts,” Chow said.

    Good luck that, or even getting a response, even though Hillary was largely spared from providing one: as Reuters correctly observes, the revelations were immediately overshadowed by the release of an 11-year-old recording of Donald Trump, the Republican presidential nominee, making lewd comments about women. In fact, the revelations were almost entirely ignored by the same prime time TV that has been glued to the Trump slow-motion trainwreck over the past 24 hours.

    Still, the hacked speeches could lead to further erosion in support from the so very critical to her successful candidacy, young American voter.

    Clinton has worked hard to build trust with so-called progressives, adopting several of Sanders’ positions after she bested him in the primary race. The U.S. senator from Vermont now supports his former rival in the Nov. 8 general election against Trump. Still, Clinton has struggled to win support from young “millennials” who were crucial to Sanders’ success, and some Democrats expressed concern that the leaks would discourage those supporters from showing up to vote.

    “That is a big concern and this certainly doesn’t help,” said Larry Cohen, chair of the board of Our Revolution, a progressive organization formed in the wake of Sanders’ bid for the presidency, which aims to keep pushing the former candidate’s ideas at a grassroots level. “It matters in terms of turnout, energy, volunteering, all those things.”

    Still, despite the Trump media onslaught, the message appeared to filter through to those who would be most impacted by Hillary selling out her voters if she were to win the presidency.

    “Bernie was right about Hillary,” wrote Facebook user Grace Tilly cited by Rueters, “she’s a tool for Wall Street.”

    “Clinton is the politicians’ politician – exactly the Wall Street insider Bernie described,” wrote Facebook user Brian Leach.

    Democratic strategist Steve Elmendorf said progressive voters would still choose the former first lady, even with misgivings. “I’d like to meet the Bernie Sanders supporter who is going to say, ‘Well I’m a little worried about her on international trade, so I’m going to vote for Donald Trump’,” he said.

    He just may meet a few, especially if Bernie’s supporters ask themselves why Bernie’s support for Hillary remained so unwavering despite a leak confirming that Hillary was indeed all he had previously railed against.

    In a statement earlier, Sanders responded to the leak by saying that despite Hillary’s paid speeches to Wall Street in which she expressed an agenda diametrically opposite to that espoused by the Vermont socialist, he reiterated his his support for the Democratic Party platform.

    “Whatever Secretary Clinton may or may not have said behind closed doors on Wall Street, I am determined to implement the agenda of the Democratic Party platform which was agreed upon by her campaign,” he said in a statement.

    “Among other things, that agenda calls for breaking up the largest financial institutions in this country, re-establishing Glass-Steagall and prosecuting those many Wall Street CEOs who engaged in illegal behavior.

    In retrospect we find it fascinating that in the aftermath of October’s two big surprises served up on Friday, Sanders actually believes any of that having read through Hillary’s Wall Street speeches, certainly far more fascinating than the staged disgust with Trump who, the media is suddenly stunned to find, was no more politically correct 11 year ago than he is today.

  • Hitler's New World Order alive in the markets – FX History Lesson 28

    As explained in our groundbreaking best-seller Splitting Pennies – the world isn’t as it seems; in fact, the world is a lot simpler and less complex than perceived.  We’re victim of “Perception Deception” – as explained eloquently in David Icke’s book.  If we can for a moment, de-politicize, de-emotionalize, and ‘de’ all the programming, advertising, and other ‘noise’ designed to distract us from reality; a different picture begins to emerge on the planet.  We’re talking about Forex, so let’s look at what happened this week in FX:

    During two chaotic minutes of Asian trading, the pound plunged the most since the Brexit referendum in June, with traders saying computer-initiated sell orders exacerbated the slump.

    The 6.1 percent drop drove sterling to a 31-year low of $1.1841, according to composite prices compiled by Bloomberg of contributions from dealers. Traders speculated the crash might have been sparked by human error, or a so-called “fat finger,” with algorithms adding to selling pressure at a time of day when liquidity is relatively low.

    While the currency snapped back in Asia, it resumed its freefall during European hours, as concern welled up that Britain is headed for a so-called hard Brexit that would restrict its access to the European Union’s single market in return for gaining control of immigration.

     

    So Bloomberg gets one of their London based FX customers on the line, Kit Jukes from SocGen, and asks him candidly about what happened.  He says that, Forex markets (and many other markets – too) are going to be volatile until a “New World Order” is implemented.  Or to quote him verbatim “Price discovery will be an issue as we move to a New World Order.”  The “NWO” he is referring to, is some sort of market panacea, where price discovery is so efficient, well – that’s not a market!  Let’s remember how all this Forex started, going back to a small hotel in New England, Bretton Woods:

    It was at this place where world leaders agreed to use the US Dollar as the world’s reserve currency, known as the “Bretton Woods” agreement, named after the ski resort where the meeting was held (probably, reminded them of Switzerland):

    Preparing to rebuild the international economic system while World War II was still raging, 730 delegates from all 44 Allied nations gathered at the Mount Washington Hotel in Bretton Woods, New Hampshire, United States, for the United Nations Monetary and Financial Conference, also known as the Bretton Woods Conference. The delegates deliberated during 1–22 July 1944, and signed the Bretton Woods agreement on its final day. Setting up a system of rules, institutions, and procedures to regulate the international monetary system, these accords established the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD), which today is part of the World Bank Group. The United States, which controlled two thirds of the world’s gold, insisted that the Bretton Woods system rest on both gold and the US dollar. Soviet representatives attended the conference but later declined to ratify the final agreements, charging that the institutions they had created were “branches of Wall Street.”[1] These organizations became operational in 1945 after a sufficient number of countries had ratified the agreement.  On 15 August 1971, the United States unilaterally terminated convertibility of the US dollar to gold, effectively bringing the Bretton Woods system to an end and rendering the dollar a fiat currency.[2] This action, referred to as the Nixon shock, created the situation in which the US dollar became a reserve currency used by many states. At the same time, many fixed currencies (such as the pound sterling, for example) also became free-floating.

    Fast forward, it’s 10-8-2016, and leading FX strategists are telling us that markets are waiting for a “New World Order” – wasn’t that what was agreed at Bretton Woods?  Was Nixon in on this plot, was he tricked, was it a coincidence that Kissinger was with Nixon at Camp David (and who knows, who else) the weekend before they created their ‘plan’ to default on Bretton Woods?  No one knows, but we can certainly analyze current data.

    For a little perspective, we must understand the history of the world from an American perspective, after World War 2.  WW2 was the defining event that shaped the 20th and 21st century.  The best perspective for any American businessman, investor, or trader – is to READ THIS BOOK: IBM and the Holocaust.  This book is a MUST READ for any Forex trader, stock investor, or anyone who wants to understand how the world ‘really’ works: IBM and the Holocaust.

    This is New York Times Bestseller with well over 1 Million copies sold.  It’s a well documented, research gold mine.  After reading this book, you can say that you understand more about world politics than Political Science professors.  This is the reality of the way the world really works, which is NOT taught in school.  Through the book, you’ll see how the founder of IBM (Watson) not only enabled the Nazi regime to expand economically and manage the holocaust, he was Hitler’s personal friend (if you can say, Hitler had a friend), receiving the 2nd most prestigious medal of honor offered by the Nazi’s in that time.

    So what does this have to do with Forex?  Two things.  First, this laid the foundation for Bretton Woods and the Euro.  The Euro is practically a derivative of the US Dollar.  That’s why countries such as the United Kingdom, Switzerland, Norway, and others – stayed out of the Euro.  The Euro is the financial end result of the Marshall Plan which was designed to ensure the US Dollar was THE world reserve currency.  Second, by seizing Germany as a vassal state, the US-UK “Axis” cemented its control over Europe, the highest economic prize across the pond.  That’s because in Europe itself, Germany has always been the ‘strongest’ state, being the biggest producer and economic leader of Northern countries, whereas Southern Europe has been plagued by debt, complicated politics, and other issues (like African refugees floating to ‘the promised land’ or the Mafia hiding Nuclear waste in Italy & Ukraine, Terrorism (Real terrorism, not this ‘fabricated’ terrorism, etc.)

    To add to the spoils of war, Project Paperclip brought top Nazi scientists (most notably, Von Braun) without which NASA programs in the past 60 years would not have been possible.  Interestingly, this was also a period where the CIA was created, leading to the current global survelleince society we have today.  Planned and organized in London, executed and accounted for in New York & Washington, all for the benefit of various international multi-ethnic owners (some American, some Dutch, Swiss, French, Italian, German, Russian, British, Israeli, etc.)

    Fast forward to 2016 – during World War 2, IBM, the most sophistocated, largest, powerful computer company in the world was feeding the Nazi war machine.  What are computer companies (think Google, Facebook, Microsoft) doing today in Europe?  In London?  Google, Facebook, Microsoft, all have strong relationships with the DOD (Department of Defense).

    It was Hitler that first wrote famously the words “New World Order” – and now this same ‘goal’ is the solution to market microstructure illiquidity, volatility, wide spreads, and huge price swings?  It seems that over the past 100 years really, not much has really changed, it is the same group of banks pulling our nose (historically speaking), whether they’re funding Hitler or Clinton, whoever wins, nothing seems to change.  In war there are no winners, only victims.  There’s a popular banking advertisement ‘banks compete – you win’ – it should be ‘When countries compete, banks win’ – and this is most obvious in the Forex market, where such a move in the GBP/USD can be a quick 10 or 20 yard-bagger for a major bank who is on the front of the order.  And all this commotion- banking profits all the way to the New World Order!

    And – according to this book The Mind of Hitler – written by a Psychoanalyst, Hitler was not only supported and financed by the Rothschilds – he WAS a Rothschild!  They tried this NWO once before, maybe this is attempt 2, their ‘trump’ card.  Pun intended.

    To learn more about Forex history, and how it impacts us today, checkout Splitting Pennies – Understanding Forex – or checkout Fortress Capital Trading Academy, who offers a great Introductory course.  Forex = The reality of how the world works.

  • Republican National Committee Begins To Redirect Funds From Trump

    “Our party is in its deepest crisis since Watergate in 1974,”

          – Ron Nehring, former chairman of the California Republican Party

    In the aftermath of the “Trump Tape”, there has been a surge in GOP officials who have either rescinded their support for Trump or have openly called for him to step down. As the WSJ put it, “the speed and breadth of the abandonment of Mr. Trump’s candidacy shocked some long-time party members and exposed a shattered party without a clear path forward.”  The latest full list of republicans bailing on Trump is shown in the table below courtesy of Taniel, and can be tracked on The Hill’s website.

     

    Those declarations are mostly symbolic, with the RNC having little effective power to impact Trump’s process. As Ron Nehring notes, former chairman of the California Republican Party, “it doesn’t matter whether Donald Trump were to bow out. It’s too late to change the candidate on the ballot.”

    However, in a surprising move showing the dwindling support for Trump within the GOP, this evening the WSJ reported that the Republican National Committee (RNC) Chairman Reince Priebus on Saturday told party officials to redirect funds away from nominee Donald Trump to down-ballot candidates. In practical terms, the party will be working to mobilize voters who support GOP House and Senate candidates regardless of their position on the presidential race.

    As the WSJ explains, that means the RNC will push Floridians who support both Democratic nominee Hillary Clinton and Republican Sen. Marco Rubio to vote. Before today, the RNC wouldn’t have sought to turn out Clinton voters, leaving split-ticket voters for Senate campaigns to target.

    The GOP nominee has not made the large-scale ground-game investments that are typical of a major-party nominee. So the RNC has picked up the lion’s share of that slack. Before this move, the RNC’s field staff prioritized Trump, meaning that they would focus first on turning out voters for Trump, even if that meant those voters may not support GOP candidates down the ballot.

    Earlier on Saturday, Politico reported that the RNC directed a mailing vendor to hold off on all projects related to the RNC-Trump joint “Victory” fund.

    While the RNC did not immediately comment on the WSJ story, Sean Spicer, the RNC’s chief strategist, said on Twitter to briefly cast the story as “not true.”

    Which most likely means it is, and is just the latest indication of the chaos spreading through the RNC at this moment.

    Meanwhile, if the RNC is trying to send Trump a not so subtle message to get out of the race, so far it has failed: the real-estate mogul has emphatically declared he would not drop out in a message on Twitter on Saturday.

    As The Hill notes, legal experts are skeptical that the party could remove Trump without his consent. But if Trump were to step down, the RNC would vote on a new nominee after a meeting with its 168-member committee.

    The latest fallout may explain why the RNC chairman is no longer set to appear on tomorrow’s Face the Nation, with the slot going to Rudy Trump as the “campaign wanted a campaign person” according to Politico’s Jake Sherman.

  • US Soldiers Resist Obama's Support Of Al Qaeda

    Submitted by Eric Zuesse via Stratgic-Culture.org,

    As is by now well-known, the U.S. Defense Intelligence Agency’s previously classified 2012 report on the origin of the Islamic insurgency against Bashar al-Assad was released to the public on 18 May 2015, and it revealed the Obama Administration’s knowledge, at least since that time, that «the Salafist [Saudi-backed fundamentalist Sunni Islamic], the Muslim Brotherhood [Qatari-backed fundamentalist Sunni Islamic] and AQI [Al Qaeda in Iraq] are the major forces driving the insurgency in Syria», and acknowledgement that «the West, Gulf countries [Saudi Arabia and Qatar mainly], and Turkey support the opposition [to Bashar al-Assad], while Russia, China, and Iran support the regime», so that the U.S. Government is, in fact, allied with Al Qaeda there, to overthrow Assad.

    This pro-Al-Qaeda position was news, however, to America’s military personnel in that region.

    On 29 September 2016, the Russian news site rusvesna.su headlined «Scandal in the US Army: Obama, we will not fight for your fighters in Syria! – Soldiers protest (PHOTOS, VIDEO)», and they showed alleged U.S. military personnel holding up signs covering their faces, upon which signs were handwritten messages such as:

    «I joined the military to protect my family from terrorists»

     

    «Obama, I will not deploy to fight for your Al-Qaeda rebels in Syria. WAKE UP PEOPLE»

     

    «I DIDN’T JOIN THE NAVY TO FIGHT FOR AL QAEDA IN A SYRIAN CIVIL WAR!»

     

     

    «I will NOT fight for Al Qaeda in Syria»

    Whether these men (they all appear to be that) authentically are in-service U.S. military personnel cannot be established conclusively at this time, and no U.S. military would want to be publicly identified as opposing the U.S. government’s instructions, in any case. No active-duty U.S. personnel are likely to identify themselves publicly as refusing to participate in what their Commander-in-Chief is requiring of them.

    However, at the very top of the U.S. military command, in the Joint Chiefs of Staff, there have, in fact, been resignations and firings by President Barack Obama, in order to keep the Syrian war going in this way: as a joint U.S.-and-jihadist effort. Though the great investigative journalist Seymour Hersh could not obtain U.S. publication for his major reports about the Syrian war, the London Review of Books has been publishing these reports; and one of them, «Military to Military», on 7 January 2016, stated that:

    Barack Obama’s repeated insistence that Bashar al-Assad must leave office – and that there are ‘moderate’ rebel groups in Syria capable of defeating him – has in recent years provoked quiet dissent, and even overt opposition, among some of the most senior officers on the Pentagon’s Joint Staff. Their criticism has focused on what they see as the administration’s fixation on Assad’s primary ally, Vladimir Putin. In their view, Obama is captive to Cold War thinking about Russia and China, and hasn’t adjusted his stance on Syria to the fact both countries share Washington’s anxiety about the spread of terrorism in and beyond Syria; like Washington, they believe that Islamic State must be stopped… Lieutenant General Michael Flynn, director of the DIA between 2012 and 2014, confirmed that his agency had sent a constant stream of classified warnings to the civilian leadership about the dire consequences of toppling Assad. The jihadists, he said, were in control of the opposition.

     

    …By the late summer of 2013, the DIA’s assessment had been circulated widely, but although many in the American intelligence community were aware that the Syrian opposition was dominated by extremists the CIA-sponsored weapons kept coming… General Dempsey and his colleagues on the Joint Chiefs of Staff kept their dissent out of bureaucratic channels, and survived in office. General Michael Flynn did not. ‘Flynn incurred the wrath of the White House by insisting on telling the truth about Syria,’ said Patrick Lang, a retired army colonel who served for nearly a decade as the chief Middle East civilian intelligence officer for the DIA. ‘He thought truth was the best thing and they shoved him out. He wouldn’t shut up.’ Flynn told me his problems went beyond Syria. ‘I was shaking things up at the DIA – and not just moving deckchairs on the Titanic. It was radical reform. I felt that the civilian leadership did not want to hear the truth. I suffered for it, but I’m OK with that.’

    Dempsey resigned voluntarily: he took retirement, on 25 September 2015, when Obama replaced him with Joe Dunford, whose views at the time were unknown, except that a CFR neoconservative and champion of the «Maximalist» position of the U.S. in international relations, Stephen Sestanovich, praised the new head of the Joint Chiefs of Staff as «‘Fighting Joe’ Dunford»; and, to paraphrase a cliché: it takes a neoconservative to recognize a neoconservative. But neither Sestanovich nor Dunford would say anything about their views on Syria. 

    But then, during a press conference on 29 March 2016, Dunford said:

    The Russian military presents the greatest array of threats to U.S. interests… Our primary partners on the ground, the Syrian Democratic Forces, have been successful in recovering a large swath of ground in northeast Syria. And I’ll call them the SDF… The adversary knows exactly what the threshold is for us to take decisive military action. So they operate below that level. They continue to advance their interests and we lose competitive advantage. And, frankly, our interests are adversely affected.  And for me it’s actually one of the most significant challenges that we’re dealing with right now.

    This view of Russia as being America’s main enemy, is entirely consistent with Barack Obama’s «National Security Strategy 2015», which identified Russia as by far the world’s most «aggressive» nation. In other words: Russia is a continuation of the Soviet Union, in both Obama’s and Dunford’s view. The United States overthrew many heads-of-state who were friendly toward Russia — Saddam Hussein in 2003, Muammar Gaddafi in 2011, Viktor Yanukovych in 2014, and have been targeting Bashar al-Assad ever since at least 2011 — but calls Russia, by far, the world’s most aggressive nation.

    Martin Dempsey didn’t want to serve in such a military (i.e., in a military led by a President such as that), nor did Michael Flynn, but it’s what Barack Obama demands. (He demands the overthrow of Assad.) And, therefore, Dunford can talk now about having (via America’s allied «primary partners on the ground») «been successful in recovering a large swath of ground in northeast Syria», as if the U.S. (and its allies, Saudi Arabia, Qatar, UAE, and Kuwait, which pay those «primary forces on the ground» — and Turkey, which provides the jihadists passage into Syria) have any right to that land. Obama is out for conquest, not peace, but whether he will carry this all the way to World War III, isn’t yet known.

    Furthermore, as the independent journalist Rick Sterling at Consortium News put the matter, on September 23rd, some proponents of overthrowing Assad:

    actively call for U.S./NATO military intervention through a «No Fly Zone,» which would begin with attacks upon and destruction of government anti-aircraft positions and aircraft.

     

    Taking over the skies above another country is an act of war that would require a major U.S. military operation, according to senior American generals.

     

    The New York Times reported that in 2012 General Martin E. Dempsey, chairman of the Joint Chiefs of Staff, told the White House that imposing a no-fly zone in Syria would require up to 70,000 American servicemen to destroy Syria’s antiaircraft system and then impose round-the-clock control over Syrian airspace.

     

    General Carter Ham, former commander of the U.S. Africa Command who oversaw the aerial attacks on Libya in 2011, said on CBS News that «I worry sometimes that, when people say ‘impose a no-fly zone,’ there is this almost antiseptic view that this is an easily accomplished military task. It’s extraordinarily difficult…

     

    «It first entails — we should make no bones about it. It first entails killing a lot of people and destroying the Syrian air defenses and those people who are manning those systems. And then it entails destroying the Syrian air force, preferably on the ground, in the air if necessary. This is a violent combat action that results in lots of casualties and increased risk to our own personnel».

     

    In other words, an appeal for a «no-fly zone» is not a call for a non-violent solution. It is seeking a bloody act of war by the United States against Syria, a nation that poses no threat to America.

    Obama’s intended successor, Hillary Clinton, champions the imposition of a «no-fly zone» to shoot down the planes of Russia and Syria, in Syria — to shoot down the planes that have been successfully killing the jihadists who have been trying to overthrow and replace Assad. The U.S. is with the jihadists, who have been imported into Syria by, and paid by, the royal families of Saudi Arabia, Qatar, and UAE.

    Thus, for example, Hillary said, on 19 December 2015, «I am advocating the no-fly zone both because I think it would help us on the ground to protect Syrians; I'm also advocating it because I think it gives us some leverage in our conversations with Russia». She wants to order Russian planes out of Syria, and to order Syria’s only legitimate government to be replaced with an anti-Russian government. And she wants to do this not only «to protect Syrians» (who overwhelmingly blame the U.S. for the hell they’re now experiencing, the U.S.-Saudi proxy armies of imported jihadists) «because I think it gives us some leverage in our conversations with Russia».

    Although there might still be some resistance remaining at the top levels of the U.S. military against the restoration and heating-up of the formerly Cold War against the USSR (now against only Russia and any head-of-state who isn’t hostile toward it), Obama has probably by now eliminated almost all of those people at the top level; and so virtually the only U.S. military personnel who oppose the increasingly hot U.S. war against Russia could be the troops who would be ordered to do the killing and dying in that war. They would face a choice of either resigning and losing their means-of-livelihood and much else, or of fighting and maybe dying for a cause that they think to be evil (allied with Al Qaeda).

    There is no public sign yet of any such mutiny against the U.S. regime, either by its soldiers, or by its subjects.

    Two articles may be especially relevant to understanding why this would be the case. One is  «Russia Finds – Shaming The U.S. Government Into Action Can Work», from the brilliant blogger who goes by the name «Moon of Alabama». The other is, «How Bamboozled the American Public Are About Syria», from me. Whereas the former article focuses upon the U.S. government’s operation to fool the American people into believing that ‘their’ government cares about fighting Al Qaeda in countries where Al Qaeda is actually instead a crucial ally of the American government against Russia and allies of Russia, the latter article focuses upon the enormous success of that governmental lying-operation. 

    But the success of Obama’s lying-operation has been even more striking in regards to Ukraine, Crimea, and Donbass — a matter which the head of Stratfor called «the most blatant coup in history», but which the American people still believe to have been a ‘democratic revolution’ that overthrew a ‘dictator’. It was an extraordinarily bloody coup there. And, as a result of it, Crimeans were terrified and overwhelmingly sought, and then obtained, Russian protection, and citizenship; and Donbassers were terrified and broke away from the newly installed Ukrainian regime, and likewise sought Russian citizenship, but were turned down by Putin, who regrettably provided only military and humanitarian assistance against the constant bombing by the newly installed nazis in Ukraine.

    The economic sanctions against Russia that Obama had imposed by alleging that Putin ‘stole’ Crimea, caused Putin to say no to Obama’s millions of victims in Donbass. Russia accepted approximately a million refugees from Donbass, but Obama (via his paid nazi surrogates) basically destroyed Donbass (though not as much as he’s destroying Syria via his paid Al Qaeda etc. surrogates, a country that he wants even more to conquer, because the Saudi royal family demand it and are actually paying most of the bills for it). (Europe’s taxpayers are paying most of the bills for Obama’s conquest of Ukraine, and Europe also gets many of the refugees from there.) 

    Politically, what the American public see is that Republican politicians criticize Obama for fictitious reasons (such as that he ‘wasn’t born in the United States’), and Democratic politicians say that those fictitious reasons are the only reasons to criticize him. As a consequence, the American public have no idea about the reality of Obama, and of his policies.

    So: these are some of the reasons why there is no mutiny.

  • A Real Life "House of Cards" – The Most Striking WikiLeaks Revelations From The "Podesta Files"

    They say that “life imitates art”…or is it the other way around…the lines are getting so blurred.  In any event, we thought we would take this opportunity to highlight some of the most startling discoveries we found so far in Doug Stamper’s…sorry, John Podesta’s emails.  You have to admit there are some similarities there and they even have the same position…hopefully the Clinton Foundation is receiving royalties from HBO…

    Podesta

     

    Yesterday we pointed out the many amazing one-liners offered up by Hillary as she was out collecting millions of dollars for her “Wall Street speeches.”  Here is an expanded sample:

    Hillary Clinton: “I’m Kind Of Far Removed” From The Struggles Of The Middle Class “Because The Life I’ve Lived And The Economic, You Know, Fortunes That My Husband And I Now Enjoy.” “And I am not taking a position on any policy, but I do think there is a growing sense of anxiety and even anger in the country over the feeling that the game is rigged.  And I never had that feeling when I was growing up.  Never. I mean, were there really rich people, of course there were.  My father loved to complain about big business and big government, but we had a solid middle class upbringing.  We had good public schools.  We had accessible health care.  We had our little, you know, one-family house that, you know, he saved up his money, didn’t believe in mortgages.  So I lived that.  And now, obviously, I’m kind of far removed because the life I’ve lived and the economic, you know, fortunes that my husband and I now enjoy, but I haven’t forgotten it.”  [Hillary Clinton Remarks at Goldman-Black Rock, 2/4/14]

     

    Hillary Clinton Said There Was “A Bias Against People Who Have Led Successful And/Or Complicated Lives,” Citing The Need To Divese Of Assets, Positions, And Stocks.   “SECRETARY CLINTON:  Yeah.  Well, you know what Bob Rubin said about that.  He said, you know, when he came to Washington, he had a fortune.  And when he left Washington, he had a small —              MR. BLANKFEIN:  That’s how you have a small fortune, is you go to Washington. SECRETARY CLINTON:  You go to Washington.  Right.              But, you know, part of the problem with the political situation, too, is that there is such a bias against people who have led successful and/or complicated lives.  You know, the divestment of assets, the stripping of all kinds of positions, the sale of stocks.  It just becomes very onerous and unnecessary.” [Goldman Sachs Builders And Innovators Summit, 10/29/13]

     

    Hillary Clinton Noted President Clinton Had Spoken At The Same Goldman Summit Last Year, And Blankfein Joked “He Increased Our Budget.” “SECRETARY CLINTON:  Well, first, thanks for having me here and giving me a chance to know a little bit more about the builders and the innovators who you’ve gathered.  Some of you might have been here last year, and my husband was, I guess, in this very same position.  And he came back and was just thrilled by— MR. BLANKFEIN:  He increased our budget.              SECRETARY CLINTON:  Did he? MR. BLANKFEIN:  Yes.  That’s why we —              SECRETARY CLINTON:  Good.  I think he—I think he encouraged you to grow it a little, too.  But it really was a tremendous experience for him, so I’ve been looking forward to it and hope we have a chance to talk about a lot of things.” [Goldman Sachs Builders And Innovators Summit, 10/29/13]

     

    Clinton Said When She Got To State, Employees “Were Not Mostly Permitted To Have Handheld Devices.”  “You know, when Colin Powell showed up as Secretary of State in 2001, most State Department employees still didn’t even have computers on their desks. When I got there they were not mostly permitted to have handheld devices. I mean, so you’re thinking how do we operate in this new environment dominated by technology, globalizing forces? We have to change, and I can’t expect people to change if I don’t try to model it and lead it.”  [Clinton Speech For General Electric’s Global Leadership Meeting – Boca Raton, FL, 1/6/14]

     

    Clinton Joked It’s “Risky” For Her To Speak To A Group Committed To Futures Markets  Given Her Past Whitewater Scandal.  “Now, it’s always a little bit risky for me to come speak to a group that is committed to the futures markets because — there’s a few knowing laughs — many years ago, I actually traded in the futures markets. I mean, this was so long ago, it was before computers were invented, I think. And I worked with a group of like-minded friends and associates who traded in pork bellies and cotton and other such things, and I did pretty well. I invested about a thousand dollars and traded up to about a hundred thousand. And then my daughter was born, and I just didn’t think I had enough time or mental space to figure out anything having to do with trading other than trading time with my daughter for time with the rest of my life. So I got out, and I thought that would be the end of it.” [Remarks to CME Group, 11/18/13]

     

    Hillary Clinton Said Jordan Was Threatened Because “They Can’t Possibly Vet All Those Refugees So They Don’t Know If, You Know, Jihadists Are Coming In Along With Legitimate Refugees.”  “So I think you’re right to have gone to the places that you visited because there’s a discussion going on now across the region to try to see where there might be common ground to deal with the threat posed by extremism and particularly with Syria which has everyone quite worried, Jordan because it’s on their border and they have hundreds of thousands of refugees and they can’t possibly vet all those refugees so they don’t know if, you know, jihadists are coming in along with legitimate refugees. Turkey for the same reason.”  [Jewish United Fund Of Metropolitan Chicago Vanguard Luncheon, 10/28/13]

     

    Hillary Clinton Said The Saudis Opposed The Muslim Brotherhood, “Which Is Kind Of Ironic Since The Saudis Have Exported More Extreme Ideology Than Any Other Place On Earth Over The Course Of The Last 30 Years.” “And they are getting a lot of help from the Saudis to the Emiratis—to go back to our original discussion—because the Saudis and the Emiratis see the Muslim Brotherhood as threatening to them, which is kind of ironic since the Saudis have exported more extreme ideology than any other place on earth over the course of the last 30 years.” [2014 Jewish United Fund Advance & Major Gifts Dinner, 10/28/13]

     

    Hillary Clinton Said Her Dream Is A Hemispheric Common Market, With Open Trade And Open Markets.  “My dream is a hemispheric common market, with open trade and open borders, some time in the future with energy that is as green and sustainable as we can get it, powering growth and opportunity for every person in the hemisphere.” [05162013 Remarks to Banco Itau.doc, p. 28]

    Meanwhile, there are plenty of other great email exchanges as well.

    The following exchange comes from the President of the Soros-funded “Open Society Foundation (we previously wrote about the society’s plan to “Enlarge electorate by at least 10 million voters” here) who offers some advice on “police reform.”  The email points Podesta to an article previously written by the Open Society Foundation, ironically titled Get the Politics Out of Policing.”  Surprisingly, Stone points out that the problem isn’t a lack of independence by police but by politicians:

    The problem is not a lack of independence just from the police, but independence from city politics. Since 2007, Chicago has had an agency separate from the police to investigate officer-involved shootings, but the “independent” agency (the Independent Police Review Authority, or IPRA) is still under the mayor, and generally retreats from any investigation that might lead to criminal charges. Until we get investigations of cases like this out of the hands of politicians, even the best policies a police chief can impose won’t change the culture.

    Well that seemed to backfire. To summarize, Stone says don’t do exactly what the FBI did in its investigation of Hillary’s email scandal. 

     

    Police Reform

     

    Here is a fairly racist email asserting that “Jews*, Hindus/Sikhs and Chinese people” are “almost always highly successful” while “Muslims, blacks and Roma” are “professional never-do-wells” and “fare badly almost irrespective of circumstances.”

    Podesta

     

    The following email from Clinton press secretary, Brian Fallon, points out more collusion with the press (“Today Show has indicated they definitely plan to ask about guns”) and Hillary’s support for an “executive order” to close the “gun show loophole” and “impose manufacturer liability.”

    Gun Control

     

    The following “Sanders Hits” email chain points out a specific request from Hillary to do a “deeper dive” on “hits that could either by written or deployed during the next debate on Sanders.”

    Sanders Hits

     

    But, Ron Klain, former “Ebola Czar”, quickly points out that they didn’t really have anything material on Sanders, saying “that seems like a weak hit.”  You don’t get elevated to a powerful position like “Ebola Czar” without being able to quickly cut through the BS.

    Sanders Hits

     

    Of course, Podesta attempted to raise doubts over the veracity of the Wilileaks emails saying that he doesn’t “have time to figure out which docs are real and which are faked” and that he’s not happy about “being hacked by the Russians in their quest to throw the election to Donald Trump.” 

     

    While it’s a nice try, something tells us that Podesta would find the time to figure out which emails “are real and which are faked” if, in fact, any of them were fake.

  • What The Market Says – Trump Wins If…

    While the variance across the mainstream media's presidential election polls remains high, the trend in the last week appears to have been one of Trump losing ground to Hillary. While the two campaigns lob headline-grenades at one another, we leave it to the markets to decide what it will take to lead Trump to victory

    It appears that markets – Stocks, Bonds, and FX – are leading indicators of the gap between good or bad, or the lesser of two evils, depending on your perspective.

    The positive trend for Hillary appears to be catching up to stocks…

     

    Treasury yields have swung (lower) in the direction of Hillary's gains recently…

     

    And The US Dollar Index's srecent strength is supportive of Hillary…

     

    So to summarize – S&P needs to hit 2,000; 30Y yields top 2.50%, and/or USD Index weakness is all that is needed for markets to imply a Trump win (that or a Peso collapse of course).

  • Globalization Is Done

    Submitted by Raul Ilargi Meijer via The Automatic Earth blog,

    I read a lot, been doing it for years, about finance and affiliated topics (a wide horizon of them), which means I’ve inevitably seen a wholesale lot of nonsense fly by. But for some reason, and I think I know why, Q3 2016 has been gunning for a top -or bottom- seat in that regard, and Q4 is looking to do it one better/worse.

    Apart from the fast increasingly brainless political ‘discussions’ that don’t deserve the name, in the US and UK and beyond, there are the transnational organizations, NATO, IMF, EU and all those things, all suffocating in their own hubris, things I’ve dealt with before in for instance Globalization Is Dead, But The Idea Is Not and Why There is Trump. But none of it still seems to have trickled through anywhere that I can see.

    The end of growth exposes the stupidity and ignorance of all but (and even that’s a maybe) a precious few (of our) ‘leaders’. There is no other way this could have run, because an era of growth simply selects for different people to float to the top of the pond than a period of contraction does. Can we agree on that?

    ‘Growth leaders’ only have to seduce voters into believing that they can keep growth going, and create more of it (though in reality they have no control over it at all). Anyone can do that. So ‘anyone’ who’s sufficiently hooked on power games will apply.

    ‘Contraction leaders’ have a much harder time; they must convince voters that they can minimize the ‘suffering of the herd’. Which is invariably a herd that no-one wants to belong to. A tough sell.

    Any end to growth will and must therefore inevitably change the structure of a democracy, any democracy, any society for that matter. It will lead to new leaders, and new parties, coming to the front. And it should not surprise anyone that some of these new leaders and parties will question the very structure of the democracy they are part of, if only because that structure is already undergoing change anyway.

    The tight connection between an era of economic growth (and/or contraction) and the politicians that ‘rule’ during that era is reflected in Hazel Henderson’s“economics is nothing but politics in disguise”.

    On the one hand you have the incumbent class seeking to hold on to their waning power, churning out false positive numbers and claiming that theirs is the only way to go (just more of it), and on the other hand you have a loose affiliation – to the extent there’s any affiliation at all- of left and right, individuals and parties, who smell change that they can use to their own benefit.

    They just mostly don’t know how to use it yet. But they’ll find out, or some of them will. Blaming people and groups of people for what’s gone wrong will be a major way forward, because it’s just so easy. It’s another reason why the incumbents class, the traditional parties, will go the way of the dodo: they will be blamed, and rightly so in most cases, for the fall of the economic system.

    That’ll be the number one criteria: if you’re -perceived as- part of the old guard, you’re out. Not at the flick of a switch, but nevertheless the rise of Trump and Farage and all those folks has been much faster than just about anyone would have thought possible until very recently.

    They feed on discontent, but they can do so only because that discontent has been completely ignored by the ruling classes everywhere. Which has a lot to do with the rulers in all these instances we see pop up now still being well-off, while the lower rungs of societies definitely are not.

    Moreover, if most people still had comfortable middle-class lives, the dislike of immigrants and refugees would have been so much less that Trump and Wilders and Le Pen and Alternative for Deutschland could never have ‘struck gold’. It’s the perception that the ‘new’ people are somehow to blame for one’s deteriorating living conditions that makes it fertile ground for whoever wants to use it.

    And since the far left can’t go there, the right takes over by default. Bernie Sanders and Jeremy Corbyn have brave ideas on redistribution of wealth, but there is still too much resistance, at the moment, to that, from the incumbent class and their voters, to have much chance of getting anywhere.

    Of course the traditional right wing smells the opportunity too, so Hillary (yeah, she’s right wing) and Theresa May and Sarkozy and Merkel are all orchestrating sharp turns to the right, away from their once comfortable seats in the center. They all sense that power will not be emanating from the center going forward, and it’s power, much more than principles, that they are after.

    But enough about politicians and their parties, who can and will all be voted out of power. Much harder to get rid of will be the transnational organizations, like the EU and IMF (there are many more), though they represent the ‘doomed construction’ perhaps even more than mere local or national power-hungries. The leading principle is simple: What has all the centralization led to? To today’s contracting economies.

    To that end, let’s just tear into a recent random Bloomberg piece on this week’s IMF meeting, and the ‘expert opinions’ on it:

    Existential Threat To World Order Confronts Elite At IMF Meeting

    Policy-making elites converge on Washington this week for meetings that epitomize a faith in globalization that’s at odds with the growing backlash against the inequities it creates. From Britain’s vote to leave the EU to Donald Trump’s championing of “America First,” pressures are mounting to roll back the economic integration that has been a hallmark of gatherings of the IMF and World Bank for more than 70 years. Fed by stagnant wages and diminishing job security, the populist uprising threatens to depress a world economy that IMF Managing Director Christine Lagarde says is already “weak and fragile.”

     

    The calls for less integration and more trade barriers also pose risks for elevated financial markets that remain susceptible to sudden swings in investor sentiment , as underscored by recent jitters over Deutsche Bank’s financial health. “The backlash against globalization is manifesting itself in increased nationalistic sentiment, against the outside world and in favor of increasing isolation,” said Louis Kuijs at Oxford Economics in Hong Kong, a former IMF official. “If we lose consensus on what kind of a world we want to have, the world will probably be worse off.”

    Oh, but we do have consensus, Louis: Ever more people don’t want what they have now. That too is consensus. And since you said that what it takes is consensus, we should be fine then, right?!

    Also, I find the term ‘elevated markets’ interesting, even if I don’t know what it’s supposed to mean. I can only guess.

    In its latest World Economic Outlook released Tuesday, the fund highlighted the threats from the anti-trade movement to an already subdued global expansion. After growth of 3.2% in 2015, the world economy’s expansion will slow to 3.1% this year before rebounding to 3.4% in 2017, according to the report, keeping those estimates unchanged from July projections. The forecasts for U.S. growth were cut to 1.6% this year and 2.2% in 2017.

     

    “We’d like to see an end to the creeping protectionism in the world and more progress on moving ahead with free-trade agreements and other trade-creating measures,” Maurice Obstfeld, director of the IMF’s research department, said in a Bloomberg Television interview with Tom Keene. Lagarde said last week that policy makers attending the Oct. 7-9 annual meeting of the IMF and World Bank have two tasks. First, do no harm, which above all means resisting the temptation to throw up protectionist barriers to trade. And second, take action to boost lackluster global growth and make it more inclusive.

    I can see how a vote against the likes of Hollande, Hillary or Cameron constitutes a “the backlash against globalization”. What I don’t see is how that has now become the same as the anti-trade movement. When did Trump express any feelings against trade? Against international trade deals as they exist and are further prepared, yes.

    But those deals don’t define ‘trade’ to the exclusion of all other definitions. As for ‘protectionism’, that’s just a term designed to make something perfectly fine and normal look bad. Every single society on the planet should protect its basic necessities from being controlled by foreigners, either for money or for power.

    Nothing good can come of relinquishing that control for any society, ever. There‘s not a thing wrong with protecting your control of your own water and food and shelter, and these are indeed things that should never be traded or negotiated in global markets.

    So claiming that ‘do no harm’ equals NOT protecting your basics is nothing but a self-serving and dangerous kind of baloney coming your way courtesy of those people whose sociopathic plush seats and plusher bank accounts depend on your ongoing personal loss of control over what you need to survive.

    It’s what any ‘body’ does that has reached the limits of its growth: it starts feeding on its host. Be it a cancerous tumor, the Roman Empire or our present perennial-growth driven economic models, they’re all the same same thing because they are fueled by the same -thoughtless- principle.


    Ilargi: See that upward line at the end? Well, it’s an IMF growth ‘forecast’. Which are always so wrong, and always revised downward, that you must wonder if the term ‘forecast’ is even appropriate

    Achieving even those modest objectives may prove elusive. Free trade has become polling poison in the U.S. presidential campaign, with Democratic nominee Hillary Clinton now criticizing a trade deal with Pacific nations, which isn’t yet ratified in the U.S., that she had praised when it was being negotiated.

     

    Republican challenger Trump has lashed out at Mexico and China, threatening to slap big tariffs on imports from both nations. Rattled by the U.K.’s June vote to leave the EU, European leaders know it may just be the start of a political earthquake that’s threatening the continent’s old certainties.

    In case you didn’t catch it, “..the continent’s old certainties” is a goal-seeked term. Old in this case means not older than, say, 1950, if that. Look back 100 years and “the continent’s old certainties” dress in a whole other meaning.

    Next year sees elections in Germany and France, the euro area’s two largest economies, and in the Netherlands. In all three countries anti-establishment forces are gaining ground. With growing resentment of the EU from Budapest to Madrid, policy makers have described the current surge in populism as the greatest threat to the bloc since its creation out of the ashes of World War II. There are also growing signs that the union and Britain are heading for a so-called “hard exit” that would sharply reduce the bloc’s trade and financial ties with the island nation. U.K. Prime Minister Theresa May said on Oct. 2 that she’ll begin her country’s withdrawal from the EU in the first quarter of next year.

    I have addressed the misleading use of the term ‘populism’ before. In its core, it simple means something like: for, and by, the people. How that can be presented as somehow being a threat to democracy is a mystery to me. They should have picked another term, but settled on this one.

    And in the western media consensus, it comprises anything from Trump to Beppe Grillo, via Hungary’s Orban and Nigel Farage, Spain’s Podemos, Greece’s Syriza and Germany’s AfD. All these completely different movements have one thing only in common: they protest the failed and fast deteriorating status quo, and receive a lot of support from their people for doing that.

    Because it’s the people that bear the brunt of the failure, not the leadership; even Greece’s politicians still pay themselves a comparatively lush salary.

    As for Britain, it’s the textbook example of utter blindness. Those who were/are well provided for, be they politically left or right, missed out on what was happening around them so much they had no idea Brexit was a real option. And in the 15 weeks since the Brexit vote, all anyone has done in the UK is seeking to blame someone, anyone but themselves for what they all failed to see coming.

    Perhaps the biggest beneficiary of free trade over the past generation, China, still restricts access to many of its key industries, with economists worried about increasingly mercantilist policies. It’s also seeking a larger role in the existing global framework, with entry of the yuan into the IMF’s basket of reserve currencies on Oct. 1 the most recent example. An all-out trade war would be a disaster for China’s economy, with Trump’s threatened tariff potentially wiping off almost 5% of its GDP, according to a calculation by Daiwa Capital Markets.

     

    John Williamson, whose Washington Consensus of open trade and deregulation was effectively the governing ethos for the IMF and World Bank for decades, said the 2008-09 financial meltdown had undercut support for economic integration. “There was agreement on globalization before the crisis and that’s one thing that’s been lost since the financial crisis,” said Williamson, a former senior fellow at Peterson Institute for International Economics who is now retired.

     

    The growing opposition to economic integration has been fueled by a sub-par global recovery. “Perhaps the most striking macroeconomic fact about advanced economies today is how anemic demand remains in the face of zero interest rates,” former IMF chief economist Olivier Blanchard wrote last week in a policy brief for the Peterson Institute.

    These ‘experts’ seem to have an idea there’s something amiss, but they don’t have the answers. Which is impossible to come and say out loud if you’re an expert. Experts must pretend to know it all, or at least know why they don’t know. “There was agreement on globalization before the crisis”, and now it’s no longer there. That they see.

    That they ain’t coming back, neither the agreement on it nor globalization itself, is a step too far for them. To publicly acknowledge, at least. That Blanchard expresses surprise about ‘anemic demand’ at the same time that interest rates are equally anemic is something else.

    That both are two sides of the same coin, or at least may be, is something he should at least mention. That is to say, low rates induce deflation, though they are allegedly supposed to induce the opposite. Economists are mostly very misguided people.

    The world economy is getting some lift after rising at an annual rate just shy of 3% in the first half of this year, according to David Hensley, director of global economics for JPMorgan. But much of the boost will come from a lessening of drags rather than from a big burst of fresh growth, said Peter Hooper at Deutsche Bank Securities, a former Federal Reserve official. Recessions in Brazil and Russia are set to come to an end, while in the U.S. cutbacks in inventories and in oil and gas drilling will wane.

    Please allow me to chip in here. ‘Lessening of drags’ in a nonsense term. And so is the idea that “..recessions in Brazil and Russia are set to come to an end”. That’s all goal-seeked day-dreaming. Smoke or drink something nice with it and you’ll feel good for a few hours, but that doesn’t make it real.

    “I’m characterizing the global economy as something akin to a driverless car that’s stuck in the slow lane,” said David Stockton, a former Fed official and now chief economist at consultants LH Meyer. “Everybody feels like they’re being taken for a ride but they’re pretty nervous because they can’t see anybody in control.”

    I really like this one, because off the bat I thought Stockton had it all wrong. What I think is the appropriate metaphor, is not “a driverless car that’s stuck in the slow lane”, but one of those cars in a carousel at a carnival, a merry-go-round, where you can sit in it forever and you always end up in the same spot. And the only one who’s in control in the boss who hollers that you need to pay another quarter if you want to keep on riding.

    Or, alternatively, and to stay at the carnival, it’s a bumper car, which allows you to hit other cars and get hit, but never to leave the rink. That’s the global economy. Not getting anywhere, and running out of quarters fast.

    Still, for the first time in the past few years, Stockton said he sees a real upside risk to his forecast of continued global growth of around 3% next year. And that’s coming from the possibility of looser fiscal policy in the U.S. and Europe. In the U.S., both Clinton and Trump have pledged to boost infrastructure spending on roads, bridges and the like. In Europe, rising populism provides a powerful incentive for governments to abandon austerity ahead of the elections next year – and perhaps beyond. Whether such a shift will be enough to mollify those who have been on the losing side of globalization for decades is debatable, however.

    “The consensus in policy-making circles was that more trade meant better economic growth,” said Standard Chartered head of Greater China economic research Ding Shuang, who worked at the IMF from 1997 to 2010. “But the benefits weren’t shared equitably, so now we see a round of anti-globalization, anti-free trade. “Globalization will stall for the moment, until we can find a way to share those benefits,” he added.

    Globalization is done. And while we can discuss whether that’s of necessity or not, and I continue to contend that the end of growth equals the end of all centralization including globalization, fact is that globalization was never designed to share anything at all, other than perhaps wealth among elites, and low wages among everyone else.

    The EU and IMF have not delivered on what they promised, in the same way that traditional parties have not, from the US to UK to basically all of Europe. They promised growth, and growth is gone. They may have delivered for their pay masters, but they lost the rest of the world.

    Anything else is just hot air. But that doesn’t mean they will hesitate to use their control of the military and police to hold on to what they got. In fact, that’s guaranteed. But it would only be viable in a dictatorial society, and even then.

    We are transcending into an entirely different stage of our lives, our economies, our societies. Growth is gone, it went out the window long ago only to be replaced with debt. And that’s going to take a lot of getting used to. But there’s nothing that says we couldn’t see it coming.

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Today’s News 8th October 2016

  • Pope Francis: Traitor To Western Civilization?

    Authored by Antonius Aquinas, (annotated by Acting-Man.com's Pater Tenebrarum)

    Disqualified

    There has been no greater advocate of mass Muslim migration into Europe than the purported head of the Catholic Church, Pope Francis.  At a recent conference, he urged that “asylum seekers” be accepted, “through the acts of mercy that promote their integration into the European context and beyond.”*

     

    nopepope-francis

    Before we let Antonius continue with his refreshingly politically incorrect disquisition, we want to remind readers of two previous articles that have appeared here on the topic of the current pope, one that contrasted Pope John Paul II’s deep understanding of economics and economic freedom with the muddled socialism of Pope Francis (see A Tale of Two Popes for the details) and our critique of Francis’ green-red encyclical Laudatio Si – Sulla Cura Della Casa Commune (see Papal Eco-Hysteria for the details on that one). Frankly, we have no idea what possessed the College of Cardinals when it picked him. Since when does the Church feel a need to pander to the left?

     

    Jorge Bergoglio is the “purported pope” of the Catholic Church because, as certain theologians have argued, he was neither validly ordained as a priest or consecrated as a bishop in the traditional Catholic rites of Holy Orders.  Since a pope must first be a bishop, in particular the bishop of Rome, Bergoglio cannot, therefore, be pope.

    He is not a Catholic pope, but head of a new “Conciliar Church” which was concocted at the time of the Second Vatican Council (1962-65), actually an “Anti-council,” and in the tumultuous years that followed, which witnessed fundamental changes in doctrine and the Sacraments, most damaging the promulgation of the New Mass by Paul VI-Montini.

    The New Church also did away with its traditional view on evangelization and conversions and adopted the previously condemned heresy of “syncretism,” which contends that “we all worship the same god,” and that “one religion is as good as another.”  This idea pervades post-Vatican II Catholicism and is what Francis bases most of his justification for the mass migration onto lands which once made up Christendom.

    While Bergoglio cannot be pope on technical grounds, he is also disqualified for his blasphemies and heretical actions, words, and teachings, all of which have flowed at a breathtaking pace.  From the infamous, “who am I to judge,” about sodomites, to his alteration of two millennia of teaching on divorce and remarriage, to such whoppers as “God does not exist,” Bergoglio has placed himself “outside of the Church” and thus cannot hold ecclesiastical office and certainly not that of supreme pontiff.

     

    Rotating Isabella

    Despite the overwhelming theological and empirical evidence that the Chair of St. Peter is vacant (sede vacante) and its restoration will take place in its Founder’s good time, for the vast majority of Catholics and the world at large, Jorge Bergoglio is pope and his actions have consequences.

    And, since his promotion and support of mass Muslim migration is leading to not only the destruction of what is left of Western Civilization and the species which largely created that civilization – white, gentile, heterosexual men – Bergoglio and the organization which he represents, must be stopped.  If Pope Francis and his New World Order cohorts are not countered, whites, and the cultures which they built, will vanish.

     

    urban_ii_cropped

    Pope Blessed Urban II, who delivered a rousing speech in AD 1095 that inspired the first crusade.

    Painting by Francisco de Zurbarán

     

    The Catholic Church is an integral part of Western Civilization even if Bergoglio and the pack of cultural Marxist prelates which surround him will not admit it.  It was the Church that preserved the heritage of Antiquity from the barbarian invasions during and after the fall of the Roman Empire.

    Without the actions of the monks and other clerics, many of the classical works would have been lost forever, leaving future generations bereft of the wisdom and treasures of the Ancients.  It was the Church that was the indispensable part in the formulation of the greatest civilization known to mankind, Christendom.

    Moreover, it was the Catholic Church, largely through the Papacy, that inspired the Crusades, which for a glorious time drove out the Muslims from the Holy Land and returned it to its rightful possessors.

    It is undeniable that the Catholic Faith (which Bergoglio is supposedly its chief representative) inspired numerous European sovereigns, most notably Queen Isabella, to take up arms against the Mohammedans.  It was her faith which drove the heroic queen to free the Iberian Peninsula from the Muslim yoke, which then allowed her to finance Christopher Columbus on his epic, world-changing voyage.

     

    isabel_la_catolica-2

    Queen Isabella I of Castile – she funded the famous 1492 voyage of Columbus, and on the side completed the Reconquista of Spain. Incidentally, during her reign the crime rate in Spain is said to have declined to its lowest level in ages.

    Painting attributed to Gerard David

     

    Yet, Bergoglio and his fellow heretical Churchmen assiduously avoid any reminiscing of such facts and instead are deliberately encouraging Muslim migration into the lands that Europeans spilled blood and sacrificed treasures to defend – Queen Isabella must be turning over in her grave!

     

    Conclusion

    If Western Civilization is to be salvaged, those who seek its destruction must be removed from their positions of authority and influence.  Whether through political means, armed revolt, or de-legitimization, those who hold such power must be toppled.  Exposing “Pope Francis” for what he is, or is not, will go a long way in that most vital and necessary task.

  • Americans' 2016 Choices: Lesser-Able Or Lesser-Evil

    Authored by Ben Tanosborn,

    Once again, the quadrennial apparition has reached the dreaded countdown to political ignominy, placing American democracy on trial once again… yet quickly dismissing the charges, letting the political circus continue with its three-ring democracy made up of a dangerous quasi-autocratic executive, a corrupt special-interests Congress, and an ugly, politically tainted judiciary.  But in 2016, the choice of whether to reelect Lesser-Evil for the umpteenth time might be looking at Evil as a new candidate: Lesser-Able.

    This time around the duopoly which played musical chairs in the past to maintain power in a flawed undemocratic fashion does not appear to be firmly in charge, and our overly mined, make-believe democracy has found a rich vein of discontent, particularly in the white populace.  Somehow, the political elites that run the two-party system appear to have lost control of the rank-and-file.  And the Republican-R has metamorphosed from uncompromising conservatism into bigoted Repugnism while the Democratic-D is seen as having reached the limits of corrupt Demagoguery, unashamedly riding the shoulders of the minority-class represented in 90+ percent of Black voters and 70+ percent of the Latino voting bloc – many of them in sympathetic support to a massive 12-18 million of undocumented immigrants-at-arms.

    For several decades many, at times most, Americans have gone to the polls every four years and cast their vote for a candidate they have jokingly, yet sometimes in profound seriousness, identified as Lesser-Evil.  And even if the clownish-dude appeared wearing a mask, he was often mischaracterized by conservative Republicans as well as by liberal Democrats, or even Independents, as offering the lesser evil; a reasonable compromise or civic-consent for living in a nation that up to a generation ago did provide most of its people with a comparatively decent standard of living vis-à-vis much of the world.

    And that post-WWII economic blessing clouded our domestic vision, deflecting pride in our democracy to pride in our empire and military might.  We started to see ourselves as saviors of the planet and began to call the president, someone who should lead us as First Citizen, our commander-in-chief.  Our democracy decayed and we started to go to the quadrennial dates to select a commander-in-chief, under the fallacious pretense of an ill-conceived preparedness for war; giving up on the idea of electing a First Citizen, someone who could lead the charge in tackling the myriad socio-economic problems accosting the nation; problems that loom larger today as our economic preeminence in the world is fading away.

    As America did bid farewell to its popular First Citizen – and last world-class American statesman, Franklin Delano Roosevelt, subsequent selected leaders have been branded as commander-in-chief, all serving at the pleasure of an American elite, which has sadly resulted in bringing down a prosperous, globally respected United States of America from its lofty pedestal: a nation of promise for all its people sinking to the mediocrity of another fading empire neglecting half of its citizens in a last hurrah to save itself.

    Our ridiculously long presidential campaign, dubbed internationally as a celebrity horror show, has had for many TV viewers a Colosseum-worthy bloodiness of Roman circus entertainment while for others it has underlined the absurdity of an American body politic which this time has reached the bottom of the barrel, without anticipating the possible consequences, by making the choices Hillary Clinton and Donald Trump.

    Although in this 58th presidential election we will still be referring to the two candidates as potential commander-in-chief, it will start to become evident that the economic and social ills that polarize the nation require a First Citizen, not a First Warrior, and that a commander-in-chief just won’t do!  Furthermore, an end to the polarization simply will not occur as long as our political system consists of only two political parties where the membership in both maintain profiles with little or no commonality – racial, economic, or even philosophical – to try and match, or at least approach the diversity in the nation.

    So once again much of the electorate in the two tents is confronted with voting for the sempiternal Lesser-Evil, except that this time around many would-be voters see Evil with a lesser-able personality.  And that new personality, Lesser-Able, has become the figure of the Pied Piper of the discontent, Donald Trump, who many see as both unqualified and worrisome.

    In less than five weeks we’ll find out whether Lesser-Evil is reelected or Lesser-Able is to assume the reins.  In either case we’ll have to resign ourselves to having made a choice for a commander-in-chief of a declining empire, instead of a capable First Citizen ready to tackle our nation’s economic and social ills.

  • Florida Governor Denies Clinton Request For Voter Registration Extension

    As Florida Governor Rick Scott has called on every available resource in his state to help with Hurricane Matthew, Clinton campaign lawyers are apparently already bombarding him with requests to extend the voter registration deadline of October 11.  So, just to be clear, traveling to Louisiana weeks after flooding there would have negatively impacted recovery efforts, even though local politicians supported visits, but lobbying for voter registration extensions while a hurricane is actually in progress is ok?

    But, according to the Washington Examiner, Scott has denied the request saying “I’m not going to extend it…everybody has had a lot of time to register.”  A Scott spokeswoman added that “for any political party to ask this in the middle of a storm is political.”

    Florida Gov. Rick Scott said Thursday that the state would not extend its Oct. 11 voter-registration deadline in response to Hurricane Matthew, throwing cold water on a request from the Clinton campaign.

     

    “I’m not going to extend it,” the governor told reporters Thursday. “Everybody has had a lot of time to register. On top of that, we have lots of opportunities to vote: early voting, absentee voting, Election Day. So I don’t intend to make any changes.”

     

    “For any political party to ask this in the middle of a storm is political,” Scott spokeswoman Jackie Schutz said Thursday. “Our No. 1 focus is protecting life. There’ll be another day for politics.”

    That said, we’re sure the George Soros legal armies are amassing in Florida and getting ready to launch an all out offensive on this obvious attempt at suppressing minority and low-income votes.  In fact, Clinton campaign manager Robby Mook is already laying the media groundwork saying that people will need more time to register because of the storm and they “expect that the governor and local officials will make that possible.”  

    Hillary Clinton’s campaign manager, Robby Mook, said Thursday that they hoped election officials in the Sunshine State would consider making accommodations for voters affected by Hurricane Matthew.

     

    The one thing that we are hoping and expecting is that officials in Florida will adapt deadline to account for the storm,” Robby Mook told reporters.

     

    “The voter registration deadline in Florida is Oct. 11 and then our hope would be that a little bit more time would be given for people who were expecting to be able to get registered before the election and we certainly expect that the governor and local officials will make that possible,” he said.

    The extension requests come just one day after Clinton’s team created controversy by buying $63,000 of ads on the Weather Channel in Florida to run during the hurricane.  The ads were scheduled to play from Thursday through Tuesday in an obvious attempt to exploit the storm for political gain.  The plan, however, backfired for the Clinton camp, and after public outcry Clinton decided to suspend the buy. 

    In addition to the public outcry, the exploitation of the storm drew some criticism from the Trump team with Trump Jr. calling the move “disgusting.”

     

    Of course, RNC chairman Reince Priebus also chimed in calling the whole situation “shameful.”

    Republican National Committee Chairman Reince Priebus accused the Clinton campaign Thursday of trying to cash in on the weather event, and he suggested the Democratic nominee was putting her interests before the needs of the people of Florida.

     

    “Couldn’t let this crisis go to waste? Shameful [Hillary Clinton’s] campaign even considered exploiting Hurricane Matthew for political gain,” the RNC chair said Thursday on social media.

     

    “Pulling these ads after getting caught won’t cut it. [Hillary Clinton] should apologize for using storm for votes,” he said. “The people in [the] path of #HurricaneMatthew need our prayers, support, and charity.”

    Everyone ready for some Florida “voter suppression” lawsuits?

  • Commuter-In-Chief: Obama Cuts Sentences Of Some More Drug Dealers

    Yesterday, President Obama commuted the sentences of another 102 inmates, most of whom were serving time for drug-related offenses.  According to The Hill, the additional 102 commutations brings Obama’s total to 744 over the course of his presidency, more than the past 11 presidents combined, and brings his 2016 total to 590, more than any single year in U.S. history.

    And, of course, the White House continued to brag about the record-breaking commutations on twitter.

    “These statistics make clear that the president and his administration have succeeded in efforts to reinvigorate the clemency process,” White House counsel Neil Eggleston wrote in a blog post. “Beyond the statistics, though, are stories of individuals who have overcome the longest of odds to earn this second chance.”

     

    The following chart from Pardon Power helps to put the scale of commutations under the Obama administration into perspective.

    Obama Commutations

     

    Meanwhile, with just 3 months left in office, The Hill points out that Obama is accelerating the use of his clemency power

    With just three months left in office, Obama is accelerating the use of his clemency power. Obama in August handed out commutations to 325 inmates — including 214 on Aug. 3, the largest single-day total since 1900.

     

    That alone nearly doubled the number of commutations granted during Obama’s presidency.

     

    Obama first launched a clemency initiative in 2014 to review sentences of non-violent drug offenders who would receive shorter prison terms under today’s guidelines.

     

    It’s part of the president’s broader push to reform the criminal justice system.

     

    Facing pressure from reform advocates to pick up the pace of commutations, the administration has tweaked its strategy to accommodate more inmates.

     

    He has shortened some inmates’ sentences without immediately releasing them, leaving them years left to serve. That has allowed Obama to grant commutations to prisoners who have committed more serious offenses.

    Transformational change?

  • US Officially Accuses Russia Of Hacking Democratic Party, State Election Systems

    Update: the machinery begins to move:

    • CHAIRMAN OF U.S. SENATE CYBER SECURITY SUBCOMMITTEE TO INTRODUCE BILL IMPOSING SANCTIONS ON RUSSIA AFTER U.S. POLITICAL HACKING ACCUSATIONS

    * * *

    After months of speculation whether the US would officially accuse Russia of being responsible for various intrusions and hacks, primarily involving the Democratic party, moments ago we finally got the long-anticipated confirmation when the US named Russia as the actor behind the hacking attempts on political organizations and, more importantly, state election systems and accused Putin of carrying out a wide-ranging campaign to interfere with the 2016 elections, including by hacking the computers of the Democratic National Committee and other political officials.

    In a statement, the US “intelligence community” said that it is “confident” that the Russian government “directed the recent compromises of emails from US persons and institutions, including from US political organizations”, the Department of Homeland Security and Director of National Intelligence on Election Security said in a joint statement.

    The US added that “these thefts and disclosures are intended to interfere with the US election process”.

    “We believe, based on the scope and sensitivity of these efforts, that only Russia’s senior-most officials could have authorized these activities,” a U.S. government statement said on Friday about hacking of political groups. Alternatively, the activities could have been authorized by some “senior-most” US official, with the intention of creating the first false flag cyberwar.

    The statement by the Department of Homeland Security and the Office of the Director of National Intelligence did not blame the Russian government for hacking attempts against state election systems, but said “scanning and probing” of those systems originated in most cases from servers operated by a Russian company.

    “These thefts and disclosures are intended to interfere with the U.S. election process,” the statement said. “However, we are not now in a position to attribute this activity to the Russian Government,” the statement said.

    The accusation, made by the Office of the Director of National Intelligence and the Department of Homeland Security, came as pressure was growing from within the administration and some lawmakers to hold Moscow accountable for a set of actions apparently aimed at sowing discord around the election. Sure enough, the formal attribution to Russia, something that has long been discussed in information security circles, represents a step-up in rhetoric by the Obama administration.

    The administration also blamed Moscow for the hack of the Democratic Congressional Campaign Committee and the subsequent leak of private email addresses and cell phone numbers of Democratic lawmakers.  A series of other leaks of hacked material followed, all of which are suspected of being conducted by Russia-sponsored hackers.

    Russia has denied any connection to the hacks. As the official statement by the DHS and ODNI notes, the actual party doing the accusation of Russia is the US intelligence community, which as recently as a month ago was breached itself when a domestic “Snowden 2.0”, Harold T. Martin, was arrested recently after obtaining and attempting to sell an unknown number of internal NSA programs.

    Here is the full statement:

    While we are confident that Putin is laughing at this statement and/or threat, a question emerges: since the US has said it would treat cyberattacks by “foreign state powers” as the equivalent of an act of war, will the US now escalate and use this “naming of Russia” as a global master hacker (we assume the recent NSA hack will not be blamed on the Kremlin too, now that an American was arrested), as a pretext to accelerate diplomatic and/or military actions against Russia.

  • The War In Syria: Who Is Actually To Blame?

    Submitted by Darius Shahtahmasebi via TheAntiMedia.org,

    Depending on which news outlets you follow, your understanding of what is going on in Syria is likely coming from one of two main camps — Western media or Eastern media. Western media, in tandem with the Arab Gulf states, has almost completely pinned the blame for the crisis in Syria on the current president, Bashar al-Assad. Any residual blame left for the taking is delivered to Russia and Iran.

    Those of us who inform ourselves daily from an eclectic range of media sources tend to have a broader understanding of the conflict in Syria. The more critical one becomes of both ends of the media spectrum, the more one can evaluate the veracity of the respective outlets (for example, the peddling of statistics from a T-shirt shop in England versus the use of satellite imagery).

    Analyzing all forms of media leads to only one conclusion regarding the current crisis in Syria: all of the parties involved have an overwhelming amount of blood on their hands and are playing a role in the ongoing war. However, the evidence suggests there is one group of nations, headed by the world’s superpower, that has once again created a humanitarian catastrophe rivaling that of history’s worst dictators.

    Although corporate media has portrayed the situation in Syria as being one of a popular uprising against a brutal and murderous dictator, the truth is far more complex.

    According to four-star General Wesley Clark, Syria was one of seven countries the Pentagon targeted for regime change following the attacks of September 11, 2001. The others were Libya, Lebanon, Somalia, Sudan, Iraq, and Iran. This intention to take out Syria’s leader prior to the start conflict in 2011 was confirmed by Wikileaks (you can access the relevant chapter in its entirety here). According to Julian Assange, Assad’s overthrow was planned as far back as 2006. As explained by MintPress News:

    “WikiLeaks cables reveal these plans came from the Israeli government, and show that the U.S. government intended to work with Saudi Arabia, Turkey, Qatar and Egypt to encourage the breakdown of the Assad regime as a way of also weakening Iran and Hezbollah.”

     

    MintPress News further explains that according to Assange, “…the U.S. government sought to make the Syrian government appear weak by causing Assad to overreact to the threat of Islamic extremists crossing into his country.”

    Sound familiar?

    Former French Foreign Minister Roland Dumas further confirmed these claims when he claimed top British officials approached him to ask if he wanted to participate in their plans to prepare for war against Syria two years prior to the eruption of the conflict.

    Dumas stated:

    “This operation goes way back. It was prepared, preconceived, and planned… in the region it is important to know that this Syrian regime has a very anti-Israeli stance.

     

    “Consequently, everything that moves in the region… and I have this from a former Israeli Prime Minister who told me we will try to get on with our neighbors but those who don´t agree with us will be destroyed. It is a type of politics, a view of history, why not after all. But one should know about it.”

    This should all be headline news, but apparently what happens to Kim Kardashian — notable laureate that she is — is far more important.

    Having instigated the conflict in 2011, the U.S. establishment predicted Assad would fall in a similar manner to that of Muammar Gaddafi. However, nuclear giants Russia and China, having been completely duped by Western promises that Gaddafi would not be forcibly removed from power in 2011, used this knowledge to consistently veto any proposal to interfere in the Syrian conflict.

    Despite the deceptiveness of NATO’s operations in Libya, Russia has tried to facilitate the end of the Syrian war for some time now. In fact, Russia put forward a proposal in 2012 that Assad would step down as a part of a potential peace deal. As stated by former Finnish president and Nobel Peace Prize laureate Martti Ahtisaari, “it was an opportunity lost in 2012.”

    Why did the Americans reject this proposal? Because, as acknowledged by Ahtisaari:

    “Nothing happened because I think all these, and many others, were convinced that Assad would be thrown out of office in a few weeks so there was no need to do anything.”

    Four years later, the war is still raging. Western media has focused on the current situation in Eastern Aleppo, which has seen Russian and Syrian warplanes ravage the terrorist-held area. I say “terrorist-held area” because the areas being targeted by Russia and Syria are held by al-Nusra offshoot Jabhat Fateh al-Sham and its affiliated groups. Al-Sham is essentially al-Qaeda in Syria but was forced to change its name because Russia has repeatedly requested that the U.S. distinguish between moderate rebel groups and those that wish to be identified with al-Nusra. Citing Reuters, the Guardian referenced the social media outlet of another Aleppo-based rebel faction known as the Levant Front, also quoting one of its officials. The Levant Front is also heavily affiliated with al-Qaeda.

    Remember when George W. Bush told us we were at war with al-Qaeda following the attacks on September 11, 2001? Apparently, they are our ally now. Essentially, what Western media and Western governments are saying is that the Assad and Putin regimes are wrong to be targeting al-Qaeda-affiliated groups, something the U.S. establishment has claimed to be doing for over a decade.

    Western media has also conveniently ignored attacks from these so-called moderate rebels, who have been shelling government-held areas of Aleppo. Aleppo is home to 1.5 million civilians. Conversely, fewer than 300,000 civilians are trapped in rebel-held areas of Aleppo (do you really expect these al-Qaeda affiliated rebels to look after and provide shelter for civilians?).

    And where did these rebels (insert: terrorists) receive their weaponry, funding, and training? This is a topic for a separate article, but one can be assured it was not from the Russian and Syrian regimes. The U.S. establishment has poured in an immense amount of money, only to see failed programs in which the weaponry (and often fighters) end up in the hands of al-Qaeda. This is not a new or unforeseen problem, either; the New York Times reported as far back as 2012 that the majority of weapons being sent to Syria had ended up in the hands of extremists.

    Is Russia sending arms to jihadists? No.

    Even now, as Russia and the United States coalition have stepped up their involvement in recent years, the U.S. refuses to coordinate and respond to Russia’s repeated requests to work together. If the stated goal was to truly eradicate ISIS and terrorism in the region, the U.S. would surely love to work in tandem with the Russian authorities. However, the U.S. has shown time and time again it will not tolerate any progress Russia is making in combating ISIS or groups such as al-Nusra.

    No one would deny the governments of Syria, Russia, and Iran have an enormous amount of blood on their hands. Allegations and claims by the United Nations that the Syrian government has tortured and killed detainees on a massive scale – a crime against humanity – are proof alone that the Syrian regime needs to face accountability for its actions.

    However, the hypocrisy of opposing one Middle Eastern dictator while supporting others responsible for truly heinous crimes raises questions regarding the United States motives in Syria. In Libya, Muammar Gaddafi had a cozy relationship with former U.K. Prime Minister Tony Blair; the British government would send dissidents to Libya to be tortured (before the British government turned their back on Gaddafi in 2011).

    So, who is responsible for the current crisis in Syria?

    Syria was once a middle-income country before the conflict erupted into a humanitarian catastrophe. The evidence at hand, in particular from overlooked Western sources, overwhelmingly points to outside intervention, by which external powers have conspired, plotted, and poured billions upon billions of dollars into arming extremist opposition groups to take out an unfriendly regime. The powers-that-be could have allowed Assad’s removal via Russia’s proposed peace deal in 2012, but they decided not to accept it — and in turn have maximized the death toll of the conflict.

    Do not underestimate the power of the CIA to manufacture opposition to regimes unfriendly to the West. Do not underestimate the West’s ability to concern itself more with geopolitical and strategic concerns rather than humanitarian ones – a point that is consistently ignored in Western coverage of the Syrian conflict. One only needs to turn to history to see this approach has been a dominant tool of American foreign policy for decades. The most strikingly obvious example of this – to which the CIA has admitted its involvement – is when the U.S. and U.K. instigated a coup to overthrow the democratically elected leader of Iran, Mohammad Mosaddegh, over oil.

    The Guardian explained:

    “Britain, and in particular Sir Anthony Eden, the foreign secretary, regarded Mosaddeq as a serious threat to its strategic and economic interests after the Iranian leader nationalised the British Anglo-Iranian Oil Company, latterly known as BP. But the UK needed US support. The Eisenhower administration in Washington was easily persuaded.”

    If Russia had intervened to save the Iranian regime in 1953 from clamping down on a CIA-manufactured uprising, would we be blaming Russia and Iran for the crisis that unfolded?

    Surely not.

  • Wikileaks Releases Hillary's Paid Wall Street Speech Transcripts: Hundreds Of "Sensitive" Excerpts

    While the media is transfixed with the just released Washington Post leak of a private Donald Trump conversation from 2005 in which he was speaking "lewdly" about women, and for which he has apologized, roughly at the same time, Wikileaks released part one of what it dubbed the "Podesta emails", which it describes as "a series on deals involving Hillary Clinton campaign Chairman John Podesta. Mr Podesta is a long-term associate of the Clintons and was President Bill Clinton's Chief of Staff from 1998 until 2001. Mr Podesta also owns the Podesta Group with his brother Tony, a major lobbying firm and is the Chair of the Center for American Progress (CAP), a Washington DC-based think tank."

    While the underlying story in this specific case involves the alleged kickbacks received by the Clinton Foundation from the Russian government-controlled "Uranium One", a story which has been profiled previously by the NYT, and about which Wikileaks adds that "as Russian interests gradually took control of Uranium One millions of dollars were donated to the Clinton Foundation between 2009 and 2013 from individuals directly connected to the deal including the Chairman of Uranium One, Ian Telfer. Although Mrs Clinton had an agreement with the Obama White House to publicly identify all donors to the Clinton Foundation, the contributions from the Chairman of Uranium One were not publicly disclosed by the Clintons", what caught our attention is an email from Tony Carr, a Research Director at Hillary for America, in which he lay outs hundreds of excerpts from the heretofore missing transcripts of Hillary Clinton's infamous Wall Street speeches, with an emphasis on those which should be flagged as they may be damaging to Hillary.

    But first, here are the greatest hits as conveniently flagged by the Clinton Campaign itself on page one of the 80 page addendum dubbed "awkward"

    Hillary Clinton: “I'm Kind Of Far Removed” From The Struggles Of The Middle Class “Because The Life I've Lived And The Economic, You Know, Fortunes That My Husband And I Now Enjoy.” “And I am not taking a position on any policy, but I do think there is a growing sense of anxiety and even anger in the country over the feeling that the game is rigged.  And I never had that feeling when I was growing up.  Never. I mean, were there really rich people, of course there were.  My father loved to complain about big business and big government, but we had a solid middle class upbringing.  We had good public schools.  We had accessible health care.  We had our little, you know, one-family house that, you know, he saved up his money, didn't believe in mortgages.  So I lived that.  And now, obviously, I'm kind of far removed because the life I've lived and the economic, you know, fortunes that my husband and I now enjoy, but I haven't forgotten it.”  [Hillary Clinton Remarks at Goldman-Black Rock, 2/4/14]

     

    When A Questioner At Goldman Sachs Said She Raised Money For Hillary Clinton In 2008, Hillary Clinton Joked “You Are The Smartest People.” “PARTICIPANT:  Secretary, Ann Chow from Houston, Texas.  I have had the honor to raise money for you when you were running for president in Texas. MS. CLINTON:  You are the smartest people. PARTICIPANT:  I think you actually called me on my cell phone, too.  I talked to you afterwards.” [ Speech to Goldman Sachs, 2013 IBD Ceo Annual Conference, 6/4/13]

     

    Hillary Clinton Joked That If Lloyd Blankfein Wanted To Run For Office, He Should “Would Leave Goldman Sachs And Start Running A Soup Kitchen Somewhere. “ “MR. BLANKFEIN:  I’m saying for myself.             MS. CLINTON:  If you were going to run here is what I would tell you to do —             MR. BLANKFEIN:  Very hypothetical. MS. CLINTON:  I think you would leave Goldman Sachs and start running a soup kitchen somewhere.             MR. BLANKFEIN:  For one thing the stock would go up. MS. CLINTON:  Then you could be a legend in your own time both when you were there and when you left.” [ Speech to Goldman Sachs, 2013 IBD Ceo Annual Conference, 6/4/13]

     

    Hillary Clinton Noted President Clinton Had Spoken At The Same Goldman Summit Last Year, And Blankfein Joked “He Increased Our Budget.” “SECRETARY CLINTON:  Well, first, thanks for having me here and giving me a chance to know a little bit more about the builders and the innovators who you’ve gathered.  Some of you might have been here last year, and my husband was, I guess, in this very same position.  And he came back and was just thrilled by— MR. BLANKFEIN:  He increased our budget.              SECRETARY CLINTON:  Did he? MR. BLANKFEIN:  Yes.  That’s why we —              SECRETARY CLINTON:  Good.  I think he—I think he encouraged you to grow it a little, too.  But it really was a tremendous experience for him, so I’ve been looking forward to it and hope we have a chance to talk about a lot of things.” [Goldman Sachs Builders And Innovators Summit, 10/29/13]

     

    Clinton Said When She Got To State, Employees “Were Not Mostly Permitted To Have Handheld Devices.”  “You know, when Colin Powell showed up as Secretary of State in 2001, most State Department employees still didn't even have computers on their desks. When I got there they were not mostly permitted to have handheld devices. I mean, so you're thinking how do we operate in this new environment dominated by technology, globalizing forces? We have to change, and I can't expect people to change if I don't try to model it and lead it.”  [Clinton Speech For General Electric’s Global Leadership Meeting – Boca Raton, FL, 1/6/14]

     

    Clinton Joked It’s “Risky” For Her To Speak To A Group Committed To Futures Markets  Given Her Past Whitewater Scandal.  “Now, it's always a little bit risky for me to come speak to a group that is committed to the futures markets because — there's a few knowing laughs — many years ago, I actually traded in the futures markets. I mean, this was so long ago, it was before computers were invented, I think. And I worked with a group of like-minded friends and associates who traded in pork bellies and cotton and other such things, and I did pretty well. I invested about a thousand dollars and traded up to about a hundred thousand. And then my daughter was born, and I just didn't think I had enough time or mental space to figure out anything having to do with trading other than trading time with my daughter for time with the rest of my life. So I got out, and I thought that would be the end of it.” [Remarks to CME Group, 11/18/13]

     

    Hillary Clinton Said Jordan Was Threatened Because “They Can’t Possibly Vet All Those Refugees So They Don’t Know If, You Know, Jihadists Are Coming In Along With Legitimate Refugees.”  “So I think you’re right to have gone to the places that you visited because there’s a discussion going on now across the region to try to see where there might be common ground to deal with the threat posed by extremism and particularly with Syria which has everyone quite worried, Jordan because it’s on their border and they have hundreds of thousands of refugees and they can’t possibly vet all those refugees so they don’t know if, you know, jihadists are coming in along with legitimate refugees. Turkey for the same reason.”  [Jewish United Fund Of Metropolitan Chicago Vanguard Luncheon, 10/28/13]

     

    Hillary Clinton Said Her Dream Is A Hemispheric Common Market, With Open Trade And Open Markets.  “My dream is a hemispheric common market, with open trade and open borders, some time in the future with energy that is as green and sustainable as we can get it, powering growth and opportunity for every person in the hemisphere.” [05162013 Remarks to Banco Itau.doc, p. 28]

    * * *

    Here is the full email by Carrk as of January 25, 2016 laying out all the potentially delicate issues that the Clinton campaign would wish to avoid from emerging. One thing to note: as Michael Tracey points out, the Hillary campaign had all the transcripts at her disposal all along, despite repeated deflection.  Perhaps as a result of this leak she will now release the full transcripts for the "proper context."

    * * *

    From:tcarrk@hillaryclinton.com
    To: jpalmieri@hillaryclinton.com, john.podesta@gmail.com, slatham@hillaryclinton.com, kschake@hillaryclinton.com, creynolds@hillaryclinton.com, bfallon@hillaryclinton.com 
    Date: 2016-01-25 00:28 Subject:

    HRC Paid Speeches

    Team,

    Attached are the flags from HRC’s paid speeches we have from HWA. I put some highlights below. There is a lot of policy positions that we should give an extra scrub with Policy.

    In terms of what was opened to the press and what was not, the Washington Examiner got a hold of one of the private speech contracts (her speeches to universities were typically open press), so this is worth a read http://www.washingtonexaminer.com/clintons-speeches-are-cozy-for-wall-streeters-but-closed-to-journalists/article/2553294/section/author/dan-friedman

    CLINTON ADMITS SHE IS OUT OF TOUCH

    Hillary Clinton: “I'm Kind Of Far Removed” From The Struggles Of The Middle Class “Because The Life I've Lived And The Economic, You Know, Fortunes That My Husband And I Now Enjoy.” “And I am not taking a position on any policy, but I do think there is a growing sense of anxiety and even anger in the country over the feeling that the game is rigged.  And I never had that feeling when I was growing up.  Never. I mean, were there really rich people, of course there were.  My father loved to complain about big business and big government, but we had a solid middle class upbringing.  We had good public schools.  We had accessible health care.  We had our little, you know, one-family house that, you know, he saved up his money, didn't believe in mortgages.  So I lived that.  And now, obviously, I'm kind of far removed because the life I've lived and the economic, you know, fortunes that my husband and I now enjoy, but I haven't forgotten it.”  [Hillary Clinton Remarks at Goldman-Black Rock, 2/4/14]

    CLINTON SAYS YOU NEED TO HAVE A PRIVATE AND PUBLIC POSITION ON POLICY

    Clinton: “But If Everybody's Watching, You Know, All Of The Back Room Discussions And The Deals, You Know, Then People Get A Little Nervous, To Say The Least. So, You Need Both A Public And A Private Position.” CLINTON: You just have to sort of figure out how to — getting back to that word, "balance" — how to balance the public and the private efforts that are necessary to be successful, politically, and that's not just a comment about today. That, I think, has probably been true for all of our history, and if you saw the Spielberg movie, Lincoln, and how he was maneuvering and working to get the 13th Amendment passed, and he called one of my favorite predecessors, Secretary Seward, who had been the governor and senator from New York, ran against Lincoln for president, and he told Seward, I need your help to get this done. And Seward called some of his lobbyist friends who knew how to make a deal, and they just kept going at it. I mean, politics is like sausage being made. It is unsavory, and it always has been that way, but we usually end up where we need to be. But if everybody's watching, you know, all of the back room discussions and the deals, you know, then people get a little nervous, to say the least. So, you need both a public and a private position. And finally, I think — I believe in evidence-based decision making. I want to know what the facts are. I mean, it's like when you guys go into some kind of a deal, you know, are you going to do that development or not, are you going to do that renovation or not, you know, you look at the numbers. You try to figure out what's going to work and what's not going to work. [Clinton Speech For National Multi-Housing Council, 4/24/13]

    CLINTON TALKS ABOUT HOLDING WALL STREET ACCOUNTABLE ONLY FOR POLITICAL REASONS

    Clinton Said That The Blame Placed On The United States Banking System For The Crisis “Could Have Been Avoided In Terms Of Both Misunderstanding And Really Politicizing What Happened.” “That was one of the reasons that I started traveling in February of '09, so people could, you know, literally yell at me for the United States and our banking system causing this everywhere.  Now, that's an oversimplification we know, but it was the conventional wisdom. And I think that there's a lot that could have been avoided in terms of both misunderstanding and really politicizing what happened with greater transparency, with greater openness on all sides, you know, what happened, how did it happen, how do we prevent it from happening?  You guys help us figure it out and let's make sure that we do it right this time. And I think that everybody was desperately trying to fend off the worst effects institutionally, governmentally, and there just wasn't that opportunity to try to sort this out, and that came later.” [Goldman Sachs AIMS Alternative Investments Symposium, 10/24/13]

    * * *

    Clinton: “Even If It May Not Be 100 Percent True, If The Perception Is That Somehow The Game Is Rigged, That Should Be A Problem For All Of Us.” “Now, it's important to recognize the vital role that the financial markets play in our economy and that so many of you are contributing to.  To function effectively those markets and the men and women who shape them have to command trust and confidence, because we all rely on the market's transparency and integrity. So even if it may not be 100 percent true, if the perception is that somehow the game is rigged, that should be a problem for all of us, and we have to be willing to make that absolutely clear.  And if there are issues, if there's wrongdoing, people have to be held accountable and we have to try to deter future bad behavior, because the public trust is at the core of both a free market economy and a democracy.” [Clinton Remarks to Deutsche Bank, 10/7/14]

    CLINTON SUGGESTS WALL STREET INSIDERS ARE WHAT IS NEEDED TO FIX WALL STREET

    Clinton Said Financial Reform “Really Has To Come From The Industry Itself.” “Remember what Teddy Roosevelt did.  Yes, he took on what he saw as the excesses in the economy, but he also stood against the excesses in politics.  He didn't want to unleash a lot of nationalist, populistic reaction.  He wanted to try to figure out how to get back into that balance that has served America so well over our entire nationhood. Today, there's more that can and should be done that really has to come from the industry itself, and how we can strengthen our economy, create more jobs at a time where that's increasingly challenging, to get back to Teddy Roosevelt's square deal.  And I really believe that our country and all of you are up to that job.” [Clinton Remarks to Deutsche Bank, 10/7/14]

    * * *

    Speaking About The Importance Of Proper Regulation, Clinton Said “The People That Know The Industry Better Than Anybody Are The People Who Work In The Industry.” “I mean, it's still happening, as you know.  People are looking back and trying to, you know, get compensation for bad mortgages and all the rest of it in some of the agreements that are being reached. There's nothing magic about regulations, too much is bad, too little is bad.  How do you get to the golden key, how do we figure out what works?  And the people that know the industry better than anybody are the people who work in the industry. And I think there has to be a recognition that, you know, there's so much at stake now, I mean, the business has changed so much and decisions are made so quickly, in nano seconds basically.  We spend trillions of dollars to travel around the world, but it's in everybody's interest that we have a better framework, and not just for the United States but for the entire world, in which to operate and trade.” [Goldman Sachs AIMS Alternative Investments Symposium, 10/24/13]

    CLINTON ADMITS NEEDING WALL STREET FUNDING

    Clinton Said That Because Candidates Needed Money From Wall Street To Run For Office, People In New York Needed To Ask Tough Questions About The Economy Before Handing Over Campaign Contributions. “Secondly, running for office in our country takes a lot of money, and candidates have to go out and raise it.  New York is probably the leading site for contributions for fundraising for candidates on both sides of the aisle, and it's also our economic center. And there are a lot of people here who should ask some tough questions before handing over campaign contributions to people who were really playing chicken with our whole economy.” [Goldman Sachs AIMS Alternative Investments Symposium, 10/24/13]

    * * *

    Clinton: “It Would Be Very Difficult To Run For President Without Raising A Huge Amount Of Money And Without Having Other People Supporting You Because Your Opponent Will Have Their Supporters.” “So our system is, in many ways, more difficult, certainly far more expensive and much longer than a parliamentary system, and I really admire the people who subject themselves to it.  Even when I, you know, think they should not be elected president, I still think, well, you know, good for you I guess, you're out there promoting democracy and those crazy ideas of yours. So I think that it's something — I would like — you know, obviously as somebody who has been through it, I would like it not to last as long because I think it's very distracting from what we should be doing every day in our public business.  I would like it not to be so expensive.  I have no idea how you do that. I mean, in my campaign — I lose track, but I think I raised $250 million or some such enormous amount, and in the last campaign President Obama raised 1.1 billion, and that was before the Super PACs and all of this other money just rushing in, and it's so ridiculous that we have this kind of free for all with all of this financial interest at stake, but, you know, the Supreme Court said that's basically what we're in for.  So we're kind of in the wild west, and, you know, it would be very difficult to run for president without raising a huge amount of money and without having other people supporting you because your opponent will have their supporters.  So I think as hard as it was when I ran, I think it's even harder now.” [Clinton Speech For General Electric’s Global Leadership Meeting – Boca Raton, FL, 1/6/14]

     

    CLINTON TOUTS HER RELATIONSHIP TO WALL STREET AS A SENATOR

    Clinton: As Senator, “I Represented And Worked With” So Many On Wall Street And “Did All I Could To Make Sure They Continued To Prosper” But Still Called For Closing Carried Interest Loophole. In remarks at Robbins, Gellar, Rudman & Dowd in San Diego, Hillary Clinton said, “When I was a Senator from New York, I represented and worked with so many talented principled people who made their living in finance.  But even thought I represented them and did all I could to make sure they continued to prosper, I called for closing the carried interest loophole and addressing skyrocketing CEO pay. I also was calling in '06, '07 for doing something about the mortgage crisis, because I saw every day from Wall Street literally to main streets across New York how a well-functioning financial system is essential. So when I raised early warnings about early warnings about subprime mortgages and called for regulating derivatives and over complex financial products, I didn't get some big arguments, because people sort of said, no, that makes sense.  But boy, have we had fights about it ever since.” [Hillary Clinton’s Remarks at Robbins Geller Rudman & Dowd in San Diego, 9/04/14]

    * * *

    Clinton On Wall Street: “I Had Great Relations And Worked So Close Together After 9/11 To Rebuild Downtown, And A Lot Of Respect For The Work You Do And The People Who Do It.” “Now, without going over how we got to where we are right now, what would be your advice to the Wall Street community and the big banks as to the way forward with those two important decisions? SECRETARY CLINTON:  Well, I represented all of you for eight years.  I had great relations and worked so close together after 9/11 to rebuild downtown, and a lot of respect for the work you do and the people who do it, but I do — I think that when we talk about the regulators and the politicians, the economic consequences of bad decisions back in '08, you know, were devastating, and they had repercussions throughout the world.” [Goldman Sachs AIMS Alternative Investments Symposium, 10/24/13]

     

    CLINTON TALKS ABOUT THE CHALLENGES RUNNING FOR OFFICE

    Hillary Clinton Said There Was “A Bias Against People Who Have Led Successful And/Or Complicated Lives,” Citing The Need To Divese Of Assets, Positions, And Stocks.   “SECRETARY CLINTON:  Yeah.  Well, you know what Bob Rubin said about that.  He said, you know, when he came to Washington, he had a fortune.  And when he left Washington, he had a small —              MR. BLANKFEIN:  That’s how you have a small fortune, is you go to Washington. SECRETARY CLINTON:  You go to Washington.  Right.              But, you know, part of the problem with the political situation, too, is that there is such a bias against people who have led successful and/or complicated lives.  You know, the divestment of assets, the stripping of all kinds of positions, the sale of stocks.  It just becomes very onerous and unnecessary.” [Goldman Sachs Builders And Innovators Summit, 10/29/13]

    CLINTON SUGGESTS SHE IS A MODERATE

    Clinton Said That Both The Democratic And Republican Parties Should Be “Moderate.” “URSULA BURNS:  Interesting.  Democrats? SECRETARY CLINTON:  Oh, long, definitely. URSULA BURNS:  Republicans? SECRETARY CLINTON:  Unfortunately, at the time, short. URSULA BURNS:  Okay.  We'll go back to questions. SECRETARY CLINTON:  We need two parties. URSULA BURNS:  Yeah, we do need two parties. SECRETARY CLINTON:  Two sensible, moderate, pragmatic parties.” [Hillary Clinton Remarks, Remarks at Xerox, 3/18/14]

    * * *

    Clinton: “Simpson-Bowles… Put Forth The Right Framework. Namely, We Have To Restrain Spending, We Have To Have Adequate Revenues, And We Have To Incentivize Growth. It's A Three-Part Formula… And They Reached An Agreement. But What Is Very Hard To Do Is To Then Take That Agreement If You Don't Believe That You're Going To Be Able To Move The Other Side.” SECRETARY CLINTON:  Well, this may be borne more out of hope than experience in the last few years. But Simpson-Bowles — and I know you heard from Erskine earlier today — put forth the right framework. Namely, we have to restrain spending, we have to have adequate revenues, and we have to incentivize growth. It's a three-part formula.  The specifics can be negotiated depending upon whether we're acting in good faith or not. And what Senator Simpson and Erskine did was to bring Republicans and Democrats alike to the table, and you had the full range of ideological views from I think Tom Coburn to Dick Durbin.  And they reached an agreement. But what is very hard to do is to then take that agreement if you don't believe that you're going to be able to move the other side.  And where we are now is in this gridlocked dysfunction. So you've got Democrats saying that, you know, you have to have more revenues; that's the sine qua non of any kind of agreement.  You have Republicans saying no, no, no on revenues; you have to cut much more deeply into spending. Well, looks what's happened.  We are slowly returning to growth.  It's not as much or as fast as many of us would like to see, but, you know, we're certainly better off than our European friends, and we're beginning to, I believe, kind of come out of the long aftermath of the '08 crisis. [Clinton Speech For Morgan Stanley, 4/18/13]

    * * *

    Clinton: “The Simpson-Bowles Framework And The Big Elements Of It Were Right… You Have To Restrain Spending, You Have To Have Adequate Revenues, And You Have To Have Growth.” CLINTON: So, you know, the Simpson-Bowles framework and the big elements of it were right.  The specifics can be negotiated and argued over.  But you got to do all three.  You have to restrain spending, you have to have adequate revenues, and you have to have growth.  And I think we are smart enough to figure out how to do that. [Clinton Speech For Morgan Stanley, 4/18/13]

    CLINTON IS AWARE OF SECURITY CONCERNS AROUND BLACKBERRIES

    Clinton: “At The State Department We Were Attacked Every Hour, More Than Once An Hour By Incoming Efforts To Penetrate Everything We Had.  And That Was True Across The U.S. Government.” CLINTON: But, at the State Department we were attacked every hour, more than once an hour by incoming efforts to penetrate everything we had.  And that was true across the U.S. government.  And we knew it was going on when I would go to China, or I would go to Russia, we would leave all of our electronic equipment on the plane, with the batteries out, because this is a new frontier.  And they're trying to find out not just about what we do in our government.  They're trying to find out about what a lot of companies do and they were going after the personal emails of people who worked in the State Department. So it's not like the only government in the world that is doing anything is the United States.  But, the United States compared to a number of our competitors is the only government in the world with any kind of safeguards, any kind of checks and balances.  They may in many respects need to be strengthened and people need to be reassured, and they need to have their protections embodied in law.  But, I think turning over a lot of that material intentionally or unintentionally, because of the way it can be drained, gave all kinds of information not only to big countries, but to networks and terrorist groups, and the like. So I have a hard time thinking that somebody who is a champion of privacy and liberty has taken refuge in Russia under Putin's authority.  And then he calls into a Putin talk show and says, President Putin, do you spy on people?  And President Putin says, well, from one intelligence professional to another, of course not.  Oh, thank you so much.  I mean, really, I don't know.  I have a hard time following it. [Clinton Speech At UConn, 4/23/14]

    * * *

    Hillary Clinton: “When I Got To The State Department, It Was Still Against The Rules To Let Most — Or Let All Foreign Service Officers Have Access To A Blackberry.” “I mean, let's face it, our government is woefully, woefully behind in all of its policies that affect the use of technology.  When I got to the State Department, it was still against the rules to let most — or let all Foreign Service Officers have access to a Blackberry.  You couldn't have desktop computers when Colin Powell was there.  Everything that you are taking advantage of, inventing and using, is still a generation or two behind when it comes to our government.” [Hillary Clinton Remarks at Nexenta, 8/28/14]

    * * *

    Hillary Clinton: “We Couldn't Take Our Computers, We Couldn't Take Our Personal Devices” Off The Plane In China And Russia. “I mean, probably the most frustrating part of this whole debate are countries acting like we're the only people in the world trying to figure out what's going on.  I mean, every time I went to countries like China or Russia, I mean, we couldn't take our computers, we couldn't take our personal devices, we couldn't take anything off the plane because they're so good, they would penetrate them in a minute, less, a nanosecond.  So we would take the batteries out, we'd leave them on the plane.” [Hillary Clinton Remarks at Nexenta, 8/28/14]

    * * *

    Clinton Said When She Got To State, Employees “Were Not Mostly Permitted To Have Handheld Devices.” “You know, when Colin Powell showed up as Secretary of State in 2001, most State Department employees still didn't even have computers on their desks.  When I got there they were not mostly permitted to have handheld devices.  I mean, so you're thinking how do we operate in this new environment dominated by technology, globalizing forces?  We have to change, and I can't expect people to change if I don't try to model it and lead it.” [Clinton Speech For General Electric’s Global Leadership Meeting – Boca Raton, FL, 1/6/14]

    * * *

    Hillary Clinton Said You Know You Can’t Bring Your Phone And Computer When Traveling To China And Russia And She Had To Take Her Batteries Out And Put them In A Special Box. “And anybody who has ever traveled in other countries, some of which shall remain nameless, except for Russia and China, you know that you can’t bring your phones and your computers.  And if you do, good luck.  I mean, we would not only take the batteries out, we would leave the batteries and the devices on the plane in special boxes.  Now, we didn’t do that because we thought it would be fun to tell somebody about.  We did it because we knew that we were all targets and that we would be totally vulnerable. So it’s not only what others do to us and what we do to them and how many people are involved in it.  It’s what’s the purpose of it, what is being collected, and how can it be used.  And there are clearly people in this room who know a lot about this, and some of you could be very useful contributors to that conversation because you’re sophisticated enough to know that it’s not just, do it, don’t do it.  We have to have a way of doing it, and then we have to have a way of analyzing it, and then we have to have a way of sharing it.” [Goldman Sachs Builders And Innovators Summit, 10/29/13]

    * * *

    Hillary Clinton Lamented How Far Behind The State Department Was In Technology, Saying “People Were Not Even Allowed To Use Mobile Devices Because Of Security Issues.”  “Personally, having, you know, lived and worked in the White House, having been a senator, having been Secretary of State, there has traditionally been a great pool of very talented, hard-working people.  And just as I was saying about the credit market, our personnel policies haven’t kept up with the changes necessary in government.  We have a lot of difficulties in getting—when I got to the State Department, we were so far behind in technology, it was embarrassing.  And, you know, people were not even allowed to use mobile devices because of security issues and cost issues, and we really had to try to push into the last part of the 20th Century in order to get people functioning in 2009 and ‘10.” [Goldman Sachs Builders And Innovators Summit, 10/29/13]

     

    CLINTON REMARKS ARE PRO KEYSTONE AND PRO TRADE

    Clinton: “So I Think That Keystone Is A Contentious Issue, And Of Course It Is Important On Both Sides Of The Border For Different And Sometimes Opposing Reasons…” “So I think that Keystone is a contentious issue, and of course it is important on both sides of the border for different and sometimes opposing reasons, but that is not our relationship.  And I think our relationship will get deeper and stronger and put us in a position to really be global leaders in energy and climate change if we worked more closely together.  And that's what I would like to see us do.” [Remarks at tinePublic, 6/18/14]

    * * *

    Hillary Clinton Said Her Dream Is A Hemispheric Common Market, With Open Trade And Open Markets. “My dream is a hemispheric common market, with open trade and open borders, some time in the future with energy that is as green and sustainable as we can get it, powering growth and opportunity for every person in the hemisphere.”  [05162013 Remarks to Banco Itau.doc, p. 28]

    * * *

    Hillary Clinton Said We Have To Have A Concerted Plan To Increase Trade; We Have To Resist Protectionism And Other Kinds Of Barriers To Trade. “Secondly, I think we have to have a concerted plan to increase trade already under the current circumstances, you know, that Inter-American Development Bank figure is pretty surprising. There is so much more we can do, there is a lot of low hanging fruit but businesses on both sides have to make it a priority and it's not  for governments to do but governments can either make it easy or make it hard and we have to resist, protectionism, other kinds of barriers to market access and to trade and I would like to see this get much more attention and be not just a policy for a year under president X or president Y but a consistent one.” [05162013 Remarks to Banco Itau.doc, p. 32]

     

    CLINTON IS MORE FAVORABLE TO CANADIAN HEALTH CARE AND SINGLE PAYER

    Clinton Said Single-Payer Health Care Systems “Can Get Costs Down,” And “Is As Good Or Better On Primary Care,” But “They Do Impose Things Like Waiting Times.” “If you look at countries that are comparable, like Switzerland or Germany, for example, they have mixed systems.  They don't have just a single-payer system, but they have very clear controls over budgeting and  accountability. If you look at the single-payer systems, like Scandinavia, Canada, and elsewhere, they can get costs down because, you know, although their care, according to statistics, overall is as good or better on primary care, in particular, they do impose things like waiting times, you know.  It takes longer to get like a hip replacement than it might take here.” [Hillary Clinton remarks to ECGR Grand Rapids, 6/17/13]

    * * *

    Clinton Cited President Johnson’s Success In Establishing Medicare And Medicaid And Said She Wanted To See The U.S. Have Universal Health Care Like In Canada. “You know, on healthcare we are the prisoner of our past.  The way we got to develop any kind of medical insurance program was during World War II when companies facing shortages of workers began to offer healthcare benefits as an inducement for employment.  So from the early 1940s healthcare was seen as a privilege connected to employment.  And after the war when soldiers came back and went back into the market there was a lot of competition, because the economy was so heated up. So that model continued.  And then of course our large labor unions bargained for healthcare with the employers that their members worked for.  So from the early 1940s until the early 1960s we did not have any Medicare, or our program for the poor called Medicaid until President Johnson was able to get both passed in 1965. So the employer model continued as the primary means by which working people got health insurance.  People over 65 were eligible for Medicare.  Medicaid, which was a partnership, a funding partnership between the federal government and state governments, provided some, but by no means all poor people with access to healthcare. So what we've been struggling with certainly Harry Truman, then Johnson was successful on Medicare and Medicaid, but didn't touch the employer based system, then actually Richard Nixon made a proposal that didn't go anywhere, but was quite far reaching.  Then with my husband's administration we worked very hard to come up with a system, but we were very much constricted by the political realities that if you had your insurance from your employer you were reluctant to try anything else.  And so we were trying to build a universal system around the employer-based system. And indeed now with President Obama's legislative success in getting the Affordable Care Act passed that is what we've done.  We still have primarily an employer-based system, but we now have people able to get subsidized insurance.  So we have health insurance companies playing a major role in the provision of healthcare, both to the employed whose employers provide health insurance, and to those who are working but on their own are not able to afford it and their employers either don't provide it, or don't provide it at an affordable price. We are still struggling.  We've made a lot of progress.  Ten million Americans now have insurance who didn't have it before the Affordable Care Act, and that is a great step forward.  (Applause.) And what we're going to have to continue to do is monitor what the costs are and watch closely to see whether employers drop more people from insurance so that they go into what we call the health exchange system.  So we're really just at the beginning.  But we do have Medicare for people over 65.  And you couldn't, I don't think, take it away if you tried, because people are very satisfied with it, but we also have a lot of political and financial resistance to expanding that system to more people. So we're in a learning period as we move forward with the implementation of the Affordable Care Act.  And I'm hoping that whatever the shortfalls or the glitches have been, which in a big piece of legislation you're going to have, those will be remedied and we can really take a hard look at what's succeeding, fix what isn't, and keep moving forward to get to affordable universal healthcare coverage like you have here in Canada.  [Clinton Speech For tinePublic – Saskatoon, CA, 1/21/15]

     

    * * *

    Below is the full 80 page documents of "speech flags" in Hillary speeches:

     

  • Trump Apologizes For "Locker Room Banter" After Recording Emerges Of "Extremely Lewd" Conversation About Women

    One can tell it's the Friday night before a Sunday presidential debate when…

    First, the FBI releases 350 previously-deleted emails from Hillary Clinton's private server that she had failed to hand over to State. As Politico reports,

    The first major batch of Hillary Clinton emails recovered by the FBI during its probe of her private email server went public Friday, including a message where one of her top political advisers floated the idea of her running for vice president in 2012.

     

    “Only way for [President Barack Obama] to win second term is to ask you to be VP – he will realize that after midterms,” wrote Mark Penn, a pollster and chief strategist on her unsuccessful 2008 presidential bid.

     

    Friday's release of previously unseen Clinton emails prompted another round of heartburn for Clinton's presidential campaign and anticipation on the part of Republican critics hoping for an October surprise.

     

    However, the release proved to be something of a snoozer since many of the messages scheduled for release are already in the public domain in some form.

    Then Wikileaks unleashes a fresh batch of Podesta-related hacked emails, refreshing the world's memory of the 'pay-for-play' allegations surrounding Russia, Iran, China, and Uranium One.

    Today WikiLeaks begins its series on deals involving Hillary Clinton campaign Chairman John Podesta. Mr Podesta is a long-term associate of the Clintons and was President Bill Clinton's Chief of Staff from 1998 until 2001. Mr Podesta also controls the Podesta Group, a major lobbying firm and is the Chair of the Center for American Progress (CAP), a Washington DC-based think tank.

     

    In April 2015 the New York Times published a story about a company called "Uranium One" which was sold to Russian government-controlled interests, giving Russia effective control of one-fifth of all uranium production capacity in the United States. Since uranium is considered a strategic asset, with implications for the production of nuclear weapons, the deal had to be approved by a committee composed of representatives from a number of US government agencies. Among the agencies that eventually signed off the deal was the State Department, then headed by Secretary Clinton. The Committee on Foreign Investment in the United States (CFIUS) comprises, among others, the secretaries of the Treasury, Defense, Homeland Security, Commerce and Energy.

     

    As Russian interests gradually took control of Uranium One millions of dollars were donated to the Clinton Foundation between 2009 and 2013 from individuals directly connected to the deal including the Chairman of Uranium One, Ian Telfer. Although Mrs Clinton had an agreement with the Obama White House to publicly identify all donors to the Clinton Foundation, the contributions from the Chairman of Uranium One were not publicly disclosed by the Clintons.

     

    When the New York Times article was published the Clinton campaign spokesman, Brian Fallon, strongly rejected the possibility that then-Secretary Clinton exerted any influence in the US goverment's review of the sale of Uranium One, describing this possibility as "baseless".

    But, finally, and what everyone will be talking about, is the release by The Washington Post of Donald Trump having an "extremely lewd conversation about women in 2005."

     Donald Trump bragged in vulgar terms about kissing, groping and trying to have sex with women during a 2005 conversation caught on a hot microphone — saying that “when you’re a star, they let you do it” — according to a video obtained by The Washington Post.

     

    The video captures Trump talking with Billy Bush of “Access Hollywood” on a bus with Access Hollywood written across the side. They were arriving on the set of “Days of Our Lives” to tape a segment about Trump’s upcoming cameo on the soap opera.

     

     

    In the leaked audio, apparently recorded while Trump was on a bus with former Access Hollywood host Billy Bush, Trump talks about trying — and failing — to have sex with an unnamed woman. He had been married to his wife Melania for a few months at the time of the conversation. 

     

    “I did try and fuck her. She was married,” Trump says, according to the audio published by the Post.

     

    “And I moved on her very heavily," he says. "In fact, I took her out furniture shopping. She wanted to get some furniture. I said, ‘I’ll show you where they have some nice furniture.’ ”

     

    “I moved on her like a bitch, but I couldn’t get there. And she was married,” Trump says. “Then all of a sudden I see her, she’s now got the big phony tits and everything. She’s totally changed her look.”

     

    At another point in the recording, Trump is heard saying that "when you're a star," women let you "do anything."

     

    “Grab them by the pussy,” he says.

    The Clinton campaign wasted no time, responding to the 'lewd' Trump comments:

    "This is horrific we cannot allow this man to be President."

    Trump apologized in a statement…

    “This was locker room banter, a private conversation that took place many years ago…"

     

    "[Former President] Bill Clinton has said far worse to me on the golf course – not even close," Trump added.

     

    "I apologize if anyone was offended."

    So one hand a presidential candidate with a recidivist, cheating husband, on the other a married man who admits he wanted to have sex with a woman in a private setting.

    Having said that, let's leave the real debate to Twitter. These seemed to sum things up perfectly…

    Lizzy @lizzie363
    Trump talks like Bill Clinton acts but we are suppossed too condemn ones speech but overlook the others actions. #botharehorrific.

     

    Louis Winthorpe III @LWinthorpe
    So we find out Trump talks like more than half the guys you know. That's supposed to make me think he's now less electable, not more?

    One thing is certain, family values arent the winner here.

  • Black Swans: 9 Recent Events That Changed Finance Forever

    Almost every market participant out there has at least one horrific war story on a crash that profoundly affected their portfolio or world view.

    For example, one unnamed stock broker I know had himself and his clients in a soaring gold stock called Bre-X in 1997. There was way less connectivity at this time, and this person was on a trip to Vegas for some sun and fun. Staying at Caesar’s Palace, he went out for a short while as the stock was trading near its highs of $286.50 per share.

    When he got back to the hotel, he found out that news had already spread quickly: during a due diligence test, mining company Freeport had twinned seven drill holes, finding not even a trace of economic gold. The deposit was not real, and panic swept the market. His hotel phone had been ringing off the hook for three hours but he missed all the calls. Shares plummeted 83% that day, but he was already too late to get out of the stock.

    It’s easy to rationalize the series of events that led to the fall of Bre-X in hindsight, but as Visual Capitalist's Jeff Desjardin notes, at the time many traders and experts like this broker were caught by surprise. A company worth around $4.5 billion basically went to zero almost overnight as its claim of 70 million ounces of gold vanished into thin air. That’s a “black swan”, and this one in particular changed the mining and finance industries forever.

    BLACK SWANS: 9 RECENT EVENTS THAT CHANGED FINANCE FOREVER

    The following infographic comes to us from Call Levels, and it highlights nine other recent “black swan” events that will have a lasting impact on how investors approach markets. These events range from the Asian financial crisis of 1997 to the more recent Brexit panic that occurred in June 2016.

    Courtesy of: Visual Capitalist

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Today’s News 7th October 2016

  • How To Solve The Migrant Crisis (In 2 'Easy' Steps)

    Submitted by Nick Giambruno via InternationalMan.com,

    Nick Giambruno: The migrant crisis is tearing Europe apart. What’s your take Doug?

    Doug Casey: I'm all for immigration and completely open borders to enable opportunity seekers from anyplace to move anyplace else.

    With two big, critically important, caveats:

    1) there can be no welfare or free government services, so everyone has to pay his own way, and no freeloaders are attracted; and

     

    2) all property is privately owned, to minimize the possibility of squatter camps full of beggars.

    In the absence of welfare benefits, immigrants are usually the best of people because you get mobile, aggressive, and opportunity-seeking people that want to leave a dead old culture for a vibrant new one. The millions of immigrants who came to the U.S. in the late 19th and early 20th centuries had zero in the way of state support.

    But what is going on in Europe today is entirely different. The migrants coming to Europe aren’t being attracted by opportunity in the new land so much as the welfare benefits and the soft life. For the most part they are unskilled and poorly educated.

    What we’re talking about here is the migration of millions of people of different language, different race, different religion, different culture, different mode of living. If you're an alien and you're 1 out of 10,000, or 1,000, or 100, you're a curiosity, an interesting outsider. But an influx of millions of migrants is only going to destroy the old culture, and guarantee antagonism—especially when the locals have to pay for it. In many ways, what’s happening now isn’t just comparable to what happened 2,000 years ago with the migration of the Germanic northern barbarians into the Roman Empire. It’s potentially much more serious.

    Nick Giambruno: I think pretty much anywhere in the world, whenever there’s an influx of foreigners to the degree that it changes the demographics or upsets the local economic applecart, it’s obviously going to cause problems.

    For example, the Chinese are wearing out their welcome in many parts of Africa.

    We saw this ourselves when we went to Zimbabwe earlier this year. Their numbers have grown so much that there are numerous Chinese mini cities within Zim.

    Many people in Zim aren’t too happy with the Chinese dumping cheap products and upsetting the local economy. When we asked our driver to take us through a rough neighborhood, all we saw was a seemingly endless market, as far as I can tell, completely filled with Chinese products.

    Doug Casey: Incidentally, it’s supposed to be official Chinese policy to migrate about 300 million Chinese to Africa in the years to come. They’re employed in building roads, mines, railroads, and other infrastructure. The Africans like the goodies, but don’t like the Chinese. It has the makings of a race war a generation or so in the future.

    Nick Giambruno: Getting back to the crisis in Europe…

    It’s well known the gigantic bureaucracy in Brussels produces ridiculous regulations and dictates. The EU has reduced the standard of living of the average European.

    Of course this is related to the migrant issue too. The EU has a quota system which is supposed to distribute migrants across the union. Not all EU countries are happy with this.

    For example, Hungary doesn’t believe it should have to accept any migrants if it doesn’t want to. Brussels disagrees and says Hungary is obligated to take in its “fair share” of migrants.

    Hungarian Prime Minister Viktor Orban recently said:

    “Hungary does not need a single migrant for the economy to work, or the population to sustain itself, or for the country to have a future…

    …This is why there is no need for a common European migration policy – whoever needs migrants can take them, but don't force them on us, we don't need them…

    …For us migration is not a solution but a problem… not medicine but a poison, we don't need it and won't swallow it.”

    The Eurocrats are furious with Orban. Luxembourg has called for Hungary to be expelled from the EU.

    It’s clear the migrant issue is fueling resentment to the EU. It was a major factor in the Brexit vote. The unprecedented inflow of migrants has also helped anti-EU political parties grow in popularity.

    This whole mess looks to me to be a self-inflicted wound. What do you think?

    Doug Casey: The EU is a huge aggravating factor with the migrant problem. Brussels is full of globalists and doctrinaire socialists who not only promote bad policies, but make the whole continent pay for the mistakes of its most misguided members.

    All Western European governments are massive welfare states that provide free food, housing, medical care, schooling, and living expenses for citizens. And even for residents who aren’t citizens. Benefits like these will naturally draw in poor people from poor countries.

    Millions of Africans will want to emigrate, especially to the homelands of their ex-colonial masters in Europe. The colonizers are now themselves being colonized. If I was an African from south of the Sahara, I'd absolutely try to get to Italy or Greece or France or Spain or on my way to Sweden to cash in on the largesse of these stupid Europeans.

    I’m a fan of what’s left of Western Civilization. I hate to see it washed away. But that’s what will happen if the floodgate is opened.

    Nick Giambruno: I really don’t feel that sorry for the Europeans either. They largely brought this mess upon themselves.

    It’s no coincidence that migrants are flowing to the countries with the most generous welfare benefits. If there weren’t so many freebies in these countries, there wouldn’t be so many migrants showing up to collect them.

    It’s obvious the welfare state plays a major role in this crisis.

    It’s also obvious that idiotic military interventions are a major factor.

    The Europeans were and are enthusiastic supporters of the U.S. military interventions in Syria, Iraq, Afghanistan—and perhaps most consequentially for them—Libya.

    Before his overthrow by NATO, Libyan leader Muammar Gaddafi had an agreement with Italy, which is directly to Libya’s north, across the Mediterranean Sea.

    Gaddafi agreed to prevent migrants heading for Europe from using Libya’s 1,100 miles of coastline as a transit point. It was an arrangement that worked.

    So it’s no shocker that when NATO helped overthrow the Gaddafi government in 2011, the migrant floodgates opened.

    Doug Casey: Unless the Europeans get in front of this situation, it’s not just some refugees from the Near East they’ll have to deal with. Especially with the economic chaos of The Greater Depression, it’s going to be millions from Africa, and then perhaps millions more from Central Asia, and even India and Bangladesh. The world is becoming a very small place. What will happen when scores of thousands of migrants set up a squatter camp someplace—with no food, shelter, or sanitary facilities. The situation is likely to be most stressful…

    Some will say, “But you have to be charitable, you can’t just let them starve because they’ve had some bad luck.” To that I’d say an individual, or a family, can have some bad luck. But the places these people come from have had “bad luck” for centuries. Their bad luck is the consequence of their political, economic, and social systems. It makes no sense, it’s idiotic, to import—at huge expense—masses of people that have a culture of “bad luck.”

    At the most, if someone wants to help them, they should help them with their own money.

    Nick Giambruno: Then there are the so-called economists and think tanks that say bringing in a bunch of migrants will “stimulate” the economy…

    Doug Casey: There are hundreds of think tanks in the U.S. alone, most located within the Washington Beltway who appear to believe that. They’re populated by partisan academics, ex-politicos, retired generals, and others circulating through the revolving doors of the military/industrial/political/academic complex. They’re really just propaganda outlets, funded by foundations and donors who want to give an intellectual patina to their views.

    Think tanks, and their cousins, the lobbyists and the NGOs, are mostly what I like to call Running Dogs, who act as a support system for the Top Dogs in the Deep State. Their product is “policy recommendations,” which influence how much tax you have to pay and how many new regulations you have to obey. Think tanks are populated almost exclusively by what have been called “useless mouths.” They’re no friends of the common man.

    The migration policies they’re promoting are creating chaos.

    Nick Giambruno: I just spent weeks on the ground in Italy, a frontline state in the migrant crisis. I was investigating the upcoming referendum and how it could be the first domino to fall in the collapse of the EU.

    I can say for sure that the migrant issue is one of the largest on the mind of the average Italian voter.

    Each day on average, a couple thousand migrants—sometimes many more—arrive in Italy. They’re mostly from Sub-Saharan Africa, but also a large number are from the Indian subcontinent.

    While I was in Rome I saw many. Lots of them aggressively beg and hawk trinkets. People now lock their doors to their homes when before they might not have.

    I witnessed, a number of times, young male migrants sitting in the handicap spot on trams, buses, and other public transportation, refusing to give up their seats for elderly Italian women.

    It’s anecdotal, but it's hard to think of a way to wear out your welcome faster than for regular Italians to see an elderly woman have to struggle to stand on a bus while a migrant, perfectly capable of standing, comfortably sits.

    While at the Milan train station I witnessed migrants shoving aside a clerk at the ticket check to forcibly board a train. I could see the look on the faces of the other Italian passengers. They were dumbfounded at how the migrants were blatantly choosing to not live by the rules of society and nobody was doing anything about it.

    Then in Como—one of the swankiest places in Italy and where George Clooney maintains a residence—I saw how many hundreds of migrants have turned the train station into a filthy makeshift camp. It was a bizarre blend of extreme poverty and extreme wealth.

    To say Italians are fed up is a gross understatement.

    Most feel Italy has enough problems without trying to solve the problems of the world. They wonder why they are forced to subsidize the migrants—who receive over $80 a month from the state, far more than their annual income in their home countries—while they are suffering under extreme economic hardship.

    Italians largely blame the EU and pro-EU politicians for this mess.

    So Doug, what should be done about this mess that doesn’t, at the same time, feed the growth of the State?

    Doug Casey: Immigration across political borders doesn't have to be a problem. It’s simply a matter of maintaining the property rights of all concerned.

    Let me repeat, and re-emphasize, what I said earlier. The free-market solution to the migrant situation is quite simple. If all the property of a country is privately owned, anyone can come and stay as long as he can pay for his accommodations. When even the streets and parks are privately owned, trespassers, beggars, squatters, migrants, vagrants, and the like have a problem. A country with 100% private property, and zero welfare, would only attract people who like those conditions. And they’d undoubtedly be welcome as individuals. But “migration” would be impossible.

    So, again, I'm all for open borders. Anybody should be able to go anywhere if they can support themselves. In a free market society, however, nobody's going to give you money just for existing. You have to produce goods and services in order to be able to buy food, shelter, and clothing.

    This is how the migration problem could be solved. You don't need the government. You don't need the army. You don't need visas or quotas. You don't need laws. You don't need treaties to solve the migration problem. All you need is privately owned property and the lack of welfare benefits.

    Nick Giambruno: I agree, but I doubt that is going to happen anytime soon, except in our dreams. What do you think are some likely outcomes?

    Doug Casey: Well, I agree; they’ll come up with some cockamamie political solution. But the good news is that it will speed up the disintegration of the EU. It never made sense from the beginning to try to get Swedes to live by the same rules as Sicilians, or Germans by the same rules as Portuguese. Not to mention that the rules are entirely arbitrary. Worse, almost all the rules result in economic transfers, with legislated winners and losers. Deals like that always lead to resentment, among both the winners and the losers.

    The euro, meanwhile, will approach its intrinsic value at an accelerating rate and eventually cease to exist. The Esperanto currency was doomed from the beginning. It was not just an “IOU nothing,” like the U.S. dollar, but a “Who owes you nothing” since it’s not even backed by a specific government’s taxing power.

    My prediction that the Continent will one day just be a giant petting zoo for the Chinese is intact—assuming the current wave of migrants approve.

    On the bright side, the collapse of the EU will accelerate the disintegration of nation-states everywhere. There are about 200 nation-states in the world. The international “elite,” the “intelligentsia,” the members of the Deep State everywhere, and organizations like the EU in Brussels, would like to see a much smaller number of more powerful states. Orwell anticipated just three mega-states in his dystopia, 1984. But the actual trend is in the opposite direction.

    It’s not just the UK seceding from the EU, but Scotland from the UK. The Basques and Catalans may eventually secede from Spain. Belgium, a totally artificial country, will eventually break up into Flemish-speaking Flanders and French-speaking Wallonia. France has half a dozen secession movements. Italy was only unified into its present form from scores of principalities, duchies, and baronies in 1861. It was the same with Germany until Bismarck in 1871. The break-up of the USSR in 1990 into 13 smaller states was a good start, but Russia itself is a small empire with dozens of distinct ethnic and linguistic groups. You will rarely hear about this in the mass media, but there are dozens of secession movements throughout Europe.

    There will be an exodus of capital and people from Europe to parts of Latin America, plus to the U.S., Canada, Australia, and New Zealand. This is, obviously, bad for Europe and good for the recipient countries, since the emigrants will be educated and affluent. In recent years, I might not have included Latin America, but things have changed. Argentina and Colombia are liberalizing economically. The continent isn’t involved in any entangling alliances, isn’t on the migration highway, and has low costs. Why a wealthy European would stay in that stagnant and unstable continent when he could live better, and mostly tax-free, at a fraction of the cost in Argentina is a mystery to me. If I was a European, I would be leaving Europe at this point.

  • Paul Craig Roberts Rages "Washington Is Leading The World To War"

    Authored by Paul Criag Roberts,

    What must the world think watching the US presidential campaign? Over time US political campaigns have become more unreal and less related to voters’ concerns, but the current one is so unreal as to be absurd.

    The offshoring of American jobs by global corporations and the deregulation of the US financial system have resulted in American economic failure. One might think that this would be an issue in a presidential campaign.

    The neoconservative ideology of US world hegemony is driving the US and its vassals into conflict with Russia and China. The risks of nuclear war are higher than at any previous time in history. One might think that this also would be an issue in a presidential campaign.

    Instead, the issues are Trump’s legal use of tax laws and his non-hostile attitude toward President Putin of Russia.

    One might think that the issue would be Hillary’s extremely hostile attitude toward Putin (“the new Hitler”), which promises conflict with a major nuclear power.

    As for benefitting from tax laws, Pat Buchanan pointed out that Hillary used to her benefit a loss almost as large as Trump’s and during the Arkansas years Hillary even took a tax deduction for itemized pieces of used clothing donated to a charity, including $2 for one of Bill’s used underpants.

    The vice presidential “debate” revealed that the Democratic Party’s candidate is so ignorant that he thinks Putin, who is democratically elected and has enormous public support, is a dictator.

    Here is what we know about the two presidential candidates. Hillary has a long list of scandals from Whitewater and Vince Foster to Benghazi and violation of national security protocols. She is bought-and-paid-for by the oligarchs on Wall Street, in the mega-banks, and in the military-security complex as well as by foreign interests. The proof is the Clinton’s $120 million personal fortune and the $1,600 million in their foundation. Goldman Sachs did not pay Hillary $675,000 for three 20-minute speeches for the wisdom they contained.

    What we know about Trump is that the oligarchic establishment cannot stand him and has ordered the Ministry of Propaganda, a.k.a., the US media, to destroy him.

    Clearly, Hillary is the candidate of the One Percent, and Trump is the candidate for the rest of us.

    Unfortunately, about half of the 99 percent is too dumb to know this.

    Moreover, if Trump were to end up in the White House, it doesn’t mean he could prevail over the oligarchy.

    The oligarchy is entrenched in Washington with control over economic and foreign policy positions, think tanks and other lobbyists, and the media.

    The people control nothing.

    What does the world think when they see Donald Trump damned because he doesn’t want war with Russia or the American economy moved offshore?

    Where in American politics do Washington’s European, British, Canadian, Australian, and Japanese vassals see leadership worthy of their sacrifice of sovereignty and independent foreign policy? Where do they even see a modicum of intelligence?

    Why does the world look to the most stupid, vile, arrogant, corrupt and murderous government on the planet for leadership?

    War is the only destination to which Washington can lead.

  • Top Gold Forecaster: “As Quickly As Gold Fell" May "Rally Back” on Global Risks

    Top Gold Forecaster Says “As Quickly As Gold Fell” May “Rally Back” on Global Risks

    Gold’s largest plunge in 14 months may soon reverse according to gold’s top forecaster in Q3 according to Bloomberg:

    Looming risks from the U.S. presidential election in November to Britain starting talks to leave the European Union next year may boost its role as a haven, said Barnabas Gan, an economist at Oversea-Chinese Banking Corp. in Singapore. Increasing shale oil output in the U.S. is also likely to cool the surge in crude prices, curbing inflation, he said.

    “As quickly as gold fell, as quickly gold could rally back,” Gan said in a report received Wednesday. “Weak inflationary pressures may once again lift gold prices back to their previous shine.” He was the most accurate forecaster of the metal in the third quarter, according to Bloomberg data.

    Bullion slumped Tuesday on speculation that the period of easy monetary policy is ending. The European Central Bank was said to be building an informal consensus to wind down bond purchases gradually, while Federal Reserve officials called this week for higher U.S. borrowing costs amid signs of an improving economy. Oil prices have also been rising, stoking inflation worries and boosting the odds of a rate hike.

    Little evidence has emerged of investors cutting holdings in exchange-traded funds. Assets climbed 3.1 metric tons to 2,036.5 tons Tuesday to hold near the highest level since 2013, data compiled by Bloomberg show.

    Some further downward pressure is still expected in the near term from an eventual victory for Democrat Hillary Clinton in the presidential poll on Nov. 8, which would price the risk of dramatic policy uncertainty under Donald Trump out of the market, according to BMI Research. Over the long term, low real interest rates would ensure precious metals remain an attractive investment, it said in a report dated October 4.

    Bullion may average $1,400 next year, BMI forecasts.

    Gold forecasting is a mugs game at the best of times but given the uncertain geo-political situation, the fragile banking system and the very strong fundamentals for gold, it is hard to argue with Barnabas Gan of OCBC  or BMI. Gold should be meaningfully higher in the coming months and into 2017 as investors diversify into gold. Or rather we are likely to see dollars, euros, pounds and other fiat currencies continue to be devalued versus gold.

    Read full article here

    Gold and Silver Bullion – News and Commentary

    Wounded Gold Bull Market Steadies After Worst Slump in 3 Years (Bloomberg)

    Gold edges up as bargain hunters step in after falls (Reuters)

    Fed Hike Shouldn’t Shake Investor Faith in Gold, Says Mine Chief (Bloomberg)

    Gold steadies after extending losses to lowest since June (Reuters)

    Banks must face U.S. gold rigging lawsuit (Reuters)

    Video: Gold’s “Path Of Least Resistance Is Up”, Silver More Potential (Bloomberg)

    Deutsche Shows Banking Remains “Accident Waiting To Happen” – Wolf (IrishTimes)

    Deutsche Bank Brings Too-Big-to-Fail Quandary Home to Merkel (Bloomberg)

    Gundlach: “Deutsche Bank Will Be Bailed Out But What About Credit Suisse” (ZeroHedge)

    Gold & Silver Smash Was Orchestrated To Bailout Shorts (KingWorldNews)

    Gold Prices (LBMA AM)

    06 Oct: USD 1,265.50, GBP 994.30 & EUR 1,131.23 per ounce
    05 Oct: USD 1,274.00, GBP 1,001.11 & EUR 1,134.37 per ounce
    04 Oct: USD 1,309.15, GBP 1,026.90 & EUR 1,172.21 per ounce
    03 Oct: USD 1,318.65, GBP 1,023.40 & EUR 1,173.99 per ounce
    30 Sep: USD 1,327.90, GBP 1,025.01 & EUR 1,187.67 per ounce
    29 Sep: USD 1,320.85, GBP 1,016.92 & EUR 1,177.14 per ounce
    28 Sep: USD 1,324.80, GBP 1,020.10 & EUR 1,181.06 per ounce

    Silver Prices (LBMA)

    06 Oct: USD 17.76, GBP 13.98 & EUR 15.88 per ounce
    05 Oct: USD 17.80, GBP 13.99 & EUR 15.86 per ounce
    04 Oct: USD 18.74, GBP 14.68 & EUR 16.78 per ounce
    03 Oct: USD 19.18, GBP 14.89 & EUR 17.07 per ounce
    30 Sep: USD 19.35, GBP 14.92 & EUR 17.33 per ounce
    29 Sep: USD 19.01, GBP 14.61 & EUR 16.95 per ounce
    28 Sep: USD 19.12, GBP 14.69 & EUR 17.05 per ounce


    Recent Market Updates

    – Gold Buying ‘Opportunity’ After Surprise 3.4% Drop
    – Deutsche Bank “Is Probably Insolvent”
    – GBP Gold Rises 1.3% as Sterling Slumps On ‘Hard Brexit’ Concerns, Up 36% YTD
    – Why Krugman, Roubini, Rogoff And Buffett Hate Gold
    – ECB Refused “To Answer Questions” – Deutsche Bank “Systemic Threat” Is “Not ECB Fault”
    – Euro “Might Start To Unravel” If Collapse Of Deutsche Bank
    – Do You Really Own Your Gold?
    – “Gold Will Likely Soar To A Record Within Five Years”
    – Savings Guarantee? U.N. Warns Next Financial Crisis Imminent
    – Gold Up 1.5%, Silver Surges 3% – Yellen Stays Ultra Loose At 0.25%
    – Trump and Clinton Are “Positive For Gold” – $1,900/oz by End of Year
    – Gold Bugs Rejoice – Central Banks Think You’re On To Something
    – ‘Hard’ Brexit Looms For Ireland

    Log In and Buy Now To Lock In Lower Gold and Silver Prices

  • More Illegal Immigrant Voters Discovered In Philly – "Just The Tip Of The Iceberg"

    Over the past few weeks, we’ve written frequently about allegations of voter fraud from around the country.  The key swing state of Virginia, in particular, seems to be a hotbed of potential corruption as evidenced by the actions of 19 year old “Young Virginia Democrat”, Andrew Spieles, who allegedly acted alone to re-register a bunch of dead voters in his home state (see our post here).  Then there were the efforts of Virginia’s governor, and long-time Clinton confidant, Terry McAuliffe to register 200,000 felons to vote.

    But Virginia, isn’t the only state with questionable voter registration practices.  Fraudulent voter registrations have been uncovered in Colorado, where dead people were found to be voting multiple years after their death, and in Washington where the Turkish-born, non-citizen who killed five people at the Cascade Mall massacre has apparently been voting for years.  

    Now, the latest voter registration fraud comes from the “City of Brotherly Love” where, according to LifeZette, an investigation by Joseph Vanderhulst, an attorney with the Public Interest Legal Foundation, revealed that 86 “non-citizens” have been registered to vote in Phildelphia for years with half of them casting ballots in at least 1 election.  What’s worse, the only reason Philadelphia election officials were even able to identify the “non-citizen” voters was because they had self-reported that they were erroneously registered to vote after a trip to the DMV to get a drivers license.  According to Vanderhulst’s investigation, the DMV “errs on the side of registering voters” if there are any discrepancies on their forms.

    Vanderhulst said city officials indicated they err on the side of registering voters.

     

    “If the checked [citizenship] boxes are blank, they still register them,” he said. “That’s how these people are getting on the rolls … It’s just too easy. Maybe it’s supposed to be easy — but the price of that seems to be no discretion on the front end.”

    Voters

     

    Of the fraudulently registered voters in Philly, 59 were registered as Democrats while 21 had no party affiliation and only 6 were registered as Republicans…which we suspect will come as a surprise to almost no one.  But apparently this isn’t a new phenomenon in Philadelphia.  Vanderhulst’s investigation found that dozens of illegally registered voters are discovered each year and many of them have participated in multiple election cycles.  

    • The city canceled 23 registered voters in 2015. Of that group, seven voted in past elections, and three had been registered for more than a decade.
    • The city canceled 30 registered voters in 2014. Of that group, 18 had voted in past elections, and eight had been registered for at least a decade.
    • The city canceled 33 registered voters in 2013. Of that group, 15 had voted in past elections, and six had been registered for at least a decade.

    Of course, none of these recent cases of voter fraud had any impact on a U.S. appeals court that recently denied efforts by Kansas, Alabama and Georgia to add a proof-of-citizenship requirement to federal voter registration forms.  Among other things, the court cited “‘precious little’ evidence of voter fraud by noncitizens.”  Per the Washington Post:

    A U.S. appeals court panel that barred Kansas, Alabama and Georgia from adding a proof-of-citizenship requirement to a federal voter registration form wrote Monday that federal law leaves it to a federal elections agency — not the states — to determine whether such a change is ­necessary.

     

    The panel wrote that although the document requirement “unquestionably” hinders voter registration groups ahead of the November elections, there was “precious little” evidence of voter fraud by noncitizens, the problem the states said the measure is intended to fight.

     

    “Permitting the states to dictate the contents of the Federal Form would undermine” its role as a ‘backstop, the two-judge majority wrote. “The Commission, not the states, determines necessity.”

    Which begs the question, exactly how much evidence of illegal voting is officially required before states will be allowed to implement common sense rules to prevent fraud?

  • Why Democracy Rewards Bad People

    Submitted by Hans-Hermann Hoppe via The Mises Institute,

    One of the most widely accepted propositions among political economists is the following: Every monopoly is bad from the viewpoint of consumers. Monopoly is understood in its classical sense to be an exclusive privilege granted to a single producer of a commodity or service, i.e., as the absence of free entry into a particular line of production. In other words, only one agency, A, may produce a given good, x. Any such monopolist is bad for consumers because, shielded from potential new entrants into his area of production, the price of the monopolist's product x will be higher and the quality of x lower than otherwise.

    This elementary truth has frequently been invoked as an argument in favor of democratic government as opposed to classical, monarchical or princely government. This is because under democracy entry into the governmental apparatus is free — anyone can become prime minister or president — whereas under monarchy it is restricted to the king and his heir.

    However, this argument in favor of democracy is fatally flawed. Free entry is not always good. Free entry and competition in the production of goods is good, but free competition in the production of bads is not. Free entry into the business of torturing and killing innocents, or free competition in counterfeiting or swindling, for instance, is not good; it is worse than bad. So what sort of "business" is government? Answer: it is not a customary producer of goods sold to voluntary consumers. Rather, it is a "business" engaged in theft and expropriation — by means of taxes and counterfeiting — and the fencing of stolen goods. Hence, free entry into government does not improve something good. Indeed, it makes matters worse than bad, i.e., it improves evil.

    Since man is as man is, in every society people who covet others' property exist. Some people are more afflicted by this sentiment than others, but individuals usually learn not to act on such feelings or even feel ashamed for entertaining them. Generally only a few individuals are unable to successfully suppress their desire for others' property, and they are treated as criminals by their fellow men and repressed by the threat of physical punishment. Under princely government, only one single person — the prince — can legally act on the desire for another man's property, and it is this which makes him a potential danger and a "bad."

    However, a prince is restricted in his redistributive desires because all members of society have learned to regard the taking and redistributing of another man's property as shameful and immoral. Accordingly, they watch a prince's every action with utmost suspicion. In distinct contrast, by opening entry into government, anyone is permitted to freely express his desire for others' property. What formerly was regarded as immoral and accordingly was suppressed is now considered a legitimate sentiment. Everyone may openly covet everyone else's property in the name of democracy; and everyone may act on this desire for another's property, provided that he finds entrance into government. Hence, under democracy everyone becomes a threat.

    Consequently, under democratic conditions the popular though immoral and anti-social desire for another man's property is systematically strengthened. Every demand is legitimate if it is proclaimed publicly under the special protection of "freedom of speech." Everything can be said and claimed, and everything is up for grabs. Not even the seemingly most secure private property right is exempt from redistributive demands. Worse, subject to mass elections, those members of society with little or no inhibitions against taking another man's property, that is, habitual a-moralists who are most talented in assembling majorities from a multitude of morally uninhibited and mutually incompatible popular demands (efficient demagogues) will tend to gain entrance in and rise to the top of government. Hence, a bad situation becomes even worse.

    Historically, the selection of a prince was through the accident of his noble birth, and his only personal qualification was typically his upbringing as a future prince and preserver of the dynasty, its status, and its possessions. This did not assure that a prince would not be bad and dangerous, of course. However, it is worth remembering that any prince who failed in his primary duty of preserving the dynasty — who ruined the country, caused civil unrest, turmoil and strife, or otherwise endangered the position of the dynasty — faced the immediate risk either of being neutralized or assassinated by another member of his own family. In any case, however, even if the accident of birth and his upbringing did not preclude that a prince might be bad and dangerous, at the same time the accident of a noble birth and a princely education also did not preclude that he might be a harmless dilettante or even a good and moral person.

    In contrast, the selection of government rulers by means of popular elections makes it nearly impossible that a good or harmless person could ever rise to the top. Prime ministers and presidents are selected for their proven efficiency as morally uninhibited demagogues. Thus, democracy virtually assures that only bad and dangerous men will ever rise to the top of government. Indeed, as a result of free political competition and selection, those who rise will become increasingly bad and dangerous individuals, yet as temporary and interchangeable caretakers they will only rarely be assassinated.

    One can do no better than quote H.L. Mencken in this connection. "Politicians," he notes with his characteristic wit, "seldom if ever get [into public office] by merit alone, at least in democratic states. Sometimes, to be sure, it happens, but only by a kind of miracle. They are chosen normally for quite different reasons, the chief of which is simply their power to impress and enchant the intellectually underprivileged….Will any of them venture to tell the plain truth, the whole truth and nothing but the truth about the situation of the country, foreign or domestic? Will any of them refrain from promises that he knows he can't fulfill — that no human being could fulfill? Will any of them utter a word, however obvious, that will alarm or alienate any of the huge pack of morons who cluster at the public trough, wallowing in the pap that grows thinner and thinner, hoping against hope? Answer: may be for a few weeks at the start…. But not after the issue is fairly joined, and the struggle is on in earnest…. They will all promise every man, woman and child in the country whatever he, she or it wants. They'll all be roving the land looking for chances to make the rich poor, to remedy the irremediable, to succor the unsuccorable, to unscramble the unscrambleable, to dephlogisticate the undephlogisticable. They will all be curing warts by saying words over them, and paying off the national debt with money no one will have to earn. When one of them demonstrates that twice two is five, another will prove that it is six, six and a half, ten, twenty, n. In brief, they will divest themselves from their character as sensible, candid and truthful men, and simply become candidates for office, bent only on collaring votes. They will all know by then, even supposing that some of them don't know it now, that votes are collared under democracy, not by talking sense but by talking nonsense, and they will apply themselves to the job with a hearty yo-heave-ho. Most of them, before the uproar is over, will actually convince themselves. The winner will be whoever promises the most with the least probability of delivering anything."

  • Algos, Barriers, Rumors: Some Theories On What Caused The Pound Flash Crash

    As reported moments ago, just around 7:07pm ET, cable snapped and plunged by what some say may have been as much as 1200 pips, dropping from 1.26 to as low as 1.14 according to some brokers, before snapping back up.

     

    What caused the move? While nobody knows the catalyst behind the flash crash  yet, Bloomberg has compiled several potential explanations.

    • “The GBP/USD slide could be due to erroneous order and/or flows related to stop-loss orders or options given USD/JPY or EUR/USD aren’t moving much”, says Toshihiko Sakai, Tokyo-based chief manager of FX and financial products trading at Mitsubishi UFJ Trust & Banking.
    • “Looks like there was a large GBP sell order amid thin liquidity”, says Kyosuke Suzuki, head of FX and money-market sales at Societe Generale.
    • Others believe that the massive move has been partly attributed to algos failing after traders targeted downside option barriers, say three Asia-based FX dealers. Traders typically place their nearest orders within 100 ticks of spot, which was at roughly 1.26 before today’s plunge.
    • The drop accelerated as liquidity disappeared, and dealers failed to load bids into their trading platforms, say traders. In other words, your plain, garden variety algo-facilitated flash crash, where the bid side suddenly disappears as one or more “liquidity providers” turn themselves off.
    • One trader told Bloomberg that his FX pricing aggregator of eight contributors blacked out for 30 seconds amid an absence of bids.
    • Furthermore, multiple large option barriers in the over-the-counter market were triggered, including 1.25 and 1.20, say traders.  Traders say they missed buy orders much lower down and had to scramble to cover inherited short positions, thus contributing to the roughly 500-point rally.

    Hopefully we will have a clear, official, and accurate answer from regulators for the crash soon: investors faith in broken markets is already non-existent as it is. However, if the May 2010 flash crash is any indication, the reason behind the collapse may not be forthcoming until 2021, and even then it will be blamed on some spoofer, living in his parents’ basement.

    Another question: whether any FX brokerages will need a bailout a la the infamous FXCM, in the aftermath of the Swiss National Bank revaluation of January 2015, as clients find themselves margined out and underwater even as cable is steadily recovering most, if not all losses.

    Whatever the reason, however, Kuroda will take two.

  • "The Most Important Ever" Payrolls Preview (Again)

    The distribution of guesses for tomorrow's "most important payrolls print ever" or at least until next month, skews modestly to the upside after the biggest spike in ISM employment ever this week jarred some economists to become more optimistic, and side with Goldman Sachs expecting a Fed-inspiring drop in the unemployment rate, rise in average hourly earnings, and better than expected payrolls of 190K. As a result, while consensus expects a NFP rebound from 151K to 172K, the whisper number is around 200k. Anything above this would send December rate hike odds surging to the all important 70% or above, bond yields spiking and equities at the mercy of whichever way the risk parity machines were calibrated tomorrow.

    Others disagree: Southbay Research is leaning on the bearish side, nothing the following positive and negative factors ahead of tomorrow's report:

    The Good

    • ISM Non-Mftg: Surges to 57.1 from 51.4
    • ISM Mftg: Up to 51.5 from 49.4
    • PMI Services: Up to 52.3 from 51
    • Chicago PMI: Up 54.2 from 51.5

    The Bad

    • ADP: Payrolls drop (Forecast September 155K)
    • PMI Mftng: Slips to 51.5 from 52
    • Construction: drops -0.7% versus -0.3% prior month
    • Corporate Profits 2Q: -1.7% y/y versus -2.2% prior quarter
    • Durable Goods Orders (ex Trans):  -0.4%

    Employment indicators:

    • ISM Non-Mftg: Employment Index surges to 57.2 from 50.7
    • ISM Mftg: Employment Index ticks up to 49.7 from 48.3
    • PMI Services: Weakest employment levels in 4.5 years
    • PMI Mftg: Employment consistent with 115K jobs

    It is worth noting that conflicting data is the hallmark of inflection points.  Furthermore, as Southbay notes, "Forget Manufacturing, Focus on Services." Here is the full bearish case:

    Look past manufacturing data for two reasons: (1) no real news here – manufacturing continues to be stuck in a low gear and (2) manufacturing doesn't factor much into September payrolls. 

     

    Services will drive the September payrolls.  Specifically Leisure & Hospitality jobs. 

     

    As Summer vacation ends, restaurants, hotels and recreational hot spots wind down and layoff seasonal workers.  The nominal level of layoffs is driven by exactly two things: the number of workers added and the amount of customer foot traffic.

     

    A Good reason to Expect Heavier Layoffs: On a trailing 12 month basis, the Leisure Hospitality sector has added about the same number of jobs as the prior year.

     

     

    What is different this year is that Restaurant operators have lost confidence.

     

    According to the National Restaurant Association, the Restaurant Performance Index turned negative in August.  The last time it was negative was February: that kicked off the weakest level of Restaurant payrolls since 2012. 

     

    Sales expectations remain weak and barely expansionary.  Consequently staffing expectations have shifted into contractionary territory

     

    Expect layoffs to at least equal, if not exceed, last year's.

     

    Bottom line: The biggest driver for September Payrolls is Restaurant payrolls, and they are looking weak.

    Whatever the actual number, expect the consensus to be vastly wrong as the last few months have been "volatile" outliers to say the least:

    Going back to the bullish, "whsiper" outlier, Goldman expects a 190k increase in nonfarm payroll employment in September, above consensus expectations for a 172k gain, and up from their preliminary forecast of 175k. Although payroll growth slowed to 155k last month, subdued employment gains are not uncommon in August, and the trend growth rate in payrolls still looks solid, with the trailing 3- and 6-month averages at 232k and 175k, respectively.

    Some observations from GS:

    Their above-consensus payroll forecast primarily reflects improving underlying labor market fundamentals during the course of the month. Initial jobless claims continued trending down towards post-crisis lows, and nearly all other employment indicators from the various regional and national manufacturing and service sector surveys turned up. The ISM non-manufacturing survey’s employment index had its largest gain on record. In addition, we expect a modest rebound in employment in Louisiana, which fell by nearly 8k last month, likely due to adverse weather conditions. Offsetting these improvements, we look for a decline in employment in the education sector (specifically, private education services and state & local government education employment), which has been growing at a roughly 30k pace over the last three months, well above the +8k monthly average since 2011. Employment in the education sector has been highly volatile during September in recent years (Exhibit 1), and monthly gains have averaged -7k since 2011.

    Arguing for a stronger report:

    • Job availability: The Conference Board’s labor differential—the difference between the share of consumers saying jobs are plentiful vs. hard to get—rose 2.3pt to +6.3, reaching a new post-crisis high
    • Jobless claims: The four-week moving average of initial jobless claims during the survey week fell by 7k to 258k. The continued downtrend in initial claims suggests that layoff activity across the economy remains minimal. Insured unemployment, or continuing claims, fell by 81k between the August and September survey weeks, and currently sits at post-crisis lows.
    • Service sector surveys: On balance, the employment components of service sector surveys improved in September. The ISM non-manufacturing report’s employment index registered its largest increase on record, rising 6.5pt to 57.2. The NY Fed (+5.3pt to +8.1, not seasonally adjusted) and Philly Fed (+9.3pt to +19.3) surveys also rose. Offsetting these increases were declines in the Richmond Fed (-7pt to +6) and Dallas Fed (-1.4pt to +4.4) surveys. Service sector employment rose 150k last month, and has increased 164k on average over the last six months.
    • Manufacturing surveys: Almost all of the employment components of the various monthly manufacturing surveys improved in September. The ISM manufacturing (+1.4pt to 49.7), Philly Fed (+14.7pt to -5.3), Dallas Fed (+7.3pt to +2.3) and Kansas City Fed (+7 to -3) rose, while the Richmond Fed (-20pt to -13) declined. Manufacturing employment fell by 14k in August, and has declined by 7k on average over the last six months.

    Arguing for a weaker report:

    • ADP: ADP reported a 154k gain in private payroll employment in September, below a revised +175k increase in August. Service-sector job gains softened a bit to 183k, manufacturing employment was flat, and construction employment fell 2k. Despite the softening in ADP employment, we have found this to have somewhat mixed value as an input towards forecasting nonfarm payrolls.
    • Online job ads: The Conference Board’s Help Wanted Online (HWOL) report showed a small 0.4% increase in new online job ads in September, while total jobs listed fell by 1.9%. However, we put only limited weight on this indicator at the moment in light of recent research by Fed economists that argued that the HWOL ad count—which has departed significantly from the job openings figures in the official Job Openings and Labor Turnover Survey (JOLTS)—has been influenced by price increases for online job ads.
    • Job cuts: According to the Challenger, Gray & Christmas report, job cuts rose 17.4% on a seasonally adjusted basis in September, although they remain roughly 25% lower than their year ago levels.

    We expect the unemployment rate to decline to 4.8% in August from an unrounded 4.922% in August. The headline U3 rate was unchanged in August but is up from a low of 4.7% in May, while the broader U6 underemployment rate held steady at 9.7%. The household survey showed a modest 97k increase in employment versus a 176k increase in the labor force. The labor force participation rate remained at 62.8%, close to where it has been since the beginning of the year.

    Average hourly earnings for all workers are likely to rise 0.3% in August, in large part reflecting favorable calendar effects. As a result, we expect the year-on-year rate to rise to 2.7% from 2.4%. The broader wage data remain encouraging: our wage tracker—which aggregates four measures of wage growth—stands at 2.6% year-on-year, a sign that diminishing slack is boosting wage growth.

    Separately, many commentators have highlighted this year’s decline in average weekly hours worked in the establishment survey, fearing that it signals weakness in labor demand. The decline in average hours appears to be relatively widespread across states and industries (Exhibits 2 & 3).

    Although it is hard to find a basis for dismissing the decline in hours worked, the series can be a bit noisy on a month-to-month basis. Furthermore, falling hours appear at odds with fundamental payroll growth figures and other labor market indicators over the same horizon, and we thus would hesitate to take an overly negative signal from these series as of yet.

    *  *  *

    And finally, if you needed any advice on trading the print, it's simple – no matter what the print – wait until US markets open and buy it all with both hands and feet:

  • A Look Inside Key West's Battle To Prevent Release Of GMO Mosquitos

    Submitted by Mike Krieger via Liberty Blitzkrieg blog,

    We’ve all heard of the Zika virus. What you probably haven’t heard of is British biotechnology company Oxitec, purchased last year by billionaire Randal Kirk. A company that has released A. aegypti killing GMO mosquitos in at least Brazil, Malaysia, Panama and the Grand Cayman islands. The company also planned a release in the Florida Keys, but has thus far been stopped by a group of determined activists.

    Bloomberg covered the story in a fascinating article published earlier today titled, Florida’s Feud Over Zika-Fighting GMO Mosquitoes.

    What follows are excerpts from that piece:

    On a Tuesday morning in September, under a sweltering tropical sun on the island of Grand Cayman, 140,000 mosquitoes flit around in four large coolers in the back of a gray Toyota minivan. Behind the wheel is Renaud Lacroix, a Ph.D. in biology and medical entomology who works for the British biotechnology company Oxitec. A colleague, Isavella Evangelou, crouches behind him in a tight space next to the coolers. The minivan is idling on the side of a dirt road in West Bay, a quiet neighborhood where iguanas and roosters dart in and out of the yards of small homes painted in Caribbean pastels. The time has come for the mosquitoes to fulfill the purpose for which they were genetically engineered: a kamikaze mission to eliminate their own species.

     

    It takes over two and half hours, emptying container after container, to release all the mosquitoes into West Bay. They’ve been doing this three times a week since July; residents used to grimace when they drove by, but now they barely glance over. The procedure seems more disruptive to those of us in the van. Each time Evangelou opens a container, a fair number of mosquitoes escape the wind tunnel and start buzzing around our heads. “There will be a few fliers, yeah,” Lacroix says with a smirk.

     

    Male mosquitoes, he reminds me, aren’t the ones that bite. Just about the only thing male mosquitoes do, he says, is seek out females, which do the biting. Oxitec is trying to leverage this mating instinct to help wipe out one particular species of mosquito: Aedes aegypti, carrier and spreader of some of the worst insect-borne diseases known to medicine—dengue, malaria, and Zika. The A. aegypti mosquito has evolved to survive even the most effective pesticides. It can lay 500 eggs in just a bottle cap’s worth of water, and it prefers to bite humans over animals, so it lives in places where no one thinks to spray, like under the couch.

     

    The idea behind Oxitec’s experiment is that if enough genetically modified male A. aegypti mosquitoes are released into the wild, they’ll track down large numbers of females in those hard-to-find places and mate with them. The eggs that result from any union with an Oxitec mosquito will carry a fatal genetic trait engineered into the father—a “kill switch,” geneticists call it. The next generation of A. aegypti mosquitoes will never survive past the larval stage, never fly, never bite, and never spread disease. No mosquitoes, no Zika.

     

    The approach was developed by founder Luke Alphey, a British geneticist specializing in vector control, or the elimination of disease-bearing creatures. Oxitec has applied the method in Brazil, Malaysia, and Panama, often with partial support from the Bill & Melinda Gates Foundation, and claims to have reduced the A. aegypti population in tiny test areas by at least 90 percent. That’s a far better percentage than spraying, which usually hits about 50 percent and has a tendency to breed resistance, requiring more and more spraying to get the same low result.

     

    Chief Executive Officer Haydn Parry has called Oxitec’s method “a dead end” for the A. aegypti species. And, of course, in the age of Zika, such a dead end couldn’t be more desirable. Since the news emerged last spring that a spike in cases of microcephaly in Brazil appeared to have been caused by Zika, politicians and public-health officials from around the world have been beating a path to Oxitec’s door. U.S. officials were among them, even as Congress dithered all summer before finally, in late September, approving the funding of countermeasures to prevent large outbreaks. “I don’t think time is on our side,” Parry told a congressional committee in May. “I think the utmost urgency is required. I’ve just come from Puerto Rico, and we could have a catastrophe on our hands if we are not careful.” The big winner if Oxitec ends up enlisted to fight Zika in the U.S. would be Intrexon, a biotech company run by billionaire Randal Kirk, which acquired Oxitec for $160 million in the summer of 2015.

     

    This August, the U.S. Food and Drug Administration approved Oxitec’s first stateside experiment, in Key Haven, Fla., an unincorporated area separated by a narrow stretch of water from Key West. In many respects, you couldn’t ask for a better test site in America. It’s secluded, tropical, and surrounded by water, which prevents new mosquitoes from entering the area. If the Oxitec method works in Key Haven, then Florida, and the country, could have a powerful tool to help stop an incipient public-health crisis.

     

    There is, however, an obstacle. Oxitec has been trying to conduct a trial in the Keys for seven years, ever since a dengue outbreak there. Local opponents have thwarted those attempts for years, and now they’ve forced a pair of referendums, set for November, on the Key Haven test. Officials from the local Mosquito Control District have pledged to be guided by that vote—even if it means saying no to the FDA’s approved experiment, with a major Zika crisis looming over Florida. In public meetings, on local radio, and, of course, online, opponents have all but commandeered the conversation about mosquitoes and Zika in the Keys. They call Oxitec’s tactics unethical and underhanded. They call the company’s science untested, unproven, and unsafe. Above all, they’re worried about unintended consequences. Their not-so-affectionate name for the Oxitec mosquitoes: Frankenflies.

     

    The Florida Keys Mosquito Control District (MCD) is run by a board of five commissioners—elected officials, not bureaucrats—and commands a $10 million annual operating budget and 69 full-time employees. When there’s trouble, the board can decide more or less unilaterally how to deal with it. In 2009, when A. aegypti brought dengue to the Keys for the first time in nearly eight decades, the board responded with an aggressive approach that saw workers go door to door to persuade residents to eliminate standing water and take other preventive measures. The disease subsided, but only after 88 people were infected. That was when the Mosquito Control District went searching for something that might be capable of wiping out A. aegypti completely. Enter Oxitec.

     

    In 2011 the MCD announced that all of the city of Key West—its 25,000 citizens, its millions of visitors—would be subject to a trial of Oxitec’s technology, overseen by the FDA. The MCD said the price tag would be less than $10 per resident, and it expected to break even on the investment by requiring less aerial spraying against the mosquito. The Keys, however, have no shortage of activists who know how to push back against government. Ed Russo is chairman of the Florida Keys Environmental Coalition, a group formed after the 2010 Deepwater Horizon oil spill. He’s also worked as a business consultant to Donald Trump, and recently wrote a short e-book titled Donald J. Trump: An Environmental Hero. (Trump was the first donor to the coalition.) Russo’s group was among those incensed that the MCD appeared to be fast-tracking the Oxitec experiment by having it overseen by the FDA, which would treat the GMO technology as an animal drug, rather than as a biopesticide, which might have required a complete environmental impact statement from the U.S. Environmental Protection Agency. “If you even want to take down one tree in a wetland, you need an EIS,” Russo says. “And these clowns don’t want to do an EIS? And we’re considered anti-science?”

     

    At a particularly heated community meeting with the MCD board in 2012, Russo asked a series of questions about Oxitec’s protocols and whether the MCD was prepared for problems. Russo says the board had no answers for him that day, and no answers over the next two months. Then the MCD announced that, after consulting with the FDA, it had decided to move the venue for the experiment. Instead of Key West, the proposed trial would be conducted in Key Haven, a small community of 144 homes on a neighboring island. “That’s when all the flags went up and the sirens wailed,” Russo says. “Would you let your family take part in a scientific experiment without your informed consent in writing? If you’re a prisoner in an institution in the United States, you are given that right.”

     

    Mila de Mier, a real estate agent in the Keys, started a Change.org petition to “say no to genetically modified mosquitoes in the Florida Keys,” which eventually got 170,000 signatures from around the country. Activists worldwide offered support and expertise. It took de Mier years, and the threat of a lawsuit, to get the MCD to say how many A. aegypti mosquitoes it estimated were in Key Haven. When she secured the data, earlier this year, it indicated that there were practically none—or at least not enough to call for traditional spraying methods. De Mier, who’s emerged as a grass-roots leader of the resistance, says she realized that as successful as Oxitec’s method was said to be, it had never faced serious public scrutiny before coming to the U.S. “I saw what they did in Brazil,” she says. “They brought a truck around with a loudspeaker, and they made a song. ‘God sent you the mosquito to heal you.’ That was the public engagement.” (Oxitec does use vehicles with loudspeakers in Brazil, but it also distributes more scientifically based information.)

     

    As Oxitec prepared its full proposal to the FDA, the company released more details, and others started asking questions. Meagan Hull, a longtime resident, wondered why, if Oxitec’s method was all about male GMO mosquitoes, did the company’s data say it also let loose some females in its test—about 1 per 1,000 males? Did those females mate, and breed, and bite? Had anyone studied the long-term effects of that? Wouldn’t some Keys residents almost certainly be bitten by a GMO mosquito? Even the males, some said, might create antibiotic resistance in the community, because all the mosquitoes Oxitec grows in its lab are doused during the larval stage with tetracycline, to bypass their kill switches and allow them to grow to adulthood. “The tetracycline’s going to cause resistance,” says John Norris, a local physician. “They care nothing about the fact that they are breeding resistant germs of no purpose.” He’s gotten more than a dozen local doctors to sign a letter objecting to the plan.

     

    David Bethune, a computer programmer and artist, wondered why Oxitec seemed so sanguine about long-term effects. “We don’t understand how the science works, but we do understand that when you put a genetically modified organism into the wild, there are going to be other consequences than just reducing the population,” he says. Chief among them: What might take A. aegypti’s place in the ecosystem? Something stronger? “Just to say, ‘We’ve got it all worked out’ is really unnecessarily arrogant,” Bethune says. “We’re the little guinea pigs on an island that they thought of as Margaritaville. They thought that we would all be out having a cocktail and just not care?”

     

    Then the Zika crisis emerged late last year, and the debate went off the rails. In January a Reddit thread, posted in a forum known for floating conspiracies, raised the possibility that it was Oxitec’s testing in Brazil that had caused the birth defects public health officials were attributing to Zika. The anonymous author posited that some of Oxitec’s GMO offspring do, in fact, survive and pass on their genes, blending with Zika to create a megavirus that brought about microcephaly. The entire notion has been disproved—chiefly because the concentration of birth defects in Brazil is located 400 miles from Oxitec’s test site, and the A. aegypti mosquito travels only a few hundred yards in its lifetime. But that hasn’t kept some opponents in the Keys from revisiting the question, even now.

     

    “I have nothing against spraying whatsoever,” said Judy Martinez, another neighbor, at the same meeting. “But I am against monkeying around with Mother Nature. They’re going to kill us off, that’s what’s going to happen.” The resolution was ultimately voted down.

     

    The Florida Keys Environmental Coalition takes no official position on the Oxitec-Zika conspiracy theory. But Barry Wray, the group’s executive director, is willing to keep the conversation going. “We’re witnessing the results of the microcephaly question gradually evolve,” he says. Wray is also happy to give oxygen to another roundly denied conspiracy theory—that the local government was won over by Oxitec in a less-than-aboveboard way. “There’s some more nefarious things that have occurred and are occurring right now, and I’m not at liberty to talk about those right at the moment,” he says.

     

    Derric Nimmo, Oxitec’s head of public-health research, remains slightly baffled by the dissidents’ claims. “I’ve done town hall meetings, done board meetings, gone door to door,” he says; the exchanges are mostly cordial, but strained. “I’ve kind of turned into, rather by accident, a communication person for Oxitec in the Keys.” It’s not a natural fit for him. “I’m a scientist at heart. It’s my background, you know, a Ph.D. My postdoc was all about molecular biology in insects. And so I’ve had to learn to try and—not dumb that down, that’s the wrong word—to try to communicate that in a simple way that people can understand.”

     

    He moves through the criticisms as quickly as he can. Even if some females are released, he says, they will have the same kill switch gene the males have, and their offspring will die in the larval stage. If the females do end up biting anyone, it would have the same impact as any ordinary mosquito bite; all the lab-bred mosquitoes are screened for disease before being released. The amount of tetracycline used on the mosquitoes is “extremely low,” he says, trivial next to what you’d find in, say, a typical pig farm. As for long-term impacts, the GMO mosquitoes never effectively reproduce, which means the entire system is closed. “Within six to eight weeks there’s no evidence of [Oxitec mosquitoes] in the wild at all,” he says.

     

    During the 60-day public-comment period for the FDA’s review of Oxitec’s proposal, he says, “there were 2,700 comments, and the FDA, the CDC, and the EPA have looked at all of those, and they’ve said there’s nothing here scientifically valid that changes our minds.” Yet for years now he’s been forced into a rear-guard action.

    The whole Reddit conspiracy theory drives Nimmo to distraction. “We’ve also had several articles from independent people, saying this is not true, but it does keep coming up, all the time. So we just have to keep answering it.”

     

    The swelling controversy in the Keys was enough to force two separate referendums on Nov. 8—one for Key Haven residents and one for all of Monroe County, which contains the Keys and a portion of the Everglades. The results won’t be binding, but three of the five Mosquito Control District commissioners have promised to honor the will of the people.

    Only 3 of the 5?

    If the Keys scuttle the project, it may go against broader public opinion. A national survey released in February by Purdue University found that 78 percent of those surveyed supported using GMO mosquitoes to fight Zika. Last month a bipartisan group of 61 Florida state legislators issued a statement asking the FDA to use emergency powers to give them Oxitec right now. “What’s happened now is you have various mosquito districts saying, ‘Why can’t we use this technology?’ ” says Parry, Oxitec’s CEO. If the vote goes against Oxitec, “we would move the trial somewhere else,” he muses. “But obviously it would be more preferable and more convenient to do it where we planned to do it.”

     

    “Broader public opinion” is entirely irrelevant in this case. The only people who should have a say are those living in the communities into which GMO mosquitos will be released. If people all over the nation are clamoring for this, finding a willing community shouldn’t be an issue.

    In Grand Cayman, the government is moving forward. In a few years, A. aegypti might be eliminated from an entire island, the first time such a thing has happened. Maybe that will lead to something unexpected, or maybe it won’t. In the Keys, some would rather take their chances with Zika than risk the unknown. “We are setting a standard for the rest of the world,” de Mier says. “Today it’s a mosquito, tomorrow God only knows what is going to happen.”

    Here’s the entire article: Florida’s Feud Over Zika-Fighting GMO Mosquitoes.

  • "I Listened To A Trump Supporter… Now I Understand"

    Submitted by Mike Krieger via Liberty Bltizkrieg blog,

    The following article by David A Hill Jr is simply outstanding.

    Here are some powerful excerpts from the piece: I Listened to a Trump Supporter

    I talked at length with a Trump supporter I grew up around. I wanted to understand. I respected her growing up. I wanted to know why a person as kind and compassionate as I remember her is voting for someone like Donald Trump.

     

    She was a family friend, a good person. In rural Ohio, everything was tight. Money, jobs. If you really needed quick cash, she’d put you to work doing landscaping. She’d pay fairly and reliably for the area.

     

    She’s voting for Donald Trump. I disagree with her choice, but I understand why she rejects Clinton so fiercely, and why she’s been swept up in Donald Trump’s particular brand of right-wing populism. I feel that on the left, it’s increasingly easy to ignore these people, to disregard them, to write them off as racists, bigots, or uneducated. I think that’s a loss for everyone involved, and that sometimes listening can help you to at least understand why a person is making the choices they make, so you can work on the root causes. For her, the root cause isn’t racism. In fact, I remember her as one of the only people in the area who proudly hired black workers, in a place where that was a huge issue. She fought over that choice.

     

    But that’s enough background. Let me relay a bit of what she told me.

     

    She’s a person who built her business from the ground up. She wasn’t rich, but was very comfortable for the area. She had a nice house, a nice car, and was stable. She achieved the American dream of not having to struggle. Things changed during the housing crisis. A landscaping business requires customers who need landscaping, and people who don’t own homes just don’t need landscaping. In some of these neighborhoods, one in five people lost their homes. That almost immediately turns a successful landscaping business into a struggling one.

     

    Then there was a domino effect. She couldn’t pay for her lawn-care equipment leases and loans. That hurt her work efficiency. Then, she lost her car. But that didn’t stop the payments. Then, she lost her house. She slowly had to let go all of her employees, until it was just her, hand-mowing lawns for cash the way you might expect a high school student in the summertime.

     

    She told me that every week, it seemed there was another default letter, another foreclosure, another bank demanding more blood from her dry veins. To her, that pile of default notices and demands for payment looked suspiciously similar to Hillary Clinton’s top donor list.

     

    She lost everything she worked so hard for. Obama swore he was going to help. The Wall Street bailout did seem to help Wall Street. But it did absolutely nothing for her. She turns on the news and sees how the Dow Jones is doing better than ever. But that didn’t bring her house and livelihood back. Liberals insist that Obama’s made her life better. But, now she’s driving a car that falls apart randomly while having to pay those same banks for a car she doesn’t own and never will. It’s difficult to convince someone whose life is objectively worse that their life is better. And it’s disingenuous to try. You can break down the specifics, sure. But when someone’s hungry, and you’re busy silencing their complaints by telling them how well world hunger is improving, you’re just going to upset them.

     

    This is not a person who is stupid or racist. She knows Bush caused the economy collapse with his irresponsible tax policies and wars. But she saw liberals as fighting for the banks’ recovery, to hell with her needs. She sees in Hillary someone who celebrates that approach. Who measures US success by the success of multinational mega corporations?—?corporations who undercut and destroy local businesses. This is a person who grew up in a town with a friendly neighborhood general store, a locally-owned hardware store, farmers’ markets, florists, and auto shops. All of these businesses closed when Walmart moved into town. All their owners now work at that Walmart for a fraction of their previous wages, no benefits, and no hope for something better, something of their own. And now, she sees a free trade supporting former Walmart executive about to come in to office, and it feels like salt in her community’s wounds.

     

    This is a wounded person. Insulting her or continuing to hurt her isn’t going to help. She’s swept up in Trump’s message because she feels someone’s finally listening. Right-wing populism is an awful thing. But desperate people with their backs against the wall will grasp on to whatever they feel will bring a change. Neoliberal capitalism is not sustainable for these people.

     

    Over the past few years, she tried getting back in her business. But a corporation moved in and is operating far cheaper, using undocumented immigrant labor. I should note: She specifically said she doesn’t hold it against the migrant workers. As she said, “They’ve got to take whatever jobs they can get. Just like we do. It’s not their fault. They didn’t choose to make prices so low that legal businesses couldn’t compete.” She was literally a “job creator”. And she wasbeing priced out by the very people Donald Trump insists are pricing her out. That hurts everyone, and it adds an air of authenticity to what he says.

     

    I asked her if she supports Trump’s Mexico wall. She told me, “It doesn’t matter if I do. Hillary wants a wall, too. That wall’s gonna happen.” She wasn’t simply making this up. She’s heard this from many sources, Clinton being one of them. So to her, the idea of a border wall is a non-issue. I pressed her on the issue, and she said she thinks, “It’s a waste of money. If someone wants to cross the border, they’re gonna cross the border.”…

     

    A few times, she seemed ashamed of things Trump’s said or done. I’d ask her to unpack her feelings. She said he sometimes upsets her, but “If you wait and wait for a flawless candidate, you’ll never find one.” She said she’d be much prouder to vote for Trump if he’d tone down his rhetoric.

    This fits into my strongly held belief that people are looking for an excuse to vote for Trump. All he has to do to win is tone down some of his more heinous and idiotic tendencies.

    I talked to her a bit about Bernie Sanders, to see what she thought of him. She told me, “He seemed like a nice enough guy. But I didn’t pay him much mind because there was no way he was gonna beat Clinton.” I talked with her about his platform, his policy proposals. She lit up. She told me, “It’s a real shame he didn’t make it.” She told me that if she knew him, his record, and his proposals, she’d have voted for him. I said that since the primary concluded, Hillary’s shifted some to adopt policies similar to his, and I asked if that changed her mind. She told me, “It doesn’t matter what she says. It matters what she’s done.”

     

    No amount of insulting her from an ivory tower is going to change her mind. No amount of guffawing about her lack of education, her self-deception, her racism, or her internalized misogyny is going to change her mind. The only thing she’ll listen to is a promise of real change to the system that’s hurt her. If the Democratic Party can’t offer her a viable alternative, we’re going to see another neck-and-neck election in 2020, and in 2024, and in 2028.

     

    These people need a populist answer. They need someone willing to listen to their very real concerns, and offer solutions that don’t look like Band-Aids on bullet wounds. If they had that on the left, we wouldn’t even be discussing Ohio as a “swing state”.

     

    Right now, this is the discourse we’re seeing about Trump supporters. This only emboldens those attitudes. To people like her, this feels like the left is laughing at her for her unwillingness to get in line and support the things that have left her broke and broken.

    The above excerpts are not the entire piece. You should read the whole thing: I Listened to a Trump Supporter.

    The more deeply I think about this election, the more I agree that the above sentiments motivate Trump voters far more than feelings of racism or hate. As I noted in a piece published a few weeks ago, The Status Quo vs. Donald Trump:

    This isn’t about me. This is about the American voter, and the more time passes, the more I understand the motivations of the vast majority of Trump supporters. It isn’t xenophobia or racism, it’s a vote against the status quo and the way they’ve strip mined and destroyed this country. It’s a FU vote and a major gamble, but it’s not as irrational or hateful as you might think.

    This doesn’t mean that Trump won’t betray his supporters and prove to be the Republican version of Barack Obama, but it does mean that the dominant media narrative characterizing Trump supporters as a bunch of racist, uneducated brutes is pretty much just dishonest, elitist propaganda.

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Today’s News 6th October 2016

  • The New 'Too Big To Fail' – EU Proposes Taxpayer-Funded Derivatives System Bailout

    It would appear the powers-that-be have just stumbled on to the ugly fact that all the bailed-in depositor money in the world won't stop the novated, rehypothecated, collateral chain collapse contagion that Deutsche Bank's $40 trillion-plus derivatives book's Damocles sword hangs over the status quo. However, being the problem-solving types, the European technocrats have a 'fair-share' solution – back a derivative clearing-house with taxpayer money to solve the new too-biggest-to-fail problem "that no one saw coming."

    While the "rules" right nbow are that everyone from shareholders, bondholders, and depositors alike on up the capital structure are supposedly "bailed-in" to save an ailing bank, this problem is just way too big.

    Here's the problem… in 3 charts…

    Derivatives book – yuuge…

     

    Global contagion – yuuger…

     

    Counterparty risk – yuugest…

     

    And so, as Bloomberg reports, the dear old European taxpayer is about to save the world… The European Union plans to give authorities sweeping powers to tackle ailing derivatives clearinghouses to prevent their failure from wreaking havoc throughout the financial system.

    Draft EU legislation seen by Bloomberg sets out rules on saving or shuttering clearinghouses that would apply to firms such as London-based LCH. The proposals cover everything from the creation of resolution authorities to the powers they would have when winding a company down, including writing down shares, debt and collateral.

     

    Having forced most clearing to go through central counterparties to manage risk in the financial system, the EU will come out with recovery and resolution proposals by year-end.  Clearing has come into focus after emerging as a pawn in the post-Brexit battle for London’s financial-services industry.

     

    “If we are going to rely more on CCPs, we need to have a clear system in place to resolve them if things go wrong,” Valdis Dombrovskis, the EU’s financial-services chief, said last month.

    Governments around the world were spooked by the damage inflicted by derivatives trades that went awry during the financial crisis. Since then, they’ve taken steps to ensure trading in the contracts is reported and centrally cleared.

    Clearinghouses stand between the two sides of a derivative wager and hold collateral, known as margin, from both in case a member defaults.

    The plan’s upfront costs for clearinghouses “are estimated to be in the millions for the largest institutions and in the thousands for smaller entities,” according to the summary of an EU impact study.

     

    Costs for “better planning and prevention of failure” will vary by firms’ “size, interconnectedness, substitutability and complexity.”

     

    While the process is taking risk out of the banking system, it has increased it in the clearinghouses, which might get into difficulty after the default of a clearing member — typically a major bank — or after some operational failure that inflicted major losses.

     

    In both cases the authorities would need to act quickly and would be doing so amid a looming crisis.

    And here is the kicker… guess who foots the bill when the fecal matter really strikes the rotating object…

    “Should these options be unavailable or be demonstrably insufficient to safeguard financial stability, government participation in the shape of equity support or temporary public ownership could be considered as a last resort,” according to the proposal. Those steps would need to comply with EU rules on state aid.

    So the US DoJ decision to retaliate for EU's Apple decision has boomerang'd right back at the EU taxpayer – who ultimately will bailout the new too-biggest-to-fail entities.

    Italeave? Portugone? Fruckoff?

  • Trader: "If You Take Away QE's Greater Fools, You'll Get A Market Resembling The Pit Scene From Trading Places"

    By Richard Breslow, former FX trader and fund manager who writes for Bloomberg

    You Don’t Need a Taper to Price for the Event

    Yesterday’s article on potential ECB tapering of their quantitative easing activities was important – even if you discount or outright dismiss its likelihood. No one was prepared to fade the news on the day and the reverberations were far and wide. If you were a bond market, of any stripe, and open for business, you got sold.

    Investors are long global bonds and other bond-infected assets in outsized size, and not at all sure why, other than that central banks will keep buying and nothing will ever change again

    As QE gets long in the tooth, it has increasingly relied on the greater fool theory to maintain itself. Take that assumption away and you’ll get a market resembling the pit scene from “Trading Places”

    Rather than dismissing the news (or trial balloon) ask yourself what would happen to your portfolio if global yield curves began to normalize. Which doesn’t require outright tightening to happen. Something to at least consider when submitting your bids for the next super-longs. It takes a lot of rolling down to get home scot-free from a 50-year maturity at crisis yields

    It’s all been about greed in order to survive in this desperate grasping-for-yield world. But more and more serious investors are trying, largely in vain, to point out that survival in the future may require getting to the exit on time. Taking a mark-to-market hit on a negative yielding bond is a nasty shock investors aren’t used to. And certainly not prepared for

    There’s been an assumption that bond vigilantes were permanently run out of town when the new central bank sheriffs came to town. And that back-ups in yield were some form of anti-social behavior to be scorned. But some policy makers are coming around to realize that steeper yield curves just might be what we need right now. For a whole host of reasons. And reminders that that’s possible should be taken as gentle nudges to reconsider the concept of adding a dose of prudence to investing decisions

    “Don’t say no one warned you” will be heard along with the wailing of the those who just wouldn’t leave the dance floor.

    * * *

  • The Noose Is Tightening Quickly On The Global Economy

    Submitted by Brandon Smith via Alt-Market.com,

    The investment world has an embarrassingly short attention span.  But frankly, it is a necessity.  If daytraders, hedge funds and other horses in the carousel actually had to look beyond the next week of market activity or study back on market history in comparison to today, then they would not be able to retain their blind optimism, which is exactly what is necessary for them to continue functioning.  If they were all to examine the global financial situation with any honesty, the entire facade would collapse tomorrow.

    At bottom, it is not central bank stimulus and intervention alone that drives equities and bond markets; it is the naive faith and willful ignorance of average market participants.  There is a problem with this kind of economic model, however.  Reality is never kept in check indefinitely.  Fiscal truths will be exposed, one way or another.

    How does one know when this full spectrum shift in awareness will occur?  Well, there’s no science that can help us with that.  While basic economics is subject to the forces of supply, demand and mathematical inevitability, it is also subject to human psychology, which is another matter entirely.

    In the past I have made a point to outline similarities in responses to various economic crises.  For example, the media response and public perception at the onset of the Great Depression was a highly unfortunate exercise in false optimism.  The response just before the credit crash of 2008 by the media and the masses was much the same.  It is interesting to note in particular that the mainstream media tends to become more over-the-top in its certainty of economic stability the closer the system comes to collapse.  That is to say, the nearer we edge towards financial calamity, the more violently the mainstream media attacks people who suggest that danger is on the horizon.

    First, take a look at the following attempts by the media to embarrass or silence analysts like Peter Schiff just before the crash of 2007/2008:

    Now, watch this attempt by CNBC to attack Bill Fleckenstein for having the audacity to question the validity of current stock values and pointing out that the Federal Reserve is destroying the economy rather than repairing it:

    Notice any striking similarities between the mainstream rhetoric of 2006/2007 and the mainstream rhetoric of today?  Notice how emotionally aggressive and almost desperate the media becomes when maintaining market faith, rather than looking at the situation objectively as the fundamentals begin to overwhelm investor complacency?

    To be clear, while mainstream economists are almost always wrong, independent analysts are not prophets.  We usually cannot provide the exact timing for the economic shifts we see coming.  All we can do is provide a general window in which the events are likely to take place.  Peter Schiff’s predictions on how the housing bubble and the credit crisis would play out were absolutely correct, even though he was about six months to eight months off his timing.  Again, this is not an exact science, and human psychology has the ability to offset market fundamentals for months.

    The supposed “catalyst” for the 2008 crash is primarily attributed to the fall of Lehman Brothers.  I highly recommend any of the “bullish” economists out there arguing today that the central banks intend to prolong a stock rally indefinitely examine the statements made in the mainstream about Lehman and by Lehman leading up to their eventual death rattle.  Then, absorb and really think on some of the recent statements and tactics used by Germany’s Deutsche Bank.

    Specifically, note Lehman’s use of accounting and derivatives gimmicks and the cycling of funds through various accounts in order to make the company appear solvent.  Then, take a look at revelations coming out of places like Italy that Deutsche Bank has been using the same model of false accounts and market manipulation, once again, with derivatives as a main tool for fraud.

    Also notice the same outright dismissals of all pertinent evidence that Deutsche Bank might be suffering a capital shortfall, as Chief Executive John Cryan blames “speculators” for the companies losses.  Lehman’s Dick Fuld and Bear Stearns’ Jimmy Cain both blamed “speculators” and “rumors and conspiracies” for the fall of their companies during the derivatives debacle eight years ago.  It would seem that history doesn’t just rhyme, it sometimes repeats exactly.

    Below is a rather revealing chart from the folks at Zero Hedge comparing the collapse of Lehman Brothers stock value to the steady decline of Deutsche Bank.  Check it out:

    Financial graph

    To be clear, Lehman was no catalyst.  It was only a litmus test for a system completely devoid of tangible value and drowning in toxic debt.  Lehman was a part of a much larger problem, it was not the cause of the problem.  The same is true for Deutsche Bank.

    The panic growing around Germany’s second largest financial institution, Commerzbank, as it moves to lay off nearly 10,000 employees and suspend its dividend is another crisis indicator separate from Deutsche Bank.  The clear solvency issues in Italy’s major banks, including Monte dei Paschi, are yet another explosive element.

    Keep in mind that when these edifices begin to crumble and Europe enters a state of financial emergency, the mainstream media and numerous governments will continue to blame speculators.  They will also claim that the entire disaster was set in motion through a “domino effect”; the first domino probably being Deutsche Bank.  This will be a lie.  There is no line of dominoes.  One bank will not be bringing down the other banks — yes, there is terrible interdependency, but the real issue is that ALL of these banks are falling due to their own cancerous behaviors.  The very system they are built around is a corrupt and unsustainable model, and I hold that this is by design.

    International financiers do not want the general public to look at the validity of the system, they want the public to view collapse events as an oversimplified case of cause and effect.

    If the public were to understand that the global banking model is a destructive one (for the public, not for the elites), then they might demand the erasure of the model and its institutions entirely.  The elites don’t want that.  What they want is to be free to conjure crisis after crisis after crisis; to have the option to collapse the system only to replace it with something identical in nature but even more oppressive in its function.  They want to create chaos today so that greater centralization can be purchased in the future through mass fear.

    I continue to maintain as I always have that central banks around the world are shifting strategies and will do very little to intervene from this point on in the propping up of insolvent banking groups or equities markets.  It is very unlikely that Germany or the European Central Bank, for example, will move to infuse Deutsch Bank with capital (at least, not until the damage has already been done).  It is also unlikely that any central bank will move to openly stimulate markets until an equities crash has run its course.  In fact, some central banks including the Federal Reserve may act to expedite a stock crash — watch for this to occur if Donald Trump attains the White House.

    This has all happened before.  It happened in 2008 when the Federal Reserve stepped back and allowed Lehman Brothers to go bankrupt.  It will probably happen again when the German government and the ECB refuse to back Deutsche BankThe noose is tightening on the global economy and, once again, the mainstream media is too biased or too dumb to see it.  They’ll accuse the alternative media of crying “doom and gloom,” and perhaps our timing will be off.  But exact timing will not really matter once the house of cards begins to topple.  If we stick to our positions and refuse to be intimidated by rhetoric, the time will come when people will only remember that we were right for the most part and that the mainstream media was incompetent or dishonest.

    In the meantime, we have a whole swarm of other trigger events before the end of the year.  I predicted in my article The World Is Turning Ugly As 2016 Winds Down that the Saudi 9/11 bill might be vetoed by Obama and that the veto would be overturned by the Senate.  This has now taken place, which means increased Saudi tensions with the U.S. resulting in the eventual demise of the dollar’s petro-currency status. Watch the coming Italian constitutional referendum which could pave the way for conservative movements to initiate an Italian version of the Brexit.  Also keep an eye on Syria yet again as diplomatic conflict flares between the U.S. and Russia (gee, who didn’t see that coming?).  And, of course, the U.S. presidential election which appears to be culminating into the most divisive political event in America in decades.

    Ignore the delusional positivism of the mainstream media and a large part of the equities trading community.  Their fantasies only grow more elaborate the closer we get to a market heart attack.  And remember, economic collapse is a process, not an overnight affair.  The progression of global decline should be apparent to anyone paying attention since 2008.  The only question is, when will the average citizen become aware?  My feeling according to current trends is, very soon.

  • Distillates Need a Cold Winter given the Supply Overhang (Video)

    By EconMatters


    Year over year the Distillate numbers from production, demand and supply appear the weakest in the Petroleum complex. A mild winter will be a headwind for Distillate prices in 2017 given current supply levels.

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

  • Chaffetz Blasts DOJ On "Side Agreements" That Effectively Prohibited FBI From Proving Intent

    Two days ago the Chairman of the House Judiciary Committee, Bob Goodlatte (R-Virginia), wrote a letter to AG Lynch that, for the first time, revealed that the FBI apparently struck “side agreements” with both Cheryl Mills an Heather Samuelson to, among other things, “destroy” their “laptops after concluding their search” (see “FBI Allowed 2 Hillary Aides To “Destroy” Their Laptops In Newly Exposed ‘Side Agreements’“). 

    Today, Jason Chaffetz, Chair of the House Oversight Committee, sent a follow-up letter requesting additional information and blasting the investigative process in which the “FBI inexplicably agreed to destroy the laptops knowing that the contents were the subject of Congressional subpoenas and preservation letters.” 

    But, perhaps the most startling takeaway from the Chaffetz letter is that limitations imposed by “side agreements” with Mills and Samuelson strictly prohibited the FBI from investigating the “intent” of Hillary’s staff to obstruct justice and/or destroy evidence subject to a Congressional subpoena.  As pointed out by Chaffetz, the “side agreements” allowed the FBI to only review emails between 6/1/14 through 2/1/15 and only those sent/received by one of Clinton’s four email addresses used during her tenure as Secretary of State

    Even more disturbing, Chaffetz points out that the FBI agreed to the “side agreements” in June 2016 at which point they were already aware that Combetta deleted Hillary’s emails using Bleachbit on 3/31/15 after a conference call with Cheryl Mills and Hillary attorney, David Kendall.  That said, the restrictions imposed by the “side agreements” strictly prohibited the FBI from reviewing Mills’ emails during that period which could have spoken to her intent to destroy evidence.

    Chaffetz Letter

     

    But, as always, we’re sure the DOJ and FBI will promptly clarify all of these new questions in a completely open and transparent way.

     

    Link to letter here.

  • "Heaven Help Us If There Is Ever A Modest Blip Of An Inflation Impulse"

    By Charlie McElligott, head of cross-asset desk strategy at RBC

    Despite the weakest Euro area Composite PMI since January ’15, periphery and core EGB’s are too seeing weakness, with traders noting not just the “tapering” story, but also Target 2 balance data, which is showing Italian and Spanish liabilities at 3+ year highs against German claims (2nd highest reading since 2008).  All-in-all, just the hypothetical mention of “tapering” speaks to the extent of speculative positioning in the periphery govies, with the seemingly lazy 3-day move lower in IKA (Italian BTP futures) actually being a 2.1 standard deviation event (against the returns of the past year).  To my points made for years now on risk-parity, risk-control / vol-targeting and leveraged ETPs, it’s the cost of “shadow short convexity” in the market place (as the strategies increase or decrease their exposure based on CB-repressed historical volatility), which now “more frequently than ever” smashes asset prices with stiff jolts of volatility “true-ups,” on account of their mechanical and unemotional rebalancing (and after a couple days…“back to normal” we go, as if nothing happened–this is your market structure).

    The BoJ kicked this party off in September with their “curve steepening” discussion (since put “into motion” under the guise of “curve control / yield targeting policy”).  As I have stated since over a week before the BoJ meeting, any curve-steeping operation could in fact be interpreted by the market as a QE taper, because 1) the BoJ is then by definition buying fewer bonds past 10 years against buying more in the belly—despite running out of bonds to buy there (!), and 2) potentially in a position where to stay true to their new policy, the BoJ could turn a NET SELLER of bonds when 10Y yields turn more negative!!!  As such, the global long-end sold off, triggering the aforementioned systematic fund de-leveraging which spilled-over across most every asset-class (except for US Investment Grade, which in the words of country-great Travis Tritt continues to act “10 feet tall and bullet-proof” ->  How’s that for showing my Ohio roots).  

    This latest version emanating off the Bloomberg story got a bit too much “headline” action, where the story itself spoke to a likely extension of the current ECB bond-buying program before “running out of Bunds” come-March.  The market is positioned for this extension / “perpetuation of the status-quo”…although they also were in September, when it never came up in the ECB meeting.  All eyes consensually see it coming in December now, yet some folks we speak to (who are close to the situation) indicate that the ECB is very closely watching the BoJ and the “market interpretation” of their current “stall tactics” being exhibited (in the form of this “curve control” snowball, against their longer-term “NEED” to go further NIRP-ier…which requires consensus building domestically and abroad on account of the negative implications for banks, pensions, insurance and corp balance sheets / capex investment).   Everybody is trying to buy-time…but at the end of the day, “extend and pretend” is the name of the gameFWIW, I personally believe this was a “shot across the bow” by Draghi to the ECB’s General Council (zee Germans) that “more needs to be done…free us from your shackles…or else you are gonna have blood on your hands.” 

    It is SO tired, but let’s face it: when even the limpest “trial balloon” discussion of the ECB’s hypothetical, WAY down-the-road discussion of how to end their QE program (we could be talking 2020 here people) creates yet another “Mini-Taper Tantrum,” we have to be intellectually honest with ourselves (as do CBers) and acknowledge the incredible degree to which the current monpol framework has distorted prices / valuations / market structure.  All assets are hooked on stimulus, and yet CB’s refuse to take the pain of allowing actual price-discovery.  A “winnowing-out” of the excess leverage and weak-handed lazy positioning would allow for a return to a greatly-desired / more-functional capital-market, and with it, the “business cycle,” which would benefit the real economy for the “greater good.”

    Ultimately, this is another “crack in the façade” of the QE monpol regime, buckling-further under its own weight.  In both the case of the BoJ and the ECB, they are acknowledging that they have little-choice but to move to “yield targeting” due to said curve and market distortions as again, both are running out of bonds to buy. 

    And with that, so too wanes the market’s believe in the omniscience of the current framework (although yes, CB’s without a doubt can still “escalate” via debt monetization / “helicopter money”…but nobody has yet shown resolve to go ‘nuclear’ without a true crisis), especially as their policies only further set-the-table for volatility explosions—as they force “real money” to get “even long-er” of duration through their yield compression madness.  Heaven help us if there is ever a modest blip of an inflation impulse.  Caveat emptor.

    * * *

    CONTEXT OF THE OVERSEAS IMPACT ON UST CURVES FROM ‘JAPAN-TRUM’ AND NEWEST ‘ECB-MINI-TANTRUM’:

  • Florida Faces "Biggest Evacuation Ever" As Hurricane Matthew Looms

    Things in Florida just went to '11' as, following his declaration of a state of emergency, the governor warned the state could be facing its “biggest evacuation ever.”

     

    As CBS local news reports,

    Gov. Rick Scott said he didn’t know how many people would be ordered to leave the coastline because it is left up to individual counties. So far, only Brevard and Martin counties have issued mandatory evacuation orders.

     

    “When you look at this storm as it goes along the East Coast, we’re going to have to prepare every county, so it could be the biggest evacuation ever. Every county is focused on it though. We’ve been working on it even before today,” Scott said.

     

    Scott said the state is preparing for the worst and hoping for the best, 1010 WINS’ Steve Kastenbaum reported.

     

    Matthew was a dangerous and life-threatening Category 3 storm with sustained winds of 120 mph, and it was expected to be very near Florida’s Atlantic coast by Thursday evening. It could become the first major hurricane to blow ashore in the U.S. since Wilma slashed across Florida in 2005.

    As The Weather Channel reports,

    "I cannot emphasize enough that everyone in our state must prepare now for a direct hit," Gov. Rick Scott said in a Wednesday press conference. "If Matthew directly impacts Florida, there will be massive destruction that we haven’t seen in years. This is a deadly storm approaching our state."

     

    The stern warnings came from everywhere – especially weather forecasters.

     

    "Extremely dangerous and life-threatening wind is possible," wrote the National Weather Service's Melbourne office in a forecast discussion. "Failure to adequately shelter may result in serious injury, loss of life or immense human suffering."

    There is even a chance that the deadly Hurricane could loop back and strike Florida twice…

     

    Meanwhile, Hurricane Matthew has already claimed it's first casualty in South Carolina as a man apparently decided to lead police directing evacuation traffic on a wild chase and then open fire on them.  According to CNN, officers were forced to return fire and wounded the man who's condition is unknown at this time.

     

    *  *  *

    As we detailed earlier, residents in the projected path of the deadly Hurricane Matthew have started preparing for the worst as east-coast governors from Florida all the way to North Carolina have all declared states of emergency.  Efforts to prepare for the deadly storm have resulted in massive gas lines and empty store shelves as residents either get out of town or bulk up on supplies to ride out the storm.

    Hurricane Matthew has battered the Caribbean over the past two days as a massive category 4 storm, with maximum sustained winds of 140 mph, claiming at least 17 lives in Haiti and Cuba.  According to the National Hurricane Center (NHC), Matthew was downgraded to a category 3 storm early this morning with maximum sustained winds of 120 mph but meteorologists warned the hurricane was likely to strengthen again in the coming days.

    Per Reuters, the U.N. has declared Hurricane Matthew the biggest natural disaster to strike Haiti since the devastating earthquake six years ago after it destroyed close to 1,000 homes and left up to 10,000 people in shelters.

    Authorities said on Wednesday five people in Haiti were crushed by trees and six were swept away by swollen rivers.

     

    "More than 1,000 homes have been damaged or destroyed by the flood waters and violent winds," said Ernst Ais, the mayor of the town of Cavaillon, near Les Cayes. He said a mother and three children died in floodwaters in his town.

     

    Three men were killed in Leogane, near Port-au-Prince, when a coconut palm fell on their home, the mayor there said.

     

    Mourad Wahba, the U.N. secretary-general's deputy special representative for Haiti, said much of the population had been displaced by Matthew and at least 10,000 were in shelter.

     

    "Haiti is facing the largest humanitarian event witnessed since the earthquake six years ago," he said.

    Per the NHC, the latest forecast calls for Hurricane Matthew to make landfall in Florida as a "Major Hurricane" with maximum sustained winds of at least 110 mph late Thursday evening or early Friday morning.  The storm is then expected to turn toward the northeast following right along the eastern seaboard all the way to North Carolina. 

    Hurricane Matthew

     

    Parts of Florida are expected to receive up to 10 inches of rain which can fluctuate substantially depending upon the ultimate path of the storm.  Meanwhile, Barclays analyst, Jay Gelb, warned that Hurricane Matthew may be among the top five worst U.S. hurricanes in history and has the potential to “wipe out” about a quarter’s worth of earnings for re-insurers.

     

    Governor Nikki Haley of South Carolina has already closed schools and order evacuations of anyone within 100 miles of the coast as deadly winds and 5-7 foot storm surges are expected. 

     

    Meanwhile, gas lines have backed up all over the east coast as people prepare to get out of town or simply stock up on fuel for generators.  Per NBC, gas stations across South Carolina are already running out of gas.

    But that’s not been so easy for some on Hilton Head.

     

    “We were at a station for 30 minutes and just as we pulled in they ran out of gas,” Montgomery said.

     

    “We got in line and by the time we got up to the pump it was out of gas,” Orr said. “A lady came out to let everybody know that they was out of gas.”

     

    And that’s a big concern for nearly everyone on the island.

     

    “They should’ve been prepared for us,” Orr said. “They knew that it was coming so they should’ve had enough gas.”

    And any station with remaining supplies are experiencing huge lines of antsy customers.

     

     

    Apparently the situation became so severe in Mount Pleasant, SC that the police department had to remind residents that "a gas station running out of gas" wasn't a valid reason to call 911.

     

    Traffic along the South Carolina hurricane evacuation route was at a standstill early this morning.

     

    Meanwhile, home improvement stores and grocery stores are running out of vital supplies like plywood and water as some residents prepare to ride out the storm from home.

     

     

     

     

  • Elizabeth Holmes To Shut Theranos' Core Operations, Fire 40% Of Workers

    The death of Theranos has been long coming ever since the WSJ' John Carreyrou did a phenomenal job, starting about one year ago, of exposing the fraud that is Clinton Global Initiative-darling Elizabeth Holmes, but as of this evening it is largely official. In an "open letter" just posted on the company's website, Holmes said Theranos would shut down its blood-testing clinical labs and fire 340 of approximately 790 full time employees, roughly 40% of its entire workforce.

    As the WSJ, whose story this has been from day one writes, "the moves mark a dramatic retreat by the Palo Alto company and founder Elizabeth Holmes from their core strategy of offering a long menu of low-price blood tests directly to consumers. Those ambitions already were endangered by crippling regulatory sanctions that followed revelations by The Wall Street Journal of shortcomings in Theranos’s technology and operations."

    Still, while Theranos' official closure, and still long-overdue criminal raid, should have taken place long ago (we wonder if Holmes' proximity to the Clinton Foundation may be a mitigating factor) in a testament to just how much dumb money there really is, the company will still continue to operate, even if under a severely scaled down, "post-pivot" business model. As Holmes writes, "we will return our undivided attention to our miniLab platform.  Our ultimate goal is to commercialize miniaturized, automated laboratories capable of small-volume sample testing, with an emphasis on vulnerable patient populations, including oncology, pediatrics, and intensive care."

    Holmes announced in August a new blood-testing device called miniLab, which is about the size of a printer but hasn’t been approved by regulators. The shutdowns and layoffs could help the closely held company minimize its cash burn in its attempt to accelerate the development of products that could be sold to outside laboratories, although it is unclear who would want to buy them.

    Her full – and perhaps final – letter is below:

    For our stakeholders,

     

    After many months spent assessing our strengths and addressing our weaknesses, we have moved to structure our company around the model best aligned with our core values and mission.

     

    We have decided to close our clinical labs and Theranos Wellness Centers, which will impact approximately 340 employees in Arizona, California, and Pennsylvania.  We are profoundly grateful to these team members, many of whom have devoted years to Theranos and our mission, for their commitment to our company and our guests.

     

    We will return our undivided attention to our miniLab platform.  Our ultimate goal is to commercialize miniaturized, automated laboratories capable of small-volume sample testing, with an emphasis on vulnerable patient populations, including oncology, pediatrics, and intensive care.

     

    We have a new executive team leading our work toward obtaining FDA clearances, building commercial partnerships, and pursuing publications in scientific journals.

     

    We are fortunate to have supporters and investors who believe deeply in our mission of affordable, less invasive lab testing, and to have the runway to realize our vision.

     

    I look forward to sharing more with you as we progress along the way.

     

    Sincerely,

     

    Elizabeth Holmes

    According to the WSJ, a retreat from the strategy that won the company a valuation of $9 billion in 2014 could make it less complicated for Ms. Holmes, to keep running Theranos as chief executive if the a ban sought by regulators to prevent her from owning any lab for two years is imposed. She also controls a majority voting stake in the company and can’t be easily removed from her position, according to people familiar with the matter.

    As for the new product, we doubt it will get a billion, or even a million dollar valuation: "The miniLab was unveiled at a conference of lab scientists, and Ms. Holmes said it could run accurate tests from a few drops of blood. Theranos sought emergency clearance of Zika-virus blood test but then withdrew its request after federal regulators found that the company didn’t include proper patient safeguards in a study of the new test."

    Oops.

    But while Holmes downfall, while fascinating, was predictable the far bigger question is how she managed to get to the top in the first place. The answer: a relent barrage of sycophants, paving her way from day one, instead of asking probing questions for some reason we hope to uncover one day. Here is a sample of everyone in the press who probably should be fired, courtesy of Bruce Quinn.

    August 30, 2013
    "Theranos: The Biggest Biotech You've Never Heard of."
    San Francisco Business Times. By Ron Leuty.  Here.

    September 8, 2013
    "Elizabeth Holmes: The Breakthrough of Instant Diagnosis."  

    The pivotal Wall Street Journal article, by Joseph Rago.  Here
    A Stanford dropout is bidding to make tests more accurate, less painful – and at a fraction of the current price.
     
    September 9, 2013
    "Secretive Theranos emerging partly from shadows."
    SF BizJournal, SF/Biotech, by Ron Leuty, subtitled, "The biggest biotech you've never heard of." Here

    October 9, 2013
    "Just a Drop Will Do."
    Pediatric News. By William Wilkoff.  Here.

     
    November 6, 2013
    "What Heath Care Needs is a Real Time Snapshot of You."
    WIRED, By Daniela Hernandez.  Here.

    November 13, 2013.
    "One Small Ow-eee."
    PediaBlog.  By Ned Ketyer MD.  Here.

    November 18, 2013
    "Creative disruption?  She's 29 and Set to Reboot Lab Medicine."

    MedPageToday.  By Eric Topol.  Here.
     
    February 18, 2014
    "This Woman Invented a Way to Run 30 Lab Tests on Only One Drop of Blood."
    WIRED again, by Caitlin Roper.  Here.  WIRED revisits Holmes, with an interview.
     
    February 28, 2014
    "Stanford Dropout Revolutionizes Blood Tests"
    Take Part, by Liana Aghajanian.  Here.  
     
    June, 2014
    Hematology Reports (Open Access Journal).  Full article PDF: Here.
    Chan SM, Chadwick J, Young DL, Holmes E, & Gotlib J (2014).  Intensive serial biomarker profiling for the prediction of neutropenic fever with hematologic malignancies undergoing therapy: a pilot study.  Hematology Reports 6(2).  
    Pubmed Central, here
     
    June 12, 2014
    "This CEO is Out for Blood."
    Fortune, by Roger Parloff.   Here.  Featured as cover story (picture).
     
    June 17, 2014
    "Elizabeth Holmes, Who Wants To Shake Up The Blood Testing Industry, Is A Billionaire At 30."
    Forbes [blog], by – Zina Moukheiber.  Here.
     
    July 2, 2014
    "Bloody Amazing."
    Forbes [blog 7/2, and Issue, 7/21], by Mathew Herper.  Here.
     
    June 3, 2014
    US Patent: "Systems and Methods of Sample Processing and Fluid Control in a Fluidic System."
    PDF, Patent 8,742,230 B2, 80 pp..  Here.
    "This invention is in the field of medical devices…portable medical devices that allow real-tie detection of analytes from a biological fluid…for providing point-of-care testing for a variety of medical applications."
     
    June 20, 2014
    "Theranos: Small Sample, Big Opportunity."
    Decibio [Consultancy blog].  By Eric Lakin.  Here.
     
    July 8, 2014
    "Nanotainer Revolutionizes Blood Testing." VIDEO
    USA TODAY.   Here.
     
    July 15, 2014
    "Meet Elizabeth Holmes, Silicon Valley's Latest Phenomenon"
    San Jose Mercury News, by Michelle Quinn.   Here.
     
    July 15, 2014
    "Theranos bringing 500 new jobs to Scottsdale's SkySong."
    Phoenix Business Journal.  By Angela Gonzales.   Here.  [SkySong is an ASU-affiliated tech park].
     
    July 21, 2014
    "Meet Elizabeth Holmes, the Youngest Female Self-made Billionaire Changing the World with Medical Technology."
    Women's ILAB, by Katherine Melescuic.  Here.
     
    August 11, 2014
    "Ignoring Lab Industry, Theranos Goes Its Way."
    "My Visit to Walgreens for Theranos Lab Tests." DARK REPORT (Paper by subscription only).  Table of contents here.
     
    September 8, 2014
    TechCrunch / Youtube Interview with John Sheiber.  VIDEO.
    Here.,For further details, see here.
     
    September 8, 2014
    "Elizabeth Holmes takes Theranos' blood test to tech movers, shakers."
    Biotech SF / Bizjournals – by Ron Leuty.  Discussion of TechCrunch presentation.  Here.
     
    September 29, 2014
    "This Woman's Revolutionary Idea Made Her A Billionaire — And Could Change Medicine."
    Business Insider.  By Kevin Loria.  Here.  See also June 4, 2015.
     
    September 30, 2014
    "Queen Elizabeth: Mystique of Theranos founder grows with Forbes' richest ranking."
    Biotech SF / Bizjournals – by Ron Leuty.   Here.
    October, 2014
    "Health Plans Deploy New Systems to Control Use of Lab Tests."
    Managed Care.  By Joseph Burns.  Here.
    Does not directly cite Theranos.  Cites contrasting viewpoints on the value of direct easy inexpensive test access:

    October 1, 2014

    "How One Entrepreneur is Transforming Blood Testing."
    Slate – by Kevin Loria.  Here.  [Reprint from Business Insider, 9/29, above.]

    October 16, 2014
    "She's America's Youngest Female Billionaire – And a Dropout."
    by Rachel Crane. CNN/Money.  Here.  [Text & Video.]

    October 27, 2014
    "Theranos Due Diligence: Company Profile, SWOT Analysis, Market Opportunity."
    Decibio.  Consulting group profile of Theranos and its valuation and market position (73 pages; $850).  Here.  Table of Contents, here.  Additional description here

     
    November 7, 2014
    TEDMED – Youtube – Elizabeth Holmes at TEDMED.  VIDEO.
    Here.,For further details, see here.

    November 7, 2014
    "Major Upside for Walgreens Stock"
    InvestorPlace.  By John Divine.  Here.
    "The single biggest catalyst for WAG stock in the future may be the company’s decision to partner with the privately held health-tech firm Theranos."

     
    December 8, 2014
    Fortune/Youtube – Theranos Billionaire Founder Talks Growth. VIDEO.

    Video interview with Pattie Sellers.  Here.
    For further details, see here.

    December 8, 2014
    "Here's How the World's Youngest Self-Made Female Billionaire Shows People She's In Charge."
    Business Insider.  By Richard Feloni.  Here.

    December 8, 2014
    "The New Yorker on the Promise, the Secrecy, and the Challenges of Super-Startup Theranos."
    MedCityNews.  by Meghana Keshavan.  Here.

    December 12, 2014
    "Behind the Curtain at Theranos."
    NBC News. (Video).  Interview with Ken Auletta.  Here.
    For more detail, see here.

    December 14, 2014
    "Blood Test Innovation: Less Cost, No Big Needle"
    Information Week/Healthcare.  By Larry Stofko.  Here.

    January 28, 2015
    "Elizabeth Holmes, Theranos: Transforming Healthcare by Embracing Failure."
    Youtube.  Stanford Graduate School of Business.  Here.
     
    February, 2015
    "Top 10 Most Innovative Companies in Health Care, 2015: #7, Theranos"
    Fast Company (staff), here.
    February, 2015
    "Vetting Theranos"
    Laboratory Economics [trade journal, subscription].  By JonDavid Kipp.  Here.
    February 2, 2015.
    "CEO Q&A: Craig Hall."
    Real Estate Daily.  By Christina Perez.  Hall was early investor in Theranos.  Here.
     
    February 3, 2015
    "Breakthrough Branding: Theranos, with Walgreens, Revolutionizes Healthcare."
    Brand Channel.  By Sheila Shayon.  Here.
     
    February 3, 2015
    "Will Theranos Turn the Lab Industry Upside Down?"
    Market Financial Analysis.  Here and here.  Order here ($99).
     
    February 6, 2015
    "Ten Things to Know about America's Youngest Female Billionaire."
    Business Insider.  By Koa Beck.  Here.
     
    February 5, 2015
    "Disruptive Technology Main Focus at Clinton Health Conference."
    California Healthline.  By Lauren McSherry. Here.
    President Clinton, Fourth Annual Health Matters Activation Summit.  "Access to health information is a basic human right," said Elizabeth Holmes, a young Silicon Valley entrepreneur who founded Theranos, a blood analytics and diagnostics company. [President] Clinton, who applauded her work to provide low-cost testing to the general public, said the company is valued at $9 billion.  See also at Clinton Foundation.org, here.
     
    February 10, 2015
    "Elizabeth Holmes – Theranos"
    Upstart.  By Teresa Novellino.  Here.
     
    February 10, 2015
    "Theranos CEO: Avoid Backup Plans."
    INC (from Stanford Business School.)  By Deborah Peterson.  Here.
    "I think that the minute that you have a backup plan, you've admitted that you're not going to succeed."
     
    February 17, 2015
    "Stealth Research: Is Biomedical Innovation Happening Outside the Peer-reviewed Literature?"
    JAMA.  By John P.A. Ionnanidis.  Here.
    "Theranos is just one example among many for which major efforts and major claims about biomedical progress seem to be happening outside the peer-reviewed scientific literature…stealth research creates total ambiguity about what evidence can be trusted in a mix of possibly brilliant ideas, aggressive corporate announcements, and mass media hype."   See comment at Healthnewsreview.org here (February 23, 2015).
    February 27, 2015
    "Tech company Theranos pushes consumer lab-testing bill."
    Arizona Republic.  By Ken Tucker.  Here.
    For legislative text, here.  For a blog on the topic, here.  For cloud version of the legislative text, here.  Article in March 2015 Laboratory Economics [subscription, here.]
     
    February, 2015
    "Theranos: Blood Tests that Need Just a Tiny Sample."
    Walgreens website, "At the Corner of Happy and Healthy," accessed 2/17/2015.  Here.
     
    March, 2015
    "Secret Shoppers Disappointed by Theranos."
    Laboratory Economics.   By Jondavid Klipp.  Here (subscription).
    Summarizes experiences of "secret shoppers" from Piper Jaffray, an Arizona lab, The Dark Report, and a California lab.  Most reported 3-day results and many reported standard venipuncture.
     
    March 2, 2015
    "Meet the Most Impressive Woman on Forbes' Female Billionaire List."
    Identities.Mic.  March 2, 2015.  By Julie Zeilinger.    Here.
    March 5, 2015
    "Millennials and Money: New Kids in the Forbes Billionaires Club."
    National Center for Business Journalism.  By Rian Bosse.  Elizabeth Holmes noted.  Here.
     
    March 6, 2015
    "Theranos Files Comment In Support Of Food and Drug Administration Oversight Of Laboratory-Developed Tests."
    Theranos Press Release.  Here.
    The comment letter, dated 3/1/2015, 4 pages, here.
     
    March 7, 2015.  
    "Health care in America: Shock treatment. A wasteful and inefficient industry is in the throes of great disruption."
    The Economist.  Theranos mentioned.  Here.  Also here.
    March 9, 2015
    "Theranos and Cleveland Clinic Announce Strategic Alliance to Improve Patient Care through Innovation in Testing."
    Press release.  Here.
     
    March 9, 2015
    "Cleveland Clinic Taps Theranos, Bets on Cheaper Diagnostics."
    Healthcare Finance News.  Anthony Brio.  Here.
     
    March 9, 2015.
    Fox News Cleveland Clinic/Theranos Interview.  VIDEO.
    Fox News Online.  Here.  Additional notes, here.
     
    March 9, 2015
    "Cleveland Clinic Enters 'Long-Term Strategic Alliance' with Theranos, Inc."
    Crain's Cleveland Business.  By Timothy Magaw.  Here.
     
    March 9, 2015
    "Elizabeth Holmes:  2015 Horatio Alger Award Winner."
    Horatio Alger Association.  Webpage,  here.  Press release, here.
     
    March 13, 2015
    "Theranos Seeks FDA Approval for Early-detection Ebola Test: George Schultz."
    Silicon Valley Business Journal.  By Ben Soriano.  Here.
     
    March 17, 2015
    "Mark Cuban Talks Healthcare Investing: Soon Our Bodies Will Be Big Math Equations."
    MedCity News.  By Stephanie Baum.  Here.
    “Sensors are the next opportunity,” Cuban said. He also voiced his enthusiasm for companies like 23andMe and Theranos.
     
    March 23, 2015
    "Boies Schiller Set to Open Palo Alto Outpost."
    The Recorder.  By Patience Haggin.  Here.
    April 7, 2015
    "Patients Can Soon Get Lab Tests Without Doctors' Orders."
    Arizona Republic.  By Yvonne Wingett Sanchez & Ken Alltucker.  Here.
     
    April 8, 2015
    "Theranos One Step Closer to Consumerizing Health."
    Decibio [Blog].  By Eric Lakin.  Here.  [Arizona consumer test law.]
     
    April 9, 2015
    "Arizona Health Law Could Boost Theranos' Biotech Prospects."
    USA Today [America's Markets].  By Marco Della Cava.  Here.
     
    April 16, 2015
    "Elizabeth Holmes."
    TIME [100 Most Influential People.]  By Henry Kissinger.  Here.
     
    April 17, 2015.
    "How Elizabeth Holmes became inspired to transform blood testing." VIDEO
    CBS News This Morning.   Here.  Also here,  here.  More here.
     
    April 20, 2015
    "The Doctor is Out: LabCorp to Let Consumers Order Own Tests."
    Bloomberg.  By Cynthia Koons.  Here., Also: In slightly different version, same author, Bloomberg Business Week, 4/27/15.
    April 20, 2015
    "What News at Theranos?  Lab Firm Expands in AZ."
    "In Arizona, New Consumer Direct Access Law is a First Win for California-Based Theranos."
    "Theranos: Many Questions, but Very Few Answers."
    Dark Report (subscription).  Here.
     
    April 27, 2015

    "World's Youngest Billionaire – Another Steve Jobs?"
    CNBC.  By Abigail Stevenson.  Here.
     
    April 27, 2015
    "Occam's Razor and the Secrecy of Theranos.  A Bunch of Crock?  No."
    Medcitynews.   By Meghana Keshavan.  Here.
     
    April 28, 2015
    "Guest List, State Dinner, Prime Minister Shinzo Abe, Japan."
    Washington Post.  Here.  (Including Ms. Holmes.)
    May 5, 2015
    "Theranos Sticks It to Critics, Plans Expansion of Lab Services."
    San Francisco Business Times.  By Ron Leuty.  Here.

    "Can Theranos Disrupt the Clinical Lab Testing Market?  An Objective Look at Advantages, Liabilities, and Challenges That Must Be Addressed."
    [Pathology] Executive War College.  By Dr. Robert Boorstein. [Deck]  Here.

     
    May 7, 2015
    "Theranos Jump Starts Consumer Lab Testing."
    Fortune.  By Ron Parloff.  Here.
    "My last routine blood tests, drawn at my physician’s office…cost me $433 out of pocket, even after application of my “gold”-level insurance….Had I not been insured, the lab’s price for those tests would have been $2,411, according to the explanation of benefits sent me. The same tests, according to Theranos’s price menu, would have cost me $75."
     
    May 7, 2015
    "New Laboratory Testing Firm Seeks to Shatter Old Diagnostic Testing Model."
    Genomeweb.  Here.
     
    May 7, 2015
    "Silicon Valley Lab Testing Startup Hires Clinton Advisor."
    Bloomberg.  By Caroline Chen.  Here.  (Similarly: Here.)
     
    May 11, 2015
    "Our Editor Describes Visit to Theranos Test Center."
    Dark Report.  (Subscription).  Here.
    Sidebar: "Comparing Patient Visit with Advertised Benefits."
     
    May 11, 2015
    "Airbnb Chesky, Theranos Holmes among presidential entrepreneurs."
    USAToday.  By Marco della Cava.  Here.
    Winners met with Commerce Secretary Penny Pritzker and President Obama.
     
    May 11, 2015
    "Elizabeth Holmes on Joining the Presidential Ambassadors for Global Entrepreneurship Initiative."
    Theranos/news/posts.  By Elizabeth Holmes.  Here.
    June 2, 2015.
    Elizabeth Holmes: Charlie Rose.  VIDEO.
    Here.  Comment, Kevin Loria, June 4, 2015.
     
    June, 2015
    "Collecting More Dollars From Patients: Why It’s Time For Clinical Labs and Pathology Groups to Move To The Retail Model."
    Dark Report [Trade journal, white paper].  Here.
    This white paper does not mention "Theranos" but covers the topic of retail access to laboratory tests.
     
    June 19, 2015
    "Personalized Technology Will Upend the Doctor-Patient Relationship."
    Harvard Business Review.  By Sundar Subramanian et al.  Here.
     
    June 21, 2015
    "The Benefits to Your Brain of a Work Uniform."
    Providence Journal [Chicago Tribune].  By Alexia Elejalde-Ruiz.  Here.
     
    June 22, 2015.
    "With Carlos Slim, Billionaire Elizabeth Holmes Brings Innovative Blood Testing Method To Mexico."
    Forbes.  By Dolia Estevez.  Here.
     
    June 23, 2015
    "Theranos' New Deal with Billionair Carlos Slim May Take It to Another Level." 
    Biz Journal SF.  By Ron Leuty.  Here.
     
    July 2, 2015
    "Controversial Multibillion-Dollar Health Startup Theranos Just Got a Huge Seal of Approval from the US Government."
    Business Insider.  By Laren F Friedman.  Here.
    July 2, 2015
    "Disruptive Diagnostics Firm Theranos Gets Boost from FDA."
    Fortune.  By Roger Parloff.  Here.
     
    July 3, 2015
    "Theranos Blood Test: The Insanely Influential Stanford Professor Who Called the Comapny Out for its 'Stealth Research.' "
    Washington Post.  By Ariana Eunjung Cha.  Here.
     
    July 24, 2015
    "Biden Visits Theranos Lab as Part of Healthcare Innovation Summit"
    USAToday. By Marco della Cava.  Here.
    Theranos Press Release, here.   The Suffield Times, here.
     
    July 24, 2015
    "Theranos Pushing Direct to Consumer Blood Testing."
    Health IT Outcomes.  By Christine Kern.  Here.
     
    July 30, 2015
    "Theranos’ Holmes Marks 50th Anniversary of Medicare and Medicaid with Vision for Next 50 Years."
    Business Wire [press release].  Here.
     
    August 11, 2015
    "Nickles Takes On Theranos."
    O'Dwyer PR Inside News, here.  (Nickles is a Washington policy group).
     
    August 17, 2015
    "A Good Month for Blood."
    Laboratory Equipment.  By Michelle Taylor.  Here.
     
    August 19-20, 2015
    "Leveraging Pharmacies for Rapid Diagnostics."
    7th Annual Next Generation Diagnostics Summit (Two-Day Track on Pharmacies).
    While not specific to Theranos, a two-day meeting on lab tests in the pharmacy space.
    Here or here.
    August 24, 2015
    "Labcorp is Reaching Past Doctor's Office to the Patient."
    Investors Business Daily.  By Gillian Rich.  Here.
     
    October 5, 2015
    "Elizabeth Holmes on Using Business to Change the World."
    Forbes.  By Sarah Hedgecock.  Here.
     
    October 6, 2015
    "Self Made Billionaire on Re-inventing Blood Tests: It's Like Cocaine."
    Vanity Fair.  By Emily Jane Fox.  Here.
     
    October 6, 2015
    "How Theranos is Disrupting the Health Care Industry."
    Bloomberg. [VIDEO 6:38 min.]  Here.
    "A cholesterol test is $2.99, whereas it could cost hundreds in other locations…The response from the lab industry, they have so aggressively seeded false information about us into the press, into journalists, into physicians in the market we are in."
     
    October 7, 2015
    "Theranos Founder Elizabeth Holmes to Deliver Keynote Address at 2015 Medical Innovation Summit."
    Craigs Cleveland Business.  Here.
     
    October 12, 2015
    "Theranos' Elizabeth Holmes Call on Women to Help Each Other."
    Fortune.  By Michael Lev-Ram.  Here.
     
    October 12, 2015
    "CME Group Announces Elizabeth Holmes as the 2015 Melamed-Arditti Innovation Award Receipient."
    MarketWatch.  Here.
     
    * * *
    Finally, here is a brief history of the rise and fall of Theranos and Liz Holmes in the only appropriate format for this farce: a cartoon.

     

     

  • Preparing For A Resurgence Of Globalism

    Via The Daily Bell,

    Backlash to World Economic Order Clouds Outlook at IMF Talks … Policy-making elites converge on Washington this week for meetings that epitomize a faith in globalization that’s at odds with the growing backlash against the inequities it creates. From Britain’s vote to leave the European Union to Donald Trump’s championing of “America First,” pressures are mounting to roll back the economic integration that has been a hallmark of gatherings of the IMF and World Bank for more than 70 years.

     

    – Bloomberg

    Populism versus globalism again, a meme we first identified after Brexit. The idea, we suggested was that a dialogue would be created in mainstream media painting populism as responsible for numerous economic political and military difficulties. Gradually, globalism would be suggested as the remedy for populism.

    At the end of this Bloomberg article, we find the beginnings of this rhetorical justification:

    “The consensus in policy-making circles was that more trade meant better economic growth,” said Standard Chartered head of Greater China economic research Ding Shuang, who worked at the IMF from 1997 to 2010. “But the benefits weren’t shared equitably, so now we see a round of anti-globalization, anti-free trade. “Globalization will stall for the moment, until we can find a way to share those benefits,” he added.

    This is the argument that will be made then, in louder and louder tones. Globalism has been rejected in favor of populism because globalism did not equitably share benefits.

    Solution? Make globalism more widespread and equitable. This is the argument being advanced, one that builds the justification for pushing globalism forward and expanding it.

    This is why memes are so important from an elite standpoint. Gradually, they can be reconfigured into “directed history.” Memes, once expressed, can be acted upon. That is what will happen here, no doubt, if this meme continues to be expanded.

    More:

    Fed by stagnant wages and diminishing job security, the populist uprising threatens to depress a world economy that International Monetary Fund Managing Director Christine Lagarde says is already “weak and fragile.” The calls for less integration and more trade barriers also pose risks for elevated financial markets that remain susceptible to sudden swings in investor sentiment, as underscored by recent jitters over Frankfurt-based Deutsche Bank AG’s financial health.

     

    “The backlash against globalization is manifesting itself in increased nationalistic sentiment, against the outside world and in favor of increasing isolation,” said Louis Kuijs, head of Asia economics at Oxford Economics in Hong Kong and a former IMF official. “If we lose consensus on what kind of a world we want to have, the world will probably be worse off.”

    This is textbook stuff. First create the meme, which  is always the expression of a problem: global warming, resource scarcity, prejudice, etc. Then gradually begin to prepare and offer antidotes.

    If the meme is successful, selected activists and politicians will begin to call for action. That’s how the meme drives the appropriate solution.

    Watching memes is useful because often you can predict the solution and thus see trends developing far in advance. In this case we would hypothesize that this meme will be expressed via forms of globalism that will extend to those immediately affected. This may, in fact, be lucrative for those who understand the elite mechanism and its regional implementations.

    Global warming, for instance, is a meme – a falsehood. But hundreds of billions and perhaps trillions have been spent in an attempt to treat it as a reality. Many have captured significant profits from participating in global warming remedies even thought he problem doesn’t exist, or not in a way that can be affected by man-made solutions.

    There is no doubt more action is coming on the globalist front, justified by “populist pushback.” Christine Lagarde herself, head of the IMF,  is quoted in the Blooomberg article as saying that “policy makers attending the Oct. 7-9 annual meeting of the IMF and World Bank have two tasks.”

    First, do no harm, which above all means resisting the temptation to throw up protectionist barriers to trade.

     

    And second, take action to boost lackluster global growth and make it more inclusive.

    Conclusion: It can’t be any clearer than that. Globalism, you see, is being recast not just as inevitable but as necessary as well, as the wise choice when contrasted with “populism.” We’ll see how far and fast this meme grows. Right now it looks to be a major one.

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Today’s News 5th October 2016

  • Conflicts Of Interest

    Submitted by Duane via FMShooter.com,

    yellen

    Fed Governor Lael Brainard has donated to Clinton’s campaign and is widely viewed as a potential Clinton pick for Treasury secretary. Yellen hesitated and then demurred when Representative Scott Garrett of New Jersey asked whether Brainard would have a conflict of interest if she were indeed in talks with Democratic nominee Hillary Clinton’s campaign about a position. The election takes place Nov. 8.

     

    “I would have to consult my counsel, I’m not aware that that’s a conflict,” Yellen said in testimony to the House Financial Services Committee in Washington, while rejecting Garrett’s suggestion that the U.S. central bank has a political bias.

    Source:  Fed Politics in Spotlight as Yellen Cornered by Lawmaker  |  Bloomberg

    Imagine how higher management would feel about you reacting in the same situation.  Goldman has been known to lay off its employees for even donating to the Trump campaign.  So a similar situation would be you, an employee of a firm, donating to a political campaign, and later getting a promotion as a result of that donation.

    Of course, Lael Brainard herself has a long history of working in the executive branch to begin with.  She initially served in Bill Clinton’s administration, and was appointed Undersecretary of the Treasury for International Affairs early in Barack Obama’s presidency.  In 2014, she was nominated to the Federal Reserve Board of Governers, and it appears the majority of “conflicts of interest” and connections with her past employers were largely ignored during her confirmation.

    brainerd

    Again, this should only surprise you so much.  Brainard is married to Kurt Campbell, CEO of The Asia Group, and previously founded and was CEO of many other think tanks and businesses.  After a distinguished military career, he also has made a career of working in politics, serving as Deputy Assistant Secretary of Defense, and the Assistant Secretary of State for East Asian and Pacific Affairs.  It would make sense to look at his trading statements, to see how his portfolio could have benefited from inside information from within the government and Federal Reserve itself.  If Campbell is appointed to a position within the government, it will just be another example of the government / lobby “revolving door” hard at work.

    Then again, it would be fair to say that about a Brainard appointment to Treasury secretary in and of itself.   And while you can expect the argument to be put forward of her “vast qualifications” at a confirmation hearing, it seems the one thing that she has done remarkably well during her career was to grease the right wheels and make sure that high-level government employment is in the cards.

    Revolving Door Politics

    So, when Yellen is queried by a Congressman about a potential conflict of interest, of course she is unaware that it could be a possible conflict.  “Revolving door” and “conflict of interest” in regards to government appointments translates to “business as usual” for government officials.

     

  • FED Talk – Why rate hikes will not have a lasting impact on gold

    The full report can be accessed and downloaded as PDF here at goldmoney.com

     

    Today’s sell off in gold has led to concerns that the >20% year-to-date rally in gold prices could begin to reverse. In our view this is primarily the reaction to renewed expectations that the FED is indeed prepared to raise rates again, which has led to large sell orders and pushed gold below a key technical level at USD1302/ozt. However, the asymmetry in the gold price outlook remains clear. There is very little downside to prices from here even if the FED raises rates multiple times over the coming year or two. Indeed, we see several triggers that could push gold prices sharply higher from here over that time horizon.

    Gold sold off more than 3% intraday today. The sharp price decline came on the back of hawkish comments from Federal Reserve Bank of Richmond President Jeffrey Lacker today and Federal Reserve Bank of Cleveland President Loretta Mester yesterday. Mr. Lacker said today in Charleston, “While inflation pressures may seem a distant and theoretical concern right now, prudent preemptive action can help us avoid the hard-to-predict emergence of a situation that requires more drastic action after the fact,” thus urging the FED to raise rates before year-end. On Monday, Cleveland FED President Mester said in a Bloomberg TV interview that the economy is ripe for rate hike and highlighted that the November FED meeting should be considered a “live” meeting (although she added that she considers all meetings as “live”) and a November rate hike compelling, despite its close proximity to the US presidential elections. These comments have sent real-interest rate expectations as measured in 10-year TIPS sharply higher which pushed gold prices sharply lower (see Exhibit 1). Tuesday saw unusually high activity in the gold futures market. The hawkish FED talk triggered large sell orders, which pushed gold prices below the key technical levels of USD1300-1302/ozt, exacerbating the sell-off. This is something we have witnessed before.

     

     

    Since the beginning of the year, the FED has tried to appear hawkish while the actual policy outlook has in fact become ever more dovish. At the end of 2015 there were 4 rate hikes expected and telegraphed by the FED in the FED dot-plot. The FED dot-plot shows the forecasts of each of the 16 members of the FOMC. Each dot represents a member’s view of where interest rates should be at for various timeframes, including a “long run” projection which represents where members think interest rates will be at the end of a hiking cycle. For 2016 the FOMC members expected 4 hikes (not including the first hike at the end of 2015). So far there have been none, and the FED members have continuously revised down their projections not just for this and next year, but also for the terminal (long run) rate. But every time after markets were disappointed by another zero round, some FOMC members came out with hawkish statements, and sometimes the FED minutes suggested that the FOMC became more hawkish. Every time the market reacted the same way: It pushed real interest rates higher and gold lower, and every time so far it was only temporary. Gold moved gradually higher, reflecting weaker interest rate projections. 

     

     

    So what happens to gold when the FED actually raises rates? We think not much. The reason is that real-interest rates can’t really move much higher from here even if the FED raises rates. The FED’s own projection for terminal rates is now just 2.85%. The FED will most probably only raise rates if inflation reaches or exceeds its own target of 2%, which would imply that real-interest rates (currently at 0.04%) are capped at 0.85% over the long run. This upside limit on real interest rates sets the floor for gold prices and explains why its price outlook is skewed to the upside. Yes, if everything goes perfectly and the FED gets the chance to raise rates to its target over several years (without encountering any economic slowdown along the way) while maintaining a 2% inflation rate, then gold prices have a little bit more downside, but less than 10% (see Exhibit 4). 

     

     

    In fact, there are many more potential drivers to the upside. 

    1. The FED might increase its inflation target as already suggested by San Francisco Fed President John Williams. This means that real-interest rate expectations would become negative again even if the FED actually raises rates;

    2. We start to experience an acceleration in broad based inflation as opposed to FED induced asset price inflation, pushing real rates back deep into negative territory;

    3. The FED keeps delaying rate hikes and taking guidance for terminal rates even lower as it has done for years;

    4. Any hiccup in the economy and the FED is forced to take rates lower instead of higher. Historically the FED has lowered rates several percentage points to counter recessions. At 0.5%, that would require steep NIRP;

    5. Any renewed QE or new form of unconventional monetary policy such as ‘helicopter money’ would push gold prices sharply higher;

    6. A renewed surge in longer dated energy prices (which bottomed in 1Q16, and we don’t expect these levels to be retested) but is likely only to materialize in a few years.

    Importantly, for gold to go higher from here it doesn’t need any Malthusian thinking. None of the scenarios above require a renewed global meltdown of financial markets or an even bigger event, such as a full blown currency crisis. The FED itself has simply set the floor for gold prices by revising its own guidance for rates to a point where the most hawkish scenario is that real-interest rates can only move marginally higher from here.

  • "Interruptionfest" VP Debate Ends In Tie, Moderator Loss

    We suspect a few screens were broken after that debacle.

    Just when you thought Lester Holt had troughed moderator incompetence, Elaine Quijano steals the show. Not only did she interrupt Mike Pence immeasurably many times but she consistently allowed Tim Kaine to interrupt his competitor and have the last word.

    Perhaps this showed 'weakness' on Pence's behalf but polls and post-debate discussions appear to show a slight bias to his lead as Kaine's manner and repetitiveness seemed to rub many the wrong way.

     

     

     

    Fox notes – Kaine Interrupted Pence 39 time, Pence Interrupted Kaine 19 times.

    As MRCTV reports, CBS News' Elaine Quijano repeatedly attacked Gov. Mike Pence (R-Ind.) during the 2016 vice presidential debate in Farmville, Va., on Tuesday.

    The debate moderator criticized Pence for failing to answer questions when he was unable to get a word in with constant interruptions from Hillary Clinton’s running mate Sen. Tim Kaine (D-Va.).

    On the subject of immigration, in addition to her initial question, Quijano overstepped her role of moderator by pressing Pence on whether illegal immigrants would be “forcibly removed” under Trump’s plan.

    “Governor, how would these millions of undocumented immigrants leave? Would they forcibly be removed?” she asked.

    She appeared to support Sen. Kaine on his criticism of Trump, answering back to him, “right,” in agreement. 

    Kaine said, “This is important, Elaine. When a guy running for president will not support the troops, not support veterans, not support teachers…”

    “Right,” Quijano responded, before Kaine even finished his remark.

    Kaine went on to overrun the moderator, taking control of the debate by speaking over both Gov. Pence and Ms. Quijano.

    The debate quickly became one-sided:

    Quijano later stopped Pence short in his discussion of the Clinton Foundation even though Kaine had ample time to defend the charity and attack the Trump Foundation. 

     

     

     

    As CBS reports, a focus group being conducted by CBS News contributor Frank Luntz believes Democratic vice presidential nominee Tim Kaine is interrupting Republican nominee Mike Pence too much during the debate.

     

     

    Polls were mixed:

    FOX: Pence Wins

    Focus Group: Pence Win

     

    *  *  *

    What They Said

    Kaine said:

    • *KAINE SAYS HE'S RUNNING WITH `HISTORY-MAKING WOMAN'
    • *KAINE: CLINTON PICKED HIM BECAUSE HE CAN HELP DELIVER RESULTS
    • *KAINE SAYS THOUGHT OF TRUMP AS COMMANDER IN CHIEF IS SCARY
    • *KAINE SAYS CLINTON ALWAYS PUTS OTHERS FIRST, UNLIKE TRUMP
    • *PENCE: CLINTON, KAINE WOULD KNOW ABOUT `INSULT-DRIVEN CAMPAIGN'
    • *KAINE SAYS CLINTON HAS PLAN THAT'S A `YOU'RE HIRED' PLAN
    • *KAINE SAYS CLINTON WILL NEVER TRY TO PRIVATIZE SOCIAL SECURITY
    • *KAINE SAYS HE'S STRONG 2ND AMENDMENT SUPPORTER
    • *KAINE ON TRUMP: CAN'T HAVE PERSON AT THE TOP WHO DEMEANS PEOPLE
    • *KAINE: TERRORIST THREAT HAS DECREASED IN SOME WAYS
    • *KAINE SAYS CLINTON ONLY CANDIDATE WHO CAN BEAT TERRORISM
    • *KAINE SAYS CLINTON WOULD VET REFUGEES, NOT DISCRIMINATE
    • *KAINE COMPARES TRUMP TO `FOOL' OR `MANIAC' ON NUCLEAR WEAPONS
    • *KAINE: CLINTON CAN STAND UP TO RUSSIA IN WAY TRUMP CANNOT
    • *KAINE: PUTIN IS WHAT WENT WRONG WITH RUSSIA RESET
    • *KAINE: CLINTON FOUNDATION ONE OF HIGHEST-RATED CHARITIES
    • *KAINE: CLINTON AT STATE TOOK NO ACTION TO BENEFIT FOUNDATION
    • *KAINE: PRESIDENT NEEDS TO DEFEND AGAINST IMMINENT THREATS
    • *KAINE: U.S. MUST BE ABLE TO COOPERATE WITH CHINA ON NORTH KOREA
    • *KAINE SAYS WAS AGAINST DEATH PENALTY, YET UPHELD VA. LAW
    • *KAINE: CLINTON WOULDN'T PUNISH WOMEN FOR ABORTION, UNLIKE TRUMP
    • *KAINE SAYS HE AND CLINTON HAVE RELATIONSHIPS ACROSS THE AISLE

    Pence said:

    • *PENCE SAYS HE HAS `LIFETIME OF EXPERIENCE' TO BRING TO DC
    • *PENCE: CLINTON, KAINE WOULD KNOW ABOUT `INSULT-DRIVEN CAMPAIGN'
    • *PENCE CRITICIZES CLINTON FOR FOUNDATION DONORS, PRIVATE SERVER
    • *PENCE SAYS HE, TRUMP CAN GET ECONOMY MOVING AGAIN, LOWER TAXES
    • *PENCE SAYS U.S. ECONOMY HAS BEEN DRIVEN INTO THE DITCH
    • *PENCE: TRUMP USED TAX CODE `THE WAY IT'S SUPPOSED TO BE USED'
    • *PENCE: TRUMP FACED TOUGH TIMES IN BUSINESS 20 YEARS AGO
    • *PENCE SAYS HE, TRUMP WILL MEET OBLIGATIONS TO SENIORS
    • *PENCE SAYS HE AGREES ON NEED FOR COMMUNITY POLICING
    • *PENCE SAYS `IMPLICIT BIAS' COMMENTS DEMEAN LAW ENFORCEMENT
    • *PENCE: TRUMP COMMENTS NOTHING COMPARED WITH `DEPLORABLES' REMRK
    • *PENCE: `AMERICA IS LESS SAFE TODAY'
    • *PENCE CRITICIZES CLINTON REFUGEE PLAN AS POTENTIALLY DANGEROUS
    • *PENCE SAYS CLINTON'S PRIORITY WAS THE RESET WITH RUSSIA
    • *PENCE: U.S. SHOULD BE PREPARED TO USE MILITARY FORCE IN SYRIA
    • *PENCE: U.S. SHOULD DEPLOY DEFENSE SHIELD TO CZECH REP., POLAND
    • *PENCE: U.S. MUST REBUILD MILITARY TO HALT NUCLEAR THREAT
    • *PENCE SAYS TRUMP WOULD NEVER PUNISH WOMEN FOR ABORTION
    • *PENCE DEFENDS TRUMP COMMENTS, HE'S `NOT A POLISHED POLITICIAN'
    • *PENCE SAYS TRUMP'S BUSINESS SMARTS WILL HELP UNIFY U.S.

    *  *  *

    Trump's View of the Winner…

    And Hillary asked for money…

     

  • ALERT: Markets to implode, only FX will be left

    Warning to investors – traditional markets are flawed.  In one of many hypothetical futures, not so far in the future, FX may be the only game in town.  As we explain in Splitting Pennies – Understanding Forex – it’s FX that drives the world, not stocks, bonds, commodities, or real estate.  Let’s take a quick look at some of the cracks in traditional markets.

    HFT Market to collapse, or drastically change

    During the credit crisis HFT snuck in a huge business for themselves in the stock market via Reg NMS by manipulating ‘order types’ and ‘latency’.  Well, that’s all starting to unwind.  Top HFT firms are fearful that the SEC is about to ‘spill the beans’ according to Bloomberg:

    Some of the biggest electronic traders are complaining that a new test in the U.S. stock market will compromise their top-secret strategies, one of their most valuable assets.  Citadel Securities and KCG Holdings Inc. are among a chorus of brokers questioning elements of a U.S. Securities and Exchange Commission experiment, which began Monday, designed to whip up more trading in small companies. Their complaint is that the test will force firms to publicly expose detailed trading data with only the thinnest veil of anonymity, allowing competitors to reverse engineer how their prized trading algorithms work.  For high-speed trading firms, complex computer code is the secret weapon for profiting from the market. Some brokers say they fear that in their test, regulators won’t sufficiently mask their publicly reported trading data.  “It’s going to take someone exactly three seconds to figure out who’s who,” said Jamil Nazarali, head of execution services at Citadel Securities, which is the market-making arm of billionaire Ken Griffin’s Citadel LLC. Trading firms will “likely change their behavior to protect their intellectual property,” making the test’s results less meaningful, he added.

    And, IEX is set to blow a hole in the dark pools of Wall St.

    Big Banks collapsing – SOON

    Previously to the “DB Crisis” – Europe’s biggest bank, Douche Bank, is now probably insolvent at best, and at worst – will form a black hole so big that it will suck half of the worlds banks and assets into it when it implodes.  DB isn’t just a bank, it’s a financial powerhouse – a superbank.  For example, if you’ve ever bought a currency ETF, it was probably offered by DB:

    (Note the big black X in the background – good choice DB!)

    Hmm.. only 35 ETFs in the USA.  Anyway, creating an ETF isn’t easy.  DB is registered in almost every country in the world, yes even in Malta.  They are in thousands of businesses.  Unwinding this behemoth will take decades.  Unraveling all of their crimes, money laundering, scandals, and derivatives is practically impossible.  Just one example of a $10 Billion dollar liability, in this case, just money laundering:

    Almost every weekday between the fall of 2011 and early 2015, a Russian broker named Igor Volkov called the equities desk of Deutsche Bank’s Moscow headquarters. Volkov would speak to a sales trader—often, a young woman named Dina Maksutova—and ask her to place two trades simultaneously. In one, he would use Russian rubles to buy a blue-chip Russian stock, such as Lukoil, for a Russian company that he represented. Usually, the order was for about ten million dollars’ worth of the stock. In the second trade, Volkov—acting on behalf of a different company, which typically was registered in an offshore territory, such as the British Virgin Islands—would sell the same Russian stock, in the same quantity, in London, in exchange for dollars, pounds, or euros. Both the Russian company and the offshore company had the same owner. Deutsche Bank was helping the client to buy and sell to himself…Although the bank’s headquarters remained in Germany, power migrated from conservative Frankfurt to London, the investment-banking hub where the most lavish profits were generated. The assimilation of different banking cultures was not always successful. In the nineties, when hundreds of Americans went to work for Deutsche Bank in London, German managers had to place a sign in the entrance hall spelling out “Deutsche” phonetically, because many Americans called their employer “Douche Bank.”  

    On the other side of the pond, Wells Fargo – previously one of America’s ‘trusted’ banks, “Main St. bank” – is collapsing after the market learned that their great sales figures were based on a house of cards that was, well, fraudulent.  If you’re not aware or not following this crisis, checkout this article for a simple explanation.

    Real Estate Market Shaky, at best

    With a major hurricane likely to hit Florida and possibly a direct hit on Miami, which already has a problem with high tides, hot markets such as Miami are feeling multiple pressures.

    Manhattan apartment sales have plunged 20% – 

    There are a lot more apartments available for purchase these days in Manhattan. And fewer people are buying.  Sales of previously owned condominiums and co-ops fell 20 percent in the third quarter from a year earlier as potential buyers grew cautious amid more choices, according to a report Tuesday from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. There were 5,290 resale apartments on the market at the end of September, 53 percent more than the number available in late 2013, the lowest point for listings.

    The swelling inventory is providing an opportunity to New Yorkers shut out of a market in which construction has been dominated by ultra-luxury condos aimed at the wealthiest buyers. Resales, particularly those priced at less than $1 million, were in chronically short supply in recent years, and those that made it to the market sparked bidding wars. Now, more owners are listing apartments to profit from climbing values, and they’re finding lots of company.  “Rapidly rising prices over the years have pulled more sellers into the market hoping to cash out,” Jonathan Miller, president of Miller Samuel, said in an interview. “But buyers are more wary. There isn’t the same intensity of activity to burn through the new supply.”

    What’s next?  

    Hedge Funds, not capitalizing on the turmoil, and even losing

    Well, hedge funds are having their worst year EVER, with fewer than one in five beating a basic market benchmark:

    In fact, this has been the year investors wanted to do anything but try to pick stocks. Active fund managers had their worst first half ever, with fewer than one in five beating a basic market benchmark, according to data from Bank of America Merrill Lynch that go back to 2003.Stock pickers were done in by two major factors: following the crowd and an uneven pattern of correlations among stocks. The 10 most-crowded stocks lagged the 10 least-owned by a whopping 18 percentage points, which BofAML called “an atypically high spread.”

    So what’s left?

    Forex Markets to dominate the next 20 years

    There’s always Forex algorithms, which Wall St. simply afraid of, because they don’t ‘control’ the FX markets.  Some FX strategies perform month in and month out like clockwork, a pension fund’s dream – but why go with something that works when it’s politically correct to lose with hedge funds (it’s good for jobs, right?).

    The point is that, FX is a money market – and a super set of other markets.  If the stock market completely crashes like 50%, investors will still have trillions in cash.  It will even create a dollar shortage.  But that cash has to go somewhere.  Some, will go to Euros, Swiss Francs, and other ‘money’.  Bitcoin isn’t a percent of a percent of a percent, although certainly money will flow into Bitcoin.  Bitcoin isn’t viable alterantive to major FX currencies simply because of acceptability.  It’s not possible to pay for goods in foreign countries in Bitcoin – but many accept US Dollars.  Until that changes – or until the United States of America ceases to exist as a country (which is probably the only event that could really obliterate FX markets) – then, FX is going to be the only game left in town.  Why?  Because, the US Dollar is supported by bombs.  As long as the US Army has enough gas in their tanks, and munitions in their supply, you can bet dollar markets will function.  Other markets, like real estate, don’t have such protection.  But there’s a good reason for that.  Because all markets DEPEND on FX.  Without a dollar market, the stock market couldn’t exist.  If you want to be Wall St.’s next HFT firm, you first need to fund an account WITH DOLLARS.  

    So, although many markets teetering on the brink of implosion, FX looking stronger than ever, and until there’s a viable alternative (which considering alternatives, China, Russia, Bitcoin, etc… not a real solid candidate next 20 years) we can expect FX supremacy and US Dollar Hegemony for the long term.  So, if you’re still naive to the realities of FX – now’s a great time to start learning!

    If you don’t know Forex, checkout the book Splitting Pennies – Understanding Forex – or checkout Fortress Capital Trading Academy, who offers a great Introductory course.

  • DOJ Drops Charges Against Arms Dealer Who "Threatened To Expose" Hillary Arming Islamic Extremists

    In what would under other circumstances likely be a major media spectacle, Politico reported that the Obama administration is moving to dismiss charges against an arms dealer whom it had accused of selling weapons destined for Libyan rebels and who had threatened to expose Hillary Clinton’s talks about arming anti-Qaddafi rebels.

    According to a motion filed in federal court in Phoenix, the DOJ on Monday filed a motion to drop the case against the arms dealer, an American named Marc Turi. One potential reason for the surprising move is that as Politico writes, the deal averts a trial that threatened to cast additional scrutiny on Hillary Clinton’s private emails as Secretary of State, and to expose reported Central Intelligence Agency attempts to arm rebels fighting Libyan leader Moammar Qadhafi.


    Marc Turi

    Turi was indicted in 2014 on four felony counts: two of arms dealing in violation of the Arms Export Control Act and two of lying to the State Department in official applications. The charges accused Turi of claiming that the weapons involved were destined for Qatar and the United Arab Emirates, when the arms were actually intended to reach Libya. Turi’s lawyers argued that the shipments were part of a U.S. government-authorized effort to arm Libyan rebels. It’s unclear if any of the weapons made it to Libya, and there’s no evidence linking weapons provided by the U.S. government to the Benghazi attacks.

    According to Politico government lawyers were facing a Wednesday deadline to produce documents to Turi’s legal team, and the trial was officially set to begin on Election Day, although it likely would have been delayed by protracted disputes about classified information in the case. A Turi associate asserted that the government dropped the case because the proceedings could have embarrassed Clinton and President Barack Obama by calling attention to the reported role of their administration in supplying weapons that fell into the hands of Islamic extremist militants.

    Making matters worse, Turi’s case had delved into emails sent to and from the controversial private account that Clinton used as Secretary of State, which the defense planned to harness at any trial.

    “They don’t want this stuff to come out because it will look really bad for Obama and Clinton just before the election,” said the associate.

    Leery of admitting the actual truth, in the dismissal motion, prosecutors were vague saying that “discovery rulings” from U.S. District Court Judge David Campbell contributed to the decision to drop the case. The joint motion asks the judge to accept a confidential agreement to resolve the case through a civil settlement between the State Department and the arms broker.

    Additionally, Turi’s defense was pressing for more documents about the alleged rebel-arming effort and for testimony from officials who worked on the issue the State Department and the CIA. The defense said it planned to argue that Turi believed he had official permission to work on arms transfers to Libya. “If we armed the rebels, as publicly reported in many, many sources and as we strongly believe happened and as we believe at least one witness told the grand jury, then documents about that process relate to that effort,” Cabou told Campbell at the same hearing last year.

    And so, the best course of action for the DOJ was to shut the case down, or else risk drawing unwanted attention to Hillary at the most sensitive time for the presidential candidate.

    “Our position from the outset has been that this case never should have been brought and we’re glad it’s over,” said Jean-Jacques Cabou, a Perkins Coie partner serving as court-appointed defense counsel in the case. “Mr Turi didn’t break the law….We’re very glad the charges are being dismissed.”

     

    Under the deal, Turi admits no guilt in the transactions he participated in, but he agreed to refrain from U.S.-regulated arms dealing for four years. A $200,000 civil penalty will be waived if Turi abides by the agreement.

     

    A State Department official confirmed the outlines of the agreement.

    To be sure, the lawsuit devolved into a case of who said what.

    According to a government official who asked not to be named, “Mr. Turi cooperated with the Department’s Directorate of Defense Trade Controls in its review and proposed administrative settlement of the alleged violations. Based on a compliance review, DDTC alleged that Mr. Turi…engaged in brokering activities for the proposed transfer of defense articles to Libya, a proscribed destination under [arms trade regulations,] despite the Department’s denial of…requests for the required prior approval of such activities.”

    “The proposal did not result in an actual transfer of defense articles to Libya,” the State Department official told Politico on Tuesday.

    On the other hand, Turi adviser Robert Stryk of the government relations and consulting firm SPG accused the government of trying to scapegoat Turi to cover up Clinton’s mishandling of Libya. “The U.S. government spent millions of dollars, went all over the world to bankrupt him, and destroyed his life — all to protect Hillary Clinton’s crimes,” he said, alluding to the deadly Sept. 11, 2012 terrorist attack on the U.S. Consulate in Benghazi, Libya.

    At a court hearing in 2015, Cabou said emails between Clinton and her top aides indicated that efforts to arm the rebels were — at a minimum — under discussion at the highest levels of the government.

    “We’re entitled to tell the jury, ladies and gentlemen of the jury, the Secretary of State and her highest staff members were actively contemplating providing exactly the type of military assistance that Mr. Turi is here to answer for,” the defense attorney said, according to a transcript.

    Whatever the case, the overhang of another Libya snafu potentially muddying up the waters just before the election, was something the Clinton campaign could not afford as Republicans still hold Clinton responsible for mishandling the circumstances around that attack.

    It is unlikely that the story will remain hushed for long, however: Stryk said that Turi was now weighing book and movie deals to tell his story, and to weigh in on the Benghazi attack.

  • All The Ways You Can Comply (& Still Die) During An Encounter With Police

    Submitted by John Whitehead via The Rutherford Institute,

    How do you protect yourself from flying fists, choking hands, disabling electrified darts and killing bullets?

    How do you defend yourself against individuals who have been indoctrinated into believing that they are superior to you, that their word is law, and that they have the power to take your life?

    Most of all, how can you maintain the illusion of freedom when daily, Americans are being shot, stripped, searched, choked, beaten and tasered by police for little more than daring to frown, smile, question, challenge an order or just exist?

    The short answer: you can’t.

    Now for the long answer, which is far more complicated but still leaves us feeling hopeless, helpless and vulnerable to the fears, moods and misguided training of every cop on the beat.

    If you ask police and their enablers what Americans should do to stay alive during encounters with law enforcement, they will tell you to comply (or die).

    It doesn’t matter where you live—big city or small town—it’s the same scenario being played out over and over again in which Americans are being brainwashed into believing that anyone who wears a government uniform—soldier, police officer, prison guard—must be obeyed without question, while government agents, hyped up on their own authority and the power of their uniform, ride roughshod over the rights of the citizenry.

    The problem, of course, is what to do when compliance is not enough.

    I’m not talking about the number of individuals—especially young people—who are being shot and killed by police for having a look-alike gun in their possession, such as a BB gun. I’m not even talking about people who have been shot for brandishing weapons at police, such as scissors.

    I’m talking about the growing numbers of unarmed people are who being shot and killed for just standing a certain way, or moving a certain way, or holding something—anything—that police could misinterpret to be a gun, or igniting some trigger-centric fear in a police officer’s mind that has nothing to do with an actual threat to their safety.

    Killed for standing in a “shooting stance.” In California, police opened fire on and killed a mentally challenged—unarmed—black man allegedly because he removed a vape from his pocket and took a “shooting stance.”

     

    Killed for holding a cell phone. Police in Arizona shot a man who was running away from U.S. Marshals after he refused to drop an object that turned out to be a cellphone.

     

    Killed for holding a baseball bat. Chicago police shot and killed a 19-year-old college student who was carrying a baseball bat around the apartment where he and his father lived.

     

    Killed for opening the front door. Bettie Jones was fatally shot—accidentally—when she attempted to open the front door for police responding to a domestic disturbance call.

     

    Killed for being a child in a car pursued by police. Jeremy David Mardis, six years old and autistic, died after police opened fire on a car in which he was a passenger.

     

    Killed for attacking police with a metal spoon. In Alabama, police shot and killed a 50-year-old man who reportedly charged a police officer while holding “a large metal spoon in a threatening manner.”

     

    Killed for running in an aggressive manner holding a tree branch. Georgia police shot and killed a 47-year-old man wearing only shorts and tennis shoes who ran towards police holding a stick in an “aggressive manner.

     

    Killed for crawling around naked. Atlanta police shot and killed an unarmed man who was reported to have been “acting deranged, knocking on doors, crawling around on the ground naked.” Police fired two shots at the man after he reportedly starting running towards them.

     

    Killed because a police officer accidentally pulled out his gun instead of his taser. An Oklahoma man suspected of trying to sell an illegal handgun was shot and killed after a 73-year-old reserve deputy inadvertently fired his gun instead of his taser.

     

    Killed for wearing dark pants and a basketball jersey. Donnell Thompson, a mentally disabled 27-year-old described as gentle and shy, was shot and killed after police—searching for a carjacking suspect reportedly wearing similar clothing—encountered him lying motionless in a neighborhood yard.

     

    Killed for telling police you lawfully own a firearm and have a conceal-and-carry permit. Philando Castile was shot and killed during a routine traffic stop allegedly over a broken tail light. As he was reaching for his license and registration, Castile explained to police that he had a  conceal-and-carry permit. That’s all it took for police to shoot Castile four times in the presence of his girlfriend and her 4-year-old daughter.

     

    Killed for leaving anywhere at all when a police officer pulls up. Deravis Caine Rogers was killed after starting to drive away from an apartment complex right around the same time as a police officer pulled up. Despite the fact that the police officer had no reason to believe Rogers was a threat or was suspected of any illegal activity, the officer fired into Rogers’ passenger side window.

     

    Killed for driving while deaf. In North Carolina, a state trooper shot and killed 29-year-old Daniel K. Harris—who was deaf—after Harris initially failed to pull over during a traffic stop.

     

    Killed for being homeless. Los Angeles police shot an unarmed homeless man after he failed to stop riding his bicycle and then proceeded to run from police.

     

    Killed for being old and brandishing a shoehorn. John Wrana, a 95-year-old World War II veteran, lived in an assisted living center, used a walker to get around, and was shot and killed by police who mistook the shoehorn in his hand for a 2-foot-long machete and fired multiple beanbag rounds from a shotgun at close range.

     

    Killed for having your car break down on the road. Terence Crutcher, unarmed and black, was shot and killed by Oklahoma police after his car broke down on the side of the road. Crutcher was shot in the back while walking towards his car with his hands up.

     

    Killed for holding a garden hose. California police were ordered to pay $6.5 million after they opened fire on a man holding a garden hose, believing it to be a gun. Douglas Zerby was shot 12 times and pronounced dead on the scene.

    Now you can make all kinds of excuses to justify these shootings, and in fact that’s exactly what you’ll hear from politicians, police unions, law enforcement officials and individuals who are more than happy to march in lockstep with the police. However, to suggest that a good citizen is a compliant citizen and that obedience will save us from the police state is not only recklessly irresponsible, but it is also deluded and out of touch with reality, because in the American police state, compliance is no longer enough.

    Frankly, as these incidents make clear, the only truly compliant, submissive and obedient citizen in a police state is a dead one.

    If you’re starting to feel somewhat overwhelmed, intimidated and fearful for your life and your property, you should be.

    As I point out in my book Battlefield America: The War on the American People, “we the people” are now at the mercy of law enforcement officers who have almost absolute discretion to decide who is a threat, what constitutes resistance, and how harshly they can deal with the citizens they were appointed to “serve and protect.”

    Sad, isn’t it, how quickly we have gone from a nation of laws—where the least among us had just as much right to be treated with dignity and respect as the next person (in principle, at least)—to a nation of law enforcers (revenue collectors with weapons) who treat us all like suspects and criminals?

  • University Distributes Seven-Page Speech Guide

    By Kate Hardiman, University of Notre Dame, via The College Fix

    Student leaders of this year’s freshman orientation at James Madison University were given a list of 35 things they should avoid saying, including phrases such as “you have such a pretty face,” “love the sinner, hate the sin,” “we’re all part of the human race,” “I treat all people the same,” “it was only a joke,” “I never owned slaves,” and “people just need to pick themselves up by their bootstraps,” among other expressions.

    Those phrases and others on the list “widen the diversity gap” and do not “create a safe and inclusive environment,” according to the seven-page handout, a copy of which was provided to The College Fix by a campus spokesman.

    Adapted from Dr. Maura Cullen’s book “35 Dumb Things Well-Intended People Say: Surprising Things We Say that Widen the Diversity Gap,” the list also classifies some compliments and encouraging words, such as calling someone “cute” or saying “I know exactly how you feel,” as a no-no.

    Many of the “dumb” statements also pertained to race. “I don’t see color,” “I’m colorblind” and “I don’t see difference. We’re all part of the same race, the human race” were all advised against. “If you are going to live in this country, learn to speak the language” also made the list.

    After each phrase, an explanation as to why it should be avoided was given. Expressions on race allegedly make people of color feel invisible and diminish their life experiences, the handout states. Statements of empathy supposedly “shuts the other person down,” it adds. Saying to LBGTQ people “what you do in the privacy of your own bedroom is your business” is “hurtful and annoying” because it does not acknowledge the quality and depth of their relationship outside the bedroom, the handout states.

    The last item on the list warns against labeling something as political correct, calling it “an attempt to shut the other person up.”

    James Madison University’s director of communications Bill Wyatt told The College Fix via email that “this was just an exercise, prior to orientation, to get our volunteers to understand how language affects others. The list was not distributed to our first-year students nor were the volunteers instructed not to use the phrases.”

    Yet page one of the handout, written by JMU, reads that orientation leaders should “use this handout as a resource” to help accomplish the goal of creating a “safe and inclusive environment for your first year students.”

    They were also called upon by the handout to “take some time to reflect on your prejudices and biases, and how that might affect your interactions with students.”

    The full list of 35 “dumb” expressions is:

    1. “Some of my best friends are …”
    2. “I know exactly how you feel.”
    3. “I don’t think of you as …”
    4. “The same thing happens to me too.”
    5. “It was only a joke! Don’t take things so seriously.”
    6. What do ‘your’ people think.”
    7. “What are you?” or “Where are you really from?”
    8. “I don’t see color” or “I’m color blind.”
    9. “You are so articulate.”
    10. “It is so much better than it used to be. Just be patient.”
    11. “You speak the language very well.”
    12. Asking black people about their hair or hygiene.
    13. Saying to LBGTQ people “what you do in the privacy of your own bedroom is your business.”
    14. “Yes, but you are a ‘good’ one.”
    15. “You have such a pretty face.”
    16. “I never owned slaves.”
    17. “If you are going to live in this country, learn to speak the language!”
    18. “She/he is a good person. She/he didn’t mean anything by it.”
    19. “When I’ve said the same thing to other people like you, they don’t mind.”
    20. Calling women “girls, honey, sweetie pie” or other familiar terms.
    21. When people of color say, “It is not the same thing.”
    22. When people of faith say, “Love the sinner, hate the sin.”
    23. When white men say, “We are the ones being discriminated against now!”
    24. Referring to older people as “cute.”
    25. Asking a transgender person, “What are you really? A man or a woman?”
    26. Referring to the significant other, partner, or spouse of a same gender couple as their “friend.”
    27. “Why do ‘they’ (fill in the blank) always have to sit together? They are always sticking together.”
    28. “People just need to pick themselves up by their bootstraps.”
    29. People with disabilities are “courageous.”
    30. “That’s so gay/queer. That’s so retarded.”
    31. “I don’t see difference. We are all part of the same race, the human race.”
    32. I don’t care if you are pink, purple or orange, I treat all people the same.”
    33. Asking a transgender person, “Have you had the operation.”
    34. Saying to a Jewish person, “You are so lucky to have ‘your’ Christmas spread over a week!”
    35. “Here’s another book on political correctness.”

    Click here to read the entire document.

  • Clinton Foundation Allegedly Hacked Exposing Thousands Of Donor Databases; "Pay To Play" Folder

    While the hack of the Clinton Foundation was foreshadowed two months ago, moments ago notorious hacker Gufficer 2.0, who previously was responsible for hacking the DNC and DNCC not to mention the resignation of Debbie Wasserman Shultz, announced that the moment “many of you have been waiting for” has come, by revealing that the Clinton Foundation has been hacked.

    This is what Guccifer 2.0, who has denied being affiliated with the Russian government claiming that like the original Guccifer he is from Romania, posted moments ago on his website:

    So, this is the moment. I hacked the Clinton Foundation server and downloaded hundreds of thousands of docs and donors’ databases.

     

    Hillary Clinton and her staff don’t even bother about the information security. It was just a matter of time to gain access to the Clinton Foundation server.

    The unknown hacker has allegedly exposed 1,000 of Hillary donors (a small list of master donors can be found here)…

    Guccifer

     

    …corporate donations made to various House representatives….

    Guccifer

     

     

    …as well as Wall Street bank donations, curiously cross-referenced to how much TARP funding they received.

    Guccifer

     

    As Guccifer notes,” It looks like big banks and corporations agreed to donate to the Democrats a certain percentage of the allocated TARP funds.

    Guccifer 2.0 also posted a note to Julian Assange who was mocked on Tuesday morning after he failed to produce Clinton documents he has long claimed to have.

    “P.S. I’m pleased to congratulate Wikileaks on their 10th anniversary!!!,” Guccifer 2.0 writes. “Julian, you are really cool! Stay safe and sound!”

    * * *

    But the most interesting, and perhaps damning, finding is the following: a root directory snapshot revealing a folder which Hillary may have some trouble explaining: “Pay to Play

    Guccifer

    The hacker also provides a link to the hundreds of thousands of other documents he has access to saying “I can’t post all databases here for they’re too large. I’m looking for a better way to release them now.”

    We will go through the files, with a focus on Pay to Play because this may be the clearest confirmation that after repeated accusations that the Clinton Foundation was primarily a conduit for rich donors to get access to privileged kickbacks, or well “pay to play”, this was indeed the case, although the fact that someone actually left a folder with that name in the foundation’s server makes us wonder if someone is really that stupid, or whether this hack is even real.

    To be sure, as The Hill notes, some of the files contained in the leaked data dump appear to originate not from the Foundation but from the DNCC:

    A sampling of the posted documents include a spreadsheet of big bank donations, a list of primarily California donors, an outdated spreadsheet of some Republican House members — and a screenshot of files he claimed to have obtained, one of which was titled “Pay to Play.”

     

    But there are a number of red flags that suggest the documents are in fact from a previous hack on the Democratic Congressional Campaign Committee (DCCC), not a new hack on the Clinton Foundation.

     

    A spot check of some of the people on the donor list against FEC filings found that they all lined up with DCCC contributions.

     

    The Clinton Foundation discloses its donors, and many of the alleged donors published by Guccifer 2.0 do not appear to have given to the organization.

    One spreadsheet was allegedly created by a Kevin C. McKeon at DCCC in 2009. There was a Kevin McKeon that worked at DCCC at that time.

    The Clinton Foundation has denied the hack, with president Donna Shalala saying that “none of the files or folders shown are ours.”

     

     

  • Gundlach: "Deutsche Bank Will Be Bailed Out But What About Credit Suisse"

    Last Thursday, when Deutsche Bank was flailing ahead of the now confirmed fake report of a reduced settlement with the DOJ, Reuters spoke to Jeff Gundlach about his thoughts regarding the German lender, his advice was simple: don’t touch it. “I would just stay away. It’s un-analyzable,” Gundlach said about Deutsche Bank shares and debt. “It’s too binary.” Gundlach said investors who are betting against shares in Deutsche Bank might find it futile. Maybe, but not if they cover their shorts before the max pain point, something which the market – where equity/CDS pair trades now allow a “go for default” strategy – will actively seek out.

    “The market is going to push down Deutsche Bank until there is some recognition of support. They will get assistance, if need be.”

    What happens then? “One day, Deutsche Bank shares will go up 40 percent. And it will be the day the government bails them out. That jump will happen in a minute,” Gundlach said. “It is about an event which is completely out of your control.”

    The very next day his forecast was proven largely accurate, when DB soared some 25% from its overnight lows on, if not a bailout, then a report of a potentiel reprieve, even if the report ultimately ended up being wrong.

    Then, earlier today, during the Grant’s Fall 2016 investment conference, Gundlach once again discussed the troubled German bank and said that “you cannot save your faltering economy by killing your financial system and one of the clear poster children for this is Deutsche Bank’s stock price,” Gundlach, 56, said at Grant’s Fall 2016 Investment Conference on Tuesday in New York. “If you keep these negative interest rate policies for a sufficient future period of time you are going to bankrupt these banks.”

    Europe’s banks have seen their value shrink by about $280 billion this year, with Deutsche Bank losing almost half its market value. Germany’s largest lender extended losses after the U.S. Department of Justice last month requested $14 billion to settle a probe into residential mortgage-backed securities, sparking concerns that it will have to raise capital.

    Repeating what he said one week ago, Gundlach added that while the Frankfurt-based bank would ultimately be rescued by the German government if needed, other banks in the region wouldn’t be able to count on such support, Gundlach said.

    “Deutsche Bank will be supported by Germany if push comes to shove,” he said. “But what about Credit Suisse, which has shown a similar decline in stock price? Who’s there to bail them out?”

    As Bloomberg notes, having been largely forgotten in the din surrounding DB, Credit Suisse has lost about 40 percent of its value this year. The Swiss bank raised about $6 billion of capital last year under new Chief Executive Officer Tidjane Thiam to help fund a restructuring plan.

    Joining the “other” bond king who earlier today railed against unorthodox monetary policies, Gundlach warned again that negative rates risk undermining the proper functioning of capital markets, and blamed European banking’s woes on the ECB’s policies.

    However, what is a trapped central bank to do: Gundlach pointed out that even the Federal Reserve, which has not cut rates below zero, is seeing signs that its policies aren’t working. Gundlach has said that interest rates bottomed in July and that the market is looking for signs of fiscal stimulus and accelerating inflation. He’s predicting that rates on the U.S. 10-year bond may surpass 2 percent by the end of 2016. Which may explain why Gundlach told the Grant’s confernce audience that for the first time in years, he favored TIPS, which he has in the CORE fund, over nominal Treasuries.

    “For the first time in years, I am long TIPS,” he said.

    In a separate interview with Reuters, Gundlach added: “Implied future inflation priced into TIPS is low, too low for the environment likely to unfold over the next decade. Nominal Treasuries are likely to underperform TIPs over an institutional investment horizon.”

    While his inflationary bet may be premature, investors don’t seem to think so: DoubleLine posted a net inflow of $444.4 million into its open-end mutual funds in September, marking the Los Angeles-based firm’s 32nd consecutive month of inflows, while the $61.8 billion DoubleLine Total Return Bond Fund, the largest fund by total assets of the DoubleLine Funds, had a net inflow of $190.9 million in September, for a year-to-date net inflow of $8.3 billion.

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