• The Mainstream Media Has Only Itself To Blame For The "Fake News" Epidemic

  Submitted by Stephen Miller via HeatSt.com,

  The mainstream media continues to freak out over the spread of “fake news” on Facebook and other social media platforms such as Twitter and reddit. Hillary Clinton’s late campaign thinks this is a problem.

  The Democrat party seems to think people with Facebook accounts are to blame for Hillary’s decision to ignore crucial swing states in the final weeks of the campaign, that likely cost her the election.

  But the media hasn’t bothered to ask why such sites gained traction. Our media has cultivated false news for years. Understandably, people stopped caring about the “journalistic ethics” the media claim to possess.

  The CBS morning show, hosted by Charlie Rose, recently ran a segment on the rise of fake news, based on a story posted on BuzzFeed. The website claimed that Facebook users shared more “fake” news stories than “real” news stories by the end of the election.

  Was the story true? Timothy Carney from the Washington Examiner found holes in Buzzfeed’s model which thus complicated the narrative BuzzFeed was trying to present. On examination, Buzzfeed had ignored real statistics to present their own version of a narrative, not the facts.

  On the same CBS show, Charlie Rose interviewed former “fake news” pundit and left-wing icon Jon Stewart about the election. During his Daily Show years, Stewart styled himself as both a serious pundit and a comedian, allowing him to walk the line between fake news and satire.

  The show’s set, and Stewart’s demeanor, mirrored that of a network news program. His cast did on-location interviews, which were often heavily edited to present their own liberal point of view. But long after Stewart’s show ended, he is still being propped up as an important voice in journalism.

   

  Jon Stewart, "The Most Trusted Name in Fake News," will quit The Daily Show this year: http://t.co/K3FqCFEdwd pic.twitter.com/5HOmV71Yxk

  — CNN International (@cnni) February 11, 2015

  Jon Stewart topped a 2009 TIME poll asking who was the most trusted newscaster in America http://t.co/6Vcooh7G3X pic.twitter.com/wDBZWuUUCP

  — TIME (@TIME) August 7, 2015

   

  Shortly before Stewart filmed his final Daily Show segment in August 2015, the Washington Post published a piece lamenting that “many millennials are about to lose their most-trusted news source.”

  CNN’s Brian Stelter has made exposing fake news sites a bit of a pet project. He should start with his own network, along with its mainstream competitors. Stelter himself recently discussed the election with disgraced former CBS New anchor Dan Rather, who was forced to resign after presenting forged documents about George W. Bush’s service in the National Guard as legitimate news.

  CNN has run segments suggesting that asteroids cause climate change, and black holes can materialize in Earth’s atmosphere and swallow 747 passenger planes . A CNN panel led by left wing commentator Sally Kohn declared their “hearts are out there marching” with protestors in Ferguson as they all raised their hands to mimic the Black Lives Matter protest mantra — “Hands Up Don’t Shoot” — echoing an alleged gesture during a police shooting that was declared one of the year’s biggest lies (ironically) by the Washington Post.

  NBC Nightly News, hosted by Lester Holt, featured a report about “fake news” this past Tuesday, apparently with zero self awareness about how Holt came to host the show. He replaced the disgraced Brian Williams after it was revealed that Williams had fabricated a number of self-aggrandizing anecdotes about his broadcasting career.

  How were Williams’ fabrications discovered? Not by NBC’s asleep-at-the-wheel standards executives, and not by the New York Times, the Washington Post, CNN or even Fox News. They came to light after a soldier on Facebook called Williams out for exaggerating a story about covering the Iraq War. Williams continues to make millions of dollars working for NBC as a late night MSNBC host.

  NBC was also caught airing edited audio of a 911 phone call in a way that made Trayvon Martin shooter George Zimmerman come across as a racist, when the full context was far more mundane.

  Meanwhile, NBC Universal has invested $2 hundred million in BuzzFeed and Vox. There isn’t enough space to list all of the times Vox failed at delivering “real news.” I will simply let Deadspin explain: “46 Times Vox Totally Fucked Up A Story.”

  Rolling Stone continues to put out a magazine despite a verdict of malicious defamation of a UVa administrator related to its publication of, “A Rape on Campus,” a story about a brutal rape that, as it turns out, never happened.

  Another such case is Emma Sulkowicz, the Columbia University rape activist who carried a mattress on her back to protest University administrators for not expelling her alleged rapist. Except the rape never happened. Still, the New York Times ran a piece exulting Sulkowicz titled “The Art of the Political Protest.”

  When New York Senator Kirsten Gillibrand invited Sulkowicz to be her guest at the State of the Union address, there were no questions about the validity or truth of her claims. The New York Times has repeatedly pushed the fake campus rape statistic that every one in four women are sexually assaulted on campus. This story was repeatedly cited by both Gillibrand and Democratic nominee Hillary Clinton.

  Beginning to see the problem yet?

  When false narratives and comedians are championed, the public at large stops relying on publications and networks who attempt to pass themselves off as “real news” but who in fact either ignore or simply don’t care about information they put out because of an ideological bias.

  

  

• Drugs Are Killing More Americans Than Road Crashes

  So much for the so-called ‘war on drugs’… The United States has been gripped by a heroin and opiate epidemic with user numbers recently hitting a 20 year high.

  In 2014, the number of U.S. heroin users passed the million mark with deaths from overdoses rising steeply. And as Statista’s Niall McCarthy writes, drugs are now killing substantially more Americans every year than car crashes.

  In 2004, 30,711 deaths were drug related compared to 42,836 in
  motor vehicle accidents. A decade later, drug-induced deaths reached
  49,714 while road crash deaths fell to 32,675.

  
  You will find more statistics at Statista

  As well as the cheap suppy of heroin, legistlation aimed at eliminating prescription opioid abuse has actually added to the problem. It involved changing the texture of the pills to make them more difficult to crush and inject into the bloodstream. That move made people shift over to heroin in droves. New and deadlier drugs such as Fentanyl are also adding to the overdose epidemic. 50 times more potent than heroin, Fentanyl has created an overdose spike in several north-eastern states and has been named as the drug that killed pop singer Prince earlier this year.

  

  

• The Coming Financial Backlash For Silicon Valley And Much, Much More

  Authored by Mark St.Cyr,

  Silicon Valley has a problem, a very big problem. And it’s not rooted in just the geographic location. Everything (and I do mean everything) that was once assumed “a given” or, “totally worth it” or, the more memorable “it’s different this time” rationales as it pertained to startups, social media, valuations, user metrics, IPOs, unicorns, etc., etc. is about to be piled onto the ever burgeoning trash-bin of history. Right atop 2016’s polling data. For if this election proved one thing – it was this:

  This is what happens when one assumes they’re breathing rarefied air – only to find they’ve been doing nothing more than inhaling their own exhaust fumes.

  Now if you think I’m going to speak about the election results? You’d be wrong. That’s for others to discuss. No, what I have been watching is far more fascinating.

  I can only imagine how many businesses must be viewing much of the latest uproar with absolute horror when trying to decide whether they will, or will not spend ad dollars on any social platform going forward.

  I would wager to guess there are many a marketing team, or ad-buy executive sitting back shell-shocked with ranging thoughts on the likes of: “Do I want to subject ourselves, our products, or customers to boycotting, protests, trolling, or worse, which has absolutely nothing to do with us?” I’d list more – but there’s not enough digital ink to type them all.

  So using the above “revelation” let’s put some context around it on what has transpired over the last week, and see how this all might shape up in the not so distant future. And how appropriate the word “revelation” fits when using one of the metaphorical four horsemen of the “markets” to do just that: e.g., Facebook™ (FB.)

  Suddenly FB finds itself on very unfamiliar ground. It would seem the “torches and pitchforks” this time are wanting to rally and surround 1 Hacker Way, rather than some other entity. It would appear “Zuck and crew” have a revolt on their hands. And in their panic (“their” meaning FB) are providing some very unsettling reasoning, commentary, and future plans on how to deal with it.

  Let’s try to square-a-few-circles, shall we? And just to remind you: this is about business, not the political.

  Remember when FB was accused of censoring conservative news or views? First: FB made statements that its news feed (or whatever they called it) was purely algorithm based. i.e., No human real-time meddling. Only to be found out: Oh yeah, sorry, we forgot about those humans who actually curate in real-time censoring via their personal political bias which seems to be of the exact opposite viewpoint.

  So, gee-whiz, by-golly, they’re going to stop doing that. And, from this day forth, you can be assured (because they had a meeting and it was said Mark really looked like “he cared”) it’s algorithms are us! The problem?

  Well, if they did just that (taking them at their word.) How did so many “fake news” stories, or “conservative viewpoints” get shared, posted, and read on FB that may have caused such an upset? After all, that’s what all the outcries are about, correct?

  Oh, oh! That would indicate FB has far more users of “that” political spectrum than to the liking of the other. And what is FB going to do about it?

  Basically, in a nutshell – add humans and any other filter it deems appropriate and censor them (“them” being only those of the sanctioned viewpoint) via their “approved” metrics.

  Can you see a very, very, (did I say very?) big problem here? Hint: Goodbye user metrics and revenue projections.

  To the horror of one side of the political spectrum. A call (more like setting torches ablaze) has gone out to FB as to change its policy. Which, for the record; is absolutely their right to do as a private company. That policy change?

  Basically, if you read between the lines it’s a reversal of their previous “Oh, by-golly, gee-whiz” promise to be fair and impartial, to reconstituting something which may even be more partial, and biased than the previous.

  So now if you’re one of this newly targeted content creators or sharer, or consumer pariah. It’s now been made crystal clear by both the current users – as well as the management: what you post; share; or possibly even pay for when it comes to “reach.” Will; can; or may be censored without your knowledge or consent.

  So with the above inferred: Are you going to remain there? Or, better yet: Pay? As in “eyeballs for ads.” And, with all of the above, are you going to blindly trust what you’re being told, or sold in any forthcoming ad-buy based upon just the latest ooopsy?

  (On an aside: When it comes to “fake?” It’s getting harder, and harder to control my laughing at all the irony.)

  What if just 10% of the users, and/or 10% of the ad-buyers (and that could be a best case scenario) decides – “Thanks, but no thanks!” And jettisons the platform altogether? Especially after witnessing both the outpouring hostility, along with managements stated reaction to this angry cohort. All with a response that, for all appearances, is totally one-sided. i.e., If you’re not of the approved political view – all is fair game to vanquish you, your business, your ad-buy, _______ (fill in the blank.)

  Do you think that will effect metrics in a negative way? Metrics that keep a stock valuation at “priced for perfection” levels? Do you think others haven’t noticed or thought through the same?

  Remember: Did you see this kind of visceral reaction from “Zuck and crew” when it was about the “other political view-point?” Far from it, and trust me – people are not only noticing – they’ve noticed.

  Want to see just how dedicated some of social media’s management is as to the ethics of “Making minds right” as opposed to making business decisions based on business ethics? To wit:

  “Jack Dorsey Exposed: How Twitter’s CEO Restricted Advertising For Trump’s Campaign”

  Ah yes, just what every fledgling social media (or canary-in-a-coalmine) songbird needs to do: Restrict access and ad-dollars from its platform during one of media’s (in general) most profitable times: i.e., During an election period.

  This move ranks up with one of the more stupid, ill-advised, and ill-informed business decisions I’ve seen by a CEO. Especially one that is supposedly in “media.” I mean, seriously. forget your political stance: Can you see the NYTimes™ turning down millions of ad $dollars during an election cycle from any candidate? Repeat – any?

  And Twitter™ in the sh___er that it is, unable to find a buyer, a business model that for all intents and purposes is on the bottom of the cage sprawled out, comatose, decides it’s above taking ad revenue from any side of the political spectrum? During an election? I ask only this: How’s all that propaganda on having a part-time CEO working out for any of you “investors?”

  If you think metrics for Twitter go up from here? I have some wonderful oceanfront property in Kentucky that can be yours. Just “Trust me.”

  Already you’re seeing some high-profile users and others banishing their accounts. You think they’ll be the only ones?

  And this (again, all in my opinion) is only the beginning of what I believe will turn into an “apocalypse” for social media as a whole. For if you thought with this meteoric rise in the “markets” off the latest “lock-limit-down” bounce portends great things for “the Valley?” I would also like you to ponder a few other revelations I’ve been warning about that seemed to have been missed (or blind eye turned) by most of the financial press.

  Remember when it was all about “2016 was the year of the rebirth of the IPO?” How’s that all been working out? You know, since the Twilio™ IPO to save the IPO world has happened. Here’s a “picture” as they like to say in “the Valley.” To wit:

  

  Twilio as of Friday’s close.

  Remind you of anyone? Hint: As I posted last month to “cat calls” everywhere, to wit:

  

  Left is Twitter, on right is Twilio, in about the same time period after IPO.

  And for those whom may not have noticed (but those who are “investors” I know you are painfully aware) or, are one of those only concerned with headlines touted across the main-stream business/financial press. Twilio was up something like 20% from the lows this week. Sounds great!

  Unless – you understand that up 20% only brings you “up” to still being down over 20% from when I posted that chart less than 30 days ago. Never-mind from those highs less than 60 days ago. (That’s Ouch territory)

  But at least it stopped where it ended on the day it IPO’d. right? So, things aren’t that bad, right? Right?

  But not too worry, 2017 is gonna fix all this. Why? Snapchat™ is going to file for its IPO.

  What? You haven’t heard? How can this be? How can one of the most anticipated IPO’s along with a market that’s at all-time-record-highs not be teaming with unbridled “unicorn” exuberance? It’s been many (if not all) a Silicon Valley’s unicorn raison d’être. i.e., To announce to the world its arrival of “it’s different this time” in-your-face metrics as to be worth $Billions, upon $Billions of market cap.

  Sorry, just not this time. This time it’s “confidential.”  Why would this be one might presume? Nobody knows but for the players themselves. Yet, with that said, I know what it screams to those looking from the outside: There wasn’t any confidence there were going to be takers. i.e., buyers. (Much like the fear of how markets react after it’s announced “X looked at the books and decided, Thanks, but no thanks!)

  Doesn’t that just signal “it’s different this time” in more ways than one? Hint: You bet it does.

  But you know what the real “secret” is?

  It screams caution for anyone just chomping-at-the-bit to get-in on another of these “social darlings” prancing out of the unicorn stables into the public arena. An arena which is beginning to look more like a “glue factory” with every passing day.

  Yes, 2017 sure will be one to watch. For if Twitter and Twilio are anything resembling clues?

  Your “chat” or “picture” might not be the only thing that vanishes into the ether, never to be seen again. But not too worry, after all: “It’s different this time.”

  Just ask FB.

  

  

• "The Last Handshake" Caption Contest: The Final Photo Of Obama And Putin Together?

  While China’s president Xi was busy dancing on the grave of TPP and rolling out its own regional free-trade alternative during the APEC summit in Peru, Obama was just as busy defending his vanishing legacy to an international audience for the last time. He was even busier projecting his denial before the entire world. As AFP reports, after the APEC summit closed on Sunday, Obama insisted that the 12-nation trans-Pacific deal, a key part of his now failed “pivot” to Asia, was far from dead and those involved still wanted to move forward with the United States.

  Actually, no, it’s dead, but what is very much alive was Obama’s sudden realization that the policies he had been pushing for 8 years have led to a “globallized” world that has never been more splintered and where the wealth trickled-up, crushing the middle class just as the “fringe blogs” warned would happen:

  The president also sought to answer rising concerns about globalization, saying that “historic gains in prosperity” had not been evenly distributed and there was a growing gap between rich and poor.

   

  “That can reverberate through our politics,” he said. “That’s why I firmly believe one of our greatest challenges in the years ahead across our nations and within them will be to make sure that the benefits of the global economy are shared by more people.”

  No Barack, it will not be your challenge. You are now out, leaving behind just a fake – and fading – facade of a recovery narrative built upon $15 trillion in global central bank liquidity, meant to prop up stock markets to all time highs even as a violent protest movement against your policies resulted in the biggest political shock of a generation… that and an all too real $20 trillion in government debt.

  There is one way your departure will be missed, however: by exiting the global political arena, you will also deprive the world of what may have been the best photo ops ever: those between the departing US president, and the remaining Russian one.

  Today, we witnessed one final such historic event, when in what is likely to be their last in-person meeting before Obama leaves office, the US president and his Russian counterpart Putin “spoke for around  about four minutes” on Sunday at the APEC summit.

  As Reuters recounts their final meeting, the two men met at the start of the summit meeting in Lima, Peru’s capital. They exchanged pleasantries and remained standing as they spoke.

  What was said was irrelevant, but goes along the following lines (according to Reuters): “the president urged President Putin to uphold Russia’s commitments under the Minsk agreements, underscoring the U.S. and our partners’ commitment to Ukraine’s sovereignty,” a White House official said. Obama also emphasized the need for their two countries’ foreign ministers “to continue pursuing initiatives, together with the broader international community, to diminish the violence and alleviate the suffering of the Syrian people.”

  After their brief talk, Obama greeted others at the meeting before sitting down.

  It is unclear if Putin laughed before or after Obama was done dispensing “advice.” He did, however, shake Obama’s hand for the last time, as the following two historic, and sublimely captionable, photos reveal.

  We leave it up to readers to decide what may have been on either leader’s mind in this moment which distilled and sublimated the past 8 years of global history into just one second.

  Before:

  

  And After:

  

  

  

• "What Happened To Your 'Love Trumps Hate' Line? You're All Damn Hypocrites!"

  Fox’s Judge Jeanine Pirro tore into the cast of ‘Hamilton’ for their “inappropriate” behavior this weekend, slamming it as “out and out reverse racism that tee’d up hate for a man who has done nothing to deserve it.”

  Pirro raged, Pence and President-elect Donald Trump won an election fair and square because “forgotten Americans, most of whom can’t afford tickets to your play, and may not have even heard of it, got up and voted” against the Democrats’ policies.

  Pirro said Pence was trying to enjoy some time with his family after the grueling campaign and post-election transition work, but instead his presence was used “as a political bully pulpit.”

   

  She noted that Hillary Clinton and Bernie Sanders attended the show in the past without issue.

   

  “Last night violates everything you say you stand for. That big tent, inclusive broad-minded acceptance of everyone, even people who don’t look or act like you. What happened to your old ‘love trumps hate’ line? You’re all damn hypocrites!” she said.

  Full rant below…

  .@JudgeJeanine: “What happened to your old ‘love trumps hate’ line? You’re all damn hypocrites!” https://t.co/ho4V6NWSTo pic.twitter.com/BT8YC44Fjp

  — Fox News (@FoxNews) November 20, 2016

  

  

• Is Silver Set To Surge Off Significant Support?

  Gold specs are deserting the precious metal…

  

   

  And Gold ETF holdings are tumbling at their fastet rate since 2013…

  

   

  Which just happened to coincide with Gold's $1200 lows…

  

  But as Dana Lyons' Tumblr explains, Silver prices are testing a confluence of potential support levels.

  We often get questions about our technical analysis on specific assets or securities, especially as it pertains to potential support or resistance levels on the chart. We don’t post many of those types of charts anymore but we present one today in the chart of the popular iShares Silver Trust, ticker, SLV. The impetus was partially because of the amount of attention on PM’s, but primarily due to a potential inflection point on the chart.

  Everyone asks “when is XYZ going to bottom”? There is no way to ever know for sure. The best thing you can do is identify the most likely points of support in order to put the best odds of success on your side. And the best setups are always when multiple key potential support levels line up in the same vicinity. Such a setup may be present now in the chart of SLV, in our view.

  So what are the potential support levels?:

  • The 61.8% Fibonacci Retracement of the November-August Rally ~15.62
  • The 500-Day Simple Moving Average ~15.64
  • The June 7 closing price (15.60) from which SLV gapped up, launching it on its final run to 19.71

  As the chart shows, SLV is testing this level today. In fact, the low of the day was exactly 15.60.

  

  So will this 15.60 level hold? Obviously nobody knows for sure. At least there are multiple key levels of potential support there, however. That puts decent odds of success with the silver bulls – as well as giving them a level with which to play off of. If SLV remains above there, it can bounce. If it closes below there without an immediate reversal, perhaps there is more downside to come for silver prices.

  How far will SLV bounce if it holds? Obviously, we can’t know that either. There appears to be considerable potential resistance near 16.80 and just above 18.00, if the SLV does bounce. So, that would be about 7-15% of upside – without even breaking the post-summer intermediate-term downtrend. It would take a lot more strength to convince us that the post-2015 uptrend is resuming. So, even holding this level doesn’t mean it’s up, up and away again for silver.

  For now, precious metals fans will have to be satisfied with, “Hi Ho Silver, A-Bounce!”

  *  *  *

  More from Dana Lyons, JLFMI and My401kPro.

  

  

• China Devalues Yuan For Longest Streak Ever To 8 Year Lows

  For the 12th consecutive day, China has weakened the official fix of the Yuan against the USD, slashing its currency by over 2.2% in that time – a move only beaten by the “one-off” devaluation in August 2015 that crashed global stock markets. With a 189pip ‘devaluation’ tonight, Yuan is now trading at its weakest since June 2008…

  In December 2015, China weakened Yuan 10 days straight  leading into The Fed’s rate-hike decision. The current 12-day weakening streak is an all-time record for the Yuan fix.

  

   

  The last four times that Yuan has plunged, US equity market volatility has exploded (and stocks have tumbled)…

  

  But this time is different… as Yuan has collapsed, VIX has crashed too… so far.

  

  

• The 'United' States Of America (Without The Electoral College)

  SomeVotesMatter…

   

  

  Source: MichaelPRamirez.com

  

  

• New York Governor Unveils Hate-Crime Unit, Plans Taxpayer-Funded Defense Of Criminal Illegal Immigrants

  It seems that even the Governor of the great state of New York is incapable of discerning ‘real’ from ‘fake’ news when it doesn’t fit his narrative. Proclaiming that “if there is a move to deport immigrants then I say start with me,” Andrew Cuomo appears to have missed Trump’s proposal focused on ridding America of ‘criminal illegal immigrants’ and plans “to provide immigrants who can’t afford their own defense the legal assistance they need.. because in New York, we believe in justice for all.”

  Before his address today, Cuomo tweeted…

  We don’t care the color of your skin or how much money you have in your pocket – if you accept the American ideal, we will work with you.

  — Andrew Cuomo (@NYGovCuomo) November 20, 2016

  Apparently under the belief that committing crimes is part of the American ideal? Because no immigrants are being expelled unless they are criminal AND illegal (which seems fair to many). As Trump explained…

  “What we are going to do is get the people that are criminal
  and have criminal records, gang members, drug dealers, where a lot of
  these people, probably two million, it could be even three million, we
  are getting them out of our country or we are going to incarcerate,” the president-elect said in an interview with CBS’ “60 Minutes” to air Sunday evening.  “But we’re getting them out of our country, they’re here illegally.”

   

  After the border is “secure,” Trump said, his administration will
  begin to make a “determination” about what to do with the remaining
  undocumented immigrants in the U.S.

   

  “After the border is secure and after everything gets normalized,
  we’re going to make a determination on the people that they’re talking
  about who are terrific people, they’re terrific people but we are gonna
  make a determination at that,” he said. “But before we make that determination…it’s very important, we are going to secure our border.”

  But don’t let facts get in the way of a good divisive narrative…

  The focus of Cuomo’s speech was what he described as an “explosion” in hate crimes since Election Day that has prompted the creation of a special police unit to fight the uptick in New York.

  New York Police Department Commissioner James O’Neill told a New York radio station on Sunday he was disturbed by the trends.

   

  “We’ve had an uptick in hate crimes, actually a little bit more than an uptick. We’re up 31% from last year. We had at this time last year 250, this year we have 328, specifically against the Muslim population in New York City — we went up from 12 to 25, and anti-Semitic is up, too, by 9% from 102 to 111,” O’Neill said.

   

  “I have no scientific evidence as to why, but you’ve been paying attention to what’s been going on in the country over the last year or so and the rhetoric has increased, and I think that might have something to do with it,” O’Neill added.

  Apparently under the impression that this is wholly due to Donald Trump and his deplorables, Cuomo has decided to ignore President-elect Trump’s actual ‘real news’ policy proposals and attack the Clinton/Obama/Romney/Soros defined divisiveness that ‘real news’ sites proclaim. As CNN reports,

  “The ugly political discourse of the election did not end on Election Day. In many ways it has gotten worse, [turning] into a social crisis that now challenges our identity as a state and as a nation and our people,” he said.

   

  President-elect Donald Trump wasn’t specifically mentioned in his church address, but Cuomo has in the past criticized Trump and vowed in a New York Daily News op-ed that he would “reject the hateful attitudes that pervaded throughout the 2016 campaign.”

   

  Calling this kind of prejudice a “social poison [in] the fabric of our nation,” the governor cited a number of recent incidents, including a scourge of swastika graffiti and the case of black freshmen at the University of Pennsylvania being sent pictures of lynchings and racial slurs.

   

  Cuomo also vowed to set up a legal defense fund for immigrants who fear prosecution under a Trump administration. He said the fund would be the first of its kind.

   

  The plan, he said, would be to set up a public-private partnership “to provide immigrants who can’t afford their own defense the legal assistance they need … because in New York, we believe in justice for all,” Cuomo said.

   

  He added, “If there is a move to deport immigrants then I say start with me. I am a son of immigrants. Son of Mario Cuomo, who is the son of Andrea Cuomo, a poor Italian immigrant who came to this country without a job, without money, or resources and he was here only for the promise of America.”

  But do not worry dear snowflakes, Governor Cuomo has something for you too… Cuomo’s plans also include the expansion of New York’s Human Rights Law to protect students who are bullied or discriminated against.

  So to summarize – hate crimes are up year-to-date (not since the election, since that would be statistically insignificant) and that bump must be due to Trump’s encouragement of it (as opposed to the Clinton campaign’s constant efforts to divide the nation by pointing out Trump’s faults for each cohort of the country). And for anyone who is actually prosecuted, worried about being prosecuted, or just generally feeling bad about shit, New York state taxpayers will provide a defense protection (even for the criminal illegal immigrants).

  Presumably that will come from the “fairer share” that the wealthy will pay? Or will the Millennials outside Trump Tower all offer up some of their Starbucks wages to keep America safe again?

  

  

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• War Breaks Out Between Neo-Cons And Libertarians Over Trump's Foreign Policy

  In late October, when it was still conventional wisdom that Hillary was “guaranteed” to win the presidency, the WaPo explained that among the neo-con, foreign policy “elites” of the Pentagon, a feeling of calm content had spread: after all, it was just a matter of time before the “pacifist” Obama was out, replaced by the more hawkish Hillary.

  As the WaPo reported, “there is one corner of Washington where Donald Trump’s scorched-earth presidential campaign is treated as a mere distraction and where bipartisanship reigns. In the rarefied world of the Washington foreign policy establishment, President Obama’s departure from the White House — and the possible return of a more conventional and hawkish Hillary Clinton — is being met with quiet relief.”

  The Republicans and Democrats who make up the foreign policy elite are laying the groundwork for a more assertive American foreign policy via a flurry of reports shaped by officials who are likely to play senior roles in a potential Clinton White House.

  Oops.

  Not only did the “foreign policy” elite get the Trump “scorched-earth distraction” dead wrong, it now has to scramble to find what leverage – if any – it has in defining Trump’s foreign policy.  Worse, America’s warmongers are now waging war (if only metaphorically: we all know they can’t wait for the real thing) against libertarians for direct access to Trump’s front door, a contingency they had never planned for. 

  As The Hill reported earlier, “a battle is brewing between the GOP foreign policy establishment and outsiders over who will sit on President-elect Donald Trump’s national security team. The fight pits hawks and neoconservatives who served in the former Bush administrations against those on the GOP foreign policy edges.”

  Taking a page out of Ron Paul’s book, the libertarians, isolationists and realists see an opportunity to pull back America’s commitments around the world, spend less money on foreign aid and “nation-building,” curtail expensive military campaigns and troop deployments, and intervene militarily only to protect American interests. In short: these are people who believe that human life, and the avoidance of war, is more valuable than another record quarter for Raytheon, Lockheed or Boeing. 

  On the other hand, the so-called establishment camp, many of whom disavowed Trump during the campaign, is made up of the same people who effectively ran Hillary Clinton’s tenure while she was Secretary of State, fully intent on creating zones of conflict, political instability and outright war in every imaginable place, from North Africa to Ukraine. This group is pushing for Stephen Hadley, who served as national security adviser under George W. Bush. Another Bush ally, John Bolton whose name has been floated as a possible secretary of State, also falls into this camp.

  According to The Hill, other neo-con, establishment candidates floated include Senate Foreign Relations Committee Chairman Bob Corker (R-Tenn.), outgoing Sen. Kelly Ayotte (R-N.H.), rising star Sen. Tom Cotton (R-Ark.), and senior fellow at conservative think-tank American Enterprise Institute and former Sen. Jim Talent (R-Mo.). 

  “These figures all generally believe that the United States needs to take an active role in the world from the Middle East to East Asia to deter enemies and reassure allies.”

  In short, should this group prevail, it would be the equivalent of 4 more years of HIllary Clinton running the State Department.

  The outsider group sees things differently.

  They want to revamp American foreign policy in a different direction from the last two administrations. Luckily, this particular camp is also more in line with Trump’s views questioning the value of NATO, a position that horrified many in the establishment camp. 

  “How many people sleep better knowing that the Baltics are part of NATO? They don’t make us safer, in fact, quite the opposite. We need to think really hard about these commitments,” said William Ruger, vice president of research and policy at the Charles Koch Institute.

  A prominent member of the outsiders is Rand Paul, skeptic of Bush’s foreign policy, who has criticized Bolton in the last few days. Paul on Tuesday blasted Bolton in an op-ed in Rare as “a longtime member of the failed Washington elite that Trump vowed to oppose.” 

  Others, however, have defended Bolton. Eliot Cohen, a former Bush State Department senior adviser, tweeted late Tuesday that Bolton “would be a capable Secretary of State — experienced & tough.”

  Then again, what Cohen thinks does not matter: he is perhaps the most visible foreign policy establishment type who has been critical of Trump’s transition. He said this week that he had been asked by a friend in Trump’s orbit to submit names of people in the establishment who might want to serve. Cohen told his friend that those skeptical of Trump would want to know who was leading his administration on foreign policy.

  When Cohen grew critical of those questions, he wrote a biting op-ed in The Washington Post advising people to not work for Trump, at least for the time being. “At the very least, they should wait to see who gets the top jobs. Until then, let the Trump team fill the deputy assistant secretary and assistant secretary jobs with civil servants, retired military officers and diplomats, or the large supply of loyal or obsequious second-raters who will be eager to serve,” he wrote. 

  Some saw the op-ed as good news, believing it signified a radical turn by Trump from a foreign party establishment that should be ignored. “The first encouraging news I’ve heard in days. If a leader of #NeverTrump is saying this, that means the establishment hasn’t won. Yet,” said Christopher Preble of the CATO Institute.

  However, neo-cons are bad at losing, so they have redoubled efforts to land one of their own next to Trump. Lindsey Graham, a prominent foreign policy hawk in the Senate, issued an endorsement of Bolton on Thursday, saying: “He understands who our friends and enemies are. We see the world in very similar ways.”

  He also slammed Paul’s criticism of Bolton: “You could put the number of Republicans who will follow Rand Paul’s advice on national security in a very small car.  Rand is my friend but he’s a libertarian and an outlier in the party on these issues.”

  Funny, that’s exactly what the experts said about Trump’s chances of winning not even two weeks ago.

  Meanwhile, the biggest warmonger, Senate Armed Services Committee Chairman John McCain, who has not said who he’d like to see in Trump’s cabinet, laid down a marker on Tuesday by warning the future Trump administration against trying to seek an improved relationship with adversary Russia. “When America has been at its greatest, it is when we have stood on the side those fighting tyranny. That is where we must stand again,” he warned.

  Luckily, McCain – whose relationship with Trump has been at rock bottom ever since Trump’s first appearance in the presidential campaign – has zero impact on the thinking of Trump.

  Furthermore, speaking of Russia, Retired Amy Col. Andrew Bacevich said there needs to be a rethink of American foreign policy. He said the U.S. must consider whether Saudi Arabia and Pakistan qualify as U.S. allies, and the growing divergence between the U.S. and Israel.   “The establishment doesn’t want to touch questions like these with a ten foot pole,” he said at a conference on Tuesday hosted by The American Conservative, the Charles Koch Institute, and the George Washington University Department of Political Science.

  Furthermore, resetting the “deplorable” relations with Russia is a necessary if not sufficient condition to halt the incipient nuclear arms build up that has resulted of the recent dramatic return of the Cold War. As such, a Trump presidency while potentially a failure, may be best remember for avoiding the launch of World War III. If, that is, he manages to prevent the influence of neo-cons in his cabinet.

  And then there are the wildcards: those Trump advisers who are difficult to peg into which camp they fall into. One example is retired Army Lt. Gen. Michael Flynn, former head of the Defense Intelligence Agency, who was selected by Trump as his national security adviser.  Flynn is a “curious case,” said Daniel Larison, senior editor at The American Conservative. The retired Army general has said he wants to work with Russia, but also expressed contrary views in his book “Field of Fight.” 

  According to Larison, Flynn writes of an “enemy alliance” against the U.S. that includes Russia, North Korea, China, Iran, Syria, Cuba, Bolivia, Venezuela, Nicaragua, al-Qaida, Hezbollah, and the Islamic State in Iraq and Syria. From that standpoint, he is about as “establishment” as they come.

  It’s also not crystal clear which camp Giuliani falls into. The former mayor is known as a fierce critic of Islamic extremism but has scant foreign policy experience. 

  Most say what is likely is change.

  “Change is coming to American grand strategy whether we like it or not,’ said Christopher Layne, Robert M. Gates Chair in National Security at Texas A&M University. 

  “I think we are overdue for American retrenchment. Americans are beginning to suffer from hegemony fatigue,” he said.

  And, let’s not forget, the tens of thousands of innocent men, women and children who are droned to death every year by anonymous remote-control operators in the US just so the US can pursue its global hegemonic interest.They most certainly have, and unless something indeed changes, will continue to suffer, leading to even more resentment against the US, and even more attacks against US citizens around the globe, and on US soil. Some call them terrorism, others call them retaliation.

  

  

• Trump "Ripped" Into Chris Christie Before Demoting Him By Phone Call

  After months of disappointments for Chris Christie, once one of the Republican Party’s brightest stars, the New Jersey governor was virtually assured a position in a Donald Trump administration. As one of the first big-name politicians to endorse the Manhattan billionaire, Christie had earned Trump’s gratitude the pundits predicted. And then everything fell apart.

  Among the top political stories in the week of Trump’s election, was that just a few months after being denied the VP slot, Christie suffered another public humiliation when he was demoted as Chairman of Trump’s presidential transition team, and was replaced by VP Mike Pence.

  Thanks to a Politico report, we learn the details of the embarrassing phone call in which Trump “ripped” into Christie, before removing him from his transition team.

  In the phone call, “Trump expressed his worry about the recent conviction of two of the governor’s former top aides, who had accused him of knowing more about the shutdown of the George Washington Bridge than he let on. Was more damaging information to come, Trump wondered?”

  Trump and his top aides were most concerned about two issues, according to nearly a dozen people briefed on the process: Christie’s mismanagement of the transition, and the lingering political fallout of the Bridgegate scandal.

  Trump was also unhappy with the number of lobbyists that Christie had on the transition team, as well as his choice to fill the staff with his own friends and loyalists.

  In the days following the election, Trump expressed deep frustration about how Christie was handling the transition. In particular, he vented about how the governor had loaded up the team with lobbyists, the very class of people Trump had campaigned against, with his calls to “drain the swamp” in Washington. The president-elect also noticed that Christie had stocked his team with old New Jersey friends and allies.

   

  There were other issues. Once the dust settled from their surprise win, the Trump team noticed that Christie had done little to vet potential administration picks or to dig into potential conflicts of interests. With Democrats eager to pounce on any early mistake, it was an oversight they simply couldn’t afford.

  Additionally, Christie was reportedly deeply disliked by Trump’s son-in-law, Jared Kushner, who has become an influential advisor on the Trump campaign:

  In the months to come, Kushner, a 35-year-old New York City real estate mogul who grew up in New Jersey, would become a bigger problem for Christie, arguing forcefully against Trump making the governor his running mate. Christie, a former U.S. attorney, became convinced that Kushner was retaliating over his 2004 prosecution of Kushner’s father, Charles.

   

  Still, while they never became close, Kushner and Christie agreed to work together. At several points, according to two sources, Trump took steps to forge a warmer relationship between them — apparently without success.

   

  Kushner’s allies say the idea that he’s out for personal vengeance, promoted in several recent stories, is simplistic and overblown. Rather, they argue, the Trump son-in-law has more substantive concerns — viewing the governor as badly damaged following the Bridgegate affair. And in the days following the election, Kushner told others in Trump Tower that Christie oversaw a messy, lobbyist-filled transition operation that simply needed to be cleaned up.

  By Thursday of last week, Trump was telling aides that he was ready to make a change.

  * * *

  How is Christie faring now and what are his future prospects?

  In recent days, Christie’s advisers have reached out to him to see how he’s holding up. He’s fine, he’s told them. It was only a matter of time that the transition process would be taken from him once the election was over. On Thursday, during an appearance in Atlantic City, Christie waved off talk about his career prospects — and criticized reporters for “prognosticating” about his future.

   

  “I know all of them have taken inordinate concern, just in the last 10 days or so, about my future. All of them have become, you know, employment counselors,” he added. “I have every intention of serving out my full term as governor — I’ve said that from the beginning.”

  Christie’s advisers speculate that the governor might exit politics entirely when his term expires in January 2018. Some of them suggest that Christie, an avid sports fan, could take a job as a sports radio host. He is an occasional guest caller to WFAN, the popular New York City-based sports talk station. To some, it’s far too early to write him off. “He’s the most interesting politician I’ve seen since Bill Clinton,” said former New Jersey Gov. Tom Kean, a Christie mentor. “He’s got an enormous set of skills.”

  

  

• Fear And Loathing Inside The Deep State

  Submitted by Larchmonter445 via The Saker,

  Everyone in the Deep State is threatened by the Trump Presidency. The Deep State understands that power, funding, ideological stratagems and domination of government, media, academia, think tanks and NGOs are in the ‘field of fight’, to use the book title by a prime target the Deep State intends to destroy in order to save itself from Trump.

  

  Lt. General (ret.) Michael T. Flynn

  Lt. General (ret.) Michael T. Flynn, three-star expert in Military Intelligence, former director of the Defense Intelligence Agency (DIA), counselor to Trump for the last fifteen months, is a vital Trump ally the Deep State is attempting to discredit.

  We have seen the one-week ferocious political and media attack on Stephen Bannon, begun the instant that Bannon was named Trump’s number one strategist-advisor. Bannon is the theologian of Drain the Swamp, the Trump policy to rid the system of corruption and catastrophically disastrous policies and bureaucrat enablers.

  To understand Steve Bannon, take the time to read this transcription or listen to the audio Q&A from a 2014 event in the Vatican. He lays out his philosophical agenda, and used the 2016 campaign to advance his war on the Elites.

  Drain the Swamp pertains to more than getting the corruption out of the system.

  

  Steve Bannon

  Bannon now has Trump’s full backing to destroy the UniParty, defeat the Globalists, banish the warmongers of the MIC and help the legal prosecution of the corrupt. This is the Revolution to end the domestic Tyranny and the global Hegemon.

  The usual weapons of personal destruction have been launched at Bannon to destroy him and to deprive Trump of his most effective counselor and field marshall. Bannon has been branded a racist, an anti-semite, a white supremacist, an Islamophobe and a misogynist. In every forum and media outlet, the meme of Bannon being the worst human on the planet played as intensively as how the Dems attacked Trump during the campaign.

  Relentless lies, chorused by every host, talking head, and hater of every value Trump and Bannon had campaigned for were spewed on Bannon’s name. All fabricated, most based on a few headlines written by Milo Yiannopoulos in Breitbart.com, alt right agitprop pieces constructed to collect reader clicks, revenues for Breitbart and fame for Milo. Bannon as chief of Breitbart was then scourged for those headlines. Mockery by Milo used against Steve Bannon.

  It was all the Media needed. But the Deep State directed it for good reason. Bannon is the Pale Rider coming to destroy them.

  

  Steve Bannon is dedicated to cleansing government and the financial system controlled by all those who have reigned over the foreign regime changes, the transfer of middle class wealth and income to Wall Street, paper wealth from derivatives to hedge fund and corporate global leaders, trillions to the 0.01% elites, all of whom populate the Ultra Wealthy Class, a new feudalism of billionaires and millionaires.

  Bannon’s life long credentials and work with Jews, Blacks, females and Muslims eventually helped stifle the Media excesses. But the vicious branding may stick long after the inauguration.

  The fear and loathing of the Deep State is focused on another nemesis and threat in the person of General Flynn. Flynn challenges the Deep State’s incompetence, particularly its lack of results in the fight against terrorism. Flynn dealt with this in the wars in Iraq and Afghanistan. He wrote a white paper on the state of US military Intelligence and the need to fix it.

  Flynn also is sickened with the 2012 Benghazi event and coverup, the lies of Clinton and the abandonment by the command structure of CIA, Pentagon, State and NSC. The Syrian war, the attempted coup of Erdogan, and the carnage wrought by bad policies, sheepish leadership and less-than-best methods of Intelligence gathering and usage motivated the General to join Trump.

  Flynn is now Trump’s guide into the Presidential raw data Intel reports and briefings. General Flynn is Trump’s personal analyst for interpretation of the data. Flynn has attended every briefing Trump has received. He is in place and the Deep State is out. So, they have mounted their counter-attack as soon as it was clear he would head the reform of the Intelligence community, and serve the newly elected President.

  Flynn has recruited over two hundred generals and admirals and twenty-two Medal of Honor recipients to the successful Trump campaign. Now some of the generals are possible cabinet or undersecretary department nominees or agency appointees.

  The Deep State is in deep trouble. General Flynn will probably be NSC head and I think he will have real power over fifteen other Intelligence agencies. Flynn may have great power over huge swaths of the MIC. He certainly will assist in the cleaning out of neocons and feckless employees, managers, supervisors and directors.

  Against Flynn, the Deep State is using a more traditional model of career attack and personal destruction than it did with Bannon. Multiple articles written to show that Flynn and Putin, Flynn and Russia, Flynn and RT media are part of the Trump gang of pro-Russian contacts connected to the Kremlin.

  Below is General Flynn at dinner with President Putin in Moscow. He explains in an interview.

  

  Other Trump-Putin supposed contacts are Carter Page and Paul Manafort, both of whom were attacked by the Media for the Deep State months ago. They resigned under political pressure applied through the media.

  In a payback, the Deep State lost some of their own sent to the Trump campaign who were unable to survive first inspection. They were dropped from the Trump campaign transition team.

  But, once Trump is sworn in, Carter Page will be back, most likely. He has connections to Gazprom, is well-liked in Moscow, and will be a link for American energy companies and perhaps some joint ventures in the gas field development and pipeline industry. Several friends of Trump are from the gas and oil industry, and the world is a small world when energy is the issue. The Arctic, the eastern Mediterranean, the South China Sea and other large development zones have enormous new fields to be tapped and exploited. Even the Black Sea zone around Crimea has yet-to-be-tapped energy stores.

  The primary interest of the Trump foreign policy will be to make America wealthy again. The Eurasian development has already attracted Trump to the OBOR of China and the AIIB infrastructure bank. Probably the entire New Silk Road of China and EAEU of Russia is not going to be without major US participation. The difference now is facilitation, participation, investment and benefits instead of obstruction, destabilization and terrorism used to thwart it all.

  To destroy Flynn and weaken Trump with the Intelligence and Military communities, the classic Washington technique of long articles with many negative anonymous sourced comments was used, carefully crafted headlines and paragraph headers, all designed for very negative Google Search feeds.

  The latest is about Flynn and Turkish “operatives”. Sounds like they met in dark alleys or underground passageways. Maybe in some Ankara safehouse, eh?

  It turns out quite differently.

  

  Hilal Mutlu (left) and Ibrahim Kurtulus (center) with Retired Lt. Gen. Michael Flynn at Oct. 10, 2016 event. (Youtube screen grab)

  But Flynn is obviously being watched closely by CIA/State Dept. They know he is doing the bidding of Trump. And for good reason, Trump needs to know which way Turkey is leaning post-coup? And how sensitive is the Kurd issue in Syria? What are the ramifications of the US and Russia working in tandem against ISIS in Syria? Will Turkey help with safe zones for refugees? Will Turkey leave Syria after the war or does it plan to resist Russia and Assad? What about NATO? What about the Uyghurs Turkey protects, and is China being forced to come with military to put down the Uyghurs inside ISIS? Will the issue of demanding Fethullah Gulen’s extradition continue? Will there be mass death penalties for the imprisoned coup participants and Gulen’s followers?

  Flynn had a panoply of possible questions to be answered by the operatives from Erdogan. And the Turks would have questions they wanted answered with some hint of Trump’s positions.

  The Deep State are tracking Flynn and the Turks and are now exposing his links as a professional consultant. Nothing illegal. Nothing suspicious. Nothing out of the ordinary. But it was General Flynn, Trump’s guy. Smear him.

  How else would this information surface in the Washington Post except from the Deep State? And if you know the history of the Deep State, the WaPo is their first choice for all leaks, briefings in depth, exposes used to undermine officials who cross them or who point to the Deep States’ misdeeds or failures. You won’t find Sy Hersh’s articles in WaPo.

  The point of the articles about General Flynn was to shame him, to put down his personality, his lack of obedience to the Obama regime. He was investigated for giving Intel to foreign nations, we are told. He shared Intelligence with the Pakistanis, we are told. Read how his fellow generals talk about him.

  Imagine if the Deep State decided that Intelligence should never be shared. Well, the U.S. would have no allies. No nation joins a war effort without Intelligence for their military. Flynn, whose entire thirty-plus year career has been in Intelligence understands that. And he did it. Proudly, he related to the investigators, and it all was dropped except the record and the reporting of it now.

  The investigation was actually to cast a black mark on Flynn to be found later, by the uninformed, at the most sensitive of times. In this case, it is to weaken Flynn, to weaken Trump.

  “Mike Flynn shares Intel. Mike Flynn acts without checking with what the Deep State wants.” It turns out that Flynn did get approval for all he did. But he simply did the professional thing. He acted in behalf of his specialty, his profession, his oath of duty and the American people who paid him to protect America.

  There is something to be gained by studying this meeting with Turkey’s operatives. Flynn’s meeting signals that Trump will not likely arm the Kurds with heavy weapons. That would drive Turkey into the Russian-Iranian embrace fully. A practical solution to defeating ISIS and AQ and ending the Syrian war has to avoid losing Turkey. Trump is not going to be trying to coup anyone. His policy is no regime changes. He also does not like these secret wars of the CIA. If there is to be war, he wants it fought by the military, with a plan for victory. Principally, Trump’s wars will be like President Eisenhower’s. There were none for eight years.

  The warmongers and neocons of the Deep State and surface government will try to work over all the Trump nominees in the security and policy arena. Trump has refused to listen to any of them, though a few have been invited in to the goings on. However, we don’t know who is talking to Trump and who is talking to the various panels of experts that will advise who they think he should select. So a few neocons and warmongers like John Bolton and General Keane have made it into Trump Tower. But he eschewed them all these years and throughout the campaign. I doubt they will have any role in policy. He considers them failures.

  Expect very deep shakeouts at CIA and State. I think Flynn will use fellow military he knows and trusts as deputies and undersecretaries. General Keith Kellogg and General Ronald Burgess are likely for important positions.

  There has to be this cleaning out of the subterranean world of the Deep State.  If President Carter got rid of 800 officers when Stansfield Turner tried cleaning out the CIA, I’m betting there are 1500 officers in the CIA who need retirement now.

  As for the State Department and the Clinton corruption of pay for play, that is only half the problem. The eighty years of Khazarian dominance of the State Department has created the need that whole thing ought to be shut down except for visas at embassies and consulates. (I’d use the Commerce Department in the interim. Send everyone else from State home. Board up Foggy Bottom for ten years.)

  Addendum: General Flynn early in the primary campaign consulted as advisor to five candidates. Carly Fiorina, Scott Walker, Ben Carson, Ted Cruz, and Donald Trump. He chose Trump as the one who wanted to be President in order to fix the country and make America great again. Now, Trump, Bannon and Flynn are going to drain the swamp, if they can survive.

  (Flynn has been named NSC Advisor and will command a staff of 400 from all the other Intel agencies, it has been reported by Fox and AP.)

  

  

• "Brace For Economic Disruption" SocGen Sees "Sharp Rise In Gold" As India Plans Cap On Cash Holdings

  India's 'de-monetization' scheme has caused chaos across the nation, and while SocGen says the government's plan may have some short-term success in curbing so-called 'black-money', investors should "brace for economic disruption" as Bloomberg reports the Indian government is considering a cap on cash holdings for individuals. As SocGen concludes, "people will now be more inclined to park their black income in gold rather than in currency."

  The daily images of utter chaos in India that has brought the conutry's economy to a standstill since they unleashed their war on cash…

  Are perhaps about to get worse, as Bloomberg reports, India is set to consider a cap on cash holdings for individuals…

  Measure planned to prevent people from hoarding cash and generating income that could evade taxes, according to government officials with direct knowledge of the matter.

   

  Planned measures include limit on large cash withdrawals from bank, the officials said, asking not to be identified citing rules on speaking to media.

   

  Budget, due in February, may have steps to encourage use of checks, credit and debit cards.

   

  Purchase of gold jewelry said to be made more stringent to prevent switching of asset from cash.

   

  Finance Ministry spokesman D. S. Malik couldn’t be reached for comment.

  But, as SocGen's Kunal Kumar Kundu writes, the demonetisation scheme (banning the use of old high-denomination banknotes – INR500 and INR1000) announced by India’s PM Modi on 8 November is likely to have only a short-term impact on corruption and black money, unless it is followed by multiple other moves aimed at curbing these issues.

  However, we do expect short-term disruption to the economy, especially in rural areas, due to a sharp drop in consumption as the cash crunch hits. The extent of the disruption will depend on how soon new banknotes come into the system. If this takes place over the next three to four weeks (as promised by the government) the damage should be limited. Otherwise, the disruption could be prolonged. At the same time, there is also a possibility of a short-term increase in tax revenue collection which could enable the government to keep its deficit within target and continue with all its desired expenditure (including capex) which we earlier feared may have to be curtailed as deficit challenges manifested. In the interim, sectors that are heavily dependent on cash transactions (essentially because these are gateways to parking black income), i.e. construction, real estate and gems & jewellery, are likely to be adversely affected over the short term.

  On the macro front, weaker consumption could mean lower inflation, thereby opening up the possibility of an earlier rate cut by RBI. Additionally, with people being forced to deposit large quantities of high-value notes, banks are seeing a surge in low-cost deposits which should lower cost of funds and result in faster transmission of monetary policy action through the interest rate channel. However, given the current weak credit environment, we see a spike in credit growth as unlikely. The only potential long-term effect of this move could be deterioration in India’s current account deficit (CAD), as people will now be more inclined to park their black income in gold rather than in currency, thereby leading to sharp rise in gold imports.

  

  India’s fight against black money – the end has corrupted the means

  At around 8pm on 8 November, India’s PM Modi announced, in a broadcast to the nation, that India’s INR500 and INR1000 banknotes would no longer be recognised as legal tender from midnight and that citizens would be able to exchange their existing notes of these denominations for other available (and legal) tender until 31 December 2016. The aim of the action was to counter tax evasion, counterfeiting and corruption. The idea of eliminating large denominations is that it makes it harder to hide large amounts of cash.

  The problem with the move is that, in one fell swoop, just over 86% of all banknotes in circulation became just paper. Fact is, high percentage of transactions take place in cash in India, especially in the rural areas. The potential fallout from such a nationwide measure could have been averted if the government had been better prepared to handle the contingencies. However, the need for the government to keep the move a secret — so that tax evaders wouldn’t be alerted before the demonetisation took place — affected preparedness. Even Finance Minister Jaitley admitted that it would take two to three weeks to reconfigure the ATMs to handle the newer and larger notes. Given that India currently has about 202,801 ATMs all over the country, it could potentially take longer.

  Existing loopholes have provided an escape hatch

  Before discussing the economic impact of the move, it is important to understand the potential impact it could have on the existing block of black money in the economy and its ability to stop generation of further black money in the economy in the future. We think that while the existing stock of black money will be negatively impacted, only part of it will actually come to the fore. There are still many loopholes in the system through which a large portion of black money is able to enter the formal banking channel without the government’s knowledge. While the country is receiving virtually one notification per day from the RBI to plug loopholes that are coming to light (another indication of lack of preparedness), this process looks set to continue. Thus, only part of the black money will actually be reported and experts think that some of it will never come back.

  Black money represents only a small fraction of black wealth

  The problem is that black money forms only a small portion of the black wealth held in the economy. In the past five years, income tax raids have found that only 5-6% of black money is kept in hard cash. Moreover, those who have amassed a sizable amount of black money are equipped at finding ways around demonetisation by converting their existing cash into bullion, gold jewellery, real estate and foreign currencies through middle men. To that extent the demonetisation scheme will only impact part of the overall stock of black wealth in the economy.

  The important thing is, however, to remember that black income is a flow concept and not a stock concept. Hence, the impact will only be temporary, and black money will eventually begin to be generated again as the move will have no impact on the generation of black income itself. This is because there are a large number of mechanisms by which such incomes are generated, and these may or may not depend on cash circulation. Normally, black income is generated by manipulating the books of accounts of businesses — revenues are understated while costs are overstated. Black income becomes a stock when it is parked – be it through property, gold, currency, etc. This scheme will only impact the black income that is parked in the form of currency. Given that only around 6% of black wealth is parked in currency form and only a part of that will be impacted, the overall impact of the measure is likely to be limited and of short duration.

  Demonetisation is not enough to fight the black money menace

  For a sustained crackdown on black money, multiple other attendant measures need to be taken to rein in black wealth generation. These include:

  • Direct tax reforms – While much discussion has taken place over the last decade, no action has been taken so far. There are indications that the government may want to implement reform in this area – widening the tax base, lowering tax rates and removing exemptions. If an announcement in this regard is indeed made during the forthcoming budget could be positive for the economy in the long term.
  • Transparency in political funding – In India, the process of political funding remains very opaque and has evolved into a major end-use for black money. Unfortunately, we are yet to see any concrete action to tackle this menace.
  • Agriculture income tax – Agricultural income is not taxed at all in India. For a country with such a poor direct-tax to GDP ratio, it is incomprehensible how virtually 15% of the economy remains untaxed. In fact, this has emerged as a significant conduit for tax evasion as a large chunk of income is shown as agricultural income and hence there is no incidence of tax.
  • Investment through the Participatory Notes route – Participatory Notes (commonly known as P-Notes or PNs) are instruments issued by registered foreign institutional investors (FII) to overseas investors who wish to invest in the Indian stock markets without registering themselves with the market regulator, the Securities and Exchange Board of India – SEBI. This anonymity allows many individuals with illbegotten wealth to invest in the Indian stock markets. Stricter measures need to be imposed to control the flow of such funds into the market.

  Like the expected impact on black money, we believe the impact on counterfeit currency will also be temporary. For sure, the existing stock of such banknotes will be extinguished, but it will only be a matter of time before the counterfeiters get back into action.

  Economic impact

  In the short term, the effect is likely to be negative on balance. However, we do not expect any long-term impact from this policy alone.

  Negative

  We feel this move could be negative for consumption in the short term. In India, especially in the rural areas, cash transactions account for the largest share of overall transactions in the economy. In urban areas, it is less. However, the challenges are multiple. According to data from the finance ministry, only about 32% of India’s population has access to financial institutions like banks and post offices. Moreover, the distribution of banks is highly skewed, with around a third of all bank branches being concentrated in only 60 Tier 1 and Tier 2 cities/towns. More importantly, close to 60% of workers earn their wages in cash, of which more than half are daily wage earners. The majority of small mom-and-pop shops deal only in cash, especially in rural areas. With 86% of banknotes moving out of circulation at just a few hours’ notice and with a limited amount of cash being made available in lieu, the effect has so far has been quite disruptive. This is no surprise given that as per an estimate by the Fletcher School at the Tufts University, in India 86.6% of transactions by value were carried out in cash in 2012. While this figure would have come down since then, it will still be very high. The fact is that India remains largely a cash economy. According to the same Fletcher School study, the ratio of currency to GDP in India (12.2%) is higher than for countries like Russia (11.9%), Brazil (4.1%) and Mexico (5.7%). Changing age-old habits is a long-term process and the demonetisation will have caught a lot of people on the wrong foot. Also, as mentioned earlier, in an effort to keep the decision secret, the actual implementation fell short of expectations. Even the banks, which were responsible for implementing this enormous project, were kept in the dark, thereby affecting their preparedness. Whether normalcy will return in another month’s time, will depend on the government’s ability to make new cash available based on its stated timeline. Having said that we think that the stress in rural areas will persist for some time.

  Overall, we expect consumption in urban areas to be lower, at least until December, while the impact on rural areas could continue for longer. Nevertheless, we will keep tracking the situation and by mid-January we should have a better sense of the level of demand
  destruction.

  Positive

  As some black wealth gets tracked, we expect a short-term spike in tax (and penal) revenue collection. This should allow the government to plug the gaping hole in the overall revenue collection budgeted for the year. Hence it should be able to maintain its fiscal deficit target for the year and continue with its overall expenditure plan (including capex), which we felt would be compromised by a build-up of revenue pressures. This benefit, however, will be a transitory in nature unless the move is followed by the tax reforms mentioned above. In the event that reforms do take place simultaneously, we would likely see a long-term structural improvement in the economy as government capex would continue unhindered resulting in more job creation.

  Overall macro impact

  GDP growth: The short-term demand destruction could be partly offset by continued government capex, which we previously expected to peter out. At this point we have limited visibility on the extent of the demand destruction that is likely to take place. On balance though, we see potential downside risks to our existing growth forecast. And the longer the disruption lasts, the greater the impact it will have.

  Inflation: In the short term, we see potential downside risks to our inflation forecast given the demand destruction.

  Monetary policy: With inflation likely to ease more than expected, there is a possibility of RBI opting for a rate cut at its December 2016 meeting as compared to our expectation of a rate cut at the April 2017 meeting. Also, with the vast amount of low-cost deposits flowing into the banking system, the banks are able to pass on the benefits of lower costs to lending rates, thereby improving the pace monetary policy transmission. However, we do not expect this to translate into higher credit growth. With credit growth currently at its weakest level, credit remains a demand issue and not a supply issue. Fiscal deficit: We believe the government will be able to meet its fiscal deficit target for the year (@ 3.5% of GDP) without having to compromise on its expenditure including capex. We had feared earlier that expenditure would be curtailed given that India’ fiscal deficit was already at 84% of the budget in the first half of FY17.

  Current account deficit: The monetisation scheme could potentially lead to a higher deficit in the longer term as many of the people who generate black income could seek to park their income in gold rather than cash in anticipation of periodic repeats of the demonetisation scheme.

  For now, the Rupee is in freefall…

  

  

  

• Facebook Reveals Seven Point Plan To Eradicate "Fake News"

  Facebook CEO Mark Zuckerberg has a message for his billion-plus users: "you're not capable of deciding for yourself what is 'news' and what is not, so we will do it for you."

  Facebook has been widely blamed – by the left-leaning mainstream media – for allowing the spread of online misinformation, amusingly much of it pro-Trump, but Zuckerberg has rejected the notion that Facebook influenced the outcome of the election or that fake news is a major problem on the service.

  "Of all the content on Facebook, more than 99 percent of what people see is authentic," he wrote in a blog post on Saturday. 

   

  "Only a very small amount is fake news and hoaxes."

  Which is why we found it odd that since such "a very small amount" of Facebook is "fake", why the left-leaning CEO would draft up his 7-point plan for eradicating "misinformation" from the social network (via Facebook)…

  A lot of you have asked what we're doing about misinformation, so I wanted to give an update.

   

  The bottom line is: we take misinformation seriously. Our goal is to connect people with the stories they find most meaningful, and we know people want accurate information. We've been working on this problem for a long time and we take this responsibility seriously. We've made significant progress, but there is more work to be done.

   

  Historically, we have relied on our community to help us understand what is fake and what is not. Anyone on Facebook can report any link as false, and we use signals from those reports along with a number of others — like people sharing links to myth-busting sites such as Snopes — to understand which stories we can confidently classify as misinformation. Similar to clickbait, spam and scams, we penalize this content in News Feed so it's much less likely to spread.

   

  The problems here are complex, both technically and philosophically. We believe in giving people a voice, which means erring on the side of letting people share what they want whenever possible. We need to be careful not to discourage sharing of opinions or to mistakenly restrict accurate content. We do not want to be arbiters of truth ourselves, but instead rely on our community and trusted third parties.

   

  While the percentage of misinformation is relatively small, we have much more work ahead on our roadmap. Normally we wouldn't share specifics about our work in progress, but given the importance of these issues and the amount of interest in this topic, I want to outline some of the projects we already have underway:

   

  1. Stronger detection. The most important thing we can do is improve our ability to classify misinformation. This means better technical systems to detect what people will flag as false before they do it themselves.
  2. Easy reporting. Making it much easier for people to report stories as fake will help us catch more misinformation faster.
  3. Third party verification. There are many respected fact checking organizations and, while we have reached out to some, we plan to learn from many more.
  4. Warnings. We are exploring labeling stories that have been flagged as false by third parties or our community, and showing warnings when people read or share them.
  5. Related articles quality. We are raising the bar for stories that appear in related articles under links in News Feed.
  6. Disrupting fake news economics. A lot of misinformation is driven by financially motivated spam. We're looking into disrupting the economics with ads policies like the one we announced earlier this week, and better ad farm detection.
  7.  Listening. We will continue to work with journalists and others in the news industry to get their input, in particular, to better understand their fact checking systems and learn from them.

   

  Some of these ideas will work well, and some will not. But I want you to know that we have always taken this seriously, we understand how important the issue is for our community and we are committed to getting this right.

  So to clarify, Facebook will make it easier for any Tom, Dick, Or Harriet to complain about a story that will necessarily cut the revenues from that entity and will rely on 'fact-checking' organizations, establishment 3rd parties, and the mainstream media for input.

  Well what could go wrong?

  As we noted previously, while Facebook (or Google) have every right to tweak their ad policies however they see fit – especially if in the process their own ad revenue decline, as both companies retain a portion of the ad proceeds they pay out to content providers – the move is yet another step on a slippery slope, one which begins with determining just what is considered "fake news" and ends with blanket internet censorship along ideological lines.

  Which we find especially ironic considering much of the "pro Clinton" press was terrified that it would be Trump who would be the one to hint at or enforce censorship. It seems the media does not need Trump for that: it can do it quite well on its own.

  

  

• The American Military's Real Problem: Shooting 'Ants' With 'Elephant Guns'

  Submitted by Tobias Burgers via Strategic-Culture.org,

  In combating asymmetric threats, we have to ask ourselves, on which side of the asymmetry do we sit? Typically and almost in a cliché manner, we depict our side as superior – we have the technology, we have the equipment, we have the on-going development capabilities. But do we really have the money for such high-end, extended, near-endless military campaigns?

  Consider the defensive action by USS Mason in the Red Sea in October 2016. Its response to a rebel attack compels us to rethink the cost factor involved in defensive measures, and how we popularly interpret the costs of war and national security. A few short seconds of fending off a Yemeni rebel attack cost the United States NAVY (USN) an unsettling $8 million. Cost of the rebel attack: $500,000 or less than 10 percent of USS Mason’s reaction.

  In this article, we advocate a realignment of security and defense debates to position them in the context of what it means to wage high-tech war in the twenty-first century. The asymmetry of warfare has never been more evident than in the material costs of warfighting.

  America’s wars of the twenty-first century against non-state soldiers or non-state militants seem to require high and higher-tech weapons. They will include machines necessary for fast and effective transportation, weapons that kill and do not kill, personal equipment as part of soldiers’ combat uniforms, “unmanned” or remote equipment, anytime/anywhere communications technology, robotic platforms, global surveillance and instruments like the Low-Cost Imaging Terminal Seeker (LCITS), and a turn to non-petroleum fuels. The costs associated with these requisite weapons and equipment are staggering.

  Smart technologies/equipment/weapons – items usually associated with the obligatory “precision” characteristic, non-lethal element, or “green energy” dimension cost a fortune. By contrast, non-state actors (NSAs) are not beholden to similar budgetary cutbacks, environmental considerations, or human rights and treaty compulsion. Attack and response costs for NSAs (typically insurgents and terrorists, or generally militant extremists) are grossly disparate in cost. Thus, this kind of high tech warfare is becoming increasingly economically unviable for high-tech states and organizations like the United States and theNorth Atlantic Treaty Organization (NATO).

  It is necessary for states to consider the dissonance between low-tech attacks and high-tech defensive responses. As it stands now, high-tech states, due to their military preferences and strongly embedded high tech warfare cultures, have not really considered the options for low-tech response. War, or just simple security for that matter, has been reconfigured by states, with their advanced and technological weaponry, to become high-cost. In contrast to asymmetric enemies with much cheaper systems, this raises the question: What response options are available to countries like the United States if NSAs pursue cost-effective approaches to combat and the West. What are the potential ramifications of lost-tech/low-cost warfare against high-tech/high-cost security/defensive measures of states? It is unlikely that the United States can sustain such a war. U.S. military action against the Islamic State (IS) costs American taxpayers well over $600 thousand per hour. The cost of war in Afghanistan by the latter half of 2016 stood at $750 billion and $819 billion for combat missions in Iraq that could alternatively be funneled toward other more critical military and nonmilitary (i.e., statebuilding) projects.

  The costs of U.S. military action, either offensive or defensive, stand at around $1.5 million for just one medium to long-range subsonic cruise missile like the Tomahawk. A single air-to-ground (AGM-114) Hellfire means an injurious cost of some $115 thousand. The shoulder-rocket named the Javelin costs some $150 thousand each. The APKWS II is about $28 thousand per unit. Our departure from bombs and embrace of precision-guided munitions (PGMs) and smart weapons generally has come without clear and constant consideration for the fact that precision has its costs. “Cheap” laser-guided weapons can have a price tag of up to $250 thousand attached to them.

  One glaring flaw inherent in these weapons is their lack of deterrence. If they are to be used for security, there ought to be a purpose in their non-use; however, their non-use fails to deter the principle threats in a not-so-state-centric international realm.

  We are confronting a similar friction observed after decades of spending trillions of dollars on nuclear weapons of all sorts, the nuclear-powered aircraft, anuclear-powered cruise missile (PLUTO), as well as a nuclear torpedo called ASTOR (otherwise referred to as “underwater insanity”) designed to be used against submarines. In the latter, the use of such a torpedo would have meant the destruction of the submarine that launched it as well as the target.

  The idea of war is to cause destruction or damage to the enemy with the least possible damage to oneself, if any at all. That logic fails us in the case of ASTOR and serves as a metaphor for security and defense logic today in considering the weapons being designed and developed to guard against and pursue rebels like those who launched their rickety old rockets at a billion-dollar U.S. warship, which in-turn spent, a disproportionate sum to prevent that attack.

  We should be alarmed at the potential reduction in the human costs of war if we are moving toward increasingly robotic warfare, and with this, the possibility of warfare becoming entirely economic.

  Military leaders have an amazing ability to develop strategy but if they fail to take into account the economic costs, their strategies could become inherently unviable and unsustainable. To what extent is society willing to put up with wars that are foremost robotic and primarily economic?

  This could be the case in asymmetry as well as in conflicts between high tech actors. Combat – particularly robotic combat – could become ultimately a purely economic affair in which the states that have the economic resources to sustain a longer robotic warfare campaign win. In this, the inhuman element of future combat would not only release the concept of human casualties, but likewise begin sketching a different template for warfare, perhaps even cause a paradigm shift in warfare, from which point warfare could be solely an economic affair. This could in a sense create an incentive for actors to try to fight wars on the cheap – particularly against actors bound by their high-tech warfare capabilities.

  We often think of our military capabilities as one that allow us to dominate the battlefield, to achieve full spectrum dominance and enemy/threat enclosure. Turning to “unmanned” systems, or (small) drones, such technology could start a new era of warfare in which actors with lesser-economic possibilities, not just capabilities, can seize upon the opportunity to expand the space of the battlefield to their benefit, namely through the use of simple drones, loaded with explosives. In this, actors would exploit different avenues or new ways (for them) of attacking their enemy.

  This sort of scenario can be played-out along the lines of IS sending bomb-loaded drones against the Kurdish Peshmerga, or a terrorist trying to fly small-scale drones into the U.S. Capitol. It is pertinent to consider how this kind of approach to warfare and technology will evolve.

  For the first time, technology actually seems to favor those with lesser possibilities but perversely presents more opportunity. Generally, technology has favored the actors who have the money to pursue the research and defense (R&D) side of warfare and warfighting, but now actors who do not have it can benefit in due course. Have we been too unmindful of how warfare has become foremost economic once again? Now actors with limited means actually possess the means to act beyond their material capabilities and limits and conduct strikes beyond their (limited) horizon.

  This has hit the U.S. military at a relatively late point in the War on Terror and in context of the radically changing nature of the modern military landscape/character of war. But in a way we are still moving full-tilt down a path where we develop the means to attack ants using elephant guns. We tend to adhere to the idea of over-kill in a way that goes relatively unnoticed on our own side. During the Second World War, we sought to defeat the enemies of democracy and our self-styled freedom by dumping thousands of tons of bombs on Germany’s Kassel, Hamburg, Dresden, and Cologne, and Japan’s, Kagoshima, Tokushima, Fukuyama, Tokyo, and Yokohama (among many others.)

  Today, we overkill the enemy using expensive technology and weapons that we mistakenly perceive to be produced at bargain prices. Comparing what the United States spends on defending against extant threats to what terrorists and insurgents spend presents a shrill contrast. It is as effortless as taking a stroll to a gun market. The going price for an American-made M-16 is $200, $400 for a Chinese- or Russian-made AK-47, and $150 for a rocket-propelled grenade (RPG) at a gun market in Somalia. Obtaining the requisite small arms necessary to cause widespread panic and casualties on and off the battlefield is like sifting through used clothing at a flea market – no permission, no identification, no papers, no checks required; you just choose your weapon, pay, and be on your way to attack whomever you like. A standard suicide bomber belt costs just $150.

  Perceptions of contemporary security and defense have to align with the costs associated with rebel attacks, the current economic climate, and the idea that abstaining from the purchase of a single $1-1.5 million cruise missile would enable the United States and others to purchase less-technologically sophisticated alternatives capable of achieving near-similar ends.

  The debate about national security and military effectiveness should not be solely conducted within the existent framework. Economic perception and reality must be discussed too.

  *  *  *

  Tobias Burgers is a Doctoral Candidate at the Otto-Suhr-Institute (Free University of Berlin) where he researches the rise and use of cyber, robotic systems in security relations, and the future of military conflict. Scott Nicholas Romaniuk is a PhD Candidate in International Studies (University of Trento). His research focuses on asymmetric warfare, counterterrorism, international security, and the use of force

  

  

• The Difference Between GAAP And Non-GAAP Q3 Earnings For The Dow Jones Was 25%

  As of today, 95% of the companies in the S&P 500 have reported earnings for Q3 2016. 72% of the companies have reported earnings above the mean estimate and 55%of S&P 500 companies have reported sales above the mean estimate. More importantly, however, according to FactSet in Q3 the earnings recession officially ended after five consecutive quarters of EPS declines: for Q3 2016, the blended earnings growth rate for the S&P 500 is 3.0%. The third quarter marks the first time the index has seen year-over-year growth in earnings since Q1 2015 (0.5%).

  That’s the official version. The unofficial one is that of this 3% increase in EPS, half comes from buybacks, or a reduction in the number of shares outstanding, which according to Deutsche Bank contributed 1.6% to earnings growth in the third quarter.  As the chart below shows, this has been a recurring theme for the S&P, where buybacks have “added” between 1% and 2% to EPS “growth” every quarter going back at least to the start of 2012.

  

  And then there was the very acute distinction between GAAP and non-GAAP, one of our favorite topics which we have covered going as far back as 2010, and more recently in February of this year.

  In another report by FactSet, we find that as of today, all of the companies in the Dow Jones Industrial Average have reported EPS for Q3 2016. Factset then asks three questions:

  • What percentage of these companies reported non-GAAP EPS for Q3 2016?
  • What was the average difference and median difference between non-GAAP EPS and GAAP EPS for companies in the DJIA for Q3 2016?
  • How did these differences compare to last year?

  

  For Q3 2016, 21 of the 30 companies in the DJIA (or 70%) reported non-GAAP EPS in addition to GAAP EPS for the third quarter. Of these 21 companies, 16 reported non-GAAP EPS that was higher than GAAP EPS.

  The average difference between non-GAAP EPS and GAAP EPS for all 21 companies was 181.1%, while the median difference between non-GAAP EPS and GAAP EPS for all 21 companies was 10.4%.

  

  The average difference between non-GAAP EPS and GAAP EPS for the DJIA was unusually large because of DuPont. For Q3 2016, DuPont reported non-GAAP EPS of $0.34 and reported GAAP EPS of $0.01. Thus, the percentage difference between non-GAAP EPS and GAAP EPS for DuPont for Q3 was 3300%. Excluding DuPont, the average difference between non-GAAP EPS and GAAP EPS for the remaining 20 DJIA companies was 24.7%.

  How does this compare to the third quarter in 2015? Back in Q3 2015, 19 of the 30 companies in the DJIA (or 63%) reported non-GAAP EPS in addition to GAAP EPS for the quarter. Of these 19 companies, 16 reported non-GAAP EPS that was higher than GAAP EPS. The average difference between non-GAAP EPS and GAAP EPS for all 19 companies was 17.1%.

  This means that the GAAP to Non-GAAP difference (excluding outliers), continues to grow, or as FactSet puts it, the average difference between non-GAAP EPS and GAAP EPS for the Dow 30 was larger in Q3 2016 relative to Q3 2015. However, the median difference between non-GAAP EPS and GAAP EPS for the Dow 30 in Q3 2016 was nearly equal to the median difference in Q3 2015. While more DJIA companies reported non-GAAP EPS in Q3 2016 (21) compared to Q3 2015 (19), the same number of DJIA companies (16) reported non-GAAP EPS that exceeded GAAP EPS in both quarters.

  * * *

  Putting all this together, the distinction for year-over-year earnings growth for GAAP vs non-GAAP Dow Jones earnings is simple: non-GAAP Dow Jones earnings rose 10.8%, while GAAP EPS declined 3.7%:

  Companies in the DJIA reported higher average and median year-over-year growth in non-GAAP EPS compared to GAAP EPS for Q3 2016. For the 21 companies in the DJIA that reported non-GAAP EPS for Q3 2016, the average non-GAAP EPS growth rate was 10.8%, while the median non-GAAP EPS growth rate was 5.1%. For these same 21 companies, the average GAAP EPS growth rate for Q3 2016 was -3.7%, while the median GAAP EPS growth rate for Q3 2016 was -1.2%.

  

  There’s more.

  As Deutsche Bank writes in a note on Friday afternoon, “be mindful of the gap between GAAP and non-GAAP EPS and net margins“

  The German bank explains that over the past two years, the wider than usual spread between GAAP and non GAAP is from asset write-downs at Energy and Materials companies. Outside those sectors, the spread at ~87% excluding huge discontinued operations and one-time gains at Health Care, modestly below normal. The overall spread bottomed at 68% in 4Q15 and subsequently improved to ~81% in the past two quarters and ~84% QTD.

  In addition to write-downs, stock option expense (SOE) is often excluded by new Tech, bio Tech and some tech oriented consumer stocks. 42 S&P companies exclude SOE from their non-GAAP EPS, and that SOE would have had $1.07/sh impact to S&P EPS. Also, when M&A activity is strong there are often deal and integrations costs that are excluded. This is mostly at Tech and Health Care. Pension charges are sometimes excluded. This was a big item in 4Q14 and will likely be so again in 4Q16.

  Some additional details from DB:

  

  

  The chart below shows a long-term chart showing the divergence between the S&P500’s LTM EPS on a GAAP vs non-GAAP basis…

  

  … and finally, here is the implied LTM P/E multiple if using Friday’s S&P closing price: it amounts to 18.7x for non-GAAP earnings, and 23.4x for GAAP.

  

  

  

• Visualizing Black Friday's Surge In US Consumer Debt

  It's that time of year again… when Americans load up on debt to buy stuff they don't need with money they don't have because Kim Kardashian told them to…

  Next week, Black Friday and Cyber Monday will kick off the start to the U.S. holiday shopping season, during which consumers are expected to spend a total of $655.8 billion this year.

  With the average bill coming in at $938.50 for holiday spending, where are people finding the extra cash?

  Visual Capitalist's Jeff Desjardins looked back at the last five years of Equifax data to see how consumer debt correlates to holiday purchases.

  

  Courtesy of: Visual Capitalist

   

  THERE’S CREDIT IN STORE

  One way consumers take advantage of Black Friday deals is through the issuance of store credit. Specifically, Black Friday traditionally sees a noteworthy surge in signups to private label cards – the kind redeemed at stores like Macy’s.

  Each year, roughly half a million Americans are signing up for new accounts on Black Friday:

  

  Furniture and department stores are among the biggest providers of this type of credit to consumers. Here are the five-year averages by industry for the months of November and December:

  

   

  CHARGE IT, PLEASE

  This bump in activity doesn’t stop with new signups for store credit. The average balances on store cards and credit cards both jump noticeably in the months following the holiday season:

  

  Every year is different, but the data always follows the same trend.

  Stocking up on Black Friday deals is not cheap, and extra dollars spent eventually make their way onto the credit card statement with the cost of interest added on.

  

  

• Obama Admits He "Can't Pardon" Snowden Before A Trial – Sorry, Hillary

  After everyone from Jesse Jackson, to the terrified mainstream media to prominent Congressional Democrats have called upon Obama to issue a blanket pardon for Hillary Clinton, he finally admitted that it’s not possible to pardon someone who hasn’t yet stood trial for a crime.  And while Obama was referencing a potential pardon of Edward Snowden with his comments, one could assume that the law should be applied the same way for all U.S. citizens.

  I can’t pardon somebody who hasn’t gone before a court and presented themselves, so that’s not something that I would comment on at this point. I think that Mr. Snowden raised some legitimate concerns. How he did it was something that did not follow the procedures and practices of our intelligence community. If everybody took the approach that I make my own decisions about these issues, then it would be very hard to have an organized government or any kind of national security system.

  In his last international interview with ARD and DER SPIEGEL in Germany, Obama went on to highlight the fine line between protecting the privacy of citizens and gathering intelligence needed to protect the American homeland against potential terrorist attacks.  Ironically, Obama didn’t mention the potential pitfalls associated with allowing a massive influx of immigrants from nations known to harbor terrorists without the ability to vet those immigrants.

  At the point at which Mr. Snowden wants to present himself before the legal authorities and make his arguments or have his lawyers make his arguments, then I think those issues come into play. Until that time, what I’ve tried to suggest — both to the American people, but also to the world — is that we do have to balance this issue of privacy and security. Those who pretend that there’s no balance that has to be struck and think we can take a 100-percent absolutist approach to protecting privacy don’t recognize that governments are going to be under an enormous burden to prevent the kinds of terrorist acts that not only harm individuals, but also can distort our society and our politics in very dangerous ways.

   

  And those who think that security is the only thing and don’t care about privacy also have it wrong.

   

  My experience is that our intelligence officials try to do the right thing, but even with good intentions, sometimes they make mistakes. Sometimes they can be overzealous. Our lives are now in a telephone, all our data, all our finances, all our personal information, and so it’s proper that we have some constraints on that. But it’s not going to be 100 percent. If it is 100 percent, then we’re not going to be able to protect ourselves and our societies from some people who are trying to hurt us.

   

  Commenting on the election, Obama refused to acknowledge that his failed policies helped facilitate Trump’s victory, even though skyrocketing Obamacare premiums almost certainly played a role, and instead referenced the typical democrat narrative that racist white folks who were fearful of the “changing face of the American population” were to blame.

  I think what is true is that there’s been an underlying division in the United States. Some of it has to do with the fact that economic growth and recovery tends to be stronger in the cities and in urban areas. In some rural areas, particularly those that were reliant on manufacturing, there has been weaker growth, stagnation, people feeling as if their children won’t do as well as they will.

   

  There are cultural, social and demographic issues that came into play. They’re not that different from some of the issues that Europe faces with immigration, the changing face of the American population. I think some reacted there, and Trump was able to tap into some of those anxieties.

   

  American politics is always somewhat fluid. In this age of social media, it means that voters can swing back and forth. I mean, there were probably millions of voters who voted for me and supported me and this time also voted for Donald Trump, and it just indicates that some of this is less ideological and more just an impulse towards some sort of change.

  One of the more amusing segments of the interview came when Obama, perhaps one of the most divisive presidents in American history, decided to lecture president-elect Trump on his “divisive” and “controversial rhetoric.”

  And the question now, going forward, is whether the president-elect is able to move on those elements of his agenda that I think can garner broad support, like rebuilding our infrastructure. And if he can lessen some of the more controversial rhetoric that could divide the country more. That’s going to be the test for him in the years to come.

  We just have to ask, would comments like the one below by Obama be considered “divisive” and/or “controversial?”
  

  September 2014 Comments at the Congressional Black Caucus Awards Dinner – “Too many young men of color feel targeted by law enforcement, guilty of walking while black, or driving while black, judged by stereotypes that fuel fear and resentment and hopelessness. We know that, statistically, in everything from enforcing drug policy to applying the death penalty to pulling people over, there are significant racial disparities.”

  If that wasn’t enough, Obama also attempted to delegitimize Trump’s election by pointing out that only 27% of the American population voted for him.  Yes, and Obama’s victory in 2012 with 28.6% of the population was WAY more decisive…great point.

  The problem, though, is that young people are less likely to vote than older people. What results is a situation in which sometimes the elections don’t fully reflect the views of the American population. Essentially, the president-elect was supported by about 27 percent of the American population. One of our challenges, historically, is that we have very low voting rates, even during presidential elections.

  Finally, when asked about the very real possibility that Trump will dismantle key components of his legacy, Obama reminded us all of the time that he saved the entire world from financial ruin back in 2009. 

  First and foremost, it’s important to remember that, from my perspective at least, my most important legacy was making sure that the world didn’t go into a Great Depression. Keep in mind that, when I came in, we had had a crisis that was the worst we’ve seen since the 1930s, and working with people like Chancellor Merkel, working with the G-20 and other institutions internationally, we were able to stabilize the financial system, stabilize the US economy and return to growth.

  We guess that’s true if you ignore the inconvenient fact that loose monetary policies implemented by the Fed single-highhandedly caused the asset bubbles around the world that Obama points to as signs of a “recovery.”  Guess we should ignore these charts: 

  
  

  

  

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• Algorithmic Trading is the Investment of the Future

  From Fortress Capital:

  Let’s face it – investing is difficult!  Gone are the days of saving for retirement.  The average savings account in the USA pays less than 1%.  Fortunately for most investors the stock market has been going up and up, but it’s going to correct (it always does).  But it hasn’t been a good ride for all investors.  Many retirees now living off their retirements are heavy into fixed income investments like annuities that pay a fixed monthly amount based on interest rates, which are at historic lows.  Interest rates are so low, when these investors bought annuities, they are getting up to 90% less than what they expected.  Quantitative Easing is killing retirees’ portfolios.

  So what is the solution?  Along with the bad comes good – like with any technology.  Modern hospital techniques prolong life and save lives, but also with new medical technology comes many dangers.  This is also true in financial services.  For example, it’s now possible to trade and invest in algorithmic trading products called sometimes ‘robots’ which do investing for you.  Just like human managers, all robots are different.  Some are extremely risky, some are extremely conservative.  With the advent of algorithmic trading, investors should be prepared to do due diligence on this new asset class, and be familiar with some of what such an investment entails.

  Generally, robots are offered to investors as managed accounts or a fund product, such as a hedge fund, commodity pool, or structured product.  Much of the due diligence is done by the managers of the robot and explained in a document such as a prospectus, disclosure document, or other offering memorandum.  Be sure to work only with licensed managers!  

  Of course, there’s another option – which is to buy a robot and load it onto your own account, this is called ‘self-managed’ but in this case be prepared to spend a lot of time learning how to do it.  If you are so inclined, many managers encourage this and will even help support live account holders through this process.  For example, you can take Fortress Capital’s Introduction to Foreign Exchange course, providing the basics of FX, algorithmic investing, mathematics, computers, and other relevant info.

  There’s other benefits to algorithmic investing.  The US election produced huge volatility which negatively impacted stock investments and many others.  Take a look at a EUR/USD hourly chart, around the time of the US election (right).

  Now take a look at the results from that night from Magic FX, one of Fortress Capital’s algorithmic managed accounts for QEP/ECP:

  

  That is not to say that, algorithms are a panacea.  But, they do provide a new type of risk profile, a new type of opportunity for investors, and are guaranteed to change the landscape of investing forever.

  To learn more about Managed Forex Investing, checkout Splitting Pennies – Understanding Forex Book for only $6.11 on Amazon.  If you’d like to get started, see Fortress Capital’s flagship program Global Alpha.

  

  

• 5 Times When The Mainstream Media "Created Fake News"… And People Died As A Result

  

  As SHTFPLan.com's Mac Slavo notes…

  While the powers that be are determining the fate of alternative media voices that are now branded under the dubious label “fake news” and blacked out from online search results, it is worth keeping in mind all the disinformation and downright lies that have been perpetrated by the corporate news media – typically hand in hand with a political agenda.

   

  Whether it is lies that took us to war, or the perception that a deadly attack was carried out by a certain group, the impressions they create play a significant role in determining world events. Often times, that role is one of deception, ensnaring people into supporting deadly and costly actions – in spite of the true facts.

   

  These misleaders are the fake news, and the fake news problem has helped to ruin this country.

  5 Times Corporate Media Got Caught Publishing Fake News Causing the Death & Suffering of Millions

  Authored by Claire Bernish and originally published at The Free Thought Project.

  A now-notorious list of ostensibly “fake” news sites — created by a liberal professor, seemingly out of thin air — spread like wildfire online in the past two days and was eagerly reprinted by corporate media presstitutes hoping to vindicate their own failed reporting on the 2016 election.

  But branding perfectly legitimate outlets with the same scarlet letter as those devoid of integrity deemed the professor’s list a spurious attempt to defame alternative and independent media — anyone dissenting from the left’s mainstream narrative — as a whole.

  This is, in no uncertain terms, a hit list — or, at least, a laughable attempt — and it fits conveniently into the establishment’s burgeoning war on independent media disguised as a battle against fake news.

  When corporate media outlets from the Independent and Business Insider, to the Los Angeles Times and NYMag scrambled over one another to reprint this irresponsibly contrived hit list, they proved yet again a lack of journalistic integrity — the same issue that originally caused regular subscribers to abandon them in the first place.

  Indeed, in this otherwise unknown professor’s foray into the world of journalism, a glaring mistake was made — the only mainstream outlets making the list were those who had heralded Bernie Sanders as the best candidate for the White House.

  Such an obvious attempt to control thought could only be conjured in a totalitarian regime.

  In fact, failing to place the exact corporate media organizations on the list, who for nearly a year praised fealty only to Hillary Clinton — and for decades have foisted on the public countless mendacious whoppers — constitutes a comedic lack of honesty. So, to bring that irony front and center, it’s imperative to examine some mainstream lies — most of which had appalling consequences — including the deaths of hundreds of thousands of innocent people in the United States and around the world.

  1. George W. Bush’s Weapons of Mass Destruction

  President George W. Bush decided to unleash the full force of the U.S. military upon the world in a new policy of war writ large disguised as a war on terrorism following the attacks of September 11, 2001. First arbitrarily designating Afghanistan as its primary victim due to the supposed identities of the attackers, Bush then chose Iraq to feel the wrath, and set out to invade the country following dubious claims Saddam Hussein harbored destructive chemical and biological weapons and was actively seeking far stronger munitions.

  “Intelligence gathered by this and other governments leaves no doubt that the Iraq regime continues to possess and conceal some of the most lethal weapons ever devised,” the president asserted in a public address on March 17, 2003.“This regime has already used weapons of mass destruction against Iraq’s neighbors and against Iraq’s people.”

  Bush’s assertions were questioned by not only human rights experts, but by U.N. weapons inspectors and countless others — so shortly after the U.S. invaded the sovereign nation, the New York Times took up the slack to fill in the appropriatecasus belli.

  Judith Miller notoriously reported on a source she described only as an Iraqi scientist who had seen several extensive caches of such weapons stored somewhere in the country. American weapons experts, she claimed, “said the scientist told them that President Saddam Hussein’s government had destroyed some stockpiles of deadly agents as early as the mid-1990’s, transferred others to Syria, and had recently focused its efforts instead on research and development projects that are virtually impervious to detection by international inspectors, and even American forces on the ground combing through Iraq’s giant weapons plants.”

  In hindsight, Miller’s problematic report turned out to be horrendously flawed, and the Times spent months attempting tobacktrack, but the damage — fomenting widescale public support for a war no one wanted the military to undertake — had been done. Years later in 2014, the Times — after much internal strife — again took up Miller’s case, in a series reportingcatastrophic injuries U.S. military personnel suffered in handling chemical weapons in Iraq. But that report, and theparroting of it by multiple other mainstream mainstays, failed to fully disclose Hussein had been oblivious to the stockpiles presence — something the CIA had clearly stated in a report.

  2. Gulf of Tonkin Incident

  Often, the American mainstream media becomes a de facto government employee, taking the claims of U.S. officials and reporting them as proven fact — and nothing exemplifies this penchant better than reporting on the Gulf of Tonkin incident — perhaps one of most flagrant lies ever dreamed up as a justification for war.

  On August 5, 1964, the New York Times reported “President Johnson has ordered retaliatory action against gunboats and ‘certain supporting facilities in North Vietnam’ after renewed attacks against American destroyers in the Gulf of Tonkin.”Additional outlets, such as the Washington Post, echoed this claim.

  But it wasn’t true. At all. In fact, the Gulf of Tonkin incident, as it became known, turned out to be a fictitious creation courtesy of the government to escalate war in Vietnam — leading to the deaths of tens of thousands of U.S. troops and millions of Vietnamese, fomenting the largest anti-war movement in American history, and tarnishing the reputation of a nation once considered at least somewhat noble in the eyes of the world.

  In 2010, more than 1,100 transcripts from the Vietnam era were released, proving Congress and officials raised serious doubts about the information fed to them by the Pentagon and White House. But while this internal grumbling took place, mainstream media dutifully reported official statements as if the veracity of the information couldn’t be disputed.

  Tom Wells, author of the exhaustive exposé “The War Within: America’s Battle Over Vietnam,” explained the media egregiously erred in “almost exclusive reliance on U.S. government officials as sources of information” and“reluctance to question official pronouncements on ‘national security issues.’”

  If due diligence had been performed, and reporters had raised appropriate doubts about the Gulf of Tonkin false flag, it’s arguable whether support for the contentious war would have lasted as long as it did.

  3. Suppression of brutality perpetrated in Bahrain during the Arab Spring

  CNN sent reporter Amber Lyon and a crew to U.S. ally Bahrain for a documentary about technology’s role in the 2011 people’s uprising known as the Arab Spring, ultimately titled “iRevolution: Online Warriors of the Arab Spring” — but what they encountered instead bore the hallmarks of a repressive and violent regime, and its attempt to filter and censor the truth. Lyon and the other CNN reporters went to great lengths to speak with sources participating in the massive uprising — one the Bahraini government wished to quash at all costs.

  “By the time the CNN crew arrived,” the Guardian reported, “many of the sources who had agreed to speak to them were either in hiding or had disappeared. Regime opponents whom they interviewed suffered recriminations, as did ordinary citizens who worked with them as fixers. Leading human rights activist Nabeel Rajab was charged with crimes shortly after speaking to the CNN team. A doctor who gave the crew a tour of his village and arranged meetings with government opponents, Saeed Ayyad, had his house burned to the ground shortly after. Their local fixer was fired ten days after working with them.”

  Even the CNN crew experienced the wrath of the regime, upon showing up to interview one source, the Guardiancontinued, “‘20 heavily-armed men’, whose faces were ‘covered with black ski masks’, ‘jumped from military vehicles’, and then ‘pointed machine guns at’ the journalists, forcing them to the ground. The regime’s security forces seized their cameras and deleted their photos and video footage, and then detained and interrogated them for the next six hours.”

  After returning to the U.S., Lyon felt it her duty to expose the abuse being perpetrated by the government of an ally nation — but CNN International didn’t agree. CNN U.S. eventually aired the one-hour documentary. Once. CNN Internationalnever did — worse, the organization gave Lyon the cold shoulder, ignoring her repeated requests to return to Bahrain, which would have put CNN ahead of the game in reporting government brutality. Its failure to air the documentary and refusal to provide justification for doing so angered seasoned CNN and other mainstream established journalists across the board.

  Lyon met with CNN International president Tony Maddox twice — he first promised to investigate why the documentary wasn’t aired, and then turned against her, warning the journalist not to discuss the matter publicly. Bahraini officials contacted CNN International repeatedly complaining about Lyon’s continued reporting on what she’d witnessed. Intimidation continued until she was eventually laid off, putatively for an unrelated matter.

  Attempting to save face, CNN International rebuffed the Guardian’s account and interview with Lyon — but the effort was an impotent justification for the obvious failure of integrity.

  But threats for Lyon to remain silent followed her off the job, and when she persisted in exposing the Bahraini regime, as well as the suppression by CNN, the outlet sent a stern warning to halt. Lyon, however, said she had never signed a non-disclosure agreement and would not be pressured into their lies — ultimately walking away reputation in hand — something that could not be said for CNN.

  4. That time Fox News hired a CIA operative who wasn’t a CIA operative

  Wayne Shelby Simmons made guest appearances on Fox News as a security expert with insider expertise from his work as a CIA operative — for over a decade. However, Simmons had never been employed by the agency — in fact, the imposter’s lies eventually caught up with him and he was arrested and sentenced to 33 months in prison.

  “Instead of verifying whether Simmons had actually worked for the CIA, Fox News and the Agency allowed him to make fools out of Bill O’Reilly, Sean Hannity, Andrew Napolitano, Neil Cavuto, and everyone at Fox & Friendsfor over the last twelve years. After building a false reputation as a CIA agent on Fox News, Simmons obtained an interim security clearance when an unnamed government contractor hired him in 2008. Simmons also falsely claimed on national security forms that his prior arrests and criminal convictions were directly related to his supposed intelligence work for the CIA, and that he had previously held a top secret security clearance from 1973 to 2000,” The Free Thought Project’s Andrew Emett explained.

  In other words, mainstream Fox News didn’t bother with journalism at all — proffering fake expertise as the real deal — because the outlet failed the most basic of tasks any hourly wage employer would perform.

  Simmons’ commentaries weren’t harmless stabs in the dark, either — relentlessly parroting baseless Islamophobic rhetoric to drum up support for the government’s insidious war on terror likely poisoned the minds of thousands of viewers, furthering the already divisive atmosphere in the U.S.

  5. Vapid anti-marijuana propaganda and the furtherance of the war on drugs

  According to the Drug Policy Alliance, over $51 billion is spent fighting the war on drugs in the United States — each year. In 2015, a striking 38.6 percent of all arrests for drug possession were for cannabis — 643,121 people were arrested for marijuana-related offenses.

  What those figures don’t show are the millions of lives ruined by criminal conviction for the government’s unjustifiable quest to eradicate, demonize, and vilify this beneficial plant. It would be an impossible task to tally the number of families whose homes have been destroyed by SWAT teams searching for marijuana — whether or not police bothered to verify anaddress. An untold number of others have been slain by police for the same reason.

  But worst of all, the mainstream media propagates nonsensical, false propaganda about cannabis to convince the gullible and ignorant among us to equate it with heroin, cocaine, and other ‘illicit’ substances. And while a majority of the populace has seen through such lies, some outlets have obstinately continued the drug war — seemingly of their own volition.

  One stunning example occurred in March last year, when Dr. David Samadi made a guest appearance on Fox News to fearmonger the horrors of marijuana and scare the bejeezus out of the viewing audience.

  “It actually causes heart attacks. It increases your heart rate. And on and on,” Samadi claimed, fecklessly distorting statistics. “We’re seeing in Colorado that we had 13 kids that came to the emergency [room] and ended up in the ICU as a result of overdose from marijuana. Now we have crack babies coming in because pregnant women are smoking this whole marijuana business.”

  Fortunately, the Internet has provided the public with alternatives to these corporate media lies — and as of two years ago, despite these and other claims about pot being a dangerous substance, Pew Research Center found fully 69 percent of the population felt alcohol was more harmful than cannabis.

  * * *

  While this list presents only a few of the bigger lies of the corporate press, there are innumerable examples of its proud history of actual fake news. Keep these in mind when the mainstream presstitutes rush to reprint a hit list targeting journalists and outlets whose narratives counter the establishment. Indeed, it would be the corporate media — with its vast captive audience — who most deserves to be listed as propagators of lies.

  

  

• San Fran Home Sales Crash To Lowest Level Since 2008 As Pricing Reset Gets Underway

  We have frequently written over the past couple of quarters about the bubbly San Francisco housing market that looks set for another epic reversal as home prices have reached staggering new highs just as employment levels seem to be rolling over.  With home prices now implying that only 10-20% of residents can afford the “median” priced home, it’s certainly not difficult to understand why demand may be waning.     

  

   

  According to HousingWire and a new report from PropertyRadar, home sales in the Bay Area are finally starting to rollover with Q3 YTD volumes down 10.3% YoY, reflecting the fewest number of homes sold over that same time period since 2008.  Perhaps even more staggering is that distressed property sales fell 35.7% YoY so far in 2016, to the lowest level since 2001, as “low-priced” inventory dried up and buyers have found it financially impossible to move up to higher price tiers.

  Conversely, non-distressed property sales fell 7.1% on a year-over-year basis. But it should be noted that as a percentage of total sales, distressed property sales accounted for only 7.9% of total sales, compared to 11.1% in 2015 and a high of 56.3% in 2009.

   

  “The 35.7% decline in distressed property sales drove the overall decline in Bay Area sales to its lowest level since 2001,” said Madeline Schnapp, director of Economic Research for PropertyRadar.

   

  “For several years now, the affordability of distressed properties contributed significantly to overall sales,” Schnapp added. “Distressed property inventory has declined to the point it’s now a drag on overall sales. Bay Area sales will likely remain relatively flat until new, attractively priced, inventory arrives on the scene.”

  According to PropertyRadar’s data, the number of homes sold priced from $0 to $500,000 fell by nearly 27% from 2015 to 2016. Homes priced from $500,000 to $750,000 fell by just shy of 9%.

   

  Homes priced from $750,000 to $1 million fell by just 3.6%, while homes priced above $1 million actually rose, albeit by only 0.4%.

   

  “The outsized decline in distressed property sales combined with the rapid increase in prices and the lack of buyers that qualify for higher priced homes is reflected in the 26.7% decline in the sales of lower priced homes,” Schnapp said. “Income growth in the Bay Area has not kept up with rapidly rising home prices shutting out a significant percentage of would-be buyers.”

  Of course, none of this should be terribly surprising in light of the fact that median San Francisco home prices have surged 86% over the past 4 years to a mere $1.4mm. 

  

   

  As Paragon Real Estate points out, the only question left to answer now isn’t whether San Fran real estate will crash, but rather just how deep the crash will be.

  

  

  

• European Union Orders British Press Not To Report when Terrorists Are Muslims

  Submitted by Yves Manou via The Gatestone Institute,

  • This is the moment where hate speech laws become a greater threat to democracy and freedom of speech than hate speech itself.
  • In France, Muslim terrorists are never Muslim terrorists, but "lunatics," "maniacs" and "youths".
  • To attack freedom of the press and freedom of speech is not anti-hate speech; it is submission.
  • By following these recommendations, the British government would place Muslim organizations in a kind of monopoly position: they would become the only source of information about themselves. It is the perfect totalitarian information order.
  • Created to guard against the kind of xenophobic and anti-Semitic propaganda that gave rise to the Holocaust, national hate speech laws have increasingly been invoked to criminalize speech that is merely deemed insulting to one's race, ethnicity, religion, or nationality.
  • It is disturbing to wonder how long the EU will strongly engage its experts and influence to cut through existing legal obstacles, in a quest to criminalize any type of criticism of Islam, and to submit to the values of jihad.

  According the European Commission against Racism and Intolerance (ECRI) — part of the Council of Europe — the British press is to blame for increasing hate speech and racist violence. On October 4, 2016, the ECRI released a report dedicated only to Britain. The report said:

  some traditional media, particularly tabloids… are responsible for most of the offensive, discriminatory and provocative terminology. The Sun, for instance, published an article in April 2015 entitled "Rescue boats? I'd use gunships to stop migrants", in which the columnist likened migrants to "cockroaches"…

   

  The Sun newspaper has also published inflammatory anti-Muslim headlines, such as its front page of 23 November 2015 which read "1 in 5 Brit Muslims' sympathy for jihadis", along with a picture of a masked terrorist wielding a knife…

  The ECRI report establishes a direct causal link between some tough headlines in British tabloids and the security of the Muslims in the UK. In other words, the British press is allegedly inciting readers to commit "Islamophobic" acts against Muslims.

  ECRI considers that, in light of the fact that Muslims are increasingly under the spotlight as a result of recent ISIS-related terrorist acts around the world, fueling prejudice against Muslims shows a reckless disregard, not only for the dignity of the great majority of Muslims in the United Kingdom, but also for their safety.

  

  ECRI is basing its report on a recent study from Matthew Feldman, Professor at Teesside University. This study compiled anti-Muslim incidents before and after terrorist's attacks.

  In the seven days prior to the Charlie Hebdo massacre in Paris, where 12 people were killed, there were 12 reported (anti Muslim) incidents, but in the seven days following, there were 45. This pattern was similar in relation to the terror attacks in Sydney, in December and Copenhagen, in February.

  So, according to the ECRI and scholars of Teesside University, when Muslim jihadists murder people and the press reports that killers are Muslims, the press, and not Islamists, is encouraging "Islamophobic incidents" in Britain. According to ECRI Chair Christian Ahlund, "It is no coincidence that racist violence is on the rise in the UK at the same time as we see worrying examples of intolerance and hate speech in the newspapers, online and even among politicians."

  For the ECRI, the biggest problem is:

  "… where the media stress the Muslim background of perpetrators of terrorist acts, and devote significant coverage to it, the violent backlash against Muslims is likely to be greater than in cases where the perpetrators' motivation is downplayed or rejected in favour of alternative explanations."

  The report does not explain what could be "alternative explanations." But we can find examples in French press: when a Muslim attacks a soldier and tries to take his gun, he is not an Islamist terrorist, but a "lunatic." Such attacks by "lunatics" are very common in France.

  The French press downplays attacks by deciding not to name Muslim perpetrators: incriminating a "Mohamed" could, in the minds of French journalists, incite retaliations against Muslims. In another example, Muslim gangs cannot be connected to any form of violence, so they become "youths." In France, Muslim terrorists are never Muslim terrorists, but "lunatics", "maniacs" and "youths."

  But that is France. In Britain, tabloids are not so polite, and they understand perfectly the intentions of the ECRI report: to ban the word "Muslim" when it is associated with "violence or terrorism."

  The ECRI Report Marks a U-Turn in Free Speech

  This is the moment where hate speech laws become a greater threat to democracy and freedom of speech than the hate speech itself. Prohibiting journalists from naming "Islamic terrorism," and encouraging them to hide the association of Muslims with terrorism, is an attempt to misrepresent the truth in the same way the former Soviet Union censored the truth. Taking advantage of some real racist articles in tabloids — not many, because not many are quoted in the report — to attack freedom of the press and freedom of speech is not anti-hate speech; it is submission.

  The proof of submission lies in ECRI's recommendations to the British government:

  • "establish an independent press regulator";
  • "rigorous training for journalists to ensure better compliance with ethical standards";
  • "review the provisions on incitement to hatred with a view to making them more effective and usable";
  • "establish a real dialogue with Muslims in order to combat Islamophobia. They should consult them on all policies which could affect Muslims";
  • amending the Editor's Code of Practice to ensure that members of groups can submit complaints as victims against biased or prejudicial reporting concerning their community"

  By following these recommendations, the British government would place Muslim organizations in a kind of monopoly position: they would become the only source of information about themselves. It is the perfect totalitarian information order. If a breach of that kind would open in the future, no doubt all the lobbies would rush into the breach: political parties, Protestants, Catholics, Jews, multinationals, everyone.

  The British government did not fall into the trap, and firmly rebuffed ECRI's demands. It told the European council body:

  "The Government is committed to a free and open press and does not interfere with what the press does and does not publish, as long as the press abides by the law."

  In Great Britain, and in all countries of European Union, anti-hate laws already exist. Created to guard against the kind of xenophobic and anti-Semitic propaganda that gave rise to the Holocaust, national hate speech laws have increasingly been invoked to criminalize speech that is merely deemed insulting to one's race, ethnicity, religion, or nationality.

  These laws have also been invoked often by Islamists to sue against anti-Islamist speech (cartoons of Muhammad, blasphemy against Islam, etc.) as manifestations of "racism" — fortunately with little success. Most court cases that Islamists have initiated have failed because Islam is not a race.

  Agnes Callamard, expert on human rights, writes in reference to the United Nations Charter:

  "ARTICLE 19 recognises that reasonable restrictions on freedom of expression may be necessary or legitimate to prevent advocacy of hatred based on nationality, race, religion that constitutes incitement to discrimination, hostility or violence. The organisation does not extend such legitimate restrictions to offensive and blasphemous expressions."

  It is disturbing to wonder how long the EU will strongly engage its experts and influence to cut through existing legal obstacles, in a quest to criminalize any type of criticism of Islam, and to submit to the values of jihad.

  

  

• Paid Protesters "Planning To Cause Chaos In DC" And Block Peaceful Inauguration For Trump

  Submitted by Mac Slavo via SHTFPlan.com,

  

  It may be that even with the post-election riots that have swept the country, we ain’t seen nothing yet.

  This country is fissuring. Its people are sharply divided, but more than that, covert finance is pushing things towards unrest and martial law.

  If Soros money and its ilk proves effective, inauguration day on January 20th will become one of the largest demonstrations on record, with a group calling itself #DISRUPTJ20 planning to block “peaceful transition” and disrupt Trump’s swearing in.

  The groups promoting it are calling on people nationwide to join in, and for business in D.C. to take sides and take “direct action” and attempt to stop the parade, block streets and other delay the events as scheduled:

  #DisruptJ20: Call for a bold mobilization against the inauguration of Donald Trump on January 20, 2017

   

  On Friday, January 20, 2017, Donald Trump will be inaugurated as President of the United States. We call on all people of good conscience to join in disrupting the ceremonies. If Trump is to be inaugurated at all, let it happen behind closed doors, showing the true face of the security state Trump will preside over. It must be made clear to the whole world that the vast majority of people in the United States do not support his presidency or consent to his rule.

   

  […] If there is going to be positive change in this society, we have to make it ourselves, together, through direct action.From day one, the Trump presidency will be a disaster. #DisruptJ20 will be the start of the resistance. We must take to the streets and protest, blockade, disrupt, intervene, sit in, walk out, rise up, and make more noise and good trouble than the establishment can bear. The parade must be stopped. We must delegitimize Trump and all he represents. It’s time to defend ourselves, our loved ones, and the world that sustains us as if our lives depend on it—because they do.

   

  […]

   

  If you can’t make it to Washington, DC on January 20, take to the streets wherever you are. We call on our comrades to organize demonstrations and other actions for the night of January 20. There is also a call for a general strike to take place. Organize a walkout at your school now. Workers: call out sick and take the day off. No work, no school, no shopping, no housework.

   

  #DisruptJ20 Spread the word. Join the fight. #DisruptJ20

   

  Facebook: http://tinyurl.com/disruptj20

  Though it remains to be seen how many will actually show up on the day and join in, the group is concerning as it is calling for violence out of the gates.

   

  #DisruptJ20: Call for a bold mobilization against the inauguration of Donald #Trump on January 20, 2017 pic.twitter.com/EGU65bOtNG

  — stimulator (@stimulator) November 11, 2016

  Violence Being Arranged for Trump Inauguration: Group Openly Recruiting for "No Peaceful Transition" #disruptJ20 https://t.co/ctPHDFrHiZ

  — ?Michelle? (@mrntweet2) November 12, 2016

  All of these people openly planning violence need to be arrested. Domestic terrorism. #disruptj20

  — Christie Bluhm (@Christie_Bluhm) November 11, 2016

   

  

  As Dahboo77 is reporting:

  Using a propaganda video packed with outright lies, the radical left is already calling for violent uprisings and is recruiting for people to violently disrupt the Presidential Inauguration on January 20. The recruiting effort is so packed full of unbelievably false information, that only a totally uniformed moron would take it seriously.

  How much longer will foundation fronts have to funnel seed money until – as planned – chaos has been sown?

  How many staged riots and paid provocateurs will it take until a police state response brings this country to its knees, and places it under martial law?

  

  

• Paul Joseph Watson Blasts The MSM: "You're The F**king Experts Of Fake News"

  Paul Joseph Watson is back with another epic rant….this time eviscerating the mainstream media for spreading an obviously biased list of “fake news” sources compiled by a left-wing assistant professor in an obvious attempt to undermine conservative news outlets. 

  We wrote about the list a couple days ago as Zero Hedge itself was actually a target of Melissa “Mish” Zimdars’ fake news wrath.  To our complete “shock”, the list of fake news sources created by the self-described “feminist, activist” who is an avid supporter of numerous “neutral” political groups, like Occupy Wall Street, included several conservative news outlets like Breitbart and InfoWars but somehow missed leftist sites like The Huffington Post which was exposed by WikiLeaks to have been overtly colluding with the Hillary Clinton campaign.

  As always, here are a couple of our favorite lines though the full clip is a must see.

  Oh, and when they say “fake news,” that includes any reporting or opinion that contradicts their leftist narrative.

   

  Who gave the mainstream media the right to be judge, jury and executioner of what constitutes “fake news”?  All you do is put out fake news.  You’re the aficionado of fake news.  You put out the fake news that Hillary Clinton was 98% likely to win the presidency.  You printed out and shipped copies of Newsweek celebrating “Madam President.”  You put out fake, rigged polls that were proven spectacularly wrong.  You create fake narratives like Trump being responsible for violence at his own rallies when it was DNC-funded agitators all along.  You’re the fucking experts of fake news. 

   

  As WikiLeaks exposed, you’re a public relations front for the Democratic Party.  You lost the argument.  You trashed your own credibility.  And now you’re trying to resurrect it by claiming that everyone that beat you is “fake news”.  Give me a break.

   

  As a reminded, here is the full list of news outlets deemed “fake” by the snowflake of infinite wisdom, Melissa Zimdars: 

  

  

  

   

  Conveniently for the mainstream media, she ignored the following list of people who WikiLeaks exposed as having actually colluded with Hillary Clinton’s campaign over the course of two years.

  Here’s the actual list of fake news sites from @wikileaks. Melissa Zimdars, @mishmz, is a troll #MAGA #Trump pic.twitter.com/eLHSkXf5as

  — r/The_Donald (@alomikron) November 17, 2016

  

  

• Iowa Lawmaker Introduces "Suck It Up, Buttercup" Bill To Stop Student-Coddling At Universities

  Submitted by Joseph Jankowski via PlanetFreeWill.com,

  An Iowa lawmaker plans to put forth a bill that will target state universities that use taxpayer dollars to coddle students with sit-ins and grief counseling – such as “cry zones” – in order help them cope with events like President-elect Donald Trump’s victory over Hillary Clinton.

  

  Rep. Bobby Kaufmann plans to introduce the piece of legislation he’s calling the “Suck It Up, Buttercup Bill” when the legislature resumes in January.

  While issuing fines to those universities who want to pamper their students with child-like comfort, the bill would also establish new criminal charges for protesters who shut down highways, a circumstance that has risen out of the many anti-Trump protests that kicked off after the election.

  “I’ve seen four or five schools in other states that are establishing ‘cry zones’ where they’re staffed by state grief counselors and kids can come cry out their sensitivity to the election results,” said Iowa’s Bobby Kaufmann to the Des Moines Register. “I find this whole hysteria to be incredibly annoying. People have the right to be hysterical … on their own time.”

  Following the Donald Trump victory in the Nov. 8 election, schools such as Cornell and Yale went as far as setting up a “cry-in” and a “primal scream” so students could let out their grief and frustration over the results.

  Other elite universities offered students coloring books, puppies, play dough, Legos and bubbles to comfort students who felt distraught post-election.

  “That’s a waste of taxpayer dollars and that also doesn’t prepare kids for life. In life there’s winners and losers and when your car breaks down, your kids get sick or you have to take a second job to pay your mortgage, you don’t get to go to a cry zone, you don’t get to pet a pony. You have to deal with it,” Bobby Kaufmann told Fox and Friends on Wednesday.

  When addressing the anti-Trump protesters, who have organized and blocked highways in over a dozen cities nationwide, Kaufmann said, “You’ve got a right to protest, that’s constitutionally protected. But you do not have a right to throw a temper tantrum on I-80 and put my constituents’ lives in danger.”

  “That’s incredibly dangerous. What if someone had been trying to go to the hospital or was in an emergency and you had these spoiled brats blocking interstate 80?” he said.

  Iowa Rep. Phyllis Thede, (D) Bettendorf has called the legislation odd and says it’s a threat to free speech.

  “I don’t want to go after somebody because they’re fearful, upset or angry,” Thede said. “That’s not what legislatures do.”

  Thede believes they should be helping the protesters, not criminalizing their actions, but Kaufmann thinks the bill will gain support.

  “People say, ‘Suck it up, Buttercup, that’s kind of over the top,’ but so are the protests that are happening,” Kaufmann said.

  

  

• From Consequences To Compromise

  Do as I say, not as I do…

   

  

  Source: Townhall.com

  

  

• Jack Dorsey Exposed: How Twitter's CEO Restricted Advertising For Trump’s Campaign

  Submitted by Gary Coby, Director of Digital Advertising and Fundraising for Donald Trump, via Medium

  On Sunday, I tweeted…

  More specific, @twitter CEO @Jack Dorsey personally made call to restrict us; our advertising @blakehounshell @parscale https://t.co/NmvWwgc44X

  — Gary Coby (@GaryCoby) November 13, 2016

   

  We had an “upfront deal” with Twitter, which is a common setup where we commit to spending a certain amount on advertising and in exchange receive discounts, perks, and custom solutions.

  Our upfront deal was signed in August.

  Deal Highlights:

  • $5MM Spend Commitment

  • Discounts on Promoted Trends
  • Bonus Media on Other Spending
  • Value Adds, such as Custom Hashtag Emojis

  We also had several promoted trends reserved/purchased:

  • 7/21 RNC Day 4
  • 9/26 1st Debate
  • 10/9 2nd Debate
  • 11/5 Sun Before Election Day

  CUSTOM HASHTAG EMOJIS

  Twitter—or well, Dorsey—restricted us on the most unique part of our deal, the custom hashtag emojis, of which we had two.

  It’s an emoji tied to a specific hashtag. When anyone uses that hashtag, the emoji is automatically added at the end.

  We planned to launch both of our emojis for the first debate. One was a contrasting emoji for the popular #CrookedHillary. They were going to be featured in our promoted trend for maximum exposure.

  ROUND ONE — FIRST DEBATE

  At the beginning of September, I outlined several possible emoji concepts for the TW creative team to make.

  About 2 weeks before the 9/26 debate, the TW team provided several designs that were pre-approved by their legal and policy teams. One included was a hand receiving a moneybag:

  

   

  Next, I met with TW in NY, at Trump Tower, to tweak the already approved emoji designs. Pushing the envelope, the hand/moneybag emoji evolved into a running stick figure with a moneybag:

  

   

  The TW team thought this had a good chance of getting approved since all that changed was a hand to a stick figure.

  Sure, it was more aggressive and eye-catching, but that was the goal. I was fine with the hand/moneybag emoji, which was already approved, so I figured we might as well see if we can go further.

  Well, I was wrong.

  Day after day, TW wouldn’t give us an official yay/nay and my contacts inside TW told me the new design was causing a lot of heartburn and “big meetings” with folks at the top.

  Jack Dorsey was never named, just Adam Bain, TW COO.

  I wasn’t too worried because our plans could continue with the hand/moneybag emoji, even if they denied the more aggressive evolution.

  Then, finally, a couple days before the first presidential debate, TW reached out for a call with Dan Greene, VP of US Sales.

  CALL RUNDOWN:

  • Newly evolved running stick figure emoji was not approved.
  • Approval on the previously OK’d (hand/moneybag) emoji was pulled back and was no longer allowed to be used.
  • Twitter’s reason: We couldn’t accuse someone of committing a crime they did not commit or were not under investigation for. (Seriously, they said this.)
  • They claimed to fear litigation from HRC.
  • I told them we were trying to show she’s gotten wealthy from public office—they did not budge.
  • I asked, why we were able to use (still approved) emojis that showed emails being destroyed or phones being destroyed (which could also represent committing a crime)—they could not explain.
  • I asked, if the Clinton Foundation were being investigated for financial crimes, could we use it—they said no.
  • Dan apologized and admitted TW’s wrongdoing in pulling back an emoji that was previously approved.

  To me, this was clearly a BS reason that was made up to give them an out. I was also confidentially told from TW staff that the running stick figure emoji reached Adam Bain, COO, and he personally put a stop to it.

  Given that TW had pulled back a previously approved emoji and disrupted our strategy for the debate just days before, we cancelled our promoted trend (costing them hundreds of thousands of dollars).

  TRYING AGAIN in GOOD FAITH—SECOND DEBATE

  The next plan was to launch with the second presidential debate. TW, admitting wrongdoing for how they handled the first, extended a $50K discount (“make good”) so we would agree to keep our next trend and give this another shot.

  I took them at their word and proceeded. Foolish of me.

  ROUND 2 RUNDOWN:

  • Worked with TW team and our internal creative team to create a moneybag with wings emoji:

  

   

  • Knowing I needed to appease TW’s legal team, I sent it with an explanation to help fend off the HRC lawyers they feared.
  • Explanation: “The emoji represents govt waste and money flying away from taxpayers. Our internal polling has shown this to be a top issue for voters and it’d be inappropriate to restrict us from being able to discuss this important topic.”
  • Wednesday 10/5, we receive approval from their policy and legal team!

  

   

  • Thursday, 10/6, we have a call with their comms team to plan the rollout, including the list of media they’ll be leaking the story and emojis to.
  • Slated to launch at 3am ET on Saturday 10/8, with press teasers to go out on Friday 10/7, driven by their comms team.

  

   

  • Friday 10/7 PM, hours before launch, TW asks for a call, with Jack Dorsey, CEO, Adam Bain COO, and Dan Greene, VP US Sales.
  • My internal TW contacts informed me that on Thursday night, 10/6, TW CEO, Jack Dorsey, personally killed the emoji and notified his senior staff.
  • I asked if “There’s going to be another BS legal reason like last time” and they responded, “No, Jack just killed it, there isn’t one.” They were shocked that this was happening.
  • On the call, Jack and Adam started with a lovefest by telling us how great our use of the platform has been. They then told us a last-minute legal review was triggered and they needed to pull the emoji because there wasn’t a paid-for-by disclaimer. (Again. Seriously, they said this.)
  • However, both DNC and RNC conventions had custom emojis this cycle and they did not use disclaimers.

  

  • It’s also been reported that a top FEC official has said “the agency does not regulate emojis and that such transparency isn’t required on tweets.”
  • Jack and Adam apologized repeatedly and offered a new incentives package to keep our promoted trend that was just a day away.

  We told them it was BS and what they were doing with a public platform was incredibly reckless and dangerous. We voiced that it was clearly a political move and telling us otherwise was just insulting.

  Jack maintained their talking points and stayed on message. He also pushed back on it being one-sided, because they were “stopping this feature for ALL political campaigns.”

  But, the only other campaign large enough to have this type of deal would have been the Clinton campaign and my contacts inside TW informed me that they did not have one in place.

  So basically, “cancelling for all political campaigns” really meant cancelling ONLY for Donald J. Trump’s campaign.

  In return, I cancelled our 10/9 and 11/5 promoted trends. Further, I pulled all persuasion and lead gen spending, costing Twitter millions of dollars.

  

  

Digest powered by RSS Digest

• Welcome To The Brave New (Trumpolitical/Trumponomic) World

  Authord by Pepe Escobar, originally posted op-ed via Strategic-Culture.org,

  This does not mean that the Soros regime change racket and its multiple tentacles, in parallel to the Clinton machine-dominated DNC, will quit. Plan A – Maidan in the USA – is not exactly a winner among the masses. Thus Plan B – long-term harassment – was decided this past weekend at a summit in a Washington hotel.

  The endless snowflake whining – we lost the presidential election because of «rogue» FBI, WikiLeaks, the Russians, etc. – was predictable. Yet among the corrupt-to-the-core DNC it seems like no apparatchik has ever read Guy Debord’s Society of the Spectacle. Or is familiar with how showbiz – and talk radio – works.

  Paris is arguably the world capital of critical thinking. Perplexed Parisian intellectual circles at least have found out that the current pan-Western crisis is not only about economics, politics, finance, security and immigration; it’s about «political discourse» itself.

  The easy chic café diagnostic is that Trump’s victory is the symptom of language distorting reality by playing to emotions. It’s true that complex rational discourse does not deliver anymore. The masses don’t read 3,000-word essays; this is for the elites and self-described «experts». But they do respond to outrageous tweets. More than ever, perception is indeed reality.

  Thus the amalgam between Trump and the Front National (FN) in France, led by Marine Le Pen, also a master communicator capable of turning primary emotions into political reality. No wonder «white supremacist» Breitbart News – Trump’s informal Ministry of Information – will increase its exposure in France and support Le Pen.

  What the Paris debate gets right is that nationalist isolationism across the West – using amalgam and clever terminological shortcuts – has become a credible solution to «cure» national identity. Thus the appeal of ditching the EU, among countless Europeans, as a credible alternative against unemployment, as well as a means of increasing security. It’s a Trump Remixed syndrome; barbed wire (metaphorical and otherwise) as a possible choice for re-launching economic growth.

  With Trump’s victory being analyzed as the defeat of political discourse, or the victory of the controversial word, what the Paris debate gets totally wrong is promoting lofty exhortations to «reconcile oneself with complexity» as the only solution. The challenge is actually how to do nuance and complexity in only a few words at a time.

  Words, words, words

  What sophisticated intellectual analyses don't get is that Team Trump strategized a running reality show showcasing – what else – a brand. Dialogue was kept to a – tweet – minimum. Trump himself unveiled it; «These are just words». The Clinton (cash) machine fell into the trap and took these words literally. These were in fact metaphors – understandable by a fourth grader and delivered by a «man boy» impersonating a fourth grader,

  In his CBS interview this past Sunday, Trump admitted the obvious; he won because of the power of social networks, despite the Clinton cash machine spending «much more money than I did». Trump has over 28 million followers combined on Twitter, Facebook and Instagram. This supposedly «hidden minority» dribbled any poll modeling available. And outside the Beltway and Hollywood, they were everywhere.

  Trump perfected the art of simplified political discourse cutting off the middlemen – while reducing corporate/mainstream media, in the process, to no more than a pathetic footnote. The New York Times – «all the news that are irrelevant to print»? – has been a sorry show in itself, promising on the record to «report world news more accurately».

  It’s not that Trump, on the record, had not sent a warning; «I’m very highly educated. I know words. I have the best words». And he knows how to get maximum effect out of minimum (word) investment. Mega-investor Peter Thiel totally got it, telling the National Press Club in Washington how «the media is always taking Trump literally».

  Thiel stressed, shortly before the election, that «a lot of voters who vote for Trump take Trump seriously but not literally, so when they hear things like the Muslim comment or the wall comment, their question is not, ‘Are you going to build a wall like the Great Wall of China?’ or, you know, ‘How exactly are you going to enforce these tests?’ What they hear is we’re going to have a saner, more sensible immigration policy».

  So what if Trump was killing syntax via his loud and inarticulate outbursts? The meaning was always clear. The pile up of exploding rhetorical devices was always targeted at tapping into raw emotion. Thus the avalanche of «us and them»; «yuuuuge» superlatives («amazing», «tremendous potential», «wonderful»); all kinds of hyperbole; non-stop repetition; calculated stutter enhancing his trademark «improvised» delivery; and a sea of euphemisms («grabbing women by the pussy?» Nah; just plain old «locker room talk»).

  Snowflakes meanwhile were endlessly re-comforted by their standard interpretation of Trump as a con artist invented by mass media who first excelled on reality TV and then turned politics into a circus. They did not see him capitalizing on his monster advertising dollars/ratings pulling power; they did not see that the more (hated) corporate media attacked him, the better he looked for the «invisible minority»; and they did not see how the Trumpian brand of «magic realism» played all kinds of tricks with «reality».

  Social Darwinism run amok

  Zygmunt Bauman, the foremost conceptualizer of liquid modernity – and a huge influence in my 2007 book Globalistan – correctly observed how Trump has offered a unique, once in a lifetime occasion for a condemnation, without appeal, of the whole political system.

  Bauman’s on to something when he notes how traditional mechanisms such as the Montesquieu-style division of power between Executive, Legislative and Judiciary, as well as the Anglo-Saxon checks and balances, may be increasingly deprived of meaning to the benefit of an agglutination of power in authoritarian mode.

  Bauman perfectly understood how Trump married identity politics to economic angst – condensing all aspects of the existential angst consuming what’s left of the working class and the middle class. Thus the success of the lightning fast solution – the expulsion of the ethnically diverse.

  The US electorate that bothered to vote – very important; 43 percent did not – may have bought, according to Bauman, a strongman not as poison but as antidote; a «doer» capable of deploying instantaneous solutions with immediate effects. If and how he will be able to deliver is another story.

  What’s certain is that the seesaw across the West between conservatives and social democracy is not a see saw anymore. When in power, everyone was just reproducing slight variations of neoliberalism.

  Yet as we have now seen, liberalism has been dealt a serious body blow – even as the so-called progressive Left has utterly failed to «sell» to the masses a serious, history-based critique of neoliberalism.

  Meanwhile, civil war – national and global – is now raw, everywhere; social Darwinism run amok. We have an Atlanticist Wall – from Brexit to the Rio Grande – in the process of being erected against the Global South. We have the Declining White Man against minorities that in many cases have become majorities. We have Western elites pitted against «Islam» – an absurdity, because the real enemy is Salafi-jihadism, a derivation of Wahhabism. And ultimately, we have The Ultimate Predator – Man – relentlessly decimating Nature.

  In a Gramsci sense, the old order has completely collapsed, but the new order has not yet been born. It might be a new order based on the BRICS – mostly Russia, India and China. The progressive Left must find the conceptual road map to be part of it – and influence it.

  Meanwhile, we will be living among the myriad debris originated by the Trumpolitics IED. America invented the politically correct. Trump bombed politically correct. America is proud of corporate media. Trump bombed corporate media. These are already two important victories.

  Trump launched an IPO over the White House. Now he’s the CEO. If – and that’s a mighty if – he manages to run it like a sound business, that’s bound to be a good deal not only for the US but to the whole planet.

  

  

• Constitutional Law Experts Confirm Trump's "Muslim Registry" Not Illegal

  Despite post-election threats that if the president-elect attempts "to implement his unconstitutional campaign promises, we’ll see him in court," Politico reports that three constitutional lawyers say the ACLU won’t have much of a shot before a judge. The Supreme Court has "consistently reaffirmed the power of the president to control the entry and exit from the country as a matter of national security," giving Trump’s administration a decided advantage in any litigation.

  A week after the ACLU tweeted…

  Should President-elect Donald Trump attempt to implement his unconstitutional campaign promises, we'll see him in court.

  — ACLU National (@ACLU) November 9, 2016

  Reuters reports that the president-elect’s team is considering an immigration system modeled after a controversial one implemented in the months after the Sept. 11, 2001, terrorist attacks. It fulfills Trump’s promise of “extreme vetting” for immigrants from countries affected by terrorism, a threshold he has yet to flesh out more fully. As Politico notes,

  That program, labeled the National Security Entry-Exit Registration System, required those entering the U.S. from a list of certain countries — all but one predominantly Muslim — to register when they arrived in the U.S., undergo more thorough interrogation and be fingerprinted. The system, referred to by the acronym NSEERS, was criticized by civil rights groups for targeting a religious group and was phased out in 2011 because it was found to be redundant with other immigration systems.

   

  Robert McCaw, director of government affairs for the Council on American-Islamic Relations, said a reinstitution of NSEERS would be akin to “just turning back the clock.” CAIR will lobby heavily against the system as not only discriminatory but also ineffective, McCaw said, if it ends up being proposed by the Trump administration.

   

  He also accused Kobach, an architect of the original NSEERS program when he was with the Justice Department under the George W. Bush administration, of having “a long ax to grind with the Muslim community.”

   

  “NSEERS and registries like it are totally ineffective and burdensome and they’re perceived by Muslims and other minorities as just being a massive profiling campaign that, in the past, targeted Muslim travelers solely based on their religion and ethnicity,” he said. “When every country on that list happens to be a majority-Muslim country, it is religious profiling. Because there are threats from other nations and other communities and groups that don’t make it on NSEERS.”

  But, as Politico concludes, a program like NSEERS would likely pass constitutional muster before a judge, multiple experts said, in part because it already has. The system was never struck down by a court in the nearly nine years it was in place.

  Jonathan Turley, a law professor at George Washington University, said Wednesday that “a president’s power is at its apex at the nation’s borders” and that the Supreme Court has “consistently reaffirmed the power of the president to control the entry and exit from the country as a matter of national security.” Such precedent, he said would give Trump’s administration a decided advantage in any litigation.

   

  University of Virginia international law professor emeritus David Martin said the NSEERS program is constitutionally sound but fraught with issues as a matter of policy. He said even when it was in effect, NSEERS was “more and more seen as potentially counterproductive” as the Sept. 11 attacks receded in America’s rear-view mirror and the government developed “more of an appreciation that doing certain things that singled out Muslims and were seen as discriminatory were strategically unsound.”

  But  the cries of discrimination that have already begun from organizations like CAIR and others carry tremendous moral and political weight.

  “It’s kind of an American tradition to claim that things you disagree with are unconstitutional, and sometimes are out of keeping with the spirit of constitutional values, even if ultimately a court might uphold them,” Martin said. “So, I think it’s quite legitimate to argue on the basis of constitutional values even if you don’t absolutely have a Supreme Court precedent that clearly establishes your point.”

  President-Elect Trump's immigration group had also discussed ways of overturning President Barack Obama's 2012 executive action that has granted temporary deportation relief and work permits to more than 700,000 undocumented people or "dreamers" who came to the United States as children of illegal immigrants.

  

  

• "Are You Still Crying Wolf?"

  Submitted by Mike Krieger via Liberty Blitzkrieg blog,

  Scott Alexander has just penned what is perhaps the most brilliant, and important, post-election article I have read. It’s titled, You Are Still Crying Wolf, and here are the first few paragraphs:

  [Content warning: hate crimes, Trump, racism. I have turned off comments to keep out bad people who might be attracted by this sort of thing. Avoid sharing in places where this will attract the wrong kind of attention, as per your best judgment. Please don’t interpret anything in this article to mean that Trump is not super terrible]

   

  [Epistemic status: A reduction of a complicated issue to only 8000 words, because nobody would read it if it were longer. I think this is true but incomplete. I will try to discuss missing parts at more length later.]

   

  I. A New York Times article from last September that went viral only recently: Crying Wolf, Then Confronting Trump. It asks whether Democrats have “cried wolf” so many times that nobody believes them anymore. And so:

   

  When “honorable and decent men” like McCain and Romney “are reflexively dubbed racists simply for opposing Democratic policies, the result is a G.O.P. electorate that doesn’t listen to admonitions when the genuine article is in their midst”.

   

  I have a different perspective. Back in October 2015, I wrote that the picture of Trump as “the white power candidate” and “the first openly white supremacist candidate to have a shot at the Presidency in the modern era” was overblown. I said that “the media narrative that Trump is doing some kind of special appeal-to-white-voters voodoo is unsupported by any polling data”, and predicted that:

   

  If Trump were the Republican nominee, he could probably count on equal or greater support from minorities as Romney or McCain before him.

   

  Now the votes are in, and Trump got greater support from minorities than Romney or McCain before him. You can read the Washington Post article, Trump Got More Votes From People Of Color Than Romney Did, or look at the raw data (source).

   

  

   

  Trump made gains among blacks. He made big among Latinos. He made gains among Asians. The only major racial group where he didn’t get a gain of greater than 5% was white people. I want to repeat that: the group where Trump’s message resonated least over what we would predict from a generic Republican was the white population.

   

  Nor was there some surge in white turnout. I don’t think we have official numbers yet, but by eyeballing what data we have it looks very much like whites turned out in equal or lesser numbers this year than in 2012, 2008, and so on.

   

  [EDIT: though see here for an alternate perspective]

   

  The media responded to all of this freely available data with articles like White Flight From Reality: Inside The Racist Panic That Fueled Donald Trump’s Victory and Make No Mistake: Donald Trump’s Win Represents A Racist “Whitelash”.

   

  I stick to my thesis from October 2015. There is no evidence that Donald Trump is more racist than any past Republican candidate (or any other 70 year old white guy, for that matter). All this stuff about how he’s “the candidate of the KKK” and “the vanguard of a new white supremacist movement” is made up. It’s a catastrophic distraction from the dozens of other undeniable problems with Trump that could have convinced voters to abandon him. That it came to dominate the election cycle should be considered a horrifying indictment of our political discourse, in the same way that it would be a horrifying indictment of our political discourse if the entire Republican campaign had been based around the theory that Hillary Clinton was a secret Satanist. Yes, calling Romney a racist was crying wolf. But you are still crying wolf.

   

  I avoided pushing this point any more since last October because I didn’t want to look like I was supporting Trump, or accidentally convince anyone else to support Trump. But since we’re past the point where that matters anymore, I want to present my case.

  I realize that all of this is going to make me sound like a crazy person and put me completely at odds with every respectable thinker in the media, but luckily, being a crazy person at odds with every respectable thinker in the media has been a pretty good ticket to predictive accuracy lately, so whatever.

  That’s just the tip of the iceberg from a spectacular piece of writing. It’s lengthy, but don’t let that scare you away. If you don’t have the time, make the time. Then share it with all your friends who are obsessed about how Trump signifies that white nationalism is ascendant, while at the same time failing to consider many of the more acute and realistic risks that a man like Trump represents. Here is the link, once again: You Are Still Crying Wolf.

  Observing Trump primarily through the largely media/Democratic Party lens of extreme bigotry is not only wrong, it is very dangerous. Not because I’m a Trump supporter (I didn’t support Trump or Clinton), but because the public resistance to him will then focus its energy around this one-dimensional notion that the main battle is to fight back against the white supremacist who has taken over the White House. This “crying wolf” takes everybody’s eye off the ball, divides the citizenry based on what is largely a false narrative, and it subdues and confuses the needed resistance to Trump on other, but less emotionally powerful, matters of public importance. It’s sort of like how the media and politicians successfully fear-mongered the public into sacrificing their civil liberties after 9/11, despite the fact that being killed by a terrorist is extraordinarily unlikely.

  As I’ve been saying for years, if we really want to make progress, we need to find those issues that unite us as Americans, and fight together to achieve them. If we allow ourselves to be divided and conquered on the basis of identity politics, or anything else, we are truly doomed.

  Finally, let’s take a break from saying “Trump is literally Hitler” and recognize the following.

   

  But I thought Trump's win proved Americans are closet white nationalists. https://t.co/8mshUmBjaP

  — Michael Krieger (@LibertyBlitz) November 17, 2016

   

  

  

  

• Hillary "Attack Dog" David Brock Plotting With Soros, Steyer, Sussman To "Kick Trump's Ass"

  The last time we encountered David Brock, Hillary Clinton’s so called media “attack dog”, was two months ago when we exposed a money laundering scheme involving over a dozen of his Pro-Clinton SuperPACs. Now, it appears that unable to concede defeat, the man who aligned his career with Hillary Clinton, is going for blood, and is soliciting the help, but mostly money, of Clinton’s top donors.

  According to Politico, Brock is launching his own Koch-brothers-like donor network to finance attacks on President-elect Donald Trump and to rebuild the political left after Trump’s stunning victory over Clinton last week. In an email sent out on Thursday night, Brock emailed more than 200 of the biggest donors on the left, including finance titans George Soros, Tom Steyer and Donald Sussman all of whom invested millions of dollars in Clinton’s campaign with nothing to show for it, inviting them to a private retreat in Palm Beach during inauguration weekend to assess what Democrats did wrong in 2016, figure out how to correct it and raise cash for those initiatives.

  

  “This will be THE gathering for Democratic donors from across the country to hear from a broad and diverse group of leaders about the next steps for progressives under a Trump Administration,” Brock wrote to the donors in an email.  “What better way to spend inaugural weekend than talking about how to kick Donald Trump’s ass?” Brock said.

  The retreat, which is planned as the first in a series of regular gatherings, will feature appearances by an array of Democratic elected officials, operatives and liberal thinkers and group officials, Brock explained in an interview.

  While it is unclear how many of the addressed billionaires confirmed their presence at this “secret” gathering, Brock predicted there would be significant interest, noting that the keynote address at his last major donor conference, back in 2013, was delivered by former President Bill Clinton. It is unclear how much Clinton received for one hours of his time.

  Brock is a self-described “right-wing hitman-turned-Clinton enforcer” who has used his relationships with some of the left’s wealthiet supporters and billionaire donors to build an armada of aggressive political outfits that have become pillars of the institutional left and that raised a combined $65 million during the 2016 cycle. As profiled previously, Brock’s groups include the conservative media monitoring non-profit Media Matters, the opposition research super PAC American Bridge and the legal watchdog Citizens for Responsibility and Ethics in Washington.

  That’s not all: other groups in his network include the liberal media-funding vehicle American Independent Institute, the media-training non-profit Franklin Forum and the for-profit social media operation ShareBlue, which The New York Times described as “Hillary Clinton’s Outrage Machine.” A seventh group, a super PAC called Correct the Record that was created to coordinate directly with Clinton’s campaign, is winding down, though Brock said that a number of its functions and personnel likely will be absorbed by his other groups.

  And yet one wonders if Brock’s attempt to square things up with Trump isn’t too little, too late, especially for a many who like Huma Abedin, has been so closely associated with Hillary and her now defunct political career: Brock acknowledged in the interview: “There is no question that we poured our heart and soul into this election for Hillary, but these institutions were built before her campaign and were intended to outlast it.”

  To separate himself from the Clintons whom he server so well over the years, Brock said in his email to donors that he created Media Matters more than a decade ago to help the left push back during George W. Bush’s presidency.

  “In 2005, we were part of a successful progressive effort to regroup, retool and recover,” he wrote. “While today’s situation is more dire, media matters more than ever.”

  But the biggest problem for Brock is that he is likely stepping on the very toes of those whose money he is after: as Politico notes, the Palm Beach retreat seems to be a challenge to the 12-year-old Democracy Alliance, a club of liberal financiers that was started by Soros and a handful of other major donors to fund the institutional left. In fact, the club, which held its annual winter meeting this week in Washington, helped launch Media Matters, and many of Brock’s donors belong to its ranks. Brock said he’s inviting the president of the DA, as the club is known, to his Palm Beach retreat.

  There is one way Brock’s network hopes to differentiate itself: while the Democracy Alliance at its winter meeting discussed ways to push back on the Trump administration, many of the group’s members have tried to train its focus on pressuring Democrats from the left on issues like fighting climate change, money in politics and drug laws; Brock however is more overtly and aggressively political, and has been “largely agnostic on the philosophical divisions with which Democrats are grappling.”

  “We don’t think of this as representing a faction of the Democratic Party, but a cross-section of it, so we’re not going to precook things ideologically,” he said. “It is very politically minded, and there is an urgency to it.”

  At this point two questions emerge: one of the main reasons why Clinton lost is precisely due to behind the scenes scheming such as this, where political “attack dog” operatives would meet with billionaires and strategize how to shift public perception on any number of items. That has now been proven to be a losing strategy. Have the democrats truly not learned anything from their most shocking failure in history?

  The next question is just how much more “overtly and aggressively political” will Brock, whose organizations have been alleged to be behind a number of the anti-Trump riots in recent months, be in his quest to take down, or rather “kick the ass” of Donald Trump. Because if there is one thing that is so far missing from the most scandalous political election in recent history, it is an attempt to physically eliminate the president. We can only hope that the “hitman-turned-Clinton enforcer” will not decide to go that far.

  

  

• Great News On Trump Appointments

  Flynn for the Win!

  Preface:  I’ve slammed Trump when I thought he might appoint bad guys.  But there’s now cause for celebration.

  Trump has purportedly offered General Michael Flynn a post as National Security Advisor.

  This is GREAT news …

  Flynn  – a 3-star general – is former head of the Defense Intelligence Agency and director of Intelligence for the Joint Special Operations Command.

  Why do we like Flynn?

  Because he:

  • Said "What we have is this continued investment in conflict. The more weapons we give, the more bombs we drop, that just… fuels the conflict. Some of that has to be done but I am looking for the other solutions"

  • Said "We definitely put fuel on a fire [by going into Iraq]. Absolutely… there is no doubt, history will not be kind to the decisions that were made certainly in 2003. Going into Iraq, definitely… it was a strategic mistake."

  • He has called for greater accountability for US soldiers involved in abuses against Iraqi detainees: "You know I hope that as more and more information comes out that people are held accountable… History is not going to look kind on those actions… and we will be held, we should be held, accountable for many, many years to come."

  • Admitted that drone assassinations create more damage than good . He didn't disagree with a reporter's suggestion that drones tend to create more terrorists than they kill

  • Blew the whistle on the U.S. complicity of “the West, Gulf countries and Turkey” in the rise of ISIS

  • Has fought for prioritizing fighting radical Muslim jihadis above stirring up a war with Russia

  I am hopeful that Flynn will help overturn decades of Neocon and Neoliberal warmongering…

  What Liberals Should Like About Steve Bannon, Trump’s Chief Stategist

  I’d never heard of Steve Bannon until Trump named him as chief strategist and senior counselor.

  I soon learned that Bannon is executive chairman of Breitbart, which the media labels an “alt right” news source (I’ve only read a few articles on Breitbart, when linked from other websites).

  I’ve also heard a lot of accusations that Bannon is a racist, sexist and homophobe. If true, that’s despicable.

  Indeed, Democrats are so upset by Trump’s naming of Bannon that the Senate Minority Leader (Harry Reid) has demanded that Trump rescind Bannon’s appointment.

  But there’s one reason that liberals should applaud Bannon’s appointment. The Fiscal Times explains:

  On Tuesday, BuzzFeed News released a transcript of remarks Bannon delivered to the Christian conservative Human Dignity Institute in 2014. In a lengthy discourse on the causes and aftereffects of the 2008 financial crisis Bannon, himself a former managing partner at Goldman Sachs, blamed the financial crisis and subsequent recession on the “greed” of his fellow bankers and expressed anger at the fact that no bank executives faced criminal prosecution.

   

  “Think about it — not one criminal charge has ever been brought to any bank executive associated with 2008 crisis,” Bannon said. “And in fact, it gets worse. No bonuses and none of their equity was taken. So part of the prime drivers of the wealth that they took in the 15 years leading up to the crisis was not hit at all, and I think that’s one of the fuels of this populist revolt that we’re seeing as the tea party.”

   

  He continued, “[T]he underpinning of this populist revolt is the financial crisis of 2008. That revolt, the way that it was dealt with, the way that the people who ran the banks and ran the hedge funds have never really been held accountable for what they did, has fueled much of the anger in the tea party movement in the United States.”

   

  Some of Bannon’s remarks sound as though they could have come not from the close aide to an incoming Republican president, but rather from liberals like Vermont Sen. Bernie Sanders or populist Massachusetts Sen. Elizabeth Warren. Among other things, he discussed what he sees as the need to limit the activities that financial institutions are allowed to engage in, such as forcing commercial banks to focus on lending, and blocking investment banks from trading in securities.

  Bannon criticized steps taken at the outset of the financial crisis to prevent widespread failures in the financial services industry, arguing that the burden of paying for the bailout was on taxpayers while the benefits flowed to “crony capitalists.”

   

  ***

   

  Here’s how capitalism metastasized, is that all the burdens put on the working-class people who get none of the upside. All of the upside goes to the crony capitalists.

   

  “The bailouts were absolutely outrageous, and here’s why: It bailed out a group of shareholders and executives who were specifically accountable. The shareholders were accountable for one simple reason: They allowed this to go wrong without changing management … And we know this now from congressional investigations, we know it from independent investigations, this is not some secret conspiracy. This is kind of in plain sight.”

   

  Bannon described an alliance of law firms, accounting firms and other influential players in Washington who collectively pressured politicians and prosecutors to look the other way as, in his telling, the same people who caused the crisis in the first place benefited lavishly from the efforts to repair the damage they had done.

  But it was his promise — made nearly a year before Trump declared his candidacy and almost two years before Bannon became CEO of his campaign — that will likely cause the most concern in Wall Street boardrooms.

   

  “And they’ve never been held accountable today,” Bannon said. “Trust me — they are going to be held accountable.”

  Bannon’s statements mirror what top liberal  economists (and top economists from across the political spectrum) have repeatedly said.

  For example:

  Prosecuting Fraud

  • Another Nobel Economist Says We Have to Prosecute Fraud Or Else the Economy Won’t Recover
  • Top Bank Fraud Expert: ALL of the Big Banks’ Profits Come from FRAUD
  • Settling Prosecutions For Pennies on the Dollar Is a Type of Bailout
  • Real Free Market Capitalists Demand that Financial Fraud Be Prosecuted
  • The Government Has It Bass-Ackwards: Failing To Prosecute Criminal Fraud by the Big Banks Is Killing – NOT Saving – the Economy
  • 30,000 Criminal Referrals Led to 1,000+ Felony Convictions In Major Fraud Cases During the S&L Crisis … Not Even a SINGLE Prosecution Today, Even Though the 2008 Crisis Was 70 Times Bigger

  Greed

  • 6 Years After the Financial Crisis Hit, The Big Banks Are Still Committing Massive Crimes
  • Is Greed “Good” … The “Root of All Evil” … Or Something Else?

  Disgorging Ill-Gotten Gains

  • Top Fraud Prosecutor: The Criminals Can Be Forced to Disgorge their Ill-Gotten Gains INCLUDING Bonuses

  Popular Anger

  • The Occupy Movement Is Protesting the SAME THING that the Founding Fathers Protested at the Boston Tea Party

  Banks Should Be Limited to Banking

  • Wall Street Angry that Trump Says Restore Glass-Steagall
  • “Too Big To Fails” Have Stopped Being Banks
  • Volcker: Financial Innovation is Worthless, and Banks Should Be Limited to Traditional Depository Functions
  • Former Chairman of Citigroup: Restore Glass-Steagall

  Bailouts

  • The Federal Reserve Is Bailing Out FOREIGN Banks … More than the American People or Economy
  • The Government Lied When It Said It Only Bailed Out Healthy Banks … 12 of the 13 Big Banks Were Going Bust
  • BIS Warns that Bailouts Could Damage Financial System
  • IMF Warns of Revolution if Another Round of Bailouts Is Handed Out
  • Top Economists: Iceland Did It Right … And Everyone Else Is Doing It Wrong

  Crony Capitalism

  • Fed President: Too Big Banks Are Just Crony Capitalists
  • Protesters Worldwide Demand An End to Crony Capitalism
  • Capitalism, Socialism or Fascism?
  • What’s the Difference Between Fascism, Communism and Crony-Capitalism? Nothing

  Benefiting from Wrongdoing

  • It’s Not the “Great Recession”. It’s the Great BANK ROBBERY
  • Psychopaths Caused the Financial Crisis … And They Will Do It Again and Again Unless They Are Removed From Power

  So whatever you think of Bannon on a personal level, he could – if his statements reflect his real beliefs, and if he champions them in the Trump White House – help fix our broken financial system …

  

• Rutgers "Beyoncé Professor" Loses It Over Trump Victory; Sent To Bellevue For Psych Evaluation

  Up until November 8th, Kevin Allred was just another run-of-the-mill “Professor of Beyoncé” at Rutgers University.  But that all changed when Trump won the Presidency and Allred decided to live-tweet his nervous breakdown.

  It all started with the following tweet in which Allred threatened to “shoot at random white people.”

  

   

  Apparently, the administrators at Rutgers were not all that amused by the threat and sent the police to Allred’s house setting off the following glorious tweet storm.

  

   

  And, of course, the tweet storm continues on today as Allred attempts to paint himself as the victim rather than the perpetrator who threatened the lives of 1,000 innocent, white snowflakes at Rutgers.

  i said: would conservatives care as much abt the 2nd amendment if guns killed more white people? a question meant to expose double standard

  — Kevin Allred (@KevinAllred) November 16, 2016

  quick note to all you fancy folks thinking you’re gonna get me fired: i’m an adjunct lecturer – NOT a tenured professor like you think.

  — Kevin Allred (@KevinAllred) November 17, 2016

  AN EXPERIMENT: what if i start “liking” every racist/white nationalist/Trump supporter tweet sent to me? do you think they’d feel validated?

  — Kevin Allred (@KevinAllred) November 17, 2016

  CAN YOU EVEN IMAGINE WHAT A PSYCHOLOGICAL EVALUATION OF DONALD TRUMP WOULD SHOW??????? LIKE…CAN YOU?????

  — Kevin Allred (@KevinAllred) November 17, 2016

  was donald trump forced to submit to a psych eval when he told 2nd amendment supporters to go take Hillary Clinton into their own hands?

  — Kevin Allred (@KevinAllred) November 17, 2016

   

  But, as is true with most things, we suspect Allred has other motivations behind extending his new-found fame…perhaps it has something to do with his desire to publish his “Politicizing Beyonce” book?

  I JUST WANT TO GET THIS #POLITICIZINGBEYONCÉ BOOK PUBLISHED!!! ???????????????????????? pic.twitter.com/2AHJL4i1fy

  — Kevin Allred (@KevinAllred) August 15, 2016

  

  

  

• Raoul Pal Warns "Trump Will See A Recession In 2017"

  Authored by Raoul Pal via The Global Macro Investor,

  US Presidential Elections and Recessions

  As you know, I follow the business cycle, which describes the ebb and flow of the economy from boom to bust that drives asset prices and thus our investment choices.

  Linear models in a cyclical world

  Most economic models don’t use the business cycle even though it clearly exists, which strongly suggests that economic linear models are wrong, yet economists sadly persist in this flawed linear analysis. This lack of acknowledgement of the business cycle is why so many economists are almost always wrong in their forecasts. Steady state analysis is proven time and time again to be junk.

  Austrian economists (and a few others) do however accept the business cycle as given but they endlessly debate what causes this ebb and flow in the economy. In general, most opt for the credit cycle as the explanation without thought as to what creates the credit cycle and thus they fall into the economic model trap again.

  The practical world

  I live in the world of practical economics – where the investment rubber meets the economic road – so I ponder less about the detailed why and try to instead look at the when in terms of timing of the booms and busts.

  Recession and Elections

  I recently noted that since 1910, the US economy is either in recession or enters a recession within twelve months in every single instance at the end of a two-term presidency… effecting a 100% chance of recession for the new President.

  No recession without an election

  I then spent some time looking at US recessions in general, and found that every single one occurred during, or just after, an election, without exception.

  Not every single election sees a recession, only every two-term incumbent change. Some two-term Presidents saw recessions at their first-term re-elections too (Wilson and Eisenhower).

  The following chart shows every NBER recession since 1910 (in yellow) with the new President after a two-term election marked in white and the new Presidents after a single-term presidency in red. Wilson and Eisenhower appear as both. Only Coolidge saw more than a year (sixteen months) from his second-term election and the onset of the subsequent recession at the end of WWI…

  

  click image to enlarge

  Just to be 100% clear, the coloured vertical lines show the election date. Every President’s name written in white followed a two-term presidency. They each suffer recessions early in their presidency. And those names in red also suffered immediate recessions but after a single-term change of presidency. No recession except that of 1979 (clarified below) is not explained by its proximity to an election.

  Some observers might suggest that the correlation between recession dates and election dates is spurious but I simply refuse to believe that based on the chart above. It is not a coincidence.

  Why some new governments, after a change of a single-term presidency, don’t see an immediate recession remains a mystery, but those instances are few: Clinton, Carter and Johnson. Of these only Johnson and Clinton did not see a recession at all. Carter got his recession at the end of his presidency, but don’t forget Ford was not voted in so no election cycle occurred.

  In the last 100 years, the recession of 1979 is the only recession not to occur around an election date (again, Carter came into office after Ford who did not undergo the election cycle).

  Just mull that over…

  Every single US recession bar one (with explainable circumstances) occurred around an election. Only two Presidents in history did not see a recession and they were inaugurated after single-term Presidents.

  There are a few other things to note from this analysis:

  Politics creates recessions

   

  Firstly, it is the political cycle that is the key driver of recessions – governmental cycles in one way or another are an essential component. I am really not yet sure of the reason why two-term presidential cycles are so spectacularly consistent in provoking recessions but I do know that election dates are super helpful for predicting recessions and thus asset prices. The investment game is all about odds, and odds of 100% – even from a small data sample – are incredibly useful. Sure, it might not remain 100% forever but the probability is still going to be extremely high and that’s all we need to make successful forecasts and investments.

   

  [If you are not yet familiar with the relationship between the business cycle and asset prices, I’d suggest watching the video on the subject that I produced for Real Vision Television.]

   

   

  Politicians care about themselves

   

  Secondly, it makes you question whether the governmental system in general has politicians’ best interests at heart, or that of the country. It is difficult to believe it is primarily the country’s economic wellbeing that the politicians care about when this cycle is so evident.

   

  Trump will see a recession in 2017

   

  Finally, bearing in mind the above, we have to acknowledge that there is an extremely high chance of a recession within the coming year with the imminent change of government in the US after a two-term presidency. History would suggest that the odds are 100%.

  Should you really be betting on growth and inflation for 2017?

  I very much doubt it.

  I think that the current euphoria for equities and hatred for bonds is going to be exactly the wrong trade for 2017.

  

  

• "Violent Rotations" – Record Equity ETF Inflows, Record EM Debt Outflows… And It's Just Beginning

  Over the weekend, we reported that as a result of the Trump victory, the market underwent some truly staggering asset rotations and fund flows, leading to trillions in gains (for equities) and losses (for credit). Today, after the latest Lipper and EPFR fund flow data, we can say that the unprecedented fund flows have continued with numerous records being made out across the board.

  According to Lipper data, in the week ended November 16, investors flooded $23.6 billion in new cash on U.S.-based stock funds over the latest week, the most in nearly two years and the third-largest haul for those funds on record. This number consisted of a record $27 billion inflow into equity ETFs, suggesting that even during moments of peak euphoria, active managers are unable to get funding: US-based equity mutual funds posted yet another $3.4 billion in outflows in the past week.

  Meanwhile, as expected, US-based taxable bond funds saw substantial outflows, amounting to $5.9 billion in the 3rd straight week of outflows between mutual funds and ETFs. And don’t even bring up Emerging Market bonds: those just saw record outflows.

  This means that after years of predictions of a Great Rotation from stocks to bonds, it finally took place… but if you blinked too long, you missed it.  Indeed, as The Long View twitter account puts it, “the democratization of investing has risks. Hot money creates skew as bigger crowds rush through illiquid exits en masse.” Well, this week they were rushing out of anything rates related and flooding into equity linked products.

  For a different perspective, this time through the eyes of EPFR, we go to Bank of America’s Michael Hartnett who summarizes that week’s events with two words: “Violent rotation”, and goes on to list why:

  Record inflows to equity ETFs, record inflows to financial sector funds, biggest bond redemptions in 3½ years, record redemptions from EM debt.

  “Great Rotation” flows: largest equity inflows in 2 years ($28bn), biggest bond outflows in 3½ years ($18bn); widest weekly disparity between stock & bond flows ever.

  Trading a secular inflection point: if BREXIT marked 5,000 year low in global interest rates, Trump marked moment investors started to position for bond bear market; note yields can rise quickly…price action always violently big at secular inflection points as overshoots corrected quickly (e.g. Jul’80-Oct’81 US bond yields surged from 10% in 16%; by Oct’82 yields back at 10%).

  Bond vs Equity flows: past decade $1.5tn inflows to global bond funds vs $0 for global equity funds (Chart 4); mutual fund flows (excluding ETFs) show extreme divergence of $1.1tn bond inflows vs $1.3tn equity outflows (Chart 5).

  

  

  Bond bloodbath: this week largest EM debt redemptions on record (Chart 2); largest muni bond outflows in 3½ years; largest Treasury outflows in 12 months. Dollar pain trades: surge in DXY>100 causes largest precious metals outflows in 3½ years & largest EM equity outflows in 14 months.

  

  Inflation rotation: record financials inflows (monster $7.2bn – Chart 1); largest materials inflows in three years; 23rd week of TIPS inflows ($0.8bn); inflows to bank loan funds 18 of past 20 weeks.
  

  Passive smashing active: note astounding contrast this week between record inflow to equity ETFs ($34bn) & 37th straight week of equity mutual fund outflows; since 2002, $2.1tn inflows to “passive” funds vs $1.8tn outflows from “active” funds (Chart 3).

  

  Violence vs peace: what could temporarily arrest Nov stampede out of bonds…weak data…1st post-Trump data was strong weekly initial unemployment claims & poor weekly mortgage applications… numbers next week represent 1st “clean” post-election  data…mortgage apps more imp for us…2nd consecutive weak mortgage applications reading (30-year mortgage rates up 40bps to 3.94% since  election) needed to calm bond markets (data released 23rd).

  Some more details on what has been a truly historic week:

  Asset Class Flows

  • Equities: largest inflows in 2 years ($27.5bn) ($34bn inflows to ETFs offset by $7bn outflows from mutual funds)
  • Bonds: largest outflows since Jun’13 ($18.1bn)
  • Precious metals: largest outflows since Jun’13 ($2.7bn)

  Fixed Income Flows:

  • Record outflows from EM debt funds ($6.6bn)
  • Largest outflows from muni bond funds since Jun’13 ($3.0bn)
  • Largest outflows from Govt/Tsy funds in 12 months ($3.4bn)
  • Chunky $3.8bn outflows from HY bond funds (3 straight weeks)
  • $2.4bn outflows from IG bond funds
  • 23 straight weeks of TIPS inflows ($0.8bn)
  • Inflows to bank loan funds in 18 of past 20 weeks ($0.6bn)

  Equity Flows 

  • EM: largest weekly outflows in 14 months ($5.4bn)
  • US: largest weekly inflows in 2 years ($30.7bn)
  • Europe: rare $0.8bn inflows (largest in 9 months)
  • Japan: $1.0bn outflows (outflows in 3 of past 4 weeks)
  • By sector: monster inflows to financials ($7.2bn) & healthcare ($3.1bn); largest materials inflows in 3 years ($1.4bn); 7 straight weeks of consumer outflows ($0.8bn)

  * * *

  And keep in mind this is just one week after the election results: the flow party is just getting started.

  Traditionally, during such times of violent rotations, numerous hedge funds don’t survive simply because they get caught up in the margin calls, are unable to sell at modeled prices and fail to reposition fast enough. We should know the names of the first casualties within days.

  

  

• "Triggered" Lena Dunham Checks Into Posh Arizona Resort For "Vision Quest"

  Last week we noted an article written by Lena Dunham for the feminist blog Lenny Letter, entitled “Don’t Agonize, Organize,” in which Dunham chronicled her complete devastation on election night after she realized that “something had gone horribly wrong”. 

  The three hours I spent at the Javits Center Tuesday night, surrounded by campaign staffers and fellow surrogates for Hillary Clinton, are blurred and spotty. At a certain point it became clear something had gone horribly wrong. Celebrants’ faces turned. The modeling had been incorrect. Watching the numbers in Florida, I touched my face and realized I was crying. “Can we please go home?” I said to my boyfriend. I could tell he was having trouble breathing, and I could feel my chin breaking into hives. Another woman showed me her matching hive, hidden by fresh concealer.

   

  At home I got in the shower and began to cry even harder. My boyfriend, who had already wept, watched me as I mumbled incoherently, clutching myself. “It wasn’t supposed to go this way. It was supposed to be her job. She worked her whole life for the job. It’s her job.”

  Since election day we’ve been peppered by one outburst after another from the disaffected snowflake who can’t seem to come to terms with the results of the democratic process.  She recently went so far as to share her utter “terror” that a “predator will soon be residing in the White House.”

  Now, apparently the post-election stress has just overwhelmed the sensitive Dunham to the point that she has checked herself into a posh resort in Sedona, Arizona to recover from her misery.  Per the Instagram post below, Dunham has resorted to desert “vision quests” to help with her suffering.

  Asked the Canyon for some guidance. She said this week is going to be revolutionary, and so I threw my arms open and said “bring it.” (Good thing we got the week’s first true smile on camera.) Loving you all and whispered some wishes for you into the big red rock.

  Asked the Canyon for some guidance. She said this week is going to be revolutionary, and so I threw my arms open and said “bring it.” (Good thing we got the week’s first true smile on camera.) Loving you all and whispered some wishes for you into the big red rock.

  A photo posted by Lena Dunham (@lenadunham) on Nov 13, 2016 at 9:41pm PST

   

  While we wish her the best of luck as she wanders aimlessly in the desert, we would just like to remind Dunham that travel arrangements are still set to the extent she wants to follow through on her pledge to move to Vancouver. 

  I have a Gulfstream V waiting for you to leave the US. I assume you eat for the equivalent of 5. A chef will be on board. @lenadunham

  — Martin Shkreli (@MartinShkreli) November 11, 2016

  

  

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• Democratic Leadership ADMITS that Clinton Lost the Election Because of Voters’ Economic Worries

  Democratic Leadership ADMITS that Clinton Lost the Election Because of Voters’ Economic Worries

  Posted on November 16, 2016 by WashingtonsBlog

  We’ve repeatedly said that Trump mainly won the election because voters thought that the status quo would hurt them economically.

  Today, the Los Angeles Times reports that the Democratic leadership itself admits that the economy is the issue that sunk Clinton:

  Sen. Charles E. Schumer of New York was elected by Democrats as minority leader of the Senate on Wednesday ….

   

  ***

   

  Schumer also broadened the Democratic leadership tent with the intent of improving the party’s standing with both its progressive wing and its working-class base, two groups whose frustration with the party and Democratic nominee Hillary Clinton helped lead to President-elect Donald Trump’s victory.

   

  ***

   

  Populist [because she has stood up against the big banks and for the little guy] Sen. Elizabeth Warren of Massachusetts also kept a top spot.

   

  “There’s a debate going on about whether we should be the party of the diverse Obama coalition, or the blue-collar American in the heartland,” Schumer said, referring to the broad swath of heavily minority voters who helped put President Obama in office.

   

  “We need to be the party that speaks to and works on behalf of all Americans and a bigger, bolder, sharper-edged economic message that talks about people in the middle class,” Schumer said. He said Democrats should also confront  “the unfairness in the American economic system.”

  The Democratic leadership is admitting that it has to focus on changing its economic message.

  Lambert Strether – who is extremely knowledgeable about political horseraces –  adds additional evidence:

  First, the swing from Obama to Trump was greater in counties that were economically stressed. FiveThirtyEight:

   

  Instead, to understand what drove Trump’s victory, we can look at how Trump’s margin against Clinton in 2016 compared with Romney’s against President Obama in 2012. Sure enough, the swing toward Trump was much stronger in counties with a higher share of routine jobs; the swing toward Trump was also stronger where unemployment was higher, job growth was slower and earnings were lower. It is clear that the places that voted for Trump are under greater economic stress, and the places that swung most toward Trump are those where jobs are most under threat. Importantly, Trump’s appeal was strongest in places where people are most concerned about what the future will mean for their jobs, even if those aren’t the places where economic conditions are worst today.

   

  Notice that job crapification (“routine jobs”) is part of economic stress.

   

  Second, economic optimism among Black voters was much lower than in 2012. WaPo:

   

  “Pre-election research showed that among African Americans, their feelings of economic optimism were precipitously lower in this election than in 2012,” said Geoff Garin, a pollster for Priorities USA who conducted this research independently of the super PAC. “And their feeling that Clinton’s economic policies would help people like them were substantially lower. “Those kinds of things affect people’s willingness to come out to vote.”

   

  Third, primary counties with high Case-Deaton death rates voted for Trump. WaPo:

   

  In every state except Massachusetts, the counties with high rates of white mortality were the same counties that turned out to vote for Trump.

   

  We’re focusing on middle-aged whites because the data show that something has gone terribly wrong with their lives. In a study last year, economists Anne Case and Angus Deaton pointed out that mortality rates for this group have actually been increasing since the ’90s.

   

  Economic struggles have likely contributed as well. Case and Deaton also found that the increase in the death rate has been driven by people with less education. For those without a college degree, the economy in recent decades has been increasingly miserable. This may explain why some have turned to self-destructive behaviors, such as drug and alcohol abuse.

   

  The people I’ve been describing — this distressed, dying demographic slice of America — are similar to the people who tend to vote for Trump, according to phone and exit polls. Trump supporters are mostly white; skew older; and are less likely to have college degrees than other Republicans.

   

  (“Less educated” is a proxy, for “working class.”)

   

  Fourth, the swing from Obama to Trump was greater in counties that where housing costs were high. WaPo:

   

  According to the analysis, respondents in hundreds of surveys were more likely to view Trump favorably if they lived in Zip codes with heavy mortgage-interest burdens relative to local incomes, after taking into account a range of socioeconomic factors.

  Trump Won Among White Women, Among Women Without College Degrees, and Among Rural Women

  Clinton supporters assumed that women would vote for her.

  But the Guardian reports:

  A majority of white women voted for Trump. And while Clinton did carry the female vote overall, her advantage among women was a percentage point less than Obama had enjoyed over Romney in 2012.

   

  ***

   

  As John Cassidy points out in the New Yorker, not only did Trump carry white women, so did Romney in 2012, McCain in 2008 and Bush in 2004. Presumably, many white women have conservative views, whether on taxes or abortion, and neither Trump’s misogyny nor Clinton’s anatomy could override those commitments.

   

  Trump also appealed to many women who feared downward mobility and poverty, winning a majority of women without college degrees, as well as rural women. He denounced the trade deals that they felt had wrecked their economies, and vowed to create jobs by rebuilding America’s decaying infrastructure. Meanwhile, Clinton partied with her funders in the Hamptons. She represented an out-of-touch elite, and many women felt that deeply and resented her – or simply didn’t care about her campaign.

   

  Clinton also failed to excite some of the women who were part of the traditional Democratic base. She did win among poor women (those making under $50,000 a year), young women, Latinas and, overwhelmingly, black women. But turnout among some of these groups was disappointing. She won black women by two percentage points less than Obama did in 2012. And compared with Obama, her margin even among the much-vaunted Latina vote was about eight points lower.

  Newsweek adds:

  White women without  college degrees [went] for him two to one.

  Vanity Fair notes:

  Even educated women white voters just barely leaned toward Clinton; 51 percent of white women with college degrees voted for her ….

  Overall, a slim majority of women voters – 54% – went for Clinton.

  And see this.

  

• World Suffers From Trump Shell Shock – Here's What Will Happen Next

  Submitted by Brandon Smith via Alt-Market.com,

  I’ve been saying this for a long time, and I’ll say it again here — in life there are only two kinds of people:  those who know and those who don’t.  Some might claim there is a third option: those who don’t want to know.  In any case, if you want to be able to foresee geopolitical and social trends, you have to be one of the people who know.

  Above all else, in order to know you must be willing to step outside of the confusion and theater of the circus and look at developments from above.  If you are biased and retain too many sacred cows you will never understand how the world works.  You will be too busy trying to reinforce your own fantasies to see anything else.

  Beyond this, you must also understand that political and social developments are not random; they are either reactions to deliberate policies of special interests or they are driven by policies of special interests.  Therefore, these developments are predictable and can be calculated (to a point).

  I usually refer to these “special interests” as global elites, or globalists, because that is how they often refer to themselves.  The point is, most of the events you see in the political world are engineered events designed to elicit a specific psychological response from you and the people around you.  You are not a human being to these people; you are either an asset to be molded or an obstacle to be disposed of.  This is how our world works.  Period.  And until we fully understand this and accept it, things will never change.

  So, to be clear, if you understand the minds of globalists and understand what they want, you can understand the basic direction of the future.

  It is this philosophy which has allowed me to consistently and accurately predict geopolitical and economic events that very few other people have been able to predict.  For example, I correctly predicted the Federal Reserve taper of QE, I predicted the inclusion of China in the IMF’s Special Drawing Rights years in advance, I predicted the exact timing of the first Fed rate hike, I predicted the success of the Brexit referendum when most of the world and the liberty movement said it was never going to happen, I predicted that the Saudi 9/11 bill would pass, that Barack Obama would veto it and that congress would override his veto, I predicted that Hillary Clinton would be the Democratic candidate and that Donald Trump would be the Republican candidate for president of the U.S. and, for the past five months, I have been predicting that Donald Trump would win the 2016 election.

  People can either attribute these series of successful predictions to pure “luck,” or they can consider the possibility that I know what I am talking about.  I’ll leave that to them.

  The real issue, though, is not that my predictions were correct.  What is more important is WHY they were correct.  To begin with, I am often correct because it is a fact that globalists influence events.  Globalists are human (at least partially); thus, they are predictable, making events predictable.  If you can see from the perspective of a globalist, you will know what they want and what they are likely to do to get it.

  In a world without globalists I would have a hard time successfully predicting anything.

  I never make a cold prediction without a concrete rationale for why I hold that view.  I always break down the reasons and evidence that bring sense to them.  Some analysts might be content to simply flip a coin and make a call without explanation; I am not.

  As far as the Trump election win is concerned, this is what I said in June of this year:

  “In light of the Brexit I’m going to have to call it here and now and predict that the most likely scenario for elections will be a Trump presidency.  Trump has consistently warned of a recession during his campaign and with the Brexit dragging markets lower over the next few months, he will probably be proven “prophetic.”

   

  … Even if Trump is a legitimate anti-establishment conservative, his entry into the Oval Office will seal the deal on the economic collapse, and will serve the globalists well.  The international banks need only pull the plug on any remaining life support to the existing market system and allow it to fully implode, all while blaming Trump and his conservative supporters.

   

  The mainstream media has been consistently comparing Trump supporters to Brexit supporters, and Trump himself has hitched his political wagon to the Brexit. This fits perfectly with the globalist narrative that populists and conservatives are killing the global economy and placing everyone at risk.”

  All of my predictions are rooted in a particular premise; that the global elites have been, since 2008 at least, deliberately setting the stage for an evolving international financial crisis greater than any other seen in modern history.  This crisis is a means to an end.  Globalists use one strategy above all others to achieve their goals — the Hegelian Dialectic; problem, reaction, solution.

  As I have documented for years, the elites openly call for the ultimate eradication of national sovereignty and the formation of a single world economy, a single world currency and, eventually, a single world government.  In order to make this omelet, they intend to break a few eggs (and collapse a few economies).  By blaming "national sovereignty" (and the people that defend it) for this crisis, they hope to convince the masses that the only practical solution is total centralization.  You can read my in-depth analysis and evidence of this in my article “The Economic End Game Explained.”

  I also specifically predicted the Brexit and the Trump win based on another premise; that the elites are allowing conservative movements to take political power in certain regions, only to remove stimulus support from the global economy afterward.  That is to say, I successfully predicted the Brexit and the Trump win because I understand and accept the reality that conservatives and liberty activists are not “winning;” we are being set up as scapegoats for a financial crash that the globalists already created.

  Again, people can either say I am lucky, or that there is something to my position, but the fact of the matter is I have been right and I will probably continue to be right.  This brings us to what will happen going into 2017.

  The election of Donald Trump signals a sea change in not only global politics, but more importantly, global economic stability and social developments.  As frenetic and insane as 2016 has been, 2017 will be drastically more chaotic.  Some of these changes will be obvious, some of them will once again only be visible to a handful of people in the world.  Lets start first with my happier predictions…

  The Death Of The Mainstream Media

  This is an easy one.  The mainstream media, with its insane regressive-progressives and elitist bias, misrepresented the “Alt-Right,” the Trump campaign and anti-social justice movements during the entirety of the election process.  Not only this, but through Wikileaks the leftist media was made naked as numerous journalists and outlets were exposed; colluding directly with the DNC and the Hillary campaign to first bushwhack Bernie Sanders and then rig debates and polling numbers to show Clinton in a farcically superior position to Trump.

  The mainstream media is now seen by the majority of Americans on the left and right as a lumbering rotting propaganda corpse that needs to be decapitated before it spreads its disease to anyone else.  I predict MSM outlet readership and viewership (with the exception of FOX News) will collapse even further than it already has and that many outlets will be forced to consolidate until they fade out of existence.

  As I have said for years, the mainstream media is dead, they just don’t know it yet.  Well, after this election, everyone knows.  The alternative media will take the place of the mainstream media.  We will be adopting their viewership and growing explosively over the next year while they shrivel.

  They decided that their job was not to report the facts, but to manipulate public opinion.  They are liars and a disgrace to true journalism.  Good riddance.

  That said, some people will argue that my position that the elites wanted a Trump presidency is not tenable exactly because the liberal media worked so hard to rig public opinion against Trump.  I will explain in my next article why these people are missing the bigger picture.

  The Crippling Of Social Justice Warriors

  The SJW cult is not dead, but it has been crippled.  It is now a drooling bedridden quadriplegic eating its meals through a straw; a malfunctioning shell of a movement destined to be put out of its misery.

  When I think of social justice warriors I think of the Island of Misfit Toys; nobody wants these people.  They are a detriment to everything they touch, including the Democratic party.  It was the zealotry of SJWs that caused conservatives to rally in anger around Trump.  It was they that awakened the sleeping giant.

  One reason I was so certain Clinton had set herself up for a loss was her insistence that the Democrats openly adopt these hell spawn and their ideology.  By embracing politically correct rhetoric and accusing all opposition of being “deplorable” racists, sexists and homophobes, Clinton doomed her campaign from the very beginning.  Anyone with any sense could see the massive tide against SJWs growing on the internet.  In fact, I propose that the globalists, using the advanced web analytics at their disposal, saw it even before the rest of us did.

  SJWs are a tiny minority in American society.  Their only strategy has been to use Alinsky tactics to make their movement appear much larger than it really is.  Through mutual aid and elitist supporters in popular media, SJWs presented a fabricated consensus.  They made it seem as though they were the majority view and, thus, the "superior" view.

  One fantastic result of the 2016 election has been the realization by conservatives that they are not isolated on the fringes of society.  In fact, in America at least, we are a considerable force to be reckoned with.  There is an old story of a Roman Senator 2,000 years ago who suggested the idea of forcing slaves to wear armbands to make them easily identifiable.  Another senator admonished the notion, stating “No, if they realize how many of them there really are, they may revolt.”

  This is what Election 2016 did for conservatives — we have seen that millions of us have arm bands, and we are now in revolt.

  I rarely comment on race issues because I don’t really see race as very relevant in most cases; but it has been the tactic of social justice cultists to constantly and brutally target straight white males as the monsters of history and therefore responsible for the ills and failures of every minority group from today to eternity.  At this point I think it is safe to say that we will NO LONGER sit idly by as whipping boys for sad, deluded people clamoring for victim group status.

  The End Of Mainstream Polling

  I was also confident in my prediction of a Trump win based on my knowledge of inconsistencies in modern polling methods.  The fact of the matter is, polling suffers from the same lack of objectivity that any other “science” can at times suffer from — the results will always be vulnerable to influence from the observer.  If the observer wants a particular outcome for the numbers, they will consciously or unconsciously rig their method to produce the desired result.

  I saw this happen time and time again during the Brexit polls leading up to the referendum, and, as I stated many times before the U.S. election, the campaign polls seemed to be behaving the same way.  This is how you get media sources like Reuters claiming a 90 percent chance of a win by Hillary Clinton just before the election.  When pollsters weight their polls with far more democrats than republicans and when they poll the same groups repeatedly they are not going to get varied or honest data.

  In the end, polls become propaganda tools rather than litmus tests.  The mainstream has tried desperately to explain why their polls were so utterly wrong, but it is too late for them.  After the Brexit and the U.S. election, no one is going to trust these numbers again.

  Liberty Groups Will Get Some Breathing Room (For A Little While)

  The steady drum beat of government antagonism for “patriot groups” is probably going to subside for a short time.  I happen to know that many militia groups and preparedness networks are breathing a heavy sigh of relief today after eight years of a hostile Obama presidency, the IRS sniping at liberty organizations and individual activists based purely on political zealotry, the DHS profiling liberty activists as terrorists and the SPLC frothing at the mouth like rabid animals looking to use their ties to the feds as a means to sink their teeth into any conservatives with the guts to refuse participation in the mainstream narrative.

  With conservatives launching into 2017 with complete control of government and a Trump mandate, it would seem that liberty groups have “won the fight” and have nothing to worry about.

  That said, don’t get too comfortable, folks, because now we are going to discuss my negative predictions going into next year…

  The Final Stage Of Economic Collapse

  Economic collapse is a process, not a singular event; stock markets play only a minor part in this process.  Most Americans’ only relation to the economy is through the daily rise and fall of the Dow Jones.  If they see the Dow in the green, they go on with their day.  If they see the Dow in the red, they stop and question what is happening.  The election of Donald Trump has surprised many with a sudden rise, rather than fall, in stock markets.  But, as I told my readers before the election, it would be wise to wait a couple of weeks before trying to analyze these markets because that is how long it will take just to absorb the election results.

  I predict first that central banks around the globe will further cut stimulus measures and that the Fed is now guaranteed to raise interest rates, probably in December before Trump even enters the White House.  I also believe that the process of initiating a market crisis will take approximately six months to become widely visible to the public.  As a consequence of the Fed pulling the plug on markets, I predict Trump and the Fed will enter into open hostilities against each other, which will erode international faith in the U.S. dollar as the world reserve currency.

  By extension, Trump’s presence in the White House will exacerbate already-existing tensions with Saudi Arabia.  The Saudi 9/11 bill is just the beginning.  As a result, I believe Saudi Arabia will dump the U.S. dollar as the petro-currency, influencing numerous other OPEC nations to do the same.  I believe this will happen by early 2018.

  In my view, for now, oil prices will be the best indicator for where stocks are headed in the next few months.

  This is not something many Trump supporters want to hear.  The response in the liberty movement to my prediction that the elites would allow Trump into office was rather predictable as well.  In my article 'Why The U.S. Election Has The Entire World Confused' I stated:

  “I have not taken this position just to be contrary. If I think about it honestly, my position is truly a losing position. If I am mistaken and Clinton wins on the 8th then I’ll probably never hear the end of it, but that’s a risk that has to be taken, because what I see here is a move on the chess board that others are not considering. If I’m wrong, then I’m wrong.

   

  That said, if I am right, then I still lose, because Trump supporters and half the liberty movement will be so enraptured that they will probably ignore the greater issue — that Trump is the candidate the elites wanted all along.”

  This seems to be the reaction from about half the liberty movement so far; a general blind faith and bias, clinging to the idea that the election (just like the Brexit) was a victory, and that conservatives had just won the culture war and defeated the globalists.  It’s funny how it wasn’t much of a controversy when everyone thought I was wrong about Trump winning in the first place.

  There are two primary arguments that come up with these people. First, that my view on the influence of the elites is “unrealistic” and that the elites would have to be “omnipotent” in order to succeed in directing the outcome of these events so effectively.  I will address this argument in detail in my next article on the Trump presidency and what the consequences will be for us all if Trump turns out not to be a constitutionalist.

  The second argument they present is that the elites “will never succeed” in blaming Trump and conservatives for an economic crisis that was decades in the making.  To the people that embrace this argument I say — I understand mass psychology far better than you do.

  The reality is, half of America is ALREADY primed to blame Trump for everything that happens over the next four years (if we even make it that long).  Possession is nine-tenths of the law in the minds of many.  Beyond that, every meme in the global media and on the left is promoting the idea that Trump is an apocalypse in the making.  Even Germany’s 'Der Spiegal' published its after-election magazine with a cover depicting Trump’s head as a giant comet hurtling towards the Earth.  Don’t tell me that Trump cannot be blamed for an economic crisis.  Only a complete idiot would suggest that he is anything other than the perfect scapegoat.

  At bottom, it does not matter whether people believe the above predictions or not.  I have hundreds of emails from readers who called me a “tinfoil hatter” in the past and are now apologizing.  So, if you plan to react in a knee-jerk fashion to the notion that Trump and conservatives are being set up by the elites for a final financial flagellation, be sure to write two letters — one for today saying I’ve lost touch, and the other for tomorrow when you find out I was right once again.

  

  

• Illinois Pension Funding Ratio Sinks To 37.6% As Unfunded Liabilities Surge To $130 Billion

  As we’ve noted before, Defined Benefit Pension Plans are, almost by definition, a ponzi scheme. Current assets are used to pay current claims in full in spite of insufficient funding to pay future liabilities: classic Ponzi.  But unlike wall street and corporate ponzi schemes no one goes to jail here because the establishment is complicit.  Everyone from government officials to union bosses are incentivized to maintain the status quo – public employees get to sleep better at night thinking they have a “retirement plan,” public legislators get to be re-elected by union membership while pretending their states are solvent and union bosses get to keep their jobs while hiding the truth from employees. 

  That said, certain states are better at the ponzi game than others and the great state of Illinois, we must say, is one of the best.  As we noted a few months ago, Illinois governor Bruce Rauner even admitted to being a willing participant in his state’s pension ponzi warning that should his largest public pension fund do what it should have done long ago, it would put a big dent in the state’s already fragile finances and lead to “crippling” pension payment hikes.  But, if you ignore the problem then surely it will just go away…good plan.

  And, while the pension ponzi can likely outlast Rauner’s term as governor, eventually funding for current claims can only be borrowed from future generations for so long before finally running out of cash.  As the latest “Special Pension Briefing” report from Illinois’ Commission on Government Forecasting and Accountability (CGFA) points out, that time may be getting very near.

  Per the latest actuarial valuations, the 5 largest publicly-funded Illinois pensions are now $130BN underwater and only 37.6% funded.

  

   

  As a guide, here is a recap of the acronyms used by CGFA:

  TRS = Teachers’ Retirement System

   

  SERS = The State Employees’ Retirement System

   

  SURS = State Universities Retirement System

   

  GARS = General Assembly Retirement System

   

  JRS = Judges’ Retirement System

  Illinois’ unfunded liabilities really started to surge in 2008 due a combination of lower returns on assets and lower corporate bond yields which drive down discount rates used by actuaries resulting in substantial increases in the present value of liability streams.  As we’ve pointed out in the past, given the long duration of pension liabilities, even small swings in discounts can have a material impact on underfunding levels.

  

   

  Meanwhile, even though Illinois has taken the prudent step of reducing their assumed returns on assets…

  

   

  …they apparently didn’t reduce them enough as only 1 of the 5 largest pension funds managed to actually generate a positive return in FY 2016.  That said, we’re sure a lot of hedge funds were still able to collect very nice fees for generating these negative returns.

  

   

  But, don’t worry, there is hope for Illinois pensioners yet.  As CGFA points out, all the state has to do is funnel $10-$20 billion of taxpayer money into these pension funds each year and earn a consistent 7% annual return on assets and in a matter of just 28 years the funds should be 90% funded!  That seems like a very reasonable plan.

  

   

  But don’t worry teachers of Illinois, just keep electing politicians who tell you that everything is fine and we’re sure this problem will just go away. 

  

  

• Will Donald Trump End The American Unipolar Moment?

  Submitted by Federico Pieraccini via Strategic-Culture.org,

  We are facing an unprecedented breakthrough: a global change that potentially could definitively overwhelm the unipolar world order created after the fall of the Berlin Wall in 1989 and sent into overdrive by the 9/11 so-called War on Terror. The victory of Donald Trump is the most emblematic representation of a total repudiation by the American population of the so-called establishment and its interests.

  

  The American elections have ended with an unexpected verdict that has confounded all forecasts. Trump won the election in the United States, home and capital of the western system, redefining the logic by which a President is normally elected. Largely for this reason, it is an extraordinarily important victory. All the apparatus of American power, such as the media, politicians, experts and intellectuals, were not enough to stop the people from expressing a vote that is more of an explicit protest.

  The victory of Trump also spells the end of the Bush and Clinton dynasties, as well as the unexpected conclusion of Obama's mandate, the betrayal of which is the biggest in US history. Elected to solve problems such as inequality, racial divisions, poverty and social injustice, he failed on all fronts, becoming one of the major causes of a dissenting vote in favor of Trump. Barack Obama has ironically been one of Donald Trump’s biggest sponsors. Obama’s voters in 2008 and 2012 were not deceived by Clinton’s promises, and after voting for Sanders as a last hope, they preferred to stay home or even vote for Trump as an ultimate expression of contempt for the status quo represented by Democrats, Republicans, and by the Washington establishment. Above all, it represented the victory and the will of the working class, tired of their economic condition worsening over more than three decades.

  The victory of Brexit in England, Duterte in the Philippines, the 2013 Five Star movement in Italy, the phenomena of Le Pen in France, Syriza in Greece, and the continuously rejected European treaties — all these are part of the same theme connecting different voting issues. The continuous rejection of the idea of globalization and globalism has occupied the majority of the people. Identified as the great evil, it is considered the main cause for the continuing need for governments to subordinate national interests for international interests. This inevitably leads to a deadly embrace with an international model based on Wall Street finance, the main cause of the 2008 financial crisis, compounded by American wars around the world, a source of insecurity and prolonged terrorism.

  The root of this pushback is the concept of multipolarity. In a unipolar model, power and the money is concentrated in the hands of a tiny percentage, producing an imbalance of wellbeing that is the base of common frustration of Western citizens. The success of the multipolar model derives primarily from the ability to choose without without facing unilateral imposition. Whether it is leaving the EU or the victory of a candidate not linked to the political establishment, multipolarity is the most effective way to respect the popular will, a huge difference when compared to unipolarity, where people are left with no alternative. We have been transitioning for nearly a decade into the digital domain, a world where an infinite range of options is available to achieve one’s objectives.

  In the real world, the unipolar approach is outmoded and inadequate, creating the need for any alternative proposal, whether it be Trump or Brexit. We cannot otherwise explain why in recent years anyone who proposes an anti-establishment model in Europe or in the United States is considered a credible alternative. It is not the message one conveys that is important, it is simply enough to be something different from the status quo, simply an alternative.

  The power of finance has devoured the few rights left for people, giving priority to interests whose greed is insatiable and has led many Western nations to the brink of collapse in the financial crisis of 2008. Since then, nearly 10 years later, nothing has changed, and people’s economic well-being has declined alarmingly, reaching unprecedented levels. The promises made by politicians after the 2008 crisis have been broken, and the middle class and poor have continued to pay for it all, generating a level of frustration that is expressed at the ballot boxes, with votes for Brexit or for Trump in the United States.

  In addition to the economic situation, numerous wars have succeeded in antagonising Americans, with costs nearing six trillion dollars serving to further erode the confidence of the average voter in the Washington establishment. While the average American voter does not care about the foreign policy of their country, if the results are an increase in terrorism, a decrease in domestic investment, creating a general feeling of helplessness, then US foreign policy becomes something harmful, unnecessary or even counterproductive to the American voter.

  It is amazing to see how in the most recent US elections all these considerations have become central in Trump’s arguments. For the first time in US history the media and establishment’s one-sided narrative has been broken. What has been shown is that a presidential campaign can be ran independently of the Democrats or Republicans on issues revolving around Wall Street, the Washington Consensus, exporting democracy, and the defamation of geopolitical opponents. For the first time, the vision of a unipolar American hegemony has been defeated by a multipolar vision of reality, a vision that simply places an alternative to the status quo of the past 25 years. The people were offered, first in the Republican primaries and then the election, the opportunity to express a vote that seemed more a referendum with a question that essentially amounted to: “Are you happy with your current condition?” The answer was a huge middle finger to the establishment expressed through the Trump vote.

  Clinton, being a product of the establishment and representing the status quo, did not offer what the majority of Americans wanted, namely a break with the elites. Even if unconsciously, the majority of Americans rejected in their vote the unipolar economic, financial and military model, giving the rest of the world an unexpected hope for change.

  The United States woke up the day after the elections with a more divided country than ever before, a reflection of a broader division that runs through the West. These are the consequences of a changing world that is drifting away from a unipolar vision with its one financial, economic and military system represented by Washington and Brussels. Back on the old continent, growing nationalist sentiment, the rejection of European institutions and the Brexit vote should have rang alarm bells for the elite some time ago. The US elections have confirmed that the globalist establishment both in Europe and America are living in their own world. They are completely detached from normal people, and the system they relied upon to influence and manipulate, with the hope of extending the unipolar domain (economic, military and financial), is no longer effective.

  While globalization has brought wealth to the elite, it has also allowed the spread of the Internet, which is becoming more and more effective as a mass-communication tool. The concept of multipolarity is intrinsic to the Internet: everyone can open their own blog, write there own opinion, and spread it to millions of people, influencing the overall narrative. The alternative information, when printed on paper, was reserved for a niche of the population. Now such diffusion of information has become mainstream, relegating the corporate media to an increasingly narrow segment of the population. Compared to 30 years ago, the Internet has reversed the paradigm. Think of yourself: you read this analysis with, I hope, a sense of trust and belief that this information cannot be obtained from CNN, Fox News or the BBC. This is the true and genuine revolution. Trump has been able to interpret these feelings in a masterly manner, collecting all the major frustrations of the American people towards the elite, and making them his own. He has combined his personal passion into an impossible challenge, providing the desperate needs of the people with a voice “at the top” that will scream and yell on their behalf. The anger and the political incorrectness of Trump have been interpreted in a positive way by voters, almost like a concrete gesture of dissatisfaction with the elites of Wall Street, Washington and the giant American corporations.

  Trump represents the first step, after Brexit, of the West recognizing a reality that is already multipolar. The American model based on the dollar is in trouble as a result of international institutions related to BRICS. The AIIB created by Beijing, and the IMF’s moves to include the yuan in an international basket, are another indicator. Countries not aligned with US desires, such as China, Russia and Iran, have been joining forces over the last few years to build an alternative economic and financial system to that of the dollar and federal reserve, undermining the US hegemony that is guaranteed by the petrodollar. In the military sphere, NATO is no longer the only global power, and the current situation in the Middle East is a reflection of this. The involvement of Moscow and the alliance with Iran have for the first time prevented the complete destruction of a country like Syria, providing an alternative ending to that experienced by Iraq in 2003. All signs are that America's unipolar moment is gone forever.

  The last blow was the political change following the economic and military ones; first in Europe, with the decreasing popularity of politicians, an anti-establishment expression; then with the exit of Britain from Europe; and finally with Trump’s victory in the United States.

  From the point of view of national and international policies, Trump’s triumph is yet to be tested and confirmed. As a result, the international balance could yet remain intact. The world is at its biggest crossroad in modern history. The election in the United States, caused by a spreading multipolar contagion, will eventually affect and change forever the international relations of Brussels and Washington. While the rest of the world is already fully part of this epoch-making revolution, the elites of Europe and the US continue to show that they want to fight to the end to reject the new advancing world order.

  The American and European oligarchy is faced with a choice: either declare war on everyone and everything, including their own people, or embrace this global shift and try and carve out their own space within it. The challenge is to recognize and accept not being in absolute control of the levers of power but now having to share power with other centers of power like Moscow, Beijing and Tehran. It is a difficult task but certainly not impossible.

  Trump offers the possibility of real change in international relations, and the words expressed by leaders like Xi and Putin are the first signs of a real attempt to change 20 years of impositions from Washington’s unipolar domination over the rest of the planet.

  On November 9, 2016, much of the world's population, ideally, has united in one voice and with all its energy declared aloud to Washington and to all the systems of power that have made our planet insecure and an economic disaster that enough is enough!

  After Brexit and the victory of Trump, the Euro-American elites are faced with a choice that will shape the coming decades: either accept the coming multipolarity and decide to work together with other nations of the world, or descend into prolonged conflict. No one can rule out an attempt to sabotage Brexit or the assassination of Trump, especially if he decides to fulfil his promises. But one thing is certain: they will never be able to stop the progress of these inevitable changes.

  If there is something clear from Trump’s victory, it is how an important part of Europe and America’s population has forever broken out of the isolation bubble where it was confined by the elite. They have understood that what has been told to them for decades is false, biased and completely against their interests. The world has changed forever, and there is nothing that the promoters of globalism can do to prevent it.

  

  

• Yen Tumbles After Kuroda Admits Lost Control Of JGB Market

  We warned last night that the runaway yields on Japanese Government Bonds were a worrisome signal that the Bank of Japan had lost control (as short-dated yields rose above target and 10Y broke above policy 0.00% levels). Sure enough, it appears Kuroda hit the panic button tonight as it announced it first ficed-rate unlimited bond purchase operation.

  Simply put this is a government guarantee to bid on any and all offers for short-dated bonds at their mandated yield level until the selling abates.

  Yen tumbled..

  

   

  And bond yields obeyed – dropping back to BOJ policy levels for now…

  

   

  As Bloomberg reporets, the central bank said on Thursday in statements it will carry out two operations, one to buy securities maturing in one to three years, and another for debt of three to five years maturity.

   A selloff in Japanese bonds had threatened to test Governor Haruhiko Kuroda’s determination to keep yields stable with unlimited debt purchases — a weapon he had so far kept in reserve. He had said in September that the bank would hold unlimited purchases as needed, setting a fixed rate, in order to control yields.

  Ten-year sovereign yields turned positive this week for the first time since Sept. 21, when the Bank of Japan announced a shift in policy aimed at pegging them near zero percent. Kuroda added the option of holding purchase operations at fixed rates with no set amount to his toolkit following that decision.

  “The market is testing the BOJ’s tolerance for higher yields, but the BOJ may actually challenge the market back by letting yields rise,” Jun Fukashiro, a senior fund manager in Tokyo at Sumitomo Mitsui Asset Management, said earlier. “The reason the BOJ can allow a rise in yields above zero is that, when it needs to, it has the weapons to stop it.”

  

  

• Dollar Illiquidity Getting Critical: A $10 Trillion Short Which The Fed Does Not Understand

  In the latest report from ADM ISI’s strategy team, “Dollar Liquidity Threat is Getting Critical and Fed is M.I.A.”, Paul Mylchreest argues that mainstream economic luminaries (like Carmen Reinhart) are finally acknowledging the evolving crisis due to the dollar shortage outside the US, a topic which even the head researcher at the BIS shone a spotlight on yesterday suggesting that the strength of the dollar, not the VIX is the new “fear indicator”. 

  The bitter irony is that the institution which appears to have very little understanding of what’s actually happening is the Federal Reserve. We noted Stanley Fischer’s speech yesterday when he argued that liquidity is “adequate”…. at least he didn’t say “contained.”

  Yet Dollar illiquidity has been one thing that central banks can’t control…think SNB and Swiss Franc, BoJ and Yen (full report on this below) and now the PBoC as the RMB looks at 6.90. Mylchreest points out that Fischer could take a look at dollar cross currency basis swaps (chart below) and the dollar liquidity problem would be immediately obvious. 

  Fischer could take a look at dollar cross currency basis swaps (chart below) and the dollar liquidity problem would be immediately obvious.

  While everybody is now waiting for the Fed to wake up, here at ZH we have been tracking the issue of a global dollar shortage well ahead of the mainstream, starting back in 2009 and continuing with “The Global Dollar Funding Shortage Is Back With A Vengeance And ‘This Time It’s Different” in March 2015 and “Global Dollar Shortage Intensifies To Worst Level Since 2012” in October 2015.

  If the dollar continues to strengthen, it will spell trouble for the recently adopted market narrative that Trump brings higher inflation and higher rates. Another major rotation and market reversals are the last thing that active managers need, or can can afford, in the run up to year end.

  From the first section of the report:

  We know the narrative…Trump equals higher inflation, a tailwind for commodities and a headwind for bonds. We are “Endgame Inflationistas”, but declining US dollar liquidity threatens this narrative near-term.

   

  Dollar illiquidity is something that even central banks struggle to control, e.g. Swiss Franc peg, BoJ losing control of the Yen and now the PBoC/RMB.

   

  The price of the dollar acts like a “Global Fed Funds Rate”. A rising dollar tightens economic conditions globally, adding considerable deflationary pressure as is clear from the chart below.

   

  

   

  Most commentators are not making the link between a rising dollar and a shortage of offshore dollars (Eurodollars). China’s financial system is vulnerable and it’s being reflected in RMB weakness.

   

  The lack of a dollar swap between the Fed/PBoC is a glaring omission. We expect BRICS nations to become increasingly irritated about the current dollar-based system.

   

  In his recent speech, “Is There a Liquidity Problem Post-Crisis?”, Fed Vice Chairman, Stanley Fischer, concluded that liquidity is adequate. Sadly, that is incorrect and a glance at the chart (below) of negative Cross Currency Basis Swaps for dollar funding illustrates the error all too easily. A US$10 trillion Eurodollar short is a more dangerous and risky beast if the Fed doesn’t understand it!

   

  The table below shows the Cross Currency Basis Swap (CCBS) for US dollars using the average for Euros, Yen, British Pounds, Swiss Francs and Canadian Dollars. We discuss the CCBS in more detail below but, in essence, it is the additional cost of borrowing dollars via FX swaps in these currencies compared with what it should be according to interest rate differentials. The more negative the CCBS the more it implies a structural dollar shortage and a liquidity problem in dollar funding markets.

   

  

   

  While the problem has been building for more than 2 years, mainstream economic luminaries are (belatedly) starting to take notice. This was Harvard’s Carmen Reinhart last month.

   

  “Today, seven decades later, despite the broad global trend toward more flexibility in exchange-rate policy and freer movement of capital across national borders, a ‘dollar shortage’ has reemerged.”

  * * *

  Much more in the full report below.
  

  

  

• Mike Krieger Rages At The 'Fake News' Debacle: "It's An All Out Media War"

  Submitted by Mike Krieger via Liberty Blitzkrieg blog,

  Before I get into the meat of this article, I want to remind you of a few paragraphs I wrote back in the August post,  Questioning Hillary’s Health is Not Conspiracy Theory:

  As I look at the landscape in 2016 to-date, I observe emergent signs that alternative media is finally beginning to take over from the legacy mainstream media when it comes to impact and influence. The mainstream media (unlike with John McCain in 2008), had decided that Hillary Clinton’s health was not an issue and chose not to pursue it. Many in the alternative media world took a different position, and due to mainstream media’s failure to inform the American public for decades, the alternative media drove that issue to the top of the news cycle. That’s power.

   

  This is an incredibly big deal, and the mainstream media intuitively knows what it means. It means a total loss of legitimately, prestige and power. All of which is well deserved of course.

   

  So here’s the bottom line. 2016 represents the true beginning of what I would call the Media Wars. Alternative media is now capable of driving the news cycle. Mainstream media now has no choice but to fight back, and fight back it will. It will fight back dirty. This is going to get very ugly, but by the time the dust has settled, I think much of the mainstream media will be left as a shell of its former self.

  With Hillary’s loss, the mainstream media and its distressed and discredited allies are in a panic like we have never seen before. They understand that alternative voices now influence the public as much, if not more so, than the mainstream press, and they are now out to destroy those voices. The way they are going about this is by placing anti-establishment voices under the blanket umbrella of “fake news,” or in the case of Twitter, they just seem to purge people they don’t like from the platform altogether.

   

  The gloves are now completely off following the publication, and wide distribution by legacy media, of a list compiled by Melissa Zimdars, an assistant professor of communication at Merrimack College in Massachusetts, of “False, misleading, clickbait-y and satirical ‘news’ sources.” What you’ll find, is that some of your favorite websites, including Zerohedge are represented in this ridiculous list.

  

  

  

  What do almost all of these sites have in common? They published a lot of anti-Hillary Clinton articles over the course of the election, which collectively helped to swing the contest for Trump. That’s the real transgression committed by these websites.

  Interestingly, I didn’t see Slate on this list despite publishing one of the most blatant pieces of fake, pro-Hillary news propaganda of the year just a few days before the election with the following, quickly debunked, monstrosity:

  

  Even Snopes rapidly dismissed the claim, yet Slate is nowhere to be seen on the “fake news” list. If you are pro-Hillary, you apparently cannot be “fake, misleading, or clickbait-y.”

  This whole story hits close to home for me. Zerohedge has been publishing my writing since 2010, years before I had my own website. It has been instrumental in providing an outlet for my own voice, as well as countless others, when legacy media never would. As such, I reached out to Zerohedge for a comment. Here is what they said:

  It’s funny and sad at the same time – have they done any actual rigorous analysis on what they determine to be “fake” news, or perhaps the assumption is that the public should just take their word again… like when the NYT assured its readers that Hillary Clinton had a 90% chance of winning? When it comes to “fake vs fact” on Zero Hedge, we have a simple solution: we source everything, and all the data can be replicated by anyone.

   

  Ultimately this push will likely boost traffic to the “fake” websites – something the “credible” legacy media, which just had its worst year ever, desperately needs.

   

  But what is more troubling is that this sets the framework for “banned media”, especially  when one considers it was the outspoken “liberal” voices within the 4^thestate who were in arms that Trump would unleash precisely this kind of media witch hunt. Apparently the objective media does not need a president to prompt it to start its own book burning project.

  Moving along, who cares that some assistant professor made a list of sites she doesn’t like and warns people about them? Why should we pay attention?

  We should care because it is being promoted heavily by the mainstream media. For example, look at how a writer at New York Magazine promoted the list (seems kinda “clickbait-y” doesn’t it):

  

  This is as close as you can get to a publication totally endorsing the list. Moreover, the story is currently the #1 most read article on New York Magazine’s website today.

  

  Naturally, New York Magazine would never resort to the sort of “clickbait-y” tactics perpetrated by these so-called fake news sites. Perhaps I was hallucinating when I saw its recent cover photo:

  

  Then when you actually click through to the cover story, the following image pops out at you:

  

  This, you see, is what real news looks like.

  It’s not just New York Magazine either. The Los Angeles Times today published an article titled, Want to Keep Fake News Out of Your Newsfeed? College Professor Creates List of Sites to Avoid. Here’s how it begins:

   

  During the election, many people fell prey to fake news stories on social media — even the president-elect ended up retweeting fake statistics. A professor of communication has created a list of unreliable news sites to help people do better.

   

  Melissa Zimdars, an assistant professor of communication at Merrimack College in Massachusetts, put together a publicly available Google doc cataloging “False, misleading, clickbait-y and satirical ‘news’ sources.” It’s been making the rounds on social media as people seek to cleanse their newsfeeds of misinformation.

  The article then ends with the following:

  Both Facebook and Google have recently announced they will take steps to block fake news sites from accessing their advertising services.

  One has to wonder what sort of criteria Facebook and Google will be using in its determination of “fake news.” If it ends up with anything resembling the above list, we should all be very concerned.

  It’s not as if these mainstream media outlets are promoting this list to sow doubts in the sites’ already existing readers; rather, the intent is to keep their own readers away. It’s a nefarious attempt at preventing current readership from being open to alternative information, and we should all hope it backfires spectacularly.

  Of course, this is just one battle in the status quo’s attempt to silence alternative voices. Twitter is on its own mission following Hillary Clinton’s election loss. As USA Today reported this morning in its post, Twitter Suspends Alt-Right Accounts:

  SAN FRANCISCO — Twitter suspended a number of accounts associated with the alt-right movement, the same day the social media service said it would crack down on hate speech.

   

  Among those suspended was Richard Spencer, who runs an alt-right think tank and had a verified account on Twitter.

   

  The alt-right, a loosely organized group that espouses white nationalism, emerged as a counterpoint to mainstream conservatism and has flourished online. Spencer has said he wants blacks, Asians, Hispanics and Jews removed from the U.S.

   

  Heidi Beirich, spokeswoman for the Southern Poverty Law Center, told USA TODAY that the center had asked Twitter to remove more than 100 accounts of white supremacists who violated Twitter’s terms of service. She also pointed to two alt-right accounts that had been verified by Twitter, including Spencer’s.

  This Spencer character doesn’t appear to be a particularly nice guy, and Twitter can do whatever it wants, but what concerns me is the overall trend. Namely, how information gatekeepers are suddenly panicking to demonize or ban alternative voices following Trump’s election victory.

  The message here is simple: It’s Game On. The legacy media has taken the gloves off entirely and we are now engaged in all out media war.

  *  *  *

  For prior articles on the topic, see:

  Obama Enters the Media Wars – Why His Recent Attack on Free Speech is So Dangerous and Radical

  Hillary Clinton Enters the Media Wars

  The Death of Mainstream Media

  

  

• Trump Brings America Together – Everyone (Dems & Reps) Agrees On One Thing Post-Election

  Watching TV these days, or reading any media, one could easily be forgiven for thinking Democrats and Republicans incapable of agreeing on anything as months of divisive programming have embedded record levels of cognitive dissonance.

  

  So imagine our glee when we glanced at Gallup’s latest economic confidence survey.

  First, Americans are now overwhelmingly more confident in the economy since before the election, moving from a slightly negative evaluation (-10) to a slightly positive one (+3). Gallup’s U.S. Economic Confidence Index had been consistently negative throughout the year leading up to the election.

  And Second, Democrats and Republicans are in almost perfect agreement on whether the economy is getting better or worse (around 44-49% of them).

  

   

  Of course, as the chart above shows, this ‘coming together’ of opinion still shows dramatic bias:

  After Trump won last week’s election, Republicans and Republican-leaning independents now have a much more optimistic view of the U.S. economy’s outlook than they did before the election. Just 16% of Republicans said the economy was getting better in the week before the election, while 81% said it was getting worse. Since the election, 49% say it is getting better and 44% worse.

   

  Conversely, Democrats and Democratic-leaning independents’ confidence in the economy plummeted after the election. Before the election, 61% of Democrats said the economy was getting better and 35% worse. Now, Democrats are evenly divided, with 46% saying it is getting better and 47% saying it is getting worse.

  The bottom line is – for now – that the election of Trump has transformed the way Republicans and Democrats view the economy, particularly in their assessments of whether it is getting better or worse. However, it’s too early to say whether these are sustainable gains in confidence.

  

  

• Two-Thirds Of Workers In Developing Nations To Be Replaced by Robots, Report Warns

  Submitted by Jake Andersen via TheAntiMedia.org,

   An alarming new report from the United Nations is the latest in a litany of studies suggesting that the coming age of automation and workforces dominated by robots will be upon us much faster than previously thought. The U.N. now claims two-thirds of the human labor force in developing nations will be replaced by automation.

  The U.N. says a Universal Basic Income will be necessary as a stop-gap for the 75% of humans left without work.

  Anti-Media previously reported on predictions that half the American workforce could be replaced by automation within the next two decades. Another report’s statistics suggested automated software could fleece 1.7 million truckers of their jobs within a decade.

  The U.N.’s UNCTAD report notes that taken on a global scale, we’re seeing“premature deindustrialization.”

  “The increased use of robots in developed countries risks eroding the traditional labor-cost advantage of developing countries,” the report explains.

  A disturbing additional report from the World Bank observes:

  “The share of occupations that could experience significant automation is actually higher in developing countries than in more advanced ones, where many of these jobs have already disappeared.”

  Developing countries are advised to react to new ‘disruptive technologies’ by embracing radical digital technology and “supportive macroeconomic, industrial and social policies.”

  A larger looming question concerns how people will react to such job losses. How will the 1.7 million truckers who are primed to lose their jobs to automation take this? Transhumanist candidate Zoltan Istvan warned it wouldn’t be a pretty sight and that in fact, it could lead to violent uprisings, which is why Istvan supports a UBI.

  As Anti-Media previously reported:

  “Zoltan says the coming age of robots replacing humans in the workforce could be a net positive, allowing humans explore education and leisure in a way previous generations couldn’t have imagined. He advocates for a Universal Basic Income and a federally-provided social safety net that would reduce the chances of chaos and rioting when the robot economy goes into full swing.”

  But this vision of a future transhumanist utopia smacks of American and Western exceptionalism.

  

  People in developing countries may not have a Universal Basic Income available to them, and even if they do, their general impoverished living conditions and anemic social infrastructure may eclipse opportunities for leisure and entrepreneurship.

  These are questions that will be asked with increasing frequency in the next 10 years. The age of automation threatens the very nature of human labor and may require us to reimagine the role of the human being within post-industrial societies.

  

  

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• Japandemonium – Is Kuroda Losing Control Of JGB Market?

  For the first time since February, 5Y JGB yields have spiked above BOJ policy rates (to -9.5bps), but despite a policy of maintaining 10Y yields and attempting to steepen the yield curve, it appears Kuroda and his cronies have lost control as the short-end of the Japanese bond market is collapsing.

  Broadly speaking it seems investors are dumping JGBs in favor of 'cheap' US Treasuries once again…

  

   

  As the UST-JGB spread is at 6 year highs…historically an attractive relative-value entry…

  

   

  2Y JGB yields are up 5 days in a row soaring 16bps to 9-month highs

  

   

  But 10Y yield are breaking notably above the policy rate of 0.00%…

  

   

  And the JGB yield curve is bear flattening dramatically… not what the BOJ wanted (despite the bank stocks spike post-Trump)…

  

   

  With a market bereft of liquidity, and rapidly losing its anchor to BOJ policy rates, Kuroda and his pals better start praying for some divine intervention to stall this inflationary burst crushing the Potemkin village of a market they have created.

  

  

• Who's Behind The Portland Riots? 60% Of Arrested Anti-Trump Protesters Were From Out Of State, Didn't Vote

  Two months ago, Charlotte police confirmed that 70% of those arrested during the riots were from out-of-state. 18 months before that, as the riots flared in Ferguson, George Soros spurred the protest movement through years of funding and mobilizing groups across the U.S., according to financial records reviewed by The Washington Times. And now, amid more headlines of Soros' involvement, KGW reports that more than half of the anti-Trump protesters arrested in Portland were from out of state.

  At least sixty-nine demonstrators either didn’t turn in a ballot or weren’t registered to vote in the state.

   

  KGW compiled a list of the 112 people arrested by the Portland Police Bureau during recent protests. Those names and ages, provided by police, were then compared to state voter logs by Multnomah County Elections officials.

   

  Records show 34 of the protesters arrested didn’t return a ballot for the November 8 election. Thirty-five of the demonstrators taken into custody weren’t registered to vote in Oregon.

   

  Twenty-five protesters who were arrested did vote.

   

  KGW is still working to verify voting records for the remaining 17 protesters who were arrested.

  In other words over 60% of the arrested protesters in Portland were not local voters dismayed by the election of Donald Trump.

  *  *  *

  And so – just as in Ferguson and Charlotte – we see what appears to be professional agitators popping up at key times to encourage social unrest (which as we recently detailed were funded from George Soros' MoveOn.org), all of which perhaps explains why these 'professionals' were so adamant not be filmed or 'caught on tape' as GatewayPundit reports, reporters in Portland, Oregon were attacked by anti-Trump rioters Sunday night, according to Portland Police. The protesters also handed out leaflets warning people to not record the riots.

  One reporter, Mike Bivins, who was threatened by the pro-Hillary mob decided to not report the threats but changed his mind after the announcement by police that a news crew had been attacked. Bivins is student at Portland State University and was reporting for PSU”s Pacific Sentinel.

  Some protesters attacked a film crew. Bottles being thrown at police. Distractionary "bang" devices being used to effect arrests.

  — Portland Police (@PortlandPolice) November 13, 2016

  “Some protesters attacked a film crew. Bottles being thrown at police. Distractionary “bang” devices being used to effect arrests.”

  I wasn't gonna mention it, but at the outset of the Pioneer Square march masked protesters warned me not to film them. #PortlandProtest

  — Mike Bivins (@itsmikebivins) November 13, 2016

  “I wasn’t gonna mention it, but at the outset of the Pioneer Square march masked protesters warned me not to film them. #PortlandProtest”

  Fellow PSU student Andy Ngo who writes for PSU’s Vanguard student newspaper posted an image of the threatening leaflet.

  Media colleague @itsmikebivins warned not to record violent anti-Trump protests. At least 1 media crew attacked last night #PortlandProtest pic.twitter.com/fVKgaLHKO5

  — Andy C. Ngo (@MrAndyNgo) November 13, 2016

  The text of the leaflet reads:

  DON’T SNITCH, EVER.

  PUT DOWN YOUR CELLPHONES AND PARTICIPATE

  DO NOT HELP THE POLICE IN IDENTIFYING PERSONS ENGAGED IN ILLEGAL ACTIVITY
  DON’T POST PROTEST VIDEOS TO SOCIAL MEDIA

  A FEW THINGS YOU CAN DO:
  JOIN, CELEBRATE, SHOW YOUR RAGE
  YELL FUCK THE POLICE
  DRINK SOME WATER AND CHILL
  SHARE FOOD
  COLLABORATE
  FIND ONE ANOTHER
  KEEP PEOPLE SAFE FROM PHYSICAL HARM

  STOP FILMING.
  CONSIDER THIS A WARNING.

  Bivins said he also was threatened on Twitter via Direct Messages.

  @MrAndyNgo that flier also came through my direct messages :-/. It's definitely dangerous out there.

  — Mike Bivins (@itsmikebivins) November 13, 2016

  “@MrAndyNgo that flier also came through my direct messages :-/. It’s definitely dangerous out there.”

  Bivins also noted a film crew camera had been destroyed by rioters.

  @fredamoon a local news camera was smashed, and threatening fliers have been circulating. The danger is no secret. Perhaps you're not…

  — Mike Bivins (@itsmikebivins) November 13, 2016

  “@fredamoon a local news camera was smashed, and threatening fliers have been circulating. The danger is no secret. Perhaps you’re not…”

  Bivins posted video of Portland police dropping in to clear out a group of rioters (wait for it). Being a student reporter, Bivins ran away from the story (cussing up a storm) instead covering it, but he captured the intensity of the police action.

  LIVE on #Periscope: #PortlandProtest. I'm here coincidentally https://t.co/NaoDUuCz84

  — Mike Bivins (@itsmikebivins) November 14, 2016

  “LIVE on #Periscope: #PortlandProtest. I’m here coincidentally”

  On Thursday night a Portland news crew was attacked by rioters with a baseball bat.

  Anarchists hit one of the @KGWNews cameras. w/ bat #BlackLivesMatter protesters came to their aid & chased the anarchists off #Portland #PDX

  — Nattering Nabob of N (@phpress) November 11, 2016

  “Anarchists hit one of the @KGWNews cameras. w/ bat #BlackLivesMatter protesters came to their aid & chased the anarchists off #Portland #PDX”

  On Saturday night another news crew was attacked.

  @WashCoScanner @AlertSalem @aliceem36 Anarchists just attacked the KOIN cameraman.

  — Alan (@PepsiDad) November 13, 2016

  “@WashCoScanner @AlertSalem @aliceem36 Anarchists just attacked the KOIN cameraman.”

  Talked with our cameraman… Thankfully, he didn't get hurt. https://t.co/pnqNb39NDD

  — KOIN Assignment desk (@KOINdesk) November 13, 2016

  “Talked with our cameraman… Thankfully, he didn’t get hurt.”

  Cue media outrage “if these were Trump supporters”…

  Source: GatewayPundit.com

  

  

• 5 Stunning Facts About the 2016 Election
• President Obama Leaves Behind A Deplorable Civil Liberties Legacy

  Submitted by Mike Krieger via Liberty Blitzkrieg blog,

  More disappointing than the Obama administration itself (which was very disappointing), were the seemingly endless hordes of fake liberals constantly justifying and making excuses for his well documented litany of civil liberties abuses. Naturally, I likewise expect countless Trump supporters to instinctively make similar excuses for Trump if he should end up naming former Goldman Sachs Partner, and overall finance miscreant, Steve Mnuchin as Treasury Secretary. This is a huge part of our problem as a nation. Rather than having well defined principles and defending them, we tend to pick personalities we like and then cheer them on as uncritically as our favorite sports teams.

  Moving along, a New York Times article published yesterday highlighted some of the extremely illiberal policies perpetrated by so-called “liberal” champion, Barack Obama.

  Here are a few key excerpts:

  Over and over, Mr. Obama has imposed limits on his use of such powers but has not closed the door on them — a flexible approach premised on the idea that he and his successors could be trusted to use them prudently. Mr. Trump can now sweep away those limits and open the throttle on policies that Mr. Obama endorsed as lawful and legitimate for sparing use, like targeted killings in drone strikes and the use of indefinite detention and military tribunals for terrorism suspects.

   

  And even in areas where Mr. Obama tried to terminate policies from the George W. Bush era — like torture and the detention of Americans and other people arrested on domestic soil as “enemy combatants” — his administration fought in court to prevent any ruling that the defunct practices had been illegal. The absence of a definitive repudiation could make it easier for Trump administration lawyers to revive the policies by invoking the same sweeping theories of executive power that were the basis for them in the Bush years.

   

  Two decisions by Mr. Obama in 2009 set the tone for his leave-it-on-the-table approach. They involved whether to keep indefinite wartime detentions without trial and to continue using military commission prosecutions — if not at the Guantánamo prison, which he had resolved to close, then at a replacement wartime prison.

   

  Told that several dozen detainees could not be tried for any crime but would be particularly risky to release, and that a handful might be prosecutable only under the looser rules governing evidence in a military commission, Mr. Obama decided that the responsible policy was to keep both the tribunals and the indefinite detentions available.

   

  The president refused to use either power on newly captured terrorism suspects, instead prosecuting them in civilian court. But by leaving the options open, he helped normalize them and left them on a firmer legal basis.

   

  Mr. Obama followed a similar course with several national security practices that became controversial during his first term. After his use of drones to kill terrorism suspects away from war zones led to mounting concerns over civilian casualties and other matters, he issued a “presidential policy guidance” in May 2013 that set stricter limits. They included a requirement that the target pose a threat to Americans — not just to American interests — and that there would be near certainty of no bystander deaths.

   

  But the Obama administration also successfully fought in court to establish that judges would not review the legality of such killing operations, even if an American citizen was the target. Mr. Trump — who has said he would “bomb the hell out of ISIS,” beyond what Mr. Obama is doing, and go after civilian relatives of terrorists, prevailing over any military commanders who balked — could scrap the internal limits while invoking those precedents to shield his acts from judicial review.

   

  Similarly, after a surge of criminal prosecutions against people who leaked secret information to the news media and bipartisan outrage at aggressive investigative tactics targeting journalists, the Obama Justice Department issued new guidelines for leak investigations intended to make it harder for investigators to subpoena reporters’ testimony or phone records. It also decided not to force a reporter for The New York Times to testify in a leak trial or face prison for contempt.

   

  But the Obama administration also successfully fought in court to establish that the First Amendment offers no protection to journalists whom the executive branch chooses to subpoena to testify against confidential sources. Mr. Trump, who has proposed changing libel laws to make it easier to sue news organizations, could abandon the Obama-era internal restraints and invoke the Obama-era court precedent to adopt more aggressive policies in leak investigations.

  Well done Obama.

  

  

• First India, Now Australia Should Abolish Big Bank-Notes According To UBS

  Despite widespread chaos, bank runs,  tumbling currency, and economic uncertainty in India following its surprise announcement last week, UBS analysts think Australia should follow India’s lead and scrap its biggest bank notes, extending the war on cash further across the globe.

  The war on cash really began to escalate in February when The European Central Bank said it was considering withdrawing 500-euro notes because of an “increased conviction in world public opinion” such high-value notes are used for criminal purposes.

  And as a reminder, here is what happened in India this week after they abolished large denomination banknotes, (via Reuters)…

  Anger intensified in India on Saturday as banks struggled to dispense cash following the government's decision to withdraw large denomination notes in an attempt to uncover billions of dollars in undeclared wealth.

   

  

   

  Tempers frayed as hundreds of thousands of people queued for hours outside banks for a third day to swap 500 and 1,000 rupee bank notes after the notes were abolished earlier in the week.

   

  The banned bills made up more than 80 percent of the currency in circulation, leaving millions of people without cash and threatening to bring much of the cash-driven economy to a halt.

   

  "There's chaos everywhere," said Delhi Chief Minister Arvind Kejriwal, a rival of Prime Minister Narendra Modi, accusing the premier of wreaking havoc on poor and working Indians while the wealthy found ways to skirt the new rules.

   

  Customers argued and banged the glass doors at a Standard Chartered branch in southern Delhi after security guards blocked the entrance, saying there were too many people inside already.

  And now, as Bloomberg reports, UBS analysts thin Australia should follow the same path towards abolishing banknotes…

  “Removing large denomination notes in Australia would be good for the economy and good for the banks,” UBS analysts led by Jonathan Mott said in a note to clients on Monday. Benefits would include reduced crime and welfare fraud, increased tax revenue and a “spike” in bank deposits, he said.

   

  In Australia, 92 percent of all currency by value is in A$50 ($38) and A$100 notes, the larger of which is “rarely seen,” according to the UBS report. Removing bigger denominations would boost digital payments in a country where the use of cash payments is continuing to fall, the analysts wrote.

   

  Since 2009, ATM transactions in Australia have fallen 3.4 percent a year, while credit-card transactions have increased 7.3 percent a year, UBS said.

   

  The program would also be positive for banks. If all the A$100 notes were deposited into accounts at the lenders, household deposits would rise by about 4 percent, the UBS analysts said. That would likely be enough to fill the big banks’ regulatory-mandated net stable funding ratios and reduce reliance on offshore funding, they said.

  We have one warning for all those pushing the war on cash – and using the "coorruption" excuse – be careful what you wish for… trust only lasts so long. As Devashang Datta concludes,

  Our entire monetary system depends on trust. A banknote is a piece of paper that says the RBI will give the bearer another similar piece of paper, or make an entry in an electronic ledger for that amount. The system works because everybody believes that those pieces of paper will be accepted by everybody else and therefore, money serves as an useful medium of exchange. This move has shaken that trust.

  And sure enough gold prices in India have skyrocketed since the currency ban.

  

  

• Surge In Online Loan Defaults Sends Shockwaves Through The Industry

  Online lenders were supposed to revolutionize the consumer loan industry. Instead, they are rapidly becoming yet another “the next subprime.”

  We first started writing about the P2P sector in early 2015 with cautionary pieces like and “Presenting The $77 Billion P2P Bubble” and “What Bubble? Wall Street To Turn P2P Loans Into CDOs.” Things accelerated in February of this year when we first noted that substantial cracks were starting to show in the world of P2P lending, and more specifically, with LendingClub’s inability to assess credit risk of its borrowers that were causing the company to experience higher write-off rates than forecast.

  Below is a chart that was used in a LendingClub presentation showing just how far off the company was in predicting write-off rates – the bread and butter of its business. It was evident then that their algorithms weren’t “working very well.”

  

  At the time we said that what the slide above shows is that LendingClub is terrible at assessing credit risk. A write-off rate of 7-8% may not sound that bad (well, actually it does, but because P2P is relatively new, we don’t really have a benchmark), it’s double the low-end internal estimate. That’s bad.  In other words, we said, the algorithms LendingClub uses to assess credit risk aren’t working. Plain and simple.

  Three months later, in May of 2016, our skepticism was proven right when the stock of LendingClub – at the time the largest online consumer lender – imploded when the CEO resigned following an internal loan review.

  Since then, despite a foreboding sense of deterioration behind the scenes, there were few material development to suggest that the cracks in the surface of the online lending industry were getting bigger.

  Until today, that is, when we learned that – as expected – there has been a spike in online loan defaults by US consumers, sending a shockwave through the online lending industry: a group of online loans that were packaged into bonds is going bad faster than lenders and bond underwriters had expected even after the recent volatility in the P2P market, in what Bloomberg dubbed was “the latest sign that some startups that aimed to revolutionize the banking industry underestimated the risk they were taking.”

  In a page taken right out of the CDO book of 2007, delinquencies and defaults on at least four different sets of bonds have reached the “triggers” points. Breaching those levels would force lenders or underwriters to start paying down the bonds early, redirecting cash from other uses such as lending and organic growth. According to Bloomberg, one company, Avant Inc. and its underwriters, will have to begin to repay three of its asset-backed notes, which have all breached trigger levels.

  Two of Avant’s securities breached triggers this month for the first time, the person said, asking for anonymity because the data is not public. Another bond, tied to the subprime lender CircleBack Lending Inc., may also soon breach those levels, according to Morgan Stanley analysts. When the four offerings were originally sold last year, they totaled more than $500 million in size. Around $2.8 billion of bonds backed by online consumer loans were sold in 2015, according to research firm PeerIQ.

  The breach of trigger points is merely the latest (d)evolutionary event attained by the online lending industry, whose fall promises to be far more turbulent than its impressive rise. Prior to the latest news, LendingClub last month raised interest rates and tightened its standards for at least the second time this year after seeing higher delinquencies among its customers, especially those with the most debt. 

  

  However, that was a linear deterioration which had no impact on mandatory cash covenants, at least not yet. With the breach of trigger points, online lenders have officially entered the world of binary outcomes, where the accumulation of enough bad loans will have implications on the underlying business and its use of cash.

  Breaching triggers typically forces a company to divert cash flow from assets to paying off bonds instead of making new loans, which often means it has to find new, more expensive funding or to scale down its business. Avant, based in Chicago, cut its monthly target for lending this summer by about 50 percent, and decided to shrink its workforce in line with that, while CircleBack Lending, based in Boca Raton, Florida, stopped making new loans earlier this year.

  Setting bond triggers is often up to the security’s underwriters. Some lenders have been working more closely with Wall Street firms to make sure the banks know how loans will probably perform and set triggers at reasonable levels, said Ram Ahluwalia, whose data and analytics firm PeerIQ tracks their loan data.

  Indicatively, in the “old days” John Paulson would sit down with
  Goldman Sachs and determine the “triggers” on CDOs, also known as
  attachment and detachment points, so he could then be the counterparty on the trade, and short it while Goldman syndicated the long side to its clients, also known as muppets. It would be interesting if a similar transaction could take place with online loans as well.

  Other industry participants aren’t doing better: “There was a rush to grow,” said Bryan Sullivan, chief financial officer of LoanDepot, a mortgage company that last year began making unsecured loans to consumers online. In the true definition of irony, while Sullivan was speaking about the industry in general, LoanDepot’s own loan losses on a bond in September broke through the ceilings that had been set by underwriters at Jefferies Group. 

  We are not the only ones to have warned early about the dangers of online lending: Recently Steve Eisman, a money manager who predicted the collapse of subprime mortgage securities, said some firms have been careless and that Silicon Valley is “clueless” about the work involved in making loans to consumers. Non-bank startups arranged more than $36 billion of loans in 2015, mainly for consumers, up from $11 billion the year before, according to a report from KPMG.

  And while P2P may be the “next” subrpime, there is always the “old” subprime to fall back on to get a sense of the true state of the US consumer :as Bloomberg adds, the percentage of subprime car loan borrowers that were past due reached a six-year high in August according to S&P Global Ratings’ analysis of debts bundled into bonds.

  Lenders themselves are talking about the heavy competition for customers. Jay Levine, the chief executive officer of OneMain Holdings Inc., one of America’s largest subprime lenders, said last week that “the availability of unsecured credit is currently the greatest that has been in recent years,” although he said much of the most intense competition is coming from credit card lenders.

  And in a surprising twist, OneMain, formerly part of Citigroup, is taking steps to curb potential losses by requiring the weakest borrowers to pledge collateral. In other words, what was until recently an unsecured online loan industry is quietly shifting to, well, secured. Alas, for most lenders it may be too late.

  * * *

  For those curious, the deals that have or are expected to breach triggers include:

  • MPLT 2015-AV1, a bond deal backed by Avant loans that Jefferies bought and securitized.
  • AVNT 2015-A, a bond deal issued by Avant and underwritten by Jefferies.
  • AMPLT 2015-A, a bond deal backed by Avant loans and underwritten by Morgan Stanley.
  • MPLT 2015-CB2, backed by subprime loans made by CircleBack Lending Inc. and underwritten by Jefferies.

  

  

• Did President-Elect Trump Just Inadvertently Kill The Golden Goose?

  Submitted by Gordon T Long via MATASII.com,

  President-Elect Trump may have just unwittingly sowed the seed of an equity market draw-down which will send even more protesters into the streets of America. Donald Trump's stated economic policies are clearly pro-growth and if he manages to implement his pro-business, anti-regulation agenda, in  the longer term they have the potential to surpass the bold and successful initiatives of Ronald Reagan. However, in the near term he has already unknowingly just shot himself in the foot.

  To understand this we need to look at some charts from the FRED system which we unearthed in trying to understand what the future presently entails for corporate stock buybacks and dividend payouts. Shown in the chart below we see how Corporate CEO / CFO's have increased their debt loads by historically unprecedented levels of 20-30% Y-o-Y since just after the GFC (Great Financial Crisis). You will notice that in the last year that rate of growth has gone negative.

  

  The next chart we found astounding regarding the degree of correlation of the above corporate debt growth (primarily being used for buybacks and dividend payouts) compared  to the movement of the S&P 500 on a Quarterly Y-o-Y change basis. There can be little doubt about what has been sustaining the artificial levels of US equity markets!

  

  You will also notice that recently this correlation has begun to falter, as equities diverged staying positive from the falling rate of debt growth.

  To put this into perspective our analysis  indicated that corporate cashflows (EBITDA) and debt levels had now reached a level where they were potentially impacting corporate credit & lending ratings. As you would suspect, corporations as a consequence have began to slow their rate of buybacks (shown below).

  

   

  SWISS NATIONAL BANK  (A LIKELY PROXY) TEMPORARILY TO THE RESCUE

  The question is; what allowed US equities to continuing  rise?  We sense this can best be answered by showing how mysteriously, at the same time as the above divergence, we witnessed the Swiss National Bank buying US stocks. The SNB acquired to  almost the exact level required to keep markets temporarily levitated. Obviously nothing more than a coincidence and certainly not something that anyone might suspect they could be potentially acting as a proxy for the US Federal Reserve or US Treasury?

  

  ENTER PRESIDENT-ELECT DONALD TRUMP

  But now we have a new President and the political pressures on the Federal Reserve to keep markets from falling prior to the US Presidential  & Congressional election are over. Based on President-Elect Trump's campaign rhetoric, Janet Yellen knows she is likely not to have her term renewed in 2018 and knows the Fed's historical independence may in fact be exposed.

  IMMEDIATELY on Trump's victory we have witnessed A Global Bond debacle as yields have shot skyward. Suddenly corporate borrowing has become even more expensive and most importantly, perceived low-risk Treasury yields are now the same or slightly higher than stock yields!  Investors have been forced to buy US equity stocks (other than the FANGs & NOSH) for the dividends in a yield hungry world controlled by policies of Financial Repression.

  

  This dramatic post election development may be the "spanner" in the corporate stock buyback program that many have been anticipated, but were unsure what exactly would trigger it.

  Trump's aggressive $1 Trillion Infrastructure Plan may have released the "inflation genie" based on his vowed spending and tax cut programs.

  

  BOTTOM LINE

  With bond prices having removed $1 Trillion globally the expectations and pressures are now for the equity market correlation to more closely align with bond values.

  

  Courtesy of ZeroHedge.com

  Expect the correction of an over-valued US Equity market to be summarily and quickly blamed by the liberal media on the new Trump Administration before it has even taken office.

  

  

• Violent Clashes Erupt Between Greek Police And Demonstrators Protesting Obama's Visit

  It appears that no matter what outgoing US president Barack Obama does, he can’t get anything right. In the US, it is mostly the right that detests the president, who threw his entire weight behind Hillary Clinton’s failed campaign (a sentiment shared by many Bernie Sanders supporters who feel that the presidency was complicit in Hillary Clinton’s theft of the primary from their preferred candidate).

  Meanwhile, in Greece – the first stop of Obama’s farewell global tour – it is the left that appears to be disgusted with Obama. As the following videos and photos show, leftist demonstrators took to the streets to protest against US President Barack Obama’s visit to Athens, clashing with police, who used tear gas to disperse the crowd as people tried to break through cordons.

  According to Reuters, the clashes broke out just a few kilometers from the presidential mansion where Greek leaders were hosting a state banquet for visiting U.S. President Barack Obama. About 7,000 people, among them many hooded protesters and members of the Communist-affiliated group PAME, marched through the streets of central Athens holding banners reading “Unwanted!”

  

  Protesters are rallying against US policy that is “creating tensions” with various countries around the world, starting with China and Russia, as well as against the US attempts to “overthrow the government in Ukraine,” Greek journalist Aris Chatzistefanou told RT. Apart from that, protesters are blaming the US for supporting“Islamic extremists”which led to“well-known consequences.”

  ???? ??????? ??? ?????? ?????????? pic.twitter.com/WpLJhSmB5N

  — Aris Chatzistefanou (@xstefanou) November 15, 2016

  “While the Greek government is trying to present the visit of Obama as a visit of a peacemaker, thousands of demonstrators came onto the streets to protest US policy in [such] parts of the world from Latin America to Middle East, Afghanistan and Syria,” Chatzistefanou said. 

  
  

  “The government was trying to present to the Greek public that Barack Obama will come and help with the austerity policy that was imposed by the Troika,” Chatzistefanou said, also adding that there is “no direct connection” between Obama’s promises and what the IMF is planning to do.

  

  The police clashed with the protesters after they tried to break through cordon lines to reach the parliament building and the U.S. embassy. In traditional Greek fashion, some demonstrators threw two petrol bombs at police before dispersing into nearby streets close to Athens’s main Syntagma Square.

  ????? ????… ??? ??? ????? ????? pic.twitter.com/4CR8j0d7Dm

  — Aris Chatzistefanou (@xstefanou) November 15, 2016

  “We don’t need protectors!” one of the banners carried by the demonstrators read. Some could be heard exclaiming: “Yankees go home!”

  All public gatherings were banned in the central part of Athens due to Obama’s two-day visit, however that did not prevent protesters from appearing. Riot police parked buses along Obama’s route and erected cordons.

  

  No injuries or arrests have been reported so far, according to AP.

  More than 5,000 police officers were deployed in central Athens to maintain order.

  In a separate protest in the northern city of Thessaloniki, more than 1000 people took place in a similar protest, where one of the participants was caught burning a U.S. flag. 

  ?? ???????? ????? ??? ??????????? ?????? ??? ????????? ?? #skouries ??????? ???? ????????????. #obama_athens #ObamaGr pic.twitter.com/qVC2uOKZCI

  — Chris Avramidis (@Chris_Avramidis) November 15, 2016

  Authorities had to step up security measures “as the circumstances require,” with a number of protests planned, a police source told AFP earlier today.

  

  Obama left Washington on Monday, embarking on his last trip across Europe before President-elect Donald Trump assumes his post in January 2017.

  He is to spend one more day in Greece to continue the discussion of Greece’s economic situation and Europe’s migration crisis. He will then leave for Germany on Wednesday, intending to soothe concerns over Trump’s upcoming presidency

  This was the first time that Obama has visited Greece during his eight years in office. Last time Greece was visited by a US president when Bill Clinton held the office in 1999. His visit also saw extensive street fighting between anarchists and riot police.

  The visit comes only two days before the anniversary of a bloody 1973 student revolt that helped topple the 1967-1974 military junta which was backed by the U.S. government.

  

  

• The Secular Trend In Rates Remains Lower: The Yield Bottom Is Still Ahead Of Us

  Via KesslerCompanies.com,

  Donald Trump’s victory sparked a tremendous sell-off in the Treasury market from an expectation of fiscal stimulus, but more broadly, from an expectation that a unified-party government can enact business-friendly policies (protectionism, deregulation, tax cuts) which will be inflationary and economically positive. It doesn’t take too much digging to show that the reality is different. The deluge of commentaries suggesting 'big-reflation' are short-sighted. Just as before last Tuesday we thought the 10yr UST yield would get below 1%, we still think this now. 

  

  [single left-click to enlarge]

  Business Cycle

  No matter the President, this economic expansion is seven and a half years old (since 6/2009), and is pushing against a difficult history. It is already the 4th longest expansion in the US back to the 1700’s (link is external). As Larry Summers has pointed out (link is external), after 5 years of recovery, you add roughly 20% of a recession’s probability each year thereafter. Using this, there is around a 60% chance of recession now.

  History also doesn’t bode well for new Republican administrations. Certainly, the circumstances were varied, but of the five new Republican administrations replacing Democrats in the 19th and 20th centuries, four of them (Eisenhower, Nixon, Reagan, and George W. Bush) faced new recessions in their first year. The fifth, Warren Harding, started his administration within a recession.

  Fiscal Stimulus 

  Fiscal stimulus through infrastructure projects and tax cuts is now expected, but the Federal Reserve has been begging for more fiscal help since the financial crisis and it has been politically infeasible. The desire has not created the act. A unified-party government doesn’t make it any easier when that unified party is Republican; the party of fiscal conservatism. Many newer House of Representatives members have been elected almost wholly on platforms to reduce the Federal debt. Congress has gone to the wire several times with resistance to new budgets and debt ceilings. After all, the United States still carries a AA debt rating from S&P as a memento from this. Getting a bill through congress with a direct intention to increase debt will not be easy. As we often say, the political will to do fiscal stimulus only comes about after a big enough decrease in the stock market to get policy makers scared.

  Also, fiscal stimulus doesn't seem to generate inflation, probably because it is only used as a mitigation against recessions. After the U.S. 2009 Fiscal stimulus bill, the YoY CPI fell from 1.7% to 1% two years later. Japan has now injected 26 doses (link is external) of fiscal stimulus into its economy since 1990 and the country has a 0.0% YoY core CPI, and a 10yr Government bond at 0.0%.

  Rate sensitive world economy

  A hallmark of this economic recovery has been its reliance on debt to fuel it. The more debt outstanding, the more interest rates influence the economy’s performance. Not only does the Trump administration need low rates to try to sell fiscal stimulus to the nation, but the private sector needs it to survive. The household, business, and public sectors are all heavily reliant on the price of credit. So far, interest rates rising by 0.5% in the last two months is a drag on growth.

  

  [single left-click to enlarge]

  Global mooring

  Global policies favoring low rates continue to be extended, and there isn’t any economic reason to abandon them. Just about every developed economy (US, Central Europe, Japan, UK, Scandinavia) has policies in place to encourage interest rates to be lower. To the extent that the rest of the world has lower rates than in the US, this continues to exert a downward force on Treasury yields.

  

  [single left-click to enlarge]

  Demographics

  As Japan knows and we are just getting into, aging demographics is an unmovable force against consumption, solved only with time. The percent of the population 65 and over in the United States is in the midst of its steepest climb. As older people spend less, paired with slowing immigration from the new administration, consumer demand slackens and puts downward pressure on prices.

  

  [single left-click to enlarge]

  Conclusion

  We haven’t seen such a rush to judgement of boundless higher rates that we can remember. Its noise-level is correlated with its desire, not its likelihood. While we cannot call the absolute top of this movement in interest rates, it is limited by these enduring factors and thus, we think it is close to an end. In a sentence, not only will the Trump-administration policies not be enacted as imagined, but even if they were, they won't have the net-positive effect that is hoped for.  We think that a 3.0% 30yr UST is a rare opportunity buy.

  

  

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• Whiff of Panic in Miami’s Condo Market

  By Wolf Richter, WOLF STREET

  The Miami-Dade County condo market is coming under severe stress, and turmoil is spreading. There are two aspects: supply and sales activity overall, and the more obscure but highly indicative “preconstruction market.”

  Preconstruction condos are a favorite playground for condo flippers. They buy the units before construction begins. When the building is completed, some of the buyers (in recent years 30% to 40%) flip their units at a profit, benefiting from the run-up in condo prices in the interim. This activity is crucial in helping developers fund their working capital. Alas, the math has stopped working.

  The overall condo and townhouse market in Miami-Dade County is already in trouble. In October, sales plunged 30% year-over-year, while inventory for sale rose to over 14,000 units as of November 1, according to StatFunding’s Preconstruction Condo Market Update.

  At the current sales rate, that makes for over 13 months’ supply. The blue bars in the chart from StatFunding represent the swooning sales (in units, left scale). The green line represents the ballooning inventory (in units listed for sale, right scale):

  

  There is some seasonality. So here is another way of looking at these sales on a year-over-year basis (red line = 2016 sales):

  

  Behind the scenes, it looks a lot worse: the preconstruction market is in the process of unraveling. A total of 4,525 condos were completed between 2012 and 2016 at 20 large projects (80+ units each). Of them, 878 “preconstruction” units are now listed for sale by investors who’d bought from developers before construction began – 19% of the total units in those projects! At the 234-unit Marina Palms North, completed a year ago, 93 units are for sale.

  But only 47 resales have actually occurred over the last six months. This makes for a supply of 112 months, or nearly a decade, at the current sales rate. At seven of those developments, with a combined 209 units listed for sale, no sales have occurred over the past six months, and the months’ supply would be infinite.

  Of those 47 sales, 43% produced net losses after commissions. Now even more flippers are willing to take a loss: 70 units have been listed with underwater asking prices, up from 44 on August 1 and from 14 on May 1. But losses will be higher: 30% of the units that were sold at a loss had asking prices above break-even.

  And it will spread from there: These losses are establishing a down-trend in the “comparable sales” data – the Holy Grail by which the industry values properties – which will depress future asking and sales prices further.

  Just then, new supply will flood the market. Over the next 24 months, another 10,328 units at large developments are scheduled to be completed.

  If the recent average of 30% to 40% of these new units is listed for resale, it would add another 3,614 units to the list, on top of the 878 units of 2012-2016 vintage listed today. This would increase the supply to 468 months at the current sales rate. That would be 39 years’ supply!!

  No one will wait 39 years to sell a condo. Something is going to give. Prices may drop until demand materializes. Sellers may flood the already flooded rental market with these units. Or as Andrew Stearns, Founder and CEO of StatFunding put it, “something unexpected may occur due to imbalances in the market.”

  At the five large developments completed between August 2015 and June 2016 with a total of 912 units, 156 units are for sale. Developers still own 123 units. Only 25 of them are listed for sale and are included in the 156. The remaining 98 developer-owned units are not listed for sale. Developers are just sitting on them. It’s the shadow inventory. The units listed for sale and the shadow inventory combined amount to 254 units, or 28% of all units in the developments.

  After the prior condo crash during the Financial Crisis, and through to 2015, all developers sold all units. In the past, the moment developers got stuck with unsold condos marked “the inflection point in a condo cycle.” In the Press Release, Stearns said, “It looks like we may be experiencing the same thing all over again.”

  But unsold units can be costly for developers. StatFunding:

  Some developers have not repaid their construction loans, others have taken out bridge loans. Developers are also responsible for taxes, maintenance fees, and insurance of unsold units. What will developers do to liquidate unsold units?

  Market gurus are eagerly proclaiming that this time, the condo cycle is different because preconstruction condos are sold with a “50% deposit.” But this isn’t a 50% deposit. It’s a series of five 10% progress payments due at at the time of reservation, at contract, at groundbreaking, at concrete-pour at the 15th floor, and at Top Off. They typically spread over 24 months.

  When a buyer defaults on a progress payment in this market, with little possibility of selling the unit, everyone from the lenders to the developers is bending over backwards to accommodate the nonpayment. Also, alternative lenders have sprung up with loans for the defaulted progress payments. The actual number of defaults is a secret closely guarded by developers (though their lenders know).

  But when the project is completed and the buyer with defaulted progress payments attempts to get a mortgage to finalize the purchase, which is what the developer wants to happen, the bank sees the defaulted progress payments along with the stress in the condo market and might not offer a mortgage. This is when the whole deal falls apart, even as the buyer is in arrears with the progress payments. Hence, the value of that “50%  deposit” to bail out the developer can be minimal.

  Progress payment defaults “are on the rise,” according to Stearns, “and everyone in the preconstruction condo ecosystem is trying to cope with the issue.” These defaults are “a new risk to the market.”

  And now the ultimate nightmare has happened for preconstruction condo flippers: The first big condo project in the area has stalled in this condo cycle, “which could be a sign of things to come,” Stearns says.

  In September, the developer of the 247-unit H3 Hollywood ran out of funds and halted construction halfway into it. This is in Fort Lauderdale, Broward County, which is adjacent and to the north of Miami-Dade County. While they’re different markets, this incident is a harbinger of what may occur in Miami.

  If the developer fails to get funding to finish the project, buyers of preconstruction units are at risk of losing all or almost all of their deposits. Stearns:

  “Most preconstruction buyers do not understand that most of their deposit is used as working capital to build the condo project, and that if the project fails, they might lose their deposit.”

  Foreclosures suddenly spike most since the last Housing Bust. Read…  What the Heck’s going on with Foreclosures? Why this Spike?

  

• Stay Alert, America: The Worst Is Yet To Come

  Submitted by John Whitehead via The Rutherford Institute,

  “Those who do not remember the past are condemned to repeat it.”—Philosopher George Santayana

  Stay alert, America.

  This is not the time to drop our guards, even for a moment.

  Nothing has changed since the election to alter the immediate and very real dangers of roadside strip searches, government surveillance, biometric databases, citizens being treated like terrorists, imprisonments for criticizing the government, national ID cards, SWAT team raids, censorship, forcible blood draws and DNA extractions, private prisons, weaponized drones, red light cameras, tasers, active shooter drills, police misconduct and government corruption.

  Time alone will tell whether those who put their hopes in a political savior will find that trust rewarded or betrayed.

  Personally, I’m not holding my breath.

  I’ve been down this road before.

  I’ve studied history.

  I know what comes next.

  It’s early days yet, but President-elect Trump—like his predecessors—has already begun to dial back many of the campaign promises that pledged to reform a broken system of government.

  The candidate who railed against big government and vowed to “drain the swamp” of lobbyists and special interest donors has already given lobbyists, corporate donors and members of the governmental elite starring roles in his new administration.

  America, you’ve been played.

  This is what happens when you play politics with matters of life, death and liberty.

  You lose every time.

  Unfortunately, in this instance, we all lose because of the deluded hypocrisy of the Left and the Right, both of which sanctioned the expansion of the police state as long as it was their party at the helm.

  For the past eight years, the Left—stridently outspoken and adversarial while George W. Bush was president—has been unusually quiet about things like torture, endless wars, drone strikes, executive orders, government overreach and fascism.

  As Glenn Greenwald points out for The Washington Post:

  Beginning in his first month in office and continuing through today, Obama not only continued many of the most extreme executive-power policies he once condemned, but in many cases strengthened and extended them. His administration detained terrorism suspects without due process, proposed new frameworks to keep them locked up without trial, targeted thousands of individuals (including a U.S. citizen) for execution by drone, invoked secrecy doctrines to shield torture and eavesdropping programs from judicial review, and covertly expanded the nation’s mass electronic surveillance…

   

  Liberals vehemently denounced these abuses during the Bush presidency… But after Obama took office, many liberals often tolerated — and even praised — his aggressive assertions of executive authority. It is hard to overstate how complete the Democrats’ about-face on these questions was once their own leader controlled the levers of power… After just three years of the Obama presidency, liberals sanctioned a system that allowed the president to imprison people without any trial or an ounce of due process.

  Suddenly, with Trump in the White House for the next four years, it’s all fair game again.

  As The Federalist declares with a tongue-in-cheek approach, “Dissent, executive restraint, gridlock, you name it. Now that Donald Trump will be president, stuff that used to be treason is suddenly cool again.”

  Yet as Greenwald makes clear, if Trump is about to inherit vast presidential powers, he has the Democrats to thank for them.

  A military empire that polices the globe. Secret courts, secret wars and secret budgets. Unconstitutional mass surveillance. Unchecked presidential power. Indefinite detention. Executive signing statements.

  These are just a small sampling of the abusive powers that have been used liberally by Obama and will be used again and again by future presidents.

  After all, presidents are just puppets on a string, made to dance to the tune of the powers-that-be. And the powers-that-be want war. They want totalitarianism. They want a monied oligarchy to run the show. They want bureaucracy and sprawl and government leaders that march in lockstep with their dictates. Most of all, they want a gullible, distracted, easily led populace that can be manipulated, maneuvered and made to fear whatever phantom menace the government chooses to make the bogeyman of the month.

  Unless Trump does another about-face, rest assured that the policies of a Trump Administration will be no different from an Obama Administration or a Bush Administration, at least not where it really counts.

  For that matter, a Clinton Administration would have been no different.

  In other words, Democrats by any other name would be Republicans, and vice versa.

  This is the terrible power of the shadow government: to maintain the status quo, no matter which candidate gets elected.

  War will continue. Surveillance will continue. Drone killings will continue. Police shootings will continue. Highway robbery meted out by government officials will continue. Corrupt government will continue. Profit-driven prisons will continue. Censorship and persecution of anyone who criticizes the government will continue. The militarization of the police will continue. The government’s efforts to label dissidents as extremists and terrorists will continue.

  In such a climate, the police state will thrive.

  The more things change, the more they will stay the same.

  We’ve been stuck in this political Groundhog’s Day for so long that minor deviations appear to be major developments while obscuring the fact that we’re stuck on repeat, unable to see the forest for the trees.

  This is what is referred to as creeping normality, or a death by a thousand cuts.

  It’s a concept invoked by Pulitzer Prize-winning scientist Jared Diamond to describe how major changes, if implemented slowly in small stages over time, can be accepted as normal without the shock and resistance that might greet a sudden upheaval.

  Diamond’s concerns are environmental in nature, but they are no less relevant to our understanding of how a once-free nation could willingly bind itself with the chains of dictatorship.

  Writing about Easter Island’s now-vanished civilization and the societal decline and environmental degradation that contributed to it, Diamond explains, “In just a few centuries, the people of Easter Island wiped out their forest, drove their plants and animals to extinction, and saw their complex society spiral into chaos and cannibalism… Why didn’t they look around, realize what they were doing, and stop before it was too late? What were they thinking when they cut down the last palm tree?”

  His answer: “I suspect that the disaster happened not with a bang but with a whimper.”

  Much like America’s own colonists, Easter Island’s early colonists discovered a new world—“a pristine paradise”—teeming with life. Almost 2000 years after its first settlers arrived, Easter Island was reduced to a barren graveyard by a populace so focused on their immediate needs that they failed to preserve paradise for future generations.

  To quote Joni Mitchell, they paved over paradise to put up a parking lot.

  In Easter Island’s case, as Diamond speculates:

  The forest…vanished slowly, over decades. Perhaps war interrupted the moving teams; perhaps by the time the carvers had finished their work, the last rope snapped. In the meantime, any islander who tried to warn about the dangers of progressive deforestation would have been overridden by vested interests of carvers, bureaucrats, and chiefs, whose jobs depended on continued deforestation… The changes in forest cover from year to year would have been hard to detect… Only older people, recollecting their childhoods decades earlier, could have recognized a difference.

  Sound painfully familiar yet?

  Substitute Easter Island’s trees for America’s republic and the trees being decimated for our freedoms, and the arrow hits the mark.

  Diamond observes, “Gradually trees became fewer, smaller, and less important. By the time the last fruit-bearing adult palm tree was cut, palms had long since ceased to be of economic significance. That left only smaller and smaller palm saplings to clear each year, along with other bushes and treelets. No one would have noticed the felling of the last small palm.”

  We’ve already torn down the rich forest of liberties established by our founders. They don’t teach freedom in the schools. Few Americans know their history. And even fewer seem to care that their fellow Americans are being jailed, muzzled, shot, tasered, and treated as if they have no rights at all. They don’t care, that is, until it happens to them—at which point it’s almost too late.

  This is how the police state wins. This is how tyranny rises. This is how freedom falls.

  A thousand cuts, each one justified or ignored or shrugged over as inconsequential enough by itself to bother. But they add up.

  As I make clear in my book Battlefield America: The War on the American People, each cut, each attempt to undermine our freedoms, each loss of some critical right—to think freely, to assemble, to speak without fear of being shamed or censored, to raise our children as we see fit, to worship or not worship as our conscience dictates, to eat what we want and love who we want, to live as we want—they add up to an immeasurable failure on the part of each and every one of us to stop the descent down that slippery slope.

  It’s taken us 200 short years to destroy the freedoms our founders worked so hard to secure, and it’s happened with barely a whimper of protest from “we the people.”

  So when I read about demonstrations breaking out in cities across the country and thousands taking to the streets to protest the threat of fascism from a Trump presidency, I have to wonder where were the concerns when access to Obama came easily to any special interest groups and donors willing and able to pay the admissions price?

   

  When I see celebrities threatening to leave the country in droves, I have to ask myself, where was the outcry when the government’s efforts to transform local police into extensions of the military went into overdrive under the Obama administration?

   

  When my newsfeed is overflowing with people wishing they could keep the Obamas in office because they are so cool, I shake my head in disgust over this “cool” president’s use of targeted drone strikes to assassinate American citizens without any due process.

   

  When legal think tanks are threatening lawsuits over the possibility of Trump muzzling free expression, I can’t help but wonder where the outrage was over the Obama administration’s demonizing and criminalization of those who criticized the government.

   

  And when commentators who previously dismissed as fear-mongering and hateful any comparison of the government’s tactics to Nazi Germany are suddenly comparing Trump to Hitler, I have to wonder if perhaps we’ve been living in different countries all along, because none of this is new.

  Indeed, if we’re repeating history, the worst is yet to come.

  

  

• A Record 25% Of Used Car Trade-Ins Are Underwater

  We have frequently written about the unsustainable trends in new car sales in the United States created by the combination of lower rates, loosening underwriting standards and voracious demand for new securitizations by wall street and pension funds that will do just about anything for an extra 20bps of yield. 

  Today, we find that Edmunds’ “Q3 2016 Used Vehicle Market Report” reveals that many of the same problems also afflict the used auto market.  The most startling takeaway from the report is that the percentage of used cars being traded in with negative equity values continues to spike and currently stands at an all-time high 25%.  Moreover, the average balance of the negative equity also continues to rise and stood at $3,635 for Q3 2016, up from roughly $2,750 in Q3 2011.

  

   

  Meanwhile, the average used car price also continues to rise and stood at $19,200 as of Q3 2016.  This implies that, since most people simply roll their negative equity into their new loans (because, why not?), many used car buyers are likely sitting on loans where ~15-20% of their outstanding balance simply reflects their negative equity from their previous car. 

  

   

  But wait, there’s more (think weekend CNBC infomercial).  Despite rising average used car prices and rising negative equity, average monthly payments for used cars have managed to stay pretty much flat since Q3 2011.  Obviously, monthly payments are determined by 3 variables: beginning loan balance, interest rate and term.  While interest rates have certainly come down from Q3 2011, they haven’t declined nearly enough to offset a $3,300 increase in starting principal balance which indicates that, like new car loans, used car loan terms are getting stretched out further and further to manage monthly payments.

  

   

  Of course, none of this is terribly surprising…just another ponzi scheme, courtesy of accommodative fed policies, which will all come crashing down at some point.  And while timing when bubbles will burst is always tricky, with terms already maxed out, treasury yields spiking and used car purchasers extremely sensitive to monthly payments we suspect the time could very well be near.

  

  

• Can President Trump Really "Open Up Libel Laws"?

  Submitted by Mike Krieger via Liberty Blitzkrieg blog,

  Ken White over at law blog Popehat has written a very useful article on whether or not Trump is likely to be the existential threat to free speech that so many are concerned about.

  Fortunately, he argues that free speech is pretty well protected at the judicial level, adding that most contemporary attempts to whittle away at First Amendment rights actually emanate from “liberal” judges targeting hate speech, as opposed to conservative ones.

  Here’s the article: Lawsplainer: About Trump “Opening Up” Libel Laws.

  Donald Trump famously said he’d like to “open up” libel laws. How much should that concern you?

   

  From my perspective — as a First Amendment advocate and an opponent of Trump — it should concern you as an attitude about speech, but not much as a policy agenda.

   

  Let’s start with what he said.

   

  “One of the things I’m going to do if I win, and I hope we do and we’re certainly leading. I’m going to open up our libel laws so when they write purposely negative and horrible and false articles, we can sue them and win lots of money. We’re going to open up those libel laws. So when The New York Times writes a hit piece which is a total disgrace or when The Washington Post, which is there for other reasons, writes a hit piece, we can sue them and win money instead of having no chance of winning because they’re totally protected,” Trump said.

   

  I begin with the proposition that Trump is a bullshitter. The polite way to put that is that he says things that are not intended to be taken as factual statements. Was this one? Was it merely emotive? Did he think he could do this sort of thing? It’s anybody’s guess. My guess it that it was mostly bullshit — worrying in terms of his attitude towards free expression, but not a policy agenda.

   

  Let’s talk about the substance, such as it is.

   

  Trump complains about the press being able to run “hit pieces” and purposely “negative and horrible and false” articles. Part of that is true and part is false. The press can absolutely run hit pieces and negative and horrible articles. We don’t have sedition laws any more, and it’s not illegal to be biased or “unfair” in a philosophical sense. Only false statements of fact can be defamatory. Arguments, characterizations, insults, and aspersions can’t be, unless they are premised on explicit or implied false statements of fact.

   

  When a public figure like Trump sues for defamation, they must prove that the defendant made a false statement with actual malice — that is, they must show that the statement was false and that the defendant either knew it was false or recklessly disregarded whether or not it was false. “Reckless disregard” means something like deliberately ignoring manifest signs that the statement was false. That’s been the standard since New York Times v. Sullivan in 1964. Note that even under this standard, a media outlet that wrote a “purposely . . . false” statement of fact can be held liable. It’s a difficult standard, but it can be done, as Rolling Stone found out this month.

   

  So. There are two impediments to Trump and his sympathizers being able to sue whomever they want for “hit pieces” or “negative” and “horrible” statements. First, there’s the requirement that defamation involve a statement of fact, not an opinion or insult. Second, there’s the actual malice standard that applies to defamation claims against public figures.

   

  Trump doesn’t have a clear way to “open up” either one.

   

  Defamation is a creature of state law, not federal law. When you sue someone for defamation, you do so under a statute or the common law of one of the states, not under federal law. You might sue in federal court if that court has jurisdiction (a tedious discussion I’ll spare you today), but that doesn’t make defamation law federal — you’d still be suing under state law. Federal law touches defamation law only to this extent: since 1964 both state and federal courts have applied First Amendment standards to defamation claims, and First Amendment law is often developed by federal courts. In addition, a few overarching federal laws limit state defamation law (for instance, Section 230 of the Communications Decency Act, which says that a service provider isn’t liable for defamation based on what a user posts, and the SPEECH Act, which prevents enforcement of foreign libel judgments in U.S. courts unless those judgments comply with First Amendment standards).

   

  As President, Trump will appoint federal judges, from the Supreme Court to the various Courts of Appeal to the trial judges on the many District Courts. But that’s not a clear or easy path to “opening up” defamation law and changing either the actual malice standard or the requirement that defamation involve false statements of fact. The Supreme Court has supported the First Amendment very strongly in the last generation, particularly in comparison with other rights. The Court has repeatedly rejected recent attempts to create new exceptions to the First Amendment or to narrow it. Consider Snyder v. Phelps, in which the Supreme Court ruled 8-1 that Westboro Baptist Church protests at funerals were protected speech. That represented a firm refutation of the notion that speech could be limited because it is hurtful or offensive. Or consider the somewhat obscure but incredibly important United States v. Stevens, in which the Court — ruling 8-1 again — overturned a federal law against “crush videos” (don’t ask) and sternly rebuked the government’s position that courts can create new ad hoc exceptions to the First Amendment based on a weighing of the value of speech. Or consider Reed v. Town of Gilbert last year, in which the Court unanimously (though with some justices taking a different route) held the line on the idea that laws that restrict speech based on content are subject to strict scrutiny.

   

  Unlike, say, Roe v. Wade, nobody’s been trying to chip away at Sullivan for 52 years. It’s not a matter of controversy or pushback or questioning in judicial decisions. Though it’s been the subject of academic debate, even judges with philosophical and structural quarrels with Sullivan apply it without suggesting it is vulnerable. Take the late Justice Scalia, for example.  Scalia thought Sullivan was wrongly decided, but routinely applied it and its progeny in cases like the ones above.1 You can go shopping for judicial candidates whose writings or decisions suggest they will overturn Roe v. Wade, but it would be extremely difficult to find ones who would reliably overturn Sullivan and its progeny. It’s an outlying view — not chemtrial-level, but several firm strides in that direction. Nor is the distinction between fact and opinion controversial — at least not from conservatives. There’s been some back and forth over whether opinion is absolutely protected (no) or whether it might be defamatory if it implies provably false facts (yes) but there’s no conservative movement to make insults and hyperbole subject to defamation analysis. The closest anyone gets to that are liberal academics who want to reinterpret the First Amendment to allow prohibitions of “hate speech” and other “hurtful” words. It seems unlikely that Trump would appoint any of these.

  Indeed, fake liberals wanting to restrict free speech is a trend I’ve focused on for many years.

  See:

  Obama Enters the Media Wars – Why His Recent Attack on Free Speech is So Dangerous and Radical

  Executive Director of the Kansas City Library System Issues Dire Free Speech Warning

  Glenn Greenwald Confronts American “Liberals” Trying to Destroy Free Speech

  Speechless – UCLA Engages in Absurd, Anti-Intellectual and Dangerous Attack on Campus Free Speech

  Here We Go…Slate Magazine Bashes the First Amendment

  In short, there’s no big eager group of “overturn Sullivan” judges waiting in the wings to be sent to the Supreme Court. The few academics who argue that way are likely more extreme on other issues than Trump would want.

   

  So: whether or not Trump really wants to “open up” defamation law, it’s unlikely he can.

   

  The statement remains concerning, though, because it displays a contempt towards First Amendment values and freedom of the press. It carelessly conflates false statements and negative coverage. It encourages the public to scorn First Amendment rights, and the public already does that enough already. It also likely encourages defamation litigation, which by its nature silences speech through the expense and stress of litigation even when the defendant prevails. For those, I condemn Trump.

  

  

• Bond Bloodbath Becomes Buying-Panic As Treasury Yields Tumble Most Since June

  After 3 days of carnage in US Treasuries, pushing longer-dated bond yields notably above US equity dividend yield – and following both Citi and Goldman reports that Trumponomics may be less inflationary than expected (and the yield surge is tightening financial conditions) drastically, longer-dated bond yields are dropping notably in the early Asia session. 10Y yields are down 8bps – the most since June as 30Y drops back below 3.00%.

  The yield on the 10Y US Treasury note is now 12bps 'cheap' to the dividend yield from the S&P 500 – the highest since Dec 2015…

  

  And as Bloomberg reports, Fed speakers this week are unlikely to be as hawkish as the market, which could dent market pricing and lead to profit-taking on rates and USD, according to Citi managing director of G-10 FX strategy Steven Englander.

  Were the Fed to indicate that it thought three hikes were possible, we could see a lot more damage than we have seen till now, Englander writes in note.

  Citi however expects a far more dovish tone given:

  • Fed doesn’t know the nature of Trump’s fiscal measures that will be implemented, and they likely won’t be shovel ready
  • It’s cognizant of Dollar Index strength as it approaches log-term highs of 100.33

  

  Fed would rather react to any revival of “animal spirits” rather than anticipate them

  Bottom line to Fed view is:

  • FOMC will accelerate hikes if fiscal thrust takes economy into red zone, although where this zone lies is unclear
  • Fed may allow inflation to run and thus recoup some of the prior inflation undershoot
  • Fed won’t want to tighten prematurely and create a sinkhole for growth in 2017
  • Fed will move judiciously until the nature of the stimulus that emerges and the timing of its impact are clear

  As we detailed earlier, Goldman is less enthused about Trumponomics inflationary aspect...

  • Following Donald Trump’s victory in the US presidential election, the focus now turns to the potential economic implications of his proposed policies. The November 12 US Economics Analyst used the Fed staff’s FRB/US model to analyse the consequences for the US economy. In today’s companion piece, we assess the potential global economic spillovers from the Trump agenda using our global macro model.
  • Following the US simulations, we analyse four of Mr. Trump’s policy proposals, including fiscal stimulus, trade tariffs, restrictive immigration policies and a hawkish tilt in Fed policy. We first analyse the policies individually and then combine them into possible packages, including our own assumed policy outcomes.
  • Fiscal stimulus has positive global spillovers, as stronger US demand boosts imports for foreign goods and services. Dollar strength reinforces the positive spillovers to DM economies with floating exchange rates, but limits the gains in EM economies. The spillovers to China, for example, depend on the extent to which the Renminbi appreciates with the dollar and the net effects are less positive for EM economies that rely heavily on dollar-denominated debt.
  • The other components of Mr. Trump’s agenda (trade policies, immigration and Fed) have negative global spillovers as US inflation is higher and US growth slows. The growth drag is generally muted for DM economies with floating exchange rates but significantly negative for some EM economies (including China).
  • Taken together, our analysis suggests that Mr. Trump’s policies might act as a modest drag on global growth. DM growth receives a brief boost from the fiscal stimulus but then weakens and spillovers into EM economies are negative throughout. Moreover, the risks around this base case appear asymmetric. A larger fiscal package could boost global growth moderately more in the near term, but a more adverse policy mix would likely act as a significant drag on world growth in subsequent years.

  All of which appears to have sparked buying again in bond land as 30Y yield is back below 3.00%

  

   

  While still relatively small compared to the surge in yields, this is still the biggest yield drop in 10Y since June…

  

   

  The drop in yields could be a major problem for the exuberance in US financial stocks (which have run way ahead of credit)…

  

   

  And perhaps it's time for US stocks to catch down to the world's reality?

  

  

  

• How Trump can make billions for America Inc. with no risk, and support the US Dollar

  A simple plan to boost the American financial markets and bring back unknown billions in US Dollars, and to solidify the US Dollar as the only World Reserve Currency

  Several simple steps to make money for America Inc. and create an environment for growth at the same time

  Trump’s transition team announced the repealing of Dodd-Frank (LOUD CHEERING).  This ‘Dodd-Frank’ act is a cancer, it has been eating away at the financial industry and the entire economy, like a wrecking ball smashing what was left of the economy after the housing crash.

  One of the abused children of this damage (there were many) was the Currency market, or FOREX.  We will here elaborate on key points here for the Trump Administration which no doubt the market will agree with.

  Dodd-Frank is a giant Octopus with 15,000 rules and 20,000 + pages – there’s probably not a single human being on the planet who has read and understands the entire ‘law’.  We will elaborate here on a very specific part of Dodd-Frank, all that pertains to FOREX.

  List of steps to take to reform Dodd-Frank by reversing FOREX specific rules, that will boost markets, increase profits, reduce volatility, save on costs & fees, and bring money back to USA:

  1) Delete the FIFO rule.  FOREX is not futures.  There’s absolutely no utility to FIFO as it pertains to FX.  Some algorithmic traders may have 100, 200, or 300 orders on an account.  Exiting positions in the exact manner that they were entered, in such situation, is impossible.  Why should any trader have to exit positions in the same order as they were entered?  (Use the Hotel analogy, Trump owns 12 hotels, some are profitable some not – why should Trump sell the 1st hotel built – and not just the 3 losers?)

  2) Increase the leverage.  Increased leverage IS NOT correlated to increased risk.  The regulators force members to say that an increase in leverage is an increase in risk.  This is mathematically and logically incorrect.  Increase in leverage MAY increase risk, however it is NOT CORRELATED.  For example, if your use of the leverage is for hedging purposes, in this scenario, increased leverage DECREASES risk.  There are few hedging possibilities for multi-nationals in USA (such as vanilla options), Spot FX remains the only hedging option for many small businesses.  This may be as simple as opening an Oanda account and taking opposite positions against accounts receivable.  In such a scenario, the profit or loss from such a position is a wash against the real business money flows, in which case, a high amount of leverage can be useful.  The decrease in leverage was a knee-jerk reaction to quell the rampant fraud, but the real effect was simply that back alley dicers as we call them in FX, simply moved their accounts to London.  The decrease in leverage has no economic benefit, doesn’t serve any purpose other than forcing billions of dollars outside of USA.  The argument that 500:1 leverage is for gamblers is very weak, these people don’t understand FX.  In the stock market it might be ridiculous, however FX doesn’t move that much.  In a typical week the EUR/USD may move 1% or 2% – in extreme cases up to 5%, such as during Brexit when the GBP/USD moved 9%.  Compared to any other market, this is very small.  The brightest example provided by Google (GOOG) which is up 1,415.39% since IPO.  This is an impossibility in FX – if the EUR/USD is up 50% in a year, it will likely be down 50% the next.  Currencies have a tendency to revert to the mean, and even when they trend, the changes are slight on a percentage basis.  For this reason, if a small degree of leverage was used as in stocks, it would be impossible to ever turn a profit by trading FX.  And, incidentally, increased leverage will support the Fed’s QE program as Liquidity Providers (LPs) extend credit to US Dollar markets they are effectively creating credit.  The current leverage policy on FX is contrary to the Fed’s QE program.

  3) Delete the Hedging rule.  The most ridiculous of all rules is the so called ‘hedging’ rule that prohibits being long & short the same currency on the same account.  Regulators claim it’s a good rule because if you are long and short you are effectively flat, but it charges a fee (the spread) and thus, the rule saves money to customers.  This is warped and twisted thinking, incoherent and not based on reality – similar to their statement that “Foreign Futures is Forex” – no, Foreign Futures are Foreign Futures.  FOREX is Foreign Exchange of currencies, or spot trading, and NOT futures.  FOREX is always traded ‘off-exchange’ by the nature of what it is.  FOREX is a banking market, traded by interbank FOREX dealers – not on a futures exchange like the CME.  What traders mostly complain about this rule – if someone wants to hedge, why not let them?  If the brokers EXPLAIN to customers this flawed logic, that’s one thing – that’s acceptable.  Make customers tick a box that they understand the potential for unnecessary costs- but allow them to do it!  Because practically, when trading FOREX, you need hedging.  This rule simply forced many strategies to stop working completely, or move overseas.

  4) Bring back the PAMM.  PAMM stands for Percent Allocation Management Module.  PAMM is the FOREX equivalent of a futures ‘block account.’  The problem is for Forex managers, trading many client accounts as one.  It’s a simple solution – independent software combines many small accounts into one ‘master’ account, which enables the manager to trade one account vs. hundreds or thousands of individual accounts.

  5) Reduce the net-cap for RFEDS to a reasonable $5 Million if they are STP (Agent only).  FXCM, Oanda, and Gain Capital have a Monopoly on retail FX.  And, even though FXCM has been under DOJ investigation, hundreds of client lawsuits, countless fines from the CFTC, NFA, and other regulatory bodies, hundreds upon hundreds of customer complaints; they continue to be one of the few options for retail traders which practically, is no option.  The chances of making money at FXCM are slim to none, as they say in FX you have 2 hopes; no hope and Bob Hope.  FXCM takes screwing the customer to a ‘new fangled art form’

  6) Allow Broker Dealers to offer FX.  The NFA is no more an FX regulator than FINRA.  FX should be regulated on a banking level, perhaps by the Fed.  It was thought that currencies are financial commodities, and since FX futures were already offered at the CME, the CFTC seemed to be the natural regulator for FX.  A currency is not a security, but it does meet the definition of a security if you invest in it.  Although the IRS considers investment in foreign currency as debt under some rules; some investors will place their funds in a currency with the intent of appreciation of capital.  Or to put it differently, they are afraid of the deterioration of value of their domestic functional currency.  This was obvious before “Brexit” when lines formed outside of banks from customers who wanted to exchange their British Pounds for US Dollars, Euros, and Swiss Francs.  In any case, the securities business is in many aspects far more complex than commodities.  Securities brokers, broker dealers, and other FINRA licensed organizations are also under far greater scrutiny, have higher costs of compliance, have more compliance related staff, etc.  Why keep their noses out of the feeding trough?   

  7) Stop intimidating foreign brokers through FATCA.  There isn’t any law that strictly prohibits a retail US Citizen from opening a foreign FX account.  However, since many larger institutions in general are afraid they will be “Swissed” hitman style by goons as described in Confessions of an Economic Hitman, they simply do not allow US Citizens to open accounts.  US Citizens have become persona non-grata in the FX world.  US Citizens can’t even visit their websites.  In order to allow the foreign brokers to fairly compete with new US broker upstarts, this practice should be stopped.  If the tax code is to be overhauled, visit FATCA and specifically, make FATCA reporting easy and simple; most importantly for institutions.  TD Ameritrade doesn’t whine and complain about issuing 1099s at the end of the year – it’s mostly automated.  It’s been “Turbo Taxed” by accounting departments.  It should be just as easy for foreign institutions to report US citizen taxpayer obligations.  Oh and by the way – this will also stop foreign non-reporting of income, which previously was a big black hole!

  Practically, the majority of rules apply only to retail investors which in today’s environment, means 99% of the population.  The rules don’t apply to the one percenters or in FOREX LINGO QEPs, ECPs.  Leverage still applies, but ECPs can easily open accounts in London, Singapore, and Sydney legally and circumvent all these rules which are guaranteed to choke any strategy.

  Why did Dodd-Frank make all these silly rules?

  The reasoning was, that because FX frauds used these tools, they should be eliminated.  But this is severely flawed logic that would never work in the real world – that would be like saying, let’s bomb a village because one or two criminals live there.  Dodd-Frank and the climate in general cleaned up a lot of the fraud – thank you.  Now the fraud is gone.  But instead of harassing legitimate traders and investors, regulators should invest in fraud prevention tools.  The list here can be very long.  Some suggestions:

  A managed reporting system such as the NFA uses for RFEDs like FORTRESS but for CTAs, Hedge Funds, and other CPOs who choose to participate in the verified reporting system.  Sites such as myfxbook.com and fxblue.com provide this service technically to traders – but there is no auditing function.  One of the largest frauds has to do with financial reporting, more specifically, the misreporting of performance numbers.  The solution is very simple – a centralized reporting system that automatically captures performance data (there are only so many trading venues) and ‘verifies’ these numbers are true and accurate, and also can return statistics such as peak to valley draw downs, etc.  Each product can have an ID, similar to an NFA ID, where investors can check in an official database, which is secured and encrypted, all the numbers.  Building such a system is extremely cost effective, it would reduce regulatory costs as well, reduce fraud, and boost investor confidence.  In fact, it would cause foreigners to invest in USA.  Something like this doesn’t exist in Europe.  Let’s bring that money into USA, support our markets, support the economy.  Wall St. and Chicago should be the trading centers of the world – not London.  What happened to the American Revolution, that 200 years later we’ll regulate and tax our financial businesses out of America and back to the British?  WTF 

  What would be the effect on the markets if these suggested changes were implemented?

  1) There would be competition in retail FX – this would make trading better, as competition in any market does.  There was competition in the US before Dodd-Frank and in the legitimate FX world (discounting the fraud) there were many legitimate companies that had a good offering.

  2) Billions of dollars would flow back to USA to be held by institutions in New York, Chicago, Charlotte, Los Angeles, and others.  

  3) Instead of a new growth industry of algorithmic FX taking off in foreign countries, it would happen right here at home in Charlotte, Chicago, New York, San Francisco, Atlanta, and in other trading centers.

  4) Stabilization of FX markets in general; this will be nebulous to quantify, however it’s not difficult to surmise, that if there is more competition, more volume, and less fees – that the FX market will be more stable.  Because the US Dollar is the world’s reserve currency – that’s really important!  Also, it is critical that the United States take a global role in administrating FX markets, because of the USD world reserve status.  

  Look at a quick practical example.  Here’s a strategy that didn’t lose in 4 years of real live trading www.magicfxstrategy.com – but it won’t work with the ridiculous US rules.  The stock market is going to tank, hedge funds are flat on the year, 11 Trillion is in negative yielding assets.  Investors will seek such strategies.  But in this case, it will be market centers like London, Singapore, Sydney, Auckland, Limassol, Moscow, and others – that will receive the millions of dollars that will pour into such strategies.  Why not, make Wall St. the FX capital of the world?  Isn’t that the idea of global capitalism?

  For a complete pocket guide to everything FOREX – Checkout Splitting Pennies – Understanding Forex.  Makes a great business gift to your accountant, business partner, or Democrat relative that doesn’t understand the way the world works.

  Or checkout some eye-opening classics: Wall Street and the Bolshevik Revolution.  Armand Hammer: The Untold Story – Confessions of an Economic Hit Man.  This is a MUST READ for any trader who claims to understand the markets.

  

  [pictured above, this mountain is in North Carolina (Not Switzerland)]

  

  

• What Hedge Funds Bought And Sold In Q3: The Full 13-F Summary

  Today was the deadline for hedge funds to submit their Q3 13-F filings, which considering they represent a snapshot in time as of Sept 30, prior to both the October volatility spike and the presidential election, are likely totally irrelevant by this time.

  Among the more notable changes was Berkshire taking new stakes in American Airlines, Delta and United, sending the airlines sector higher after hours. Large-cap tech stocks remain favored as many funds bought or boosted stakes in Apple, Alphabet, Facebook and Alibaba just ahead of the post-Trump FANG rout.

  David Tepper’s Appaloosa Management bought into the surge in technology stocks in the third quarter, taking new stakes in Apple, Yahoo and Facebook. Tepper, who moved Appaloosa to Miami Beach from New Jersey this year, added the social media company to his portfolio, as did Sarasota-based Aviance Capital Management, and Tampa-based Suncoast Equity. Boca Raton’s American Asset Management, Polen Capital and Steinberg Global, along with Aviance Capital Partners in Naples and St. Johns Investment in Jacksonville all boosted stakes in Facebook.

  And speaking of Appaloosa, we find it amusing that the biggest long equity position of the wealthiest hegde fund manager possibly alive today, is none other than the market itself: at $541 million, Tepper’s top holding is the SPY.

  Below is a summary, courtesy of Bloomberg of 3Q equity holdings from Sept. 30 13-F filings by the top hedge funds, with some of the new, added, cut and exited positions for each.

  ADAGE CAPITAL

  • New stakes in KMI, SWK, AYI, BABA, NOC, ITW, MAS, WLK, ASH, EMN
  • Boosts AAPL, MRK, CF, PNC, GOOGL, TAP, HDS, EMR, APC
  • Cuts BMY, AAL, HON, AGN, MMM, T, BURL, PCG, ADP
  • No longer shows HES, NSAM, POR, CFX, HE, STI, NLSN, HSY, LDOS, SBGL

  APPALOOSA MANAGEMENT

  • New stakes in FB, AAPL, YHOO, TPX, BAC, CFG, QCOM, PNC, VMW, DAL
  • Boosts KMI, GT, GLBL, HCA, ETP, HDS
  • Cuts LUV, NXPI, GOOG, SYF, GM, WHR, MHK, HAIN, WMIH, ALL
  • No longer shows FOXA, CYH, TGI, IR, FOX, PPG, QHC

  BAUPOST GROUP

  • New stakes in SYF, NSAM, ODP, CPAA
  • Boosts PBF, FOXA
  • Cuts OLN, INVA, VMW, OREX, PYPL, KIN, LNG
  • No longer shows C, CAR, OZM

  BLUEMOUNTAIN

  • New stakes in KLAC, SHPG, NXST, SAEX, XPO, TWNK, MRO
  • Boosts SYMC, CI, LRCX, MYGN, TV, KSS, ALSN, WST, URI
  • Cuts MBLY, ARMK, AVGO, APD, BBY, TPX, AGN, IAC
  • No longer shows MDVN, WLTW, VRNT, FNG, JWN, CCE, BIOS

  BERKSHIRE HATHAWAY

  • New stakes in AAL, QSR, DAL, UAL
  • Boosts CHTR, PSX, LBTYA, V, WBC, BK
  • Cuts WMT, KMI, DE
  • No longer shows SU, QSR, MEG

  BRIDGEWATER ASSOCIATES

  • New stakes in SWN, ENDP, IBM, RCI, CAG, TU, UPS, LB, JCP
  • Boosts AAPL, INTC, MSFT, CSCO, CPB, AMAT
  • Cuts GG, ABC, ADS, AEM, SPLS, LYB, BIIB, FDX, JNJ, TOL
  • No longer shows ABX, MET, MRK, PH, CVS, PEP, LNC, NTAP, RCL, PVH

  CORVEX MANAGEMENT

  • New stakes in JCI, CCE, JPM, HAIN, TMUS, BAC, CSOD, BIIB
  • Boosts ZAYO, PAH, MPC, COMM, TMH, SIG
  • Cuts WMB, BEAV, BLL
  • No longer shows VER, GOOGL, KSU

  ELLIOTT MANAGEMENT

  • New stakes in MPC, ECA, GEO, CXW, RAD, GPI, ABG
  • Boosts AA, SYMC, MENT, IMPV, LOCK, BBL, MITL, HLF, IPG
  • Cuts FTNT, NE, FBIO, CAB
  • No longer shows CNP, SBS, PAY, NBHC, QLYS, CYBR, SPSC, RNG, QEP, EGN

  EMINENCE CAPITAL

  • New stakes in DNKN, CBG, EXPE, CTRP, FTNT, COMM, MENT
  • Boosts ADSK, HUM, CF, WEN, YHOO, ARRS, MS, ANTM, ZNGA, GPI
  • Cuts BIDU, TTWO, CAA, FCE/A, SPGI, BERY, CCE, ICE, PTC, KAR
  • No longer shows FOSL, DLTR, TRIP, LGF, AMBA, SJM

  ETON PARK CAPITAL

  • New stakes in FANG, TWTR, GOOG, KMI, CAB, IMPV
  • Boosts MSFT, CLR, MHK, AMZN
  • Cuts SYT, WB, SBAC, AFI, SINA, ADBE
  • No longer shows CRTO, ODP, ECR

  GLENVIEW CAPITAL MANAGEMENT

  • New stakes in UHS, TWX, ENDP, PAH, AAPL, HPE, CCE, BEAV, TLRD, WLTW
  • Boosts CBS, ANTM, Q, HUM, WMB, HCA, FDC, CSC, ESRX
  • Cuts ABBV, LH, HTZ, TEVA, CHTR, FLEX, MAN, VER, FMC, CI
  • No longer shows WOOF, FIS, SBAC, TMUS, SYT

  GREENLIGHT CAPITAL

  • New stakes in X, GEO
  • Boosts AER, CPN, UHAL, MYL, VOYA, RAD
  • Cuts KORS, AAPL, TTWO, TWX, ACM, TPH, AGR, DSW, QHC
  • No longer shows FOXA, HUM, PRGO, ABC, HTZ, CYH, LAMR, VOD

  HAYMAN CAPITAL MANAGEMENT

  • Cuts NMIH

  HIGHFIELDS CAPITAL MANAGEMENT

  • New stakes in RAD, HSY, LBTYA, COST, SYT, HRI, PDCE, TRU, AA
  • Boosts HLT, BEN, MAR, APC, SU, CF, MIK
  • Cuts TEVA, WBA, WMB, MSFT, HTZ, PFE, CBS, TRIP, TSLA
  • No longer shows PEP, BP, RDS/B, GG, GS, SWN, VRX, CC

  ICAHN ASSOCIATES

  • Boosts LF, HTZ, IEP
  • Cuts AGN, NUAN, CVRR
  • No longer shows CHK, RIG

  ICONIQ CAPITAL

  • New stakes in ADSK, RH
  • Boosts JD
  • Cuts FB
  • No longer shows TSLA

  JANA PARTNERS

  • New stakes in UHS, PCLN, MDLZ, VIAB, TWTR, SEM, VVV, KATE
  • Boosts HDS, JCI, WLTW, CSC, HPE, MPC, HRS
  • Cuts GOOG, LBRDK, CCE, CAG, USFD, CSRA, GPK
  • No longer shows WBA, MSFT, EXPE, PF, AN, ADS, SYF, BERY, ASH, RACE

  LONE PINE CAPITAL

  • New stakes in EBAY, EXPE, BABA, TV, AVGO, HLT, ICE, KMI, WMB, ALGN
  • Boosts EA, ATVI, CHTR, VMC, COMM, DLTR, MNST
  • Cuts PCLN, FB, V, LULU, YUM, EQIX, STZ, SHPG, ULTA, MHK
  • No longer shows NOC, BUD, MA, PYPL, SHW, PXD, ANET, GOOGL, AXP

  LONG POND CAPITAL

  • New stakes in WFC, GGP, SHW, CAA, CZR, MPW
  • Boosts EQR, ESS, LEN, MAR, INXN, MSG, BYD
  • Cuts TCO, H, FCE/A, MTH, LQ, PGRE, BXMT, HLT
  • No longer shows CBG, KEY, SFR, BPOP, CFG, BLDR, SRC, PFSI

  MARCATO CAPITAL

  • New stakes in BWLD, IAC, ADS, TEX, AIRM, FC, PNK, RH, HMTV
  • Boosts CSC, VRTS, ABTL, BLDR, LIND
  • Cuts BK, SIG, URI, LBRDK, M, CBPX, LBRDA, HZN, GT, BID

  MAVERICK CAPITAL

  • New stakes in DG, QCOM, SUM, SWFT, TMUS
  • Boosts AAPL, BUD, LVLT, ORLY, UHS
  • Cuts ADBE, AXP, CMCSA, FB, MYL
  • No longer shows AGN, ARMK, CL, JACK, TSN

  MELVIN CAPITAL

  • New stakes in GOOGL, YY, EA, BABA, MA, MGM, COST, AVP, MAS, CALM
  • Boosts FB, LOW, CASY, SHW, ZTS, DE, STZ, ADBE, SUM, PLAY
  • Cuts DLTR, NFLX, AMZN, PCLN, SBUX, BURL, MHK, MNST, KATE, V
  • No longer shows WMT, CRM, NWL, SIG, CMG, JACK, USFD, GRUB, PLKI

  MOORE CAPITAL

  • New stakes in GOOGL, MA, PCLN, AVGO, FL, SIVB, GXP, TWX, CPAA
  • Boosts FB, BABA, STZ, EA, HD, V, CL, APC
  • Cuts BAC, PPG, WLK, AME, EQIX, M, HUBB, GIS, AMZN
  • No longer shows in C, JPM, ABX, CMA, WBC, CONE, CAG, JCP, CQH, ICE

  OMEGA ADVISORS

  • New stakes in HES, P, WMB, SSNC, TIME, PE, RICE, TSE, VVV
  • Boosts SHPG, PVH, BERY, ASPS, NBR, EPD, TCRD, GPOR, MDCA, MVC
  • Cuts GOOGL, CIM, NRZ, AGN, TRCO, DOW, MSFT, ASH, EA, ETFC
  • No longer shows UNH, TRGP, C, NFLX, SLW, FCB, TJX, CP, AZO, RLGY

  PASSPORT CAPITAL

  • New stakes in CX, MRVL, PE, SINA, SYMC
  • Boosts BABA, CXO, JCI, RICE, WDC
  • Cuts AGN, CF, LBTYA, SRE, TAP
  • No longer shows CHTR, CSCO, EQT, GE, YHOO

  PAULSON & CO

  • New stakes in HPE, STE, EBAY, HUM, HCA, MAR, CVS
  • Boosts BIIB, LOXO, FB, FDX, BSX, ETSY, LIVN, BCRX
  • Cuts MYL, TEVA, GRFS, SHPG, AU, AGN, NG, CIE, AKRX
  • No longer shows BEAV, Q, CI, RAD, PCLN, PRGO, EGRX, KTWO

  PERRY CORP.

  • Cuts ALLY, AER
  • No longer shows AIG, BLL, TWX, JNJ

  POINT72 ASSET MANAGEMENT

  • New stakes in GOOGL, CMCSA, GOOG, MCD, AME, HON, FTV, LUV, BCR, WFM
  • Boosts FB, BG, SRPT, AAPL, YHOO, SHW, LOW, WNR, HAL, V
  • Cuts AMZN, KAR, TSO, SBH, SIG, LLY, INTC, LNCE, SLB, CMG
  • No longer shows GLW, KORS, RLGY, CRM, SWN, UTX, VMW, MXIM, BLL, WCC

  POINTSTATE CAPITAL

  • New stakes in BAC, VRX, HUM, MRK, CFG, ATVI, MPC, CXO, CHK, APC
  • Boosts AVGO, ADBE, ECA, CLVS, UNP, AMZN, COG, PH, GOOGL, APD
  • Cuts TEVA, CELG, CHTR, STZ, XEC, SWN, BHI, EOG
  • No longer shows AGN, CPN, EGN, DYN, RRC, AET, FDC, DVN, SGEN, SPB

  SANDELL ASSET

  • New stakes in SVU
  • Boosts KLAC
  • No longer shows AKRX

  SOROS FUND MANAGEMENT

  • New stakes in WMB, HPE, INTC, UBNT, FHB, SYMC
  • Boosts LBRDK, VMW, ABX, AMZN, TIVO, WUBA, AMAT, SUPV, VIAV,
  • Cuts DISH, ZTS, EBAY, KHC, EXAR, MDLZ, ATVI, AAL, EXA, MJN
  • No longer shows GLPI, CIT, ESNT, CBPO, JD, W, SYNA, CMCSA, HUM, POWI

  STARBOARD VALUE

  • New stakes in PRGO, HPE, STC, CAB, TRNC, FRGI, IMPV
  • Boosts MRVL, M, AAP
  • Cuts WRK, CW, BAX, PNK
  • No longer shows DRI, DK, NXST, FCPT

  TEMASEK

  • New stakes in ACIU, RDS/B, CTRP
  • Boosts EROS
  • Cuts BABA
  • No longer shows Q

  TIGER GLOBAL

  • New stakes in BABA, GOOG, CMCSA, VIPS, V, AWI, WUBA
  • Boosts PCLN, AAPL, MA
  • Cuts CHTR, JD, FLT, ONDK, ETSY, AMZN
  • No longer shows XRS, SQ

  THIRD POINT

  • New stakes in AAPL, BABA, HUM, V, CAG, WMB, KDMN
  • Boosts FB, GOOGL, GD, TAP, SPGI, BID, DHR, LBTYA, SHW
  • Cuts AGN, YUM, MHK, CB, AME, CHTR, BUD, SHPG, UNP
  • No longer shows LOW, SEE, ATVI, CCE, HRS, WLL, MRO, TSO, DVN

  TRIAN FUND

  • Boosts BK, SYY
  • Cuts GE

  TUDOR INVESTMENT

  • New stakes in SHW, JCI, FLT, HUM, WEX, RJF
  • Boosts MRK, BIIB, ADS, PEP, FB, GOOGL, BCR, MA, UNH
  • Cuts ESRX, LH, POST, FICO, IAC, PX, DPS, MDLZ, KLAC, V
  • No longer shows PG, ARMK, PNR, NWL, HR, AMAG, NSA, RCL, ADP, LII

  VIKING GLOBAL

  • New stakes in BAC, LYB, UHS, CRM, LOW, AZN, LBTYA, LBTYK, MET, AMSG
  • Boosts MSFT, CP, STZ, GOOGL, ECA, GOOG, JD, MA, APC, RICE
  • Cuts AVGO, TEVA, NFLX, LLY, APD, BABA, WBA, WUBA, KITE
  • No longer shows NWL, AGN, DVA, ICE, CTRP, PXD, MMC, HIG, AET, HCA

  Source: Bloomberg

  

  

• Devastated Left Calls For An End To The Electoral College

  The disaffected left is increasingly lashing out at the foundation of American democracy by calling for the electoral college system to be abolished.  Over the weekend we noted that Michael Moore had seemingly lost his mind after visiting Trump Tower and leaving a note for the President-elect which read: “You lost. Step aside.” 

  I was able to get into Trump Tower & deliver him a message: “You lost. Step aside.” SS took the note I wrote up & went 2 give it to him.

  — Michael Moore (@MMFlint) November 12, 2016

   

  Moore also tweeted out a “to-do” list for democrats which included a suggestion to “abolish the electoral college and electronic voting.”

  My 2nd To-Do List: #6. Abolish electoral college & electronic voting, Election Day on the weekend, restore voting rights of former prisoners

  — Michael Moore (@MMFlint) November 13, 2016

   

  But calls to abolish the electoral college system aren’t just coming from the far-leftists like Moore.  As Politico pointed out, failed 1988 presidential candidate Michael Dukakis, is also calling for the system to be scrapped saying it “should have been abolished 150 years ago.”  As a side note, Dukakis lost both the electoral college and popular vote in a landslide victory for George H.W. Bush in 1988.

  “Hillary won this election, and when the votes are all counted, by what will likely be more than a million votes. So how come she isn’t going to the White House in January? Because of an anachronistic Electoral College system which should have been abolished 150 years ago,” he wrote Sunday in an email to POLITICO.

   

  “That should be at the top of the Democratic priority list while we wait to see what a Trump administration has in store for us. So far, all we know is that dozens of lobbyists are all over the Trump transition — a strange way to drain the swamp.”

  Meanwhile, Hillary has also called for an end to the electoral college in the past:

  “I believe strongly that in democracy we should respect the will of the people, and to me that means it’s time to do away with the Electoral College and move to the popular election of our president,” she said at the time, shortly after her own election to the Senate. “I hope no one is ever in doubt again about whether their vote counts.”

  Of course, with a 2016 electoral college map that looks like the one below, it’s no wonder that Democrats would want to abolish a system that provides influence to people outside the major metropolitan areas of the Northeast and West Coast.

  

   

  But despite what the disaffected left now says about the “outdated” electoral college system, there was and still is solid reasoning behind it’s existence.  The power of the individual states weighed very heavily on the founding fathers who created the electoral college system specifically to avoid the mass centralization of power in high population density areas.  And, while we certainly understand why the left would look to now discredit such a system, the fact is that there would be no United States of America without it as smaller states simply never would have opted in to the union. 

  

   

  Per the map above, absent the electoral college system, presidential elections would be almost entirely determined by a handful of cities including New York City, Boston, Chicago, Los Angeles and San Francisco.  And while the left would prefer to ignore the opinions of those in the “fly-over” states, we would suggest that their representation in the electoral college is a vital underpinning of American democracy…without such representation we’re not sure why the fly-over states would choose to remain a part of a union where they had no say.

  

  

• Key Reversal Day in Oil Markets (Video)

  By EconMatters

  
  

  

  We discuss some oil technicals, and the upcoming drivers for some short covering ahead of contract rollover, and key OPEC Meetings and Production Cut Decision regarding the potential for Oil to have bottomed during this month long downtrend in Price. If OPEC Cuts the Oil Markets are Positioned Very Badly for said Event!

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

  

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• China Money Market Rates Spike To 1-Month Highs As Yuan Hits 7-Year Lows

  In what appears to be yet another effort to spook shorts out of speculative positions in offshore Yuan, China appears to have tamped down its liquidity spigot driving overnight HIBOR rates up a shocking 194bps to 3.53% – the highest in over a month. The spread between offshore and onshore yuan has collapsed, even as the Yuan plunges to to its weakest against the dollar since September 2009.

  As Yuan hits its post-leg record lows, it seems each streak of selling is met with a kneejerk liquidity plunge in money markets…

  

   

  Which has spooked the specs out of the arb between onshore and offshore Yuan…again

  

  Of course, while 3.53% is notable for overnight money and a big shock, there is plenty of room to go if the capital flight and speculation continues – ON/HIBOR neared 25% in September as turmoil re-appeared.

  

  

• Backwardation Profit Taking, Report 13 November, 2016

  The big news this week is that Donald Trump was elected to be the next president of the United States. Whether due to his comments about restructuring the government debt, tariffs on imported goods, or other economic concerns, many expected news of his election to push up the price of gold.

  They were wrong.

  Every day since last Friday (November 4) has seen the price of gold falling. From a peak of over $1308, the price fell to $1227 on Friday.

  There was a rally from $1269 to $1337 on the evening of election day, from 8pm to midnight in New York. This is roughly the time when election results began to trickle in and show that Trump was going to win. At the same time, the stock market tanked. S&P futures fell from 2150 to 2028, or -5.7%. Volume was off-the-charts high for US evening time.

  But then what passes for normal took hold once again. The price of gold resumed its slide. The stock market recovered.

  One thing is for sure. The price of gold does not go up for the reasons supposed by most gold bugs. Any more than it goes down for the reasons given by the propaganda of the paper bugs.

  There is something else going on that could drive the gold price up. I refer to the new Indian policy of demonetizing larger-denomination cash (500- and 1000-rupee notes, worth $7.40 and $14.80—i.e. not so large). So many Indians rushed out to buy gold that credible sources report a temporary 20% spike in the rupee-price of gold.

  We doubt that Prime Minister Modi can force many Indian cash holders to increase their bank balances. However, he could push the marginal cash holder to increase his holdings of gold. If that proves to be durable, that could drive the price of gold up substantially. This situation with cash and gold in India needs to be watched.

  The price of silver took a big dive on Friday, ending down a buck twenty. Yes a buck twenty, as in -6.4% (the low of the day was 15 cents lower).

  The question is: what did the election do to the fundamentals? Are people now stacking silver bars and gold coins, who had not been doing it before the election? Or is this price move just more noise that will be lost in a month, much less over the long term?

  We will give a teaser. Something changed in the market this week.

  We will update the pictures of the gold and silver fundamentals below, and show our first-ever intraday basis charts. But first, here’s the graph of the metals’ prices.

         The Prices of Gold and Silver
  
  

  Next, this is a graph of the gold price measured in silver, otherwise known as the gold to silver ratio. It rose this week, how could it not with the big price move in silver? 

  The Ratio of the Gold Price to the Silver Price
  
  

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

  Here is the gold graph.

         The Gold Basis and Cobasis and the Dollar Price
  
  

  And now we see our old friend, who has been absent for a while. Backwardation. The cobasis is over +0.3% (30 bps).

  We admit that we have a conundrum. We are not quite sure how to handle Friday. In the US, Friday was a bank holiday Veteran’s Day. The Treasury bond market was closed, as were the banks. However, the stock market was open as was the gold futures market. And there was high volume (the third highest day of the year, after Thursday and June 27).

  We are including Friday.

  Friday had a big price move in gold, with the dollar up almost 2/3 of a milligram gold (muggles will see this as gold going down -$32).

  Last week, we said:

  “Are we predicting a crash, much less on Monday morning (as we write this, the price of gold is down in Asian trading by $11)? No, but we are saying gold is not looking like a good value here. If you don’t have any, then there is never a bad time to buy. But if you’re trading a position, we could think of better times to buy than now. Maybe now (especially at Friday’s price over $1,300) might be a good time to consider selling a covered call.”

  That was then and there (a week and 76 bucks ago).

  And something else changed. The fundamentals got stronger. Unless this turns out to be an anomaly due to the bank holiday and the absence of some market makers, the fundamentals are stronger now than they have been in quite some time.

  We calculate a fundamental price of over $1310.

  We will take a look at intraday basis charts for gold and silver, below.

  Now let’s look at silver.

  The Silver Basis and Cobasis and the Dollar Price
  
  

  The same thing happened in silver. And unlike last week, it occurred across all contracts. Falling basis (abundance) and rising cobasis (scarcity). ‘Course, in silver, the price drop was epic, much bigger than in gold.

  We calculate a fundamental price of just over $17. So, like with gold, we had buying of physical metal and selling of futures.

  Many times over the years, we have seen reports of a big paper flush amidst strong physical demand. We have debunked several of them, and dismissed the rest.

  What happened on Friday was different than those other events. Here are intraday graphs showing basis and price (the cobasis moved pretty much inverse to basis so not included to keep the graph as readable as possible).

  Intraday Gold Basis and Price
  
  

  From just before 13:30 (London time, or 90 minutes before the PM gold fix), the basis begins falling. The basis is the spread of futures – spot. So futures begin selling off before even the price begins to decline. Shortly after 2pm, the price of gold is still holding at $1259, but the basis is already dropping. And boy does it drop, to a trough of -64bps. From there on, the basis recovers somewhat.

  We have annotated the graph to highlight three distinct phases. In the first phase, it is simply selling, driven by selling of futures. How do we know? First, the basis begins to fall before the price. Of course, the fact that the price begins to fall while the basis continues to fall proves it.  It is simple enough, lots of traders sold gold futures and the price fell around $30 initially.

  The second phase is more interesting from a market theory point of view. Here we see the basis rising, and it’s a pretty big move up from a low of -64bps to -38bps—just about a 2/3 retracement of the original drop. However, the price is sideways to positive. The basis is
  changing but the price is not. In other words, the spread between futures and spot is compressing (basis is negative here, so rising value means tighter).

  What this means is simple. For an hour and a half, the panicky herd of speculators stampeded at will. After that, the market makers were able to reassert some control. No, not over price but of spread! The market makers did not manipulate the price of gold up or keep it from falling. They began to decarry gold, that is sell spot and buy futures. This pushes down the bid price on spot, and pushes up the offer price on the futures contract.

  Why would they decarry? To take profits, of course! In recent months, the profit on offer to carry gold has been very high. This has tempted many arbitrageurs to exploit the opportunity: by buying a bar of metal and simultaneously selling a futures contract. They are long metal and short a future.

  When the basis drops, that provides an opportunity to close the position and make more than one would have made by holding to maturity. For example, suppose you put on this trade on June 27. You locked in a profit of 1.45% on your investment (in dollars, of course). Ever since then, the basis has been declining. Now the basis hit a low of -0.64b%. At that moment, the cobasis was +0.44%. So you could close your trade a month and a half early, and add 44 bps to your profit.

  And after this, in the third phase, the basis goes sideways while the price falls another $13. In this phase, the arbitrageurs are still decarrying. What’s our evidence for this? The price is moving down, which means lots of selling again. But in this phase, the arbitrageurs are keeping up. They are decarrying as fast as speculators are selling.

  As we have described in many past Reports, while basis is rising the marginal demand for metal is to go into the warehouse. It feeds the gold carry trade. We emphasize that when this builds up, it’s dangerous because the marginal demand can abruptly turn off and a new marginal supply come online. A high basis cannot predict the timing, but it can tell you that the market is ripe for a drop the way a supersaturated solution is ripe for a precipitation. They have seen their opportunity to profit, and are reluctant to keep holding their positions and risk the basis continuing to rise.

  Intraday Silver Basis and Price
  
  

  We did not mark up the silver chart. It is interesting that the basis correlates more highly with the price. Or, in other words, while the selling pressure in gold largely abated, it continued in silver. The total drop in the Dec silver basis was nearly 100bps.

  If you had carried silver on August 10, you could have locked in a profit of 156bps. If you decarried it on Friday, you could have added another 95bps.

  If gold was in a supersaturated solution, then silver was in a superdupersaturated solution.

  It will be interesting to see this week, if the arbitrageurs can catch up in silver and we see a rising basis. And if the elevated silver fundamental price of $17.08 holds.

  It is also possible that some market makers were off on holiday on this Veteran’s Day.

   

  © 2016 Monetary
  Metals

  

• Harry Reid Erupts Over Steve Bannon Appointment: "White Supremacists Now Represented In The White House"

  Following the biggest political news of the day, namely Donald Trump’s official announcement that RNC chairman, Reince Priebus, will serve as his chief of staff while Stephen Bannon will serve as chief strategist and senior counselor, the political and pundit response – as manifsted by statements on Twitter – splintered. On one hand, pundits and politicians praised establishment figure Priebus – for obvious reasons as he is seen as a symbolic figure in how Trump approaches the so-called “swamp”; on the other hand political outsider Steve Bannon – the head of Breitbart News and the person directly responsible for getting Trump elected as CEO of his presidential campaign, was furiously criticized.

  Fellow Wisconsinites Paul Ryan and Scott Walker praised the choice for chief of staff, while former Ted Cruz staffer Amanda Carpenter said Priebus would “make the trains run” in the White House.

  I’m very proud and excited for my friend @Reince. Congrats!

  — Paul Ryan (@SpeakerRyan) November 13, 2016

  Reince will be an outstanding Chief of Staff! Congrats to our fellow cheesehead! ????

  — Scott Walker (@ScottWalker) November 13, 2016

  Let’s be real. Reince is going to make the trains run while Trump and Bannon brainstorm new conspiracy theories

  — Amanda Carpenter (@amandacarpenter) November 13, 2016

  Congrats to @realDonaldTrump for outstanding choice of @Reince to be Chief of Staff. This shows me he is serious about governing. (1/2)

  — Lindsey Graham (@LindseyGrahamSC) November 13, 2016

  Congrats to Reince Priebus for being named Chief of Staff for Pres-elect Trump! Look forward to working with you to #MakeAmericaGreat #TCOT

  — Rep. Jeff Duncan (@RepJeffDuncan) November 13, 2016

  Not everyone was enthused: Louisiana Senate candidate and ex-KKK leader David Duke seemed less enthusiastic about the pick of Priebus, who is aligned with GOP leadership.

  I thought we were draining the swamp? Here we go again……#BREAKING https://t.co/l2DLzbMxLA

  — David Duke (@DrDavidDuke) November 13, 2016

  * * *

  However, the reaction by prominent members of the establishment to Steve Bannon’s elevated role was critical and swift, and none was more vocal in their disgust than a spokesman for Senate Majority Leader Harry Reid, a vocal critic of Trump, who said the hire “signals that White Supremacists will be represented at the highest levels” of the new administration.

  

  Others – such as Intelligence committee ranking Democrat Adam Schiff and many others – joined Reid in accusing Bannon of being “anti-Semitic” and “misogynistic.”

  Selection of Steve Bannon for senior WH role unsurprising but alarming. His alt-right, anti-Semitic & misogynistic views don’t belong in WH

  — Adam Schiff (@RepAdamSchiff) November 13, 2016

  Oh, hell! White supremacist, anti gay, anti Semite, vindictive, scary-ass dude named Senior Strategist. After vomiting, be afraid, America. https://t.co/cZvP3vccjS

  — Ana Navarro (@ananavarro) November 13, 2016

  Just to be clear news media, the next president named a racist, anti-semite as the co-equal of the chief of staff. #NotNormal

  — John Weaver (@JWGOP) November 13, 2016

  So y’all aren’t worried about Bannon having access to State secrets? Just think of him as a racist homebrewed server, should get you angry.

  — Bakari Sellers (@Bakari_Sellers) November 13, 2016

  Bannon with top WH position should surprise no one.

  Unrealistic to expect Pres Trump is suddenly different person from candidate Trump.

  — ian bremmer (@ianbremmer) November 13, 2016

  Let’s hope that @Reince has influence to check bigotry of Bannon, more so than during campaign phase. Our liberty is riding on it.

  — Mindy Finn (@mindyfinn) November 13, 2016

   

  Even the anti-defamation leage joined in:

  We at @ADL_National oppose the appt of Steve Bannon to sr role at @WhiteHouse bc he & his alt-right are so hostile to core American values pic.twitter.com/qCVEPKoa7q

  — Jonathan Greenblatt (@JGreenblattADL) November 14, 2016

  Bannon has been widely criticized by the left for articles Brietbart ran while he was in charge. Democrats worked hard during the campaign to link Trump to the so-called “alt-right” movement, which we assume is a bad thing, and associate him with racist and anti-Semitic groups. 

  They highlighted some of Breitbart’s controversial headlines, including one about Never Trump Republican and Weekly Standard editor Bill Kristol: “Republican spoiler, renegade Jew.

  * * *

  And now, moments ago, the NYT which may or may not be losing subscribers as a result of its coverage of the presidential election, has decided to turn its focus to Bannon’s Breitbart website, saying “there is talk of Breitbart bureaus opening in Paris, Berlin and Cairo, spots where the populist right is on the rise. A bigger newsroom is coming in Washington, the better to cover a president-elect whose candidacy it embraced.

  Mainstream news outlets are soul-searching in the wake of being shocked by Donald J. Trump’s election last week. But the team at Breitbart News, the right-wing opinion and news website that some critics have denounced as a hate site, is elated — and eager to expand on a victory that it views as a profound validation of its cause.

  
  Stephen K. Bannon, left, and Larry Solov flank a picture of Andrew Breitbart.
  Mr. Bannon is to be chief White House strategist and senior counselor

  Judging the amount of hatred spewed at Bannon by virtually every member of establishment media and politics, he must have done something right.

  

  

• Stunned Morgan Stanley Admits Nobody Has A Clue What Trump Will Do: "His Policies Are Like Schrodinger's Cat"

  As the sellside reports analyzing the post-president Trump world keep pouring in, one that caught our attention was from Morgan Stanley’s Andrew Sheets in which the strategist openly admits that pretty much nobody has any idea what is coming: “Most remarkably, however, after three debates, two conventions and an election that seemed to last forever, there remains a great deal of uncertainty over what type of president Trump will actually be. In an election that was dominated by coverage of tweets, videos and emails, policy questions received surprisingly little airtime. And those questions are now crucial for markets.

  To a remarkable extent, investors we’ve spoken to both before and after November 8 disagree on what President-Elect Trump will actually do. Many have told us, confidently, that they believe that, while he said some extreme things on the campaign trail, he is ultimately a moderate, pragmatic businessman. A deal-maker who will delegate policy to experts, lead with market-friendly (almost Keynesian) fiscal stimulus and ultimately avoid a large fight on trade. Other investors take a less benign view. They say the President-Elect should be taken at his word, and that since the start of his campaign he has defied predictions that he would moderate his tone or policy message.”

  The problem, according to Morgan Stanley, is during the campaign, “Trump was a master at keeping both possibilities open, broadening his appeal. Like Schrodinger’s cat, his policies existed in a state of being both pragmatic and radical, all at the same time. Upcoming cabinet appointments offer clues to which interpretation is right. Until then, we promise to keep an open mind, and focus on modelling the different paths a Trump administration could take, and what it means for markets.”

  Here is the full MS note for those who want to add to their confusion:

  And Now The Questions Get Answered

  Donald Trump will be the next President of the United States, in a win that defied expectations and political convention. He won without a fundraising advantage or the support of many in his party’s establishment. He is a wealthy businessman who rode to victory with a historic swing of working class Midwesterners. He ran a populist campaign and yet is likely to lose the popular vote narrowly.

  

  Most remarkably, however, after three debates, two conventions and an election that seemed to last forever, there remains a great deal of uncertainty over what type of president Trump will actually be. In an election that was dominated by coverage of tweets, videos and emails, policy questions received surprisingly little airtime.

  And those questions are now crucial for markets. To a remarkable extent, investors we’ve spoken to both before and after November 8 disagree on what President-Elect Trump will actually do. Many have told us, confidently, that they believe that, while he said some extreme things on the campaign trail, he is ultimately a moderate, pragmatic businessman. A deal-maker who will delegate policy to experts, lead with market-friendly (almost Keynesian) fiscal stimulus and ultimately avoid a large fight on trade.

  Other investors take a less benign view. They say the President-Elect should be taken at his word, and that since the start of his campaign he has defied predictions that he would moderate his tone or policy message. They point to the surrogates that surrounded his campaign. They point to Republican control of the House, Senate and Presidency, which means there is no check on policy. They worry more openly about the implications for foreign relations.

  Which interpretation is right? During the campaign, Trump was a master at keeping both possibilities open, broadening his appeal. Like Schrodinger’s cat, his policies existed in a state of being both pragmatic and radical, all at the same time. Upcoming cabinet appointments offer clues to which interpretation is right. Until then, we promise to keep an open mind, and focus on modelling the different paths a Trump administration could take, and what it means for markets.

  For macro, this could mean big changes. Our narrative for 2016 has been ‘slow growth, slow reflation and slow policy normalisation’. A Trump administration could affect all three. When our US economists and strategists attempt to quantify a ‘middle’ scenario of looser fiscal policy but only modest trade protectionism, GDP and inflation could both be 0.3pp higher in both 2017 and 2018. But that boost could mean more Fed tightening, and potentially a sooner end to the US cycle than we previously assumed.

  This analysis emphasises that other outcomes are also highly plausible. In a scenario where one takes most of President-Elect Trump’s proposals at face value, there could be a trade-induced shock of 0.6pp to GDP in 2017. In a scenario where divisions in the Republican party bog down proposals, there could be relatively little change from our previous baseline.

  Until we know which version of Trump we get, our market views have to be more tactical than we would like them to be. For now, we think low risk premiums and the potential of fiscal policy mean curves are likely to steepen and rate volatility can rise. Upside risks to the Fed path coupled with downside risks to global trade should support USD against low-yielding trade-focused Asia currencies (JPY, KRW, CNH). We think this supports equities in the US over Europe and EM, with the former benefiting from hope over tax cuts and repatriation, while EM faces headwinds from a stronger USD and Europe needs to deal with a heavy political calendar in 2017. In US equities, this points to overweight industrials, healthcare (especially biotech) and credit cards, and underweight consumer staples.

  This has been a long and emotional election cycle in the US. There is an unusual level of uncertainty among investors over what type of leader the largest economy in the world has elected, and what policies he will pursue. The next several weeks are likely to bring more clarity. A famous US President once said “Trust, but verify”. The assessment of policy may call for the reverse: Verify, then trust.

  

  

• Chaos Ensues As Europe Splinters In Response To Trump: UK, France, Hungary Snub EU Emergency Meeting

  While America’s so-called “establishment”, the legacy political system and mainstream media, appear to be melting, and transforming before our eyes into something that has yet to be determined, Europe also appears to be disintegrating in response to the Trump presidential victory: as the FT reports, in a stunning development, Britain and France on Sunday night snubbed a contentious EU emergency meeting to align the bloc’s approach to Donald Trump’s election, exposing rifts in Europe over the US vote.

  Hailed by diplomats as a chance to “send a signal of what the EU expects” from Mr Trump, the plan fell into disarray after foreign ministers from the bloc’s two main military powers declined to attend the gathering demanded by Berlin and Brussels.

  The meeting, which comes as Trump appointed his key deputies – chosing the more moderate establishment figure, RNC chairman Reince Priebus, to be his chief-of-staff over campaign chairman Stephen Bannon, who becomes chief strategist and counsellor – was supposed to create a framework for Europe in how to deal with a “Trump threat” as Europe itself faces an uphill climb of contenuous, potentially game-changing elections over the coming few months as we described last week in “European Politicians Terrified By “Horror Scenario” After Brexit, Trump.”

  Instead The split in Europe highlights the difficulties “European capitals face in coordinating a response to Mr Trump, who has questioned the US’s commitments to Nato and free trade and hinted at seeking a rapprochement with Russian president Vladimir Putin” much to the amusement of famous euroskeptic Nigel Farage who was the first foreign political leader to meet with Donald Trump at the Trump Tower over the weekend.

  
  Donald Trump and Nigel Farage. Taken from Nigel Farages twitter page.

  Trump’s move infuriated members of Europe’s fraying core, with Carl Bildt, the former Swedish prime minister, tweeting: “If Trump wanted to look statesmanlike to Europe, receiving Farage was probably the worst thing he could [do].”

  As the FT adds, British foreign secretary Boris Johnson dropped out of the Brussels meeting, with officials arguing that it created an air of panic, while French foreign minister Jean-Marc Ayrault opted to stay in Paris to meet the new UN secretary-general. Hungary’s foreign minister boycotted the meeting, labeling the response from some EU leaders as “hysterical”.

  Johnson’s refusal to attend will add to an already difficult relationship with his German counterpart Frank-Walter Steinmeier, who has told colleagues that he cannot bear to be in the same room as the British foreign secretary.

  In short: total chaos.

  Ironically, the German foreign minister had wanted to demonstrate that the EU was capable of rapid response when it came to foreign policy. Instead the disarray highlighted a familiar problem for Berlin, according to diplomats. “When the EU’s most powerful country wants to lead, other member states don’t necessarily follow,” said one EU diplomat. But the German foreign ministry put a brave face on events, saying on Sunday: “It’s good that the EU meets … to look into the consequences of the election of Donald Trump for Europe.”

  A combination of Trump’s election and Britain’s vote to leave the EU had triggered calls for a total overhaul of the EU’s foreign and defense policy, with Berlin and Paris demanding greater integration. “If the US disengages from Europe, we need to look after our own security,” said one EU diplomat. Those ministers who do attend the meeting, will discuss plans such as bolstering the EU’s ambition to mount joint operations during a scheduled meeting on Monday, which Mr Johnson and Mr Ayrault will attend.

  Elsewhere, as reported yesterday, NATO chief Jens Stoltenberg warned both the US and its European partners against “going it alone” on defence matters. Paris and Berlin had been co-ordinating their response to Mr Trump’s election, while London has jockeyed to maintain its position as the US’s main European ally. The French president and German chancellor spoke before releasing two separate, guarded welcomes to the president-elect last week. 

  Meanwhile, other European leaders have openly criticized the incoming president. European Commission president Jean-Claude Juncker last week accused Mr Trump of ignorance. “We must teach the president-elect what Europe is and how it works. I believe we’ll have two years of wasted time while Mr Trump tours a world he doesn’t know.”

  But the most concerned of all will likely be Italy’s PM Matteo Renzi, who as explained on various occasions, and as Bloomberg writes, is “Next in the Crosshairs for Anti-Establishment Wave.”

  Of course, with the US finding itself in a state of post-presidential election shock, it is only reasonable that Europe’s own establishment forces are next, and this time the impact will be far closer to the core, slamming first Italy, then France, the Netherlands, and ultimately – perhaps – Germany itself.

  

  

  

• Liberals Scared to Death by Their Own Caricature of Trumpettes

  This article by David Haggithwas first published on The Great Recession Blog:

  

  Everyone must stop saying they are “stunned” and “shocked.” What you mean to say is that you were in a bubble and weren’t paying attention to your fellow Americans and their despair. YEARS of being neglected by both parties, the anger and the need for revenge against the system only grew. Along came a TV star they liked whose plan was to destroy both parties and tell them all “You’re fired!” Trump’s victory is no surprise. He was never a joke. Treating him as one only strengthened him.   –Michael Moore on the failure of both political parties in America 

   

  How delusions become reality

   

  This past week, as I put together my coverage of Hell Week, I read how some liberals are creating petitions for the west coast to secede from the union. I read about the Canada immigrations web site being overwhelmed after the US election by visitors looking for an escape route from the US. I read about high-school kids who once sat peaceably next to each other in class rising up in class to beat up their classmates who voted for Trump. Prior to the election, I heard my own liberal friends say how they’d have to leave the country if Trump won.

  Why? The country isn’t any different the day after Trump won than it was the day before … except that perception has changed dramatically everywhere because of one man who deliberately spoke as far outside of political correctness as he could … and won the highest office in the land by doing so.

  Liberals are afraid of their own shadows right now. That’s because they’ve created anti-matter, Mr. Hyde caricatures of the Trumpettes — the average little guys who support Trump. These shadows that liberals have cast by their own self-deceit now surround them, and they believe the grotesquely exaggerated images they have created.

  This false belief like any phobia is taking on its own life by creating mass hysteria in the streets of America. By that step, belief becomes reality. While the initial description that liberals painted of Trumpettes is false — they’re all misogynistic, homophobic racists — the hysteria is real, and that causes people to react with violence against whatever they fear. Those violent reactions become very real horrors that are not just painted in the imagination, and they divide the nation deeper, creating  fears that are now based on real horrible events that came about due to the original false beliefs. It’s like a panic attack that feeds on itself.

  And the more people continue to believe the caricature that liberals created out of Trump supporters and then react in fear to that caricature, the more real-life bad events will create real horrors. It can quickly become a self-fueling social vortex that all began from false fears.

  Liberals have for months been retelling each other every day that Trump supporters are all bigots, homophobes, xenophobes and misogynists. They painted Trump supporters with a broad crimson-stained brush as being entirely motivated by hatred. On one level, I’m sure they created this image of the Trumpettes in order to win the election — by making making them look like the KKK fan club, which no decent person would want to belong to.

  There is, however, a deadly downside to this kind of demonization: you cannot do it unless you also convince yourself that the stereotype you are creating is true — otherwise you’d live in the knowledge that you are a liar. Nobody wants to live in the knowledge that he or she is a liar, and it is simple to convince yourself that the stereotype you are believing is true because that is who you want to simplify the other side anyway.

   

  Political correctness kept liberals from seeing how the election would turn out

   

  As a result, liberals were shocked, while I was not, that Trump won. They were shocked to discover that they live in a nation filled with haters. (They don’t, of course; but they believethey do, which explains their sudden horror that wasn’t there a week ago. A week ago, they believed Hillary would win by a landslide because they thought (as liberals tend to do) that the majority thinks and feels like they do.

  I suspected Trump would win, as I’ve said here, because he was far more likely to have a horde of closet supporters than Hillary was. Why? Because not everyone in this world is brave or politically inclined, even though they vote. And when liberals demand political correctness by demonizing those who don’t stay in those bounds, they simply drive people underground.

  When politically correct speech rules the day, those who do not think in politically correct ways and who are not politically inclined decide they’re just not going to talk about who they vote for because they don’t want to have arguments with friends or even lose friends. They don’t want to be labeled as racists for their views when they know they are not racist but don’t know how to prove they are not against such charges.

  Thus, when pollsters call them, they say they are undecided when, in fact, they have already decided to vote for Trump. They may do that because they are afraid someone will overhear, and they don’t want to be tarred and feathered. Mostly they do it because they have already decided how how they’re going to vote and have decided not to say not a word about it by simply answering that they are “undecided.” They don’t care about pollsters, nor even like them, so they give them the same stock response. Policing for politically correct speech drives all but the boldest of free-thinking people underground.

  That is exactly why America has always supported the ideal of anonymous voting. It’s the only way you can be sure all people will vote for what they believe is right and not simply cast the vote they think will create the least trouble for themselves. Not everyone is brave, and political correctness causes those who are not as brazen as Trump to hide their views. So, I was pretty sure we’d discover Trump had a large number of closet voters that the pollsters can’t sniff out. Trump’s campaign didn’t know he had those voters either; they just hoped they did. The brave supporters, who are outspoken, are readily counted; but the less brave would remain unknown until election day.

  Because Trump is boisterous, bellicose and all-around obnoxious, Trump supporters had more reason  to be afraid to say, “I support that guy.” If not for the fact that he was the only guy left in town who was clearly saying he would tear the establishment apart, many probably wouldn’t support someone like that. It also may be that this kind of arrogance is what it takes to have shoulders that are broad enough to knock the establishment apart because you don’t care what others think. They saw Trump as someone who could bear the slings and arrows that would certainly come to anyone who tried to break up the corrupt establishment. Rather than being reviled as horrible human beings for supporting someone like Trump, they just remained silent.

  That is how liberals created their own blindness and their own shock and awe as to how this election turned out. It’s really nothing more than a panic attack. I wasn’t surprised by a Trump victory (though the sea of red counties across the nation was more amazing than I thought it might be) because I am quite certain that most Trump supporters are not bigots. They didn’t vote for him because of racists inclinations but voted because they are angry at the establishment, and they want a junk-yard dog who can tear into it.

  Because I never believed the stereotype that was created for Trump supporters by the left, I don’t suddenly fear that I live in a nation filled with bigots. As a result, I’m not shocked by the election results nor afraid, even though I didn’t vote for Trump (or Hillary). Nor am I afraid Trump supporters will beat me up for saying that. But liberals are now deathly afraid of the illusion they created. They are running from their own straw man who appears to them to have suddenly caught on fire.

  Sure, Trump attracts bigots like a light in the night attracts most bugs. Maybe they make up as much as 10% of Trump supporters, though I doubt it; but because liberals have convinced themselves that all Trump supporters must be that kind of person, liberals are now scared by their own manufactured caricature. In their perception, they have just awakened to the Night of the Living Dead in a world where everyone around them might be a zombie.

   

  Trump is his own self-made caricature

   

  Trump is a master at playing the media because the media wants to be played, and Trump knows it wants to be played. Trump deliberately avoids all politically correct speech and belts out the most provocative statements he can make because he knows the media will love a story about a celebrity who is peeling the skin off of people’s ears by saying things that are politically incorrect in a world where political correctness has become the highest virtue.

  Controversy sells. There is a reason to be provocative if you want your message to be heard. There is a cost, too, because being so provocative makes it hard for many people to trust or respect you. Trump by nature doesn’t care, so he’s the perfect provocateur.

  The media knows they’re being played. You hear them mentioning it from time to time as if they speak about “the other guys” in the media, but notice they are covering the same story the other guys are about the latest ostentatious thing Trump said while they make their statements that Trump is playing the media. Why? Because they don’t care either. It makes a hot story that sells. By talking about how Trump is playing the media, they can rise above being played themselves while selling the same blisteringly hot story.

  Trump know all of that.

  So, Trump says things like “we need to keep out Mexicans who are rapists,” and the media and liberals start chattering among themselves about how Trump believes all Mexicans are rapists. I note, as the chatter takes off, that he didn’t actually say “Mexicans are rapists.” He said we need to keep out any that are. (That may be only 1% of Mexicans that he wants to keep out, and why wouldn’t we want to keep out convicted rapists, whether they are Mexican or any other nationality?)

  Trump lets the story play the way the media casts it because it gets coverage all over the nation for days on end, and his supporters see that he doesn’t cower from it. He goes right out for the next outrageous statement to kick the hornets nest again. They want someone with guts, and he’s showing them he has that.

  Nor did Trump ever say he has grabbed a woman by the crotch. In fact, he actually said he struck out with seducing the one woman he was talking about. He said celebrities can get away with outrageous actions. He did not say it is good behavior or that he has ever done it. (Notice, he switched from saying “I” to saying “you” at that part of the conversation.)

  He deliberately named the most outrageous thing that popped into his head because celebrities DO get away with that. We’ve all heard stories about how mobs of women throw themselves at rock stars and say, “Take me!” They rip off their own blouses at concerts and get on people’s backs to make sure the celebrity can see their bare breasts bounding above the crowd. There are some who, if a rock star grabbed them the way Trump described, probably would jump up and wrap their legs around him and say, “Bring it on, Big Boy!”

  So, we know it happens. (Not with most women, for sure, but enough to keep the limited number of rock stars happily busy.) And that is PROBABLY all Trump was really saying: “Since celebraties get away with the worst imaginable things, I was surprised I couldn’t even seduce this woman by offering her a shopping spree to furnish her apartment. She was having none of it.” That doesn’t leave him as a good guy, but it probably wasn’t as horrible as the story was made out to be by those who wanted to use it to defeat Trump.

  Trump routinely says things in reckless ways, and while that works great for publicity, it may prove damaging as a president. It certainly grabs the press by the crotch, which the press seems to like. Like the kind of woman I described above, they say, “Take us! We want to go for the ride” … and Trump obliges. Trump’s provocative speech gets endless replay by the press, so he doesn’t immediately correct himself because that would defeat the purpose in being provocative. (It’s also against his nature to correct himself.) A lot of it may be because he’s reckless, but it worked for him as a candidate. How well it work as a president is an entirely different manner, but it appears to me he realizes that and has immediately toned it down.

  Is there anyone in this country that really wants to import rapists from Mexico … or from Russia … or from Canada or any other country. Of course not. So, why be upset that Trump says we need to stop importing racists from Mexico … unless you deliberately misread that statement to mean he thinks we need to stop importing all Mexicans because they are all rapists? Liberals jumped to that conclusion because it fit their political aims to believe it. They created the lie and immediately believed their own lie … because they wanted to. But now it leaves them afraid of something that was never real in the first place.

  Trump was speaking about an incident where some actual criminals who were illegal aliens raped someone after they were known by the government to be both criminal and illegal aliens. He was saying that we should never allow known criminals into our country from other countries (Mexico or otherwise), and we should always deport aliens if we find out they are rapists. What do we need rapists for? What’s wrong with that? He was pointing out that it is ludicrous that those rapists were still in the country since their illegal status SHOULD make it very easy to get them out.

  In a liberal’s world, I guess, removing any immigrant for any reason is bad. We need more rapists. So, don’t dare use their illegal status as a way of getting the problem out of the country. Trump was showing how deliberately naive our nation is regarding corrupt people. He knew it would resonate with a large group that is fed up with the kind of blatant stupidity that says, “We have to keep rapists here because its not right to send them away.”

  The majority of people understood what Trump was saying, and that’s why he won. He didn’t bother to clarify it for the rest because the provacative way he said it gave it endless replays, and he knew that his supporters would be glad to see that controversy didn’t cause him to waver. He also knew that the few who really are racists would take it as affirming their racist views and would vote for him because of it, too (and a vote is a vote), while those who mischaracterized it as meaning he thinks Mexicans are rapists would never vote for him regardless. Apparently, a fair number of Latinos understood all of that, too, because Trump doubled the Republican share of Latino votes over what Romney got.

   

  Liberal demonization of others creates racism

   

  Painting the story in blood by making it sound like Trump believes all Mexicans are rapists is where the real evil begins because people start to believe this demonization and apply it to anyone who would support someone like Trump. As a result, perfectly wonderful Mexicans who live in this country start to fear that everyone who supports Trump is one of those kinds of people who believe Mexicans are all rapists. So, they see a Trump bumper sticker and think, “That guy hates Mexicans.” The tragic part of demonization is not how it hurts Trump or his supporters; it’s that many people are now afraid that all Trump supporters are racists when they needn’t have any such fear.

  As this liberal manufactured fear grows, it spreads like a dark fog over the landscape, and when the fog lifts, the ground is sometimes stained crimson as in this story about Black people dragging a White guy out of his car and beating him and dragging him down the road with his car while the whole crowd laughs … just because he  identified himself as a Trump voter — probably had a Trump bumper sticker.

  That’s what demonization does. It creates, in this case, a narrative that all Trump supporters (or whatever group is being demonized during that particular season) are evil and hate-filled. Therefore, it is OK to drag them down the street with their own cars after beating them up over and over while laughing about it and taking a video. It no longer matters what you do to these individuals because they are demons who are responsible for all the bad that ever happened to you.

  They stop being people and become the are caricatures  you have made of them. And that excuses your own hatred when you act in rebellion against them. (We do the same thing in war to make it easier to shoot the enemy. If we thought of that soldier in the opposite trench as a mother with children, we might be slow to pull the trigger and, thus, die, ourselves.)

  Trump helps create this problem by constantly speaking in language that is easily interpreted in outlandish ways, and he doesn’t clarify what he means because the provocative way he says it is the very thing that gives it air time. Thus, he gets the lion’s share of media attention without paying for any of it. He makes himself a spectacle on their dollar (and makes a lot of money for them by giving them a story, so they don’t care). That’s how it works.

  But now we need to recognize the demonization for what it is AND the way Trump’s speech deliberately plays with that fire, and we need to back it down; or we’ll go down the vortex where our fears create our reality by causing real horrible acts that should be feared. Let’s start with undoing the stereotype that has been created.

   

  What does a true Trump supporter look like?

   

  The fact also is that most of these Trump supporters who were reviled are no more vile than are Hillary’s supporters. They are just baking apple pies and setting them on the window sill, chatting about Kim Kardashian, and putting Halloween costumes on their children. And they are not racists for one second of their lives. They are not afraid of other cultures (xenophobic). They don’t hate people who are homosexual, even though they might feel uncomfortable around them because that isn’t their norm.

  They’re just living their lives because they are not as political as many liberals, who may wrongly assume that everyone is as political as they are. These quieter Trump supporters that swung the election aren’t that interested in politics so they don’t talk about politics. They are more interested in turning the garden under for winter.

  You don’t have to hate Mexicans or anyone else to decide that you liked life better when you could afford to buy a house (which most Americans cannot any more) and could afford to buy a new car every four years, even while paying much higher interest than you do today.  Because liberal Democrats have tried to paint these immigration concerns, as I’ve written about in another article today, as racism or xenophobia for years, the middle class finally rebelled because they finally had a candidate who didn’t care about political correctness.

  Donald Trump was the only person left speaking for those who have been shut out of good-paying jobs with great benefits the Reagan days onward by both Democrats and Republicans. Bernie had already been sidelined.

  While seeing their own lifestyle slowly diminish, middle-class Americans watched banksters get fabulously wealthier, and Obama did nothing about it. No one was brought to justice. Republicans supported bailing them out because they were too big to fail, but then Republicans never did a thing to make them smaller afterward so that we wouldn’t face that threat again. Democrats bailed the wealthy out for the same reason and then let them get bigger and wealthier so all the more too-big-to-fail.

  Trump rose as the anti-Republican Republican, and the middle class needed an anti-Establishment hero because the corporate establishment owns both parties. So, he won, and any liberal or conservative who is sick of the Wall-Street establishment should HOPE he succeeds in doing that one thing — busting up the establishment’s hold on government and should support him in that mission because it is likely to be your only chance to bust up the establishment, short of its own complete failure into anarchy, which will be violent for everyone.

   

  Moving on beyond hatred

   

  If you hate everyone who simply wants to gain back the middle-class life that their parents once enjoyed or that THEY once enjoyed, then you are going to have a lot of people to hate. Since you don’t want to be a “hater,” you will paint all of them with a broad brush as being the haters, themselves, while you are just defending the defenseless against them. That way you can nobly hate half of America, and write their concerns off with one word — racism — while you hold your head above the masses.

  Problems don’t go away because you deny them. Denial actually creates new problems or makes old ones worse. Trump’s supporters have revolted now because no one was listening to them, and they’re not going away now that they have finally awakened and started fighting for themselves. They chose Donald Trump as their strongman leader because he was brazen enough that he didn’t care what the entire world said about him. He has many characteristics that most Trumpettes don’t like either, but he is still the only person who stood up for them and who survived the establishment’s efforts to put him back in his place, which Bernie did not survive.

  If you’re a liberal, you can jump in your yacht and try to find an uninhabited shore in Canada to land on, or you can scare yourself to death with the notion that 50% of America is suddenly a bunch of violent, xeno-homo-phobic, redneck bigoted haters -or- you can throw away the stereotypes and start dealing with reality, which is that the middle class will now fight the establishment tooth and claw in order to gain back the jobs and benefits and lifestyle that eroded out from under them for thirty years. Whatever one makes of Hillary’s politics, you have to admit she represented the establishment, while Trump became the sole survivor representing the dis-establishment.

  That  means stopping the demonization that says immigration concerns are about racial hatred or xenophobia. That’s a convenient stereotype to shut off all discussion. Sure, there is a small mob of people for whom it border security and tightly controlled immigration is all about hatred; but that doesn’t explain the massive sea of red counties that spread across the political map on the second Tuesday of November. It is completely rational to believe that determined terrorists might be smart enough and opportunistic enough to hide themselves among 500,000 unknown, illegal immigrants each year. If we don’t know who those half million people are, how can we know there are not 10,000 terrorists among them? We need to KNOW.

  Trying to caricature the masses into a comically grotesque bunch of “Deplorables” is only going to flood your own world with true hatred and violence because people believe that caricature and strike out against the “Deplorables” who then strike back. A part of racism is in perception. Perception becomes reality because we respond to the world with an intensity that is based on our perception, and our response becomes the next person’s reality and becomes self-inflating.

  If, for example, we perceive people like Trump’s supporters as being racist who are really just sick and tired of becoming poorer, then we’ll interpret their actions, such as their Trump bumpersticker, as being racist. We’ll feel slighted by a bumper sticker — by what we interpret as their display racism. We’ll see their statements that they want less immigration as being all about race, even if it truly is all about jobs or about their fear that the borders are not being watched carefully enough to keep out the few people who genuinely want to bury us in mass graves.

  When you start seeing people in that crimson hue, you’ll start to fear them more; and they’ll perceive that you act differently toward them because of your fear, and they’ll start to fear you more. Then they act differently toward you because of their fear. False, demonizing beliefs quickly wind up into a vortex mass hysteria.

  Perhaps the worst kind of Xenophobia there is is the kind that fears half of our neighbors as being from another planet, not just another culture. We have a few people like that who now want to carve the west coast off of the rest of the country, showing themselves to be just as deeply isolationist as the people they angry at for being so isolationists!

   

  How do we bring a divided America together again?

   

  If we can take the demonization back out of politics now and deal with the real concerns that are eating our society — the concern about lower-paying jobs and fewer jobs because jobs are being deported, drastically reduced benefits, the end of the middle class to the benefit of the top 1%, justice against those who truly did rape society — then  maybe we can get through this.

  We need to stop thinking about whether something is Republican or Democrat but about how we can serve and protect the middle class or we’ll simply wind up with a greater number of lower-class people all around us. The rich will always have enough.

  The elephant in the room is awake now. So, either deal with it, or live in fear of it because it is definitely not going away. The one thing Donald Trump has done for all of us is become a lightning rod that woke the sleeping giant — the middle class. In the end, going back to policies that build the middle class can be good for all of America, and the rich will still be rich at the end of the day.

  Whatever party you belong to, stop it! The two-party systems has polarized the nation purely for the survival goals of each party.

  For conservatives, that means stop worrying about the need to take care of the rich so they can trickle down jobs to you. That hasn’t worked after thirty years, and it never will. That means the Trumpettes need to start with making it clear immediately that the Donald’s trumped-up, trickle-down tax plan is over before it even begins. He may have the guts to break up the establishment, but that plan feeds everything toward the establishment.

  Use the advantage of your numbers to make sure ALL of the tax breaks go directly to the middle class and the poor. Stop believing the nightmarishly repeated lie that money will ever trickle down or that all jobs are created by the rich. The bulk of jobs are created by small, middle-class-owned businesses all cross the nation.

  It’s time for the rich to pay their fair share in taxes. Don’t believe the Republican establishment lie that the rich pay more than their fair share already. They don’t. Yes, the wealthiest 20% of the people pay 75%  of the taxes, which sounds like they are doing far more than their share. However, that is only because they make more than 80% of all the wealth in the country — a number so obscene it is hard to comprehend. Therefore, they should be paying 80% of the taxes. Moreover, the 1% make about 60% of all that wealth and pay a smaller percentage in taxes than the middle class! So, don’t fall for a third round of trickle-down economics.

  You won’t get what you need if you don’t fight for it, and Trump has already started to make the mistake of surrounding himself with establishment advisors. Maybe he knows what needs to happen but doesn’t know how to do it and is looking for advice from the wrong people, or maybe he was the establishment’s Trojan horse in the first place — someone to take the heat of imminent economic failure while still being certain to support the rich.

  Either way, don’t let it happen. Force him into being the hero he has set himself up to be. Don’t think your job is done just because you voted. The job has only now begun. And while you’re at it, don’t forget to look out for the underprivileged. Their needs don’t end just because we are finally going to start making the great middle class great again.

  For liberals, just consider all that I’ve said above, and start doing the demonization, start looking to find common ground on areas of immigration concern where it has more to do with how it affects the job of the neighbor you love and more to do with how to be wise about terrorism. That doesn’t mean the doors are slammed shut, but you ought to be able to focus on the common ground and work with accomplishing what can happen there. You just may find the things that bind us together are greater than the things that alienate us once we stop demonizing the other side and seek common ground.

   

  Let me close with a comment by Chris MacIntosh when he predicted Donald Trump’s election because he believed the left is blinded by their own political correctness:

  When only right-wing demagogues are prepared to say what a politically correct establishment is unwilling to say, then it will be right-wing demagogues that are elected to power. (Capitalist Exploits)

   

  

• Suicide Hotlines Get Record Number Of Calls After Trump Win: "Phones Have Been Ringing Off The Hook"

  Submitted by Mac Slacvo via SHTFPlan.com,

  Things have gotten steadily worse for Democrats after Donald Trump’s election to the Presidency of the United States. Scores of celebrities are freaking out across social media, Hillary supporters are holding “Cry Ins” to help each other cope, visits to Canada’s immigration website have skyrocketed, and coping videos are starting to make the rounds online.

  While many shocked Clinton supporters have found solidarity with thousands of others by protesting and rioting in the streets, some, like movie star Robert DeNiro, have fallen into a depressive state.

  And according to The Hill, those overwhelming feelings of depression have led to suicidal thoughts in many. So much so that suicide hotlines across the country are struggling to keep up:

  Phones have been ringing off the hook at suicide hotlines since Donald Trump was named president-elect Tuesday.

   

  According to multiple reports, many of those calling or texting into hotlines are members of the LGBTQ community, minorities and victims of sexual assault who are worried about Trump’s victory.

   

  The Suicide Prevention Lifeline told “The Washington Post” it is seeing calls “unmatched in the hotline’s history,” with a response unlike that in 2008 or 2012.

   

  …

   

  Election stress is nothing new. Psychologists have noted upticks in anxiety and stress during and following contentious election cycles. This specific election, many have observed, is no exception and is exceeding average numbers in those seeking mental care and counseling.

  If you are someone you know can’t handle the stress, please share this video.

  You’re not alone:

  By way of helping, here are 7 things liberals should have learned from this election (but won't).

  1) The Standard Liberal Rhetoric Against Republicans Is Nuts: Last week, Bill Maher said the following, “I know liberals made a big mistake because we attacked your boy [President George W. Bush] like he was the end of the world. He wasn’t. And Mitt Romney, we attacked that way. I gave Obama a million dollars, I was so afraid of Mitt Romney. Mitt Romney wouldn’t have changed my life that much, or yours. Or John McCain. They were honorable men who we disagreed with. And we should have kept it that way. So we cried wolf. And that was wrong."

   

  Whether you love or hate Trump, you have to agree that his behavior, temperament and style are wildly different than that of George W. Bush and Mitt Romney. Yet, the Left’s charges against Trump seem to be largely identical to the ones it leveled at Bush and Romney. Racist? Check. Sexist? Check. Is a mean, hateful person? Check. Fascist? Check. A Nazi? Check. When you try to paint every person that doesn’t agree with you as the devil, then you’ll soon find you lack the ability to describe someone you truly believe to be the devil if he appears.

   

  2) Smearing People As Racists Has Consequences: A big part of Barack Obama’s initial appeal to many of the Americans who voted for him in 2008 was the unspoken promise that he’d lead us into a post-racial era. How racist could America be if we had a black President, right? Unfortunately, Obama and his allies on the Left took us in exactly the opposite direction. Day in and day out, any white person who didn’t toe the liberal line was called a racist and falsely accused of having white privilege. Anyone who complained about it was told in not so many words, “You’re white; so shut up.” Meanwhile, the clear majority of people being called racists didn’t agree with that assessment. They seethed; they got angry about it and many of them got their revenge by voting for Donald Trump.

   

  Read more here…

  

  

• What Happens When 2-Term Presidencies End?

  Four words – nothing good for stocks.

   

  

  h/t @ConvertBond

  With the election decided, the burning question now is, “What next?” And, as Axioma details in their latest report, as “unprecedented” as the 2016 US Presidential election may have been, there are at least some precedents to which we can point for insights into what may now lie ahead.

  Granted, the economic impact of policies introduced by Donald Trump will not be seen for many months or years. Nevertheless, we can look to other market events to get an idea of what we might expect in equity and currency markets over the near term, while the markets are still absorbing the news.

  Admittedly, two examples of vote-related surprises (2000 uncertainty post-election, and Brexit) and associated market movements and volatilities, along with the example of how the market may view one of Trump’s signature issues (NAFTA agreement in Jan 1994), are hardly comprehensive indicators of what we might see in markets over the next few months; and of course, the economic impact of trade and other policies may not be known for months or years. But we believe the uncertainty and associated market volatility we have seen in the past may well come to pass again, and market volatility may become the order of the day, as the US transitions to a substantially different style of administration from the past eight years and new policies are put into place.

  

  

• Donald Trump's First Interview Since Winning The Election: Key Highlights And Full Transcript

  In his first televised interview since winning the election this week, a “more serious, more subdued” Donald Trump spoke to CBS’ 60 Minutes correspondent Lesley Stahl from his penthouse in the Trump Tower.

  

  As CBS’ Lesley Stahl summarized the interview, “what we discovered in Mr. Trump’s first television interview as president-elect, was that some of his signature issues at the heart of his campaign were not meant to be taken literally, but as opening bids for negotiation.  

  Before we get into the nuances of Trump’s interview whose full transcript is presented at the end of this post, for those pressed for time here are the key highlights from Trump’s interview:

  • Trump says he will talk with FBI Director Comey before deciding whether to ask his resignation, says “I respect him a lot”
  • Trump, on pledge to appoint special prosecutor to investigate Clintons, says “I don’t want to hurt them. They’re good people”
  • Trump says he is “fine” with same-sex marriage; says He Does Not Intend To Overturn Supreme Court Ruling on Gay Marriage
  • Trump confirms he will forego salary as president
  • Trump tells protesters: “don’t be afraid”
  • Trump condemns harassment of minorities
  • Trump vows to name pro-life, pro-gun rights Supreme Court justices

  Among many things discussed, Trump told Stahl that Clinton’s phone call conceding the election was “lovely” and acknowledged that making the phone call was likely “tougher for her than it would have been for me,” according to previews of the interview released by CBS. Trump said “she couldn’t have been nicer. She just said, ‘Congratulations, Donald, well done,’” Trump told Stahl. “And I said, ‘I want to thank you very much. You were a great competitor.’ She is very strong and very smart.”

  Trump’s tone in the interview contrasted his attacks on the campaign trail, in which he nicknamed Clinton “Crooked Hillary” and encouraged chants to “Lock her up!” during his rallies. 

  Trump also told Stahl that former president Bill Clinton called him the following day and “couldn’t have been more gracious.” “He said it was an amazing run – one of the most amazing he’s ever seen,” Trump  said. “He was very, very, really, very nice.”

  During the campaign, Trump had tried to use Bill Clinton’s infidelities as a way to attack and embarrass Hillary Clinton. For the second presidential debate, Trump had sought to intimidate his competitor by inviting women who had accused the former president of sexual abuse to sit in the Trump family box. Debate officials quashed the idea.

  In the interview with Stahl, Trump did not rule out calling both of the Clintons for advice during his term. “I mean, this is a very talented family,” he said. “Certainly, I would certainly think about that.”

  Ironically, Trump was also asked if he would appoint a special prosecutor to investigate Hillary’s private server as he suggested he would during the second debtate.

  “I’m going to think about it….I don’t want to hurt them,” he said in the “60 Minutes” interview. “Um, I feel that I want to focus on jobs, I want to focus on healthcare, I want to focus on the border and immigration and doing a really great immigration bill. We want to have a great immigration bill. And I want to focus on — all of these other things that we’ve been talking about.”

  Trump also reiterated on “60 Minutes” that he may keep portions of the Affordable Care Act, something he had mentioned he might do after meeting with President Barack Obama in the White House on Thursday.

  When Stahl asked whether people with pre-existing conditions would still be covered after Trump repealed and replaced Obamacare, Trump said they would “because it happens to be one of the strongest assets.”

  “Also, with the children living with their parents for an extended period, we’re going to… very much try and keep that,” Trump added, referring to portions of the healthcare act that cover children under their parents’ insurance through age 26. “It adds cost, but it’s very much something we’re going to try and keep.”

  When Stahl questioned whether there would be a gap between the repeal of Obamacare and the implementation of a new plan that could leave millions of people uninsured, Trump interrupted her.

  “Nope. We’re going to do it simultaneously. It’ll be just fine. It’s what I do. I do a good job. You know, I mean, I know how to do this stuff,” Trump said. “We’re going to repeal and replace it. And we’re not going to have, like, a two-day period and we’re not going to have a two-year period where there’s nothing. It will be repealed and replaced. I mean, you’ll know. And it will be great healthcare for much less money.”

  Trump’s campaign promises included fully repealing the Affordable Care Act, forcing Mexico to pay for a border wall and banning Muslims from entering the U.S., however in the last few days Trump appears to have taken a more moderate stance on these matters and now seems to be walking back his more extreme positions.

  * * *

  Trump was also asked for his take on the Supreme Court and Roe v Wade.

  On this important issues Trump said that he is “pro-life. The judges will be pro-life. They’ll be pro-life, they’ll be– in terms of the whole gun situation, we know the Second Amendment and everybody’s talking about the Second Amendment and they’re trying to dice it up and change it, they’re going to be very pro-Second Amendment. But having to do with abortion if it ever were overturned, it would go back to the states. So it would go back to the states.” He added that perhaps women “will have to go to another state.”

  * * *

  On the topic of violence in the streets since his election victory, Donald Trump says he’s “saddened” to hear some of his supporters are inciting violence: “If it helps. I will say this…Stop it”

  Trump said had he heard about reports of racial slurs and personal threats against African Americans, Latinos and gays by some of his supporters.

  Donald Trump: I am very surprised to hear that– I hate to hear that, I mean I hate to hear that–

  Lesley Stahl: But you do hear it?

  Donald Trump: I don’t hear it—I saw, I saw one or two instances…

  Lesley Stahl: On social media?

  Donald Trump: But I think it’s a very small amount. Again, I think it’s–

  Lesley Stahl: Do you want to say anything to those people?

  Donald Trump: I would say don’t do it, that’s terrible, ‘cause I’m gonna bring this country together.

  Lesley Stahl: They’re harassing Latinos, Muslims–

  Donald Trump: I am so saddened to hear that. And I say, “Stop it.” If it– if it helps. I will say this, and I will say right to the cameras: Stop it.

  Trump was also asked about his opinion on demonstrators:

  Lesley Stahl: [T]here are people, Americans, who are scared and some of them are demonstrating right now, demonstrating against you, against your rhetoric–

  Donald Trump: That’s only because they don’t know me. I really believe that’s only because–

  Lesley Stahl: Well, they listened to you in the campaign and that’s–

  Donald Trump: I just don’t think they know me.

  Lesley Stahl: Well, what do you think they’re demonstrating against?

  Donald Trump: Well, I think in some cases, you have professional protesters. And we had it– if you look at WikiLeaks, we had–

  Lesley Stahl: You think those people down there are—

  Donald Trump: Well Lesley—

  Lesley Stahl: are professional?

  Donald Trump: Oh, I think some of them will be professional, yeah–

  Lesley Stahl: OK, but what about – they’re in every city. When they demonstrate against you and there are signs out there, I mean, don’t you say to yourself, I guess you don’t, you know, do I have to worry about this? Do I have to go out and assuage them? Do I have to tell them not to be afraid? They’re afraid.

  Donald Trump: I would tell them don’t be afraid, absolutely…. We are going to bring our country back. But certainly, don’t be afraid. You know, we just had an election and sort of like you have to be given a little time. I mean, people are protesting. If Hillary had won and if my people went out and protested, everybody would say, “Oh, that’s a terrible thing.” And it would have been a much different attitude. There is a different attitude. You know, there is a double standard here.

  * * *

  The full interview is below:

  * * *

  And the full interview transcript is below:

  

  

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• Martin Armstrong Exposes "The Real Clinton Conspiracy" Which Backfired Dramatically

  Submitted by Martin Armstrong via ArmstrongEconomics.com,

  

  Meanwhile, Hillary lost not merely because she misread the “real” people, she decided to run a very divisive and nasty negative campaign, which has fueled the violence ever since. According to WikiLeaks emails from campaign John Podesta, Clinton colluded with the DNC and the media to raise what they thought would be the extreme right among Republicans to then make her the middle of the road to hide her agenda.

  

  Clinton called this her “pied piper” strategy, that intentionally cultivated extreme right-wing presidential candidates and that would turn the Republicans away from their more moderate candidates. This enlisted mainstream media who then focused to Trump and raise him above all others assuming that would help Hillary for who would vote for Trump. This was a deliberate strategy all designed to propel Hillary to the White House.

  The Clinton campaign and Democratic National Committee along with mainstream media all called for using far-right candidates “as a cudgel to move the more established candidates further to the right.” Clinton’s camp insisted that Trump should be “elevated” to “leaders of the pack” and media outlets should be told to “take them seriously.”

  If we look back on April 23, 2015, just two weeks after Hillary Clinton officially declared her presidential campaign, her staff sent out a message on straregy to manipulate the Republicans into selecting the worse candidate. They included this attachment a “memo for the DNC discussion.”

  

  The memo was addressed to the Democratic National Committee and stated bluntly, “the strategy and goals a potential Hillary Clinton presidential campaign would have regarding the 2016 Republican presidential field.” Here we find that the real conspiracy was Clinton manipulating the Republicans. “Clearly most of what is contained in this memo is work the DNC is already doing. This exercise is intended to put those ideas to paper.”

  “Our hope is that the goal of a potential HRC campaign and the DNC would be one-in-the-same: to make whomever the Republicans nominate unpalatable to a majority of the electorate.”

  The Clinton strategy was all about manipulating the Republicans to nominate the worst candidate Clinton called for forcing “all Republican candidates to lock themselves into extreme conservative positions that will hurt them in a general election.”

  It was not Putin trying to rig the elections, it was Hillary. Clinton saw the Republican field as crowded and she viewed as “positive” for her. “Many of the lesser known can serve as a cudgel to move the more established candidates further to the right.” Clinton then took the strategic position saying “we don’t want to marginalize the more extreme candidates, but make them more ‘Pied Piper’ candidates who actually represent the mainstream of the Republican Party.”

  Her manipulative strategy was to have the press build up Donald Trump, Sen. Ted Cruz and Ben Carson. “We need to be elevating the Pied Piper candidates so that they are leaders of the pack and tell the press to them seriously.”

  This conspiracy has emerged from the Podesta emails. It was Clinton conspiring with mainstream media to elevate Trump and then tear him down. We have to now look at all the media who endorsed Hillary as simply corrupt. Simultaneously, Hillary said that Bernie had to be ground down to the pulp. Further leaked emails showed how the Democratic National Committee sabotaged Sanders’ presidential campaign. It was Hillary manipulating the entire media for her personal gain. She obviously did not want a fair election because she was too corrupt.

  What is very clear putting all the emails together, the rise of Donald Trump was orchestrated by Hillary herself conspiring with mainstream media, and they they sought to burn him to the ground. Their strategy backfired and now this is why she has not come out to to speak against the violence she has manipulated and inspired.

  

  This is by far the WORST campaign in history and it was all orchestrated by Hillary to be intentionally divisive for the nation all to win the presidency at all costs. She has torched the constitution and the country. No wonder Hillary could not go to the stage to thank her supporters. She never counted on them and saw the people as fools. The entire strategy was to take the White House with a manipulation of the entire election process. Just unbelievable. Any Democrat who is not angry at this is clearly just a biased fool. Wake up and smell the roses. You just got what you deserve.

   

  

  

• Is A Real Civil War Possible?

  Submitted by Doug Casey via InternationalMan.com,

  The Trump victory is very good news for the US – relative to a win for Hillary, which would have been an unmitigated disaster. So I’m happy he won.

  Will Trump winning mean a real change in direction for the US? Unlikely. Don’t mistake Trump for a libertarian. He has all kinds of stupid notions—torture as official policy, killing families of accused terrorists, and putting on import duties. He has no grasp of economics. He’s an authoritarian. His cabinet choices, so far, are all neocons and Deep State hangers-on. He’s likely to treat the US as if it were his 100% owned corporation.

  On the bright side, he has real business experience—although of the kind that sees government as a partner. I doubt he’ll try, or be able if he does, to pull up any agencies by the roots. He’ll mainly be able to set the tone, as did Reagan. But, hey, something is better than nothing.

  THE POLITICAL FUTURE

  A brief word on US political parties. I’ve said for years that the Demopublicans and the Republicrats are just two wings of the same party. One says it’s for social freedom (which is a lie), but is actively antagonistic to economic freedom. The other says it’s for economic freedom (which is a lie), but is actively antagonistic to social freedom. Both are controlled by members of the Deep State.

  I still think that’s an accurate description of reality. But, in truth, it’s a little unfair to the Republicans. The creatures who control the Republican Party are one thing – and they were massively repudiated by the victory of Trump. Good riddance. But the people who gravitate towards the GOP are something else. To them, the GOP mostly represents a cultural club they belong to.

  Rank and file Republicans don’t have any cohesive philosophy binding them together. They’re just sympathetic to “traditional” values. They like the picture postcard version of America. The 1950’s style Father Knows Best family. The world of American Graffiti. A house in the suburbs, or a small, neat farm. Thanksgiving dinners with relatives. The exchange of Christmas cards. Going to church on Sunday. The husband having a job that allows him to support the wife and kids. Chevrolets and Fords. A relatively small, non-predatory government. A friendly neighborhood cop. A basically decent and stable society, which doesn’t tolerate crime, or overly outlandish behavior, where social norms are understood and observed.

  You get the picture. It’s a cultural thing, not an ideological or political construct. Unfortunately, it’s no longer a reality. It’s more and more just an ideal, about as dated as a Norman Rockwell painting on the defunct Saturday Evening Post.

  The Democrats are quite different in outlook. They see themselves as hip and sophisticated, and see traditional values as “square”. They’re for globalism, not American nationalism. Forget the clean-cut Mouseketeers; the fat and loathsome Lena Dunham is the new role model. Political correctness rules. White men are automatically despised. Black is beautiful. Women are better than men. The very idea of America is in disrepute, and held in contempt. Multiculturalism overrules home-grown values. Etc. Etc.

  You’ll notice that there was very little discussion about policy in this election. It was almost all ad hominem attacks, mostly pushing emotional hot buttons, not intellectual points. It’s all about a culture clash. It’s a non-violent civil war. These two groups no longer have very much in common. And they don’t just disagree, they hate each other.

  Is a real civil war possible? Unlikely. The electorate is too degraded to actually get off their couches to fight, apart from the fact few know how to use a gun anymore. Besides, 25% of the US is on antidepressants or other psychoactive drugs; they’re too passive to want radical change. Almost half the country is on some form of the dole; they fear having their doggy dishes taken away. More than half the country is obese; fat people tend to avoid street fights. The median age in the US is 38; old people don’t usually get in fights. Anyway, everybody lives on their electronic devices, not the real world.

  You’ll notice that voting for Trump and Hillary broke along cultural lines. The Republicans won the rural areas (which are dropping in population); the Democrats won the cities (which are growing). The Reps are white (and becoming no more than a plurality); the Dems have most of the so-called “people of color”, who used to be called “colored people” (and are becoming a majority). The Reps did better with males; the Dems better with females, who tend to see the world in softer and gentler shades. The Reps are favored by native-born Americans; the Dems are favored by immigrants, who often have very different values. The Reps represent the diminishing middle-class; the Dems represent the growing underclass. The Reps did better with older people, who are on their way out; the Dems did better with younger people, indoctrinated by academia and the media, who are on their way up.

  None of this looks good for the future of traditional American culture. In fact, Hillary won the popular vote. That means, demographics being what they are, the Republicans are in more trouble next time. With current immigration and birth patterns, the constituency of the Democrats should gain about 2% every four-year election cycle in the future. Even more important, as we leave the eye of the storm that started in 2007, and go into the trailing edge of the economic hurricane, the Trump administration will be blamed. There will, therefore, be a radical reaction away from what it’s believed to represent in 2020.

  It used to be the Reps and the Dems differentiated mostly on ideological grounds. Now it’s much more on cultural grounds. Allow me to identify the elephant in the room, and spell out the real nature of the Democratic Party.

  The Democratic party is a cesspool filled with leftist social engineers, academics, busy-body pundits, the “elite”, cultural Marxists, race baiters, racial “minorities” who see race as their main identity, radical feminists and LBGT types, entitled underachievers, statists, the soft-headed, the envy-driven, the stupid, professional losers, haters of free markets, and people who simply hate the idea of America. I can’t imagine anyone of good will, or even common decency, being a member of today's Democratic Party. It needs to be flushed. But it will only get stronger in the near future, for many reasons.

  But it’s an honest party—they generally say what they believe, even if it’s repulsive to anyone who values things like liberty. Interestingly, there are no Dinos—unless they’re Stalinists or Maoists who think the others aren’t going far enough. The party has absolutely no redeeming values.

  A real battle for the soul of the country is shaping up. But I fear it won’t be heroic, so much as sordid. The knaves versus the fools. The Dems are the evil party, but the Reps are just the stupid party.

  Why? Trump and the Trumpers have no ideology except a vision of a vanished world. They’re understandably angry, but don’t know what to do about it. They have no real program, except to say the Dems have gone too far. No coherent philosophy, just a nebulous belief that the Democrats are wrong. They’re justifiably fed up with the Establishment that gave them non-entities like Dole, McCain, and Romney.

  Why did Trump win? Two reasons.

  First, “Cultural Americans” know that their culture is dying, and their standard of living is declining. They sensed—correctly—that this would be their “last hurrah”, their last real kick at the cat. Trump is likely the last white male president. Unless a rabid statist like Tim Kaine is elected in 2020, with promises of a new and more radical New Deal. Or ongoing wars tilt the odds towards a general, most of whom are still white males.

   

  Second, don’t forget that Trump wasn’t the only protest candidate in the primaries. There was Bernie. His supporters know that Hillary and the Dem insiders stole it from him, and they’re still very unhappy. Many abstained from voting for Hillary because of the theft. A few probably voted for Trump out of spite. Or because they wanted to burn the house down. Nobody says this.

  Perversely, they’ll get their wish. The Greater Depression will deepen under Trump, even if he makes the right moves. Which will play into the election of someone from the Democrat cesspool in 2020. So maybe the Trump victory isn’t such a good thing after all.

  But let’s look at the bright side. All things considered, we’re in for some wonderful free (kind of) entertainment.

  

  

• NATO Panics As Putin Urges Trump To Force Alliance Withdrawal From Russian Border

  While many in the media have speculated that the Kremlin had a hand in Wikileaks’ procurement of hacked Podesta emails – something Julian Assange denied last week – and US intelligence services officially accused Russian government-supported hackers of interfering with the US election (providing zero proof for the allegation), the truth is that Vladimir Putin is delighted with the outcome from the US elections: not so much for Hillary’s loss as that the sharp, neo-con wing in the Pentagon has been muted for the next four years.

  And, in the first test of Trump’s willingness to rebuild bridges with Russia, Putin’s spokesman suggested that President-elect Donald Trump should begin rebuilding the U.S.-Kremlin relationship by urging NATO to withdraw forces from the Russian border.  Dmitry Peskov told the Associated Press that such a move  “would lead to a kind of detente in Europe.” Trump repeatedly praised Putin during his campaign and suggested the U.S. abandon its commitment to the NATO alliance.

  The request comes at a time of disturbing, relentless escalations in military tensions between NATO and Russia: this week we reported that NATO has placed as much as 300,000 troops on “high alert” in preparation for confrontation with Russia. 

  Peskov said in the interview that the NATO presence does not make Russia feel “safe.”  “Of course, we have to take measures to counter,” he said.

  Additionally, setting the stage for Trump’s official position on Crimea, in a separate interview with the Associated Press on Thursday, Peskov insisted that Crimea which became part of Russia after the CIA-sponsored Ukraine presidential coup in 2014, will remain such.   “No one in Russia — never — will be ready to start any kind of discussion about Crimea,” he said, refusing to call it “annexation.”

  When asked how Trump could approach the Crimea issue, quoted by The Hill, Peskov said it would take time. “We understand that it will take time for our partners in Europe, for our partners here in the United States to understand that. We are patient enough to wait until this understanding occurs here in Washington, in the States, in Europe,” he said.

  * * *

  But while the Crimea issue is largely moot, with the West resigned to its concession to Moscow, fears that Trump will indeed follow Russia’s advice and pressure the alliance into standing down, or worse, withdraw US support, has resulted in outright panic, and according to German Spiegel, NATO strategists are planning for a scenario in which Trump orders US troops out of Europe.

  Spiegel adds that strategists from NATO Secretary-General Jens Stoltenberg’s staff have drafted a secret report which includes a worst-case scenario in which Trump orders US troops to withdraw from Europe and fulfills his threat to make Washington less involved in European security.

  “For the first time, the US exit from NATO has become a threat” which would mean the end of the bloc, a German NATO officer told the magazine. During his campaign, Trump repeatedly slammed NATO, calling the alliance “obsolete.” He also suggested that under his administration, the US may refuse to come to the aid of NATO allies unless they “pay their bills” and “fulfill their obligations to us.”

  Of course, this is the same Spiegel which after Trump’s victory has predicted the end of the world.

  

  “We are experiencing a moment of the highest and yet unprecedented uncertainty in the transatlantic relationship,” said Wolfgang Ischinger, former German ambassador in Washington and head of the prominent Munich Security Conference. By criticizing the collective defense, Trump has questioned the basic pillar of NATO as a whole, Ischinger added.

  Alternatively, by putting into question a core support pillar behind NATO’s endless provocations and troop buildup at Russia’s border, Trump may prevent World War III.

  NATO, however, demands its way or no other way at all, and it why Ischinger demands that the president-elect reassure his “European allies” that he remains firm on the US commitment under Article 5 of the NATO charter prior to his inauguration.

  This wasn’t the only criticism launched at Trump by the military alliance: earlier this week, Stoltenberg slammed Trump’s agenda, saying: “All allies have made a solemn commitment to defend each other. This is something absolutely unconditioned.” Perhaps the commitment was only contingent on having a resident in the Oval Office who put the interests of the Military Industrial Complex ahead of those of, for example, the American people?

  NATO’s panic has grown so vast that out of fear Trump would not appear in Brussels even after his inauguration, NATO has re-scheduled its summit – expected to take place in early 2017 – to next summer, Spiegel said.

  The NATO report likley also reflects current moods within the EU establishment as well, as Jean-Claude Juncker, President of the European Commission, has called on the member states to establish Europe’s own military. Washington “will not ensure the security of the Europeans in the long term… we have to do this ourselves,” he argued on Thursday. Because Greek troops just can’t wait to give their lives to defend German citizens and vice versa.

  Meanwhile, Spiegel admits that despite NATO’s bluster, Trump has all the leverage, and if Trump is serious about reducing the number of US troops stationed in Europe, large NATO countries like Germany have little to offer, Spiegel said. Even major member states’ militaries lack units able to replace the Americans, which in turn may trigger debate on strengthening NATO’s nuclear arm, a sensitive issue in most European countries for domestic reasons.

  How will Trump respond? It is unclear: while in his pre-election rhetoric, Trump pushed for an anti-interventionist agenda, and certainly made it seem that NATO would be weakned under his presidency, that remains to be seen as his transition team currently hammers out the specifics of his rather vague policies. We would not be surprised at all to find that for all the anti-establishment posturing, the “shadow government” – now in the hands of the Bush clan – which Ron Paul warned against earlier, manages to regain dominance, and far from a detente, Trump’s position emboldens NATO to pressure Putin even further. We would be delighted if our cynicism is proven wrong on this occasion.  
  

  

  

• Chicago Man Beaten By Angry Black Mob For Voting Trump Speaks Out

  A couple of days ago we wrote about the 49-year old Chicago resident, David Wilcox, who was beaten by a group of angry black men as onlookers shouted “you voted Trump? you gonna pay for that sh*t,” “beat his ass,” and “don’t vote Trump.”  Today the battered Wilcox spoke to the Chicago Tribune to give more details on the events surrounding the assault.  In addition to being beaten mercilessly, Wilcox was also drug down the streets of Chicago’s West Side at 70-80 miles per hour as he attempted to prevent the mob from stealing his vehicle.

  “I stopped and parked. And I asked if they had insurance, and the next thing that I knew they were beating the s— out of me,” Wilcox said Thursday.

   

  “They were beating me to have me let go of the car,” Wilcox said. “The guy went to 70 and 80 mph. If I let go, I was dead. He slowed to 45. … He tried to push the door open. …So he stepped on it again.”

   

  “He stepped up back to 70 and 80, swerved again,” Wilcox said. “The wheels on my side left the ground, up to 2 inches. … Then he slowed down. I was looking at oncoming traffic. He probably slowed to about 45. God was watching over for me. I rolled about five or seven times into the oncoming traffic lanes.”

   

  “There was a parole officer with a gun and bulletproof vest,” he added. “He turned left, and he told me just sit down and wait for the police to come.”

   

  Wilcox filled out a police report, but no one was reported in custody Thursday afternoon. Police said they were investigating the beating and who made the “politically divisive” statements in the video.

   

  Wilcox believes the attackers, who were black, were egged on by the bystanders. “They intensified it, aggravated it and made it more than it was.”

   

  Ironically the attackers didn’t even know that Wilcox was a Trump voter at the time of the attack.  That said, he confirmed his support of Trump to the Chicago Tribune which he attributed to his view that Trump would be better for the economy.

  “He’s gonna bring back the economy. I believe he’s gonna be the one to protect the (nation). I know he doesn’t speak politically correct sometimes, but 95 percent of the country doesn’t.”

  Somehow we suspect if this event were reversed and a white Trump mob was video taped beating a black Hillary supporter the mainstream media would pay a little closer attention.  That said, we won’t hold our breath waiting for CNN and MSNBC to cover this one.

  * * *

  Below is what we shared a couple of days ago.

  Authored by Paul Joseph Watson, originally posted at InfoWars.com,

  Shocking video out of Chicago shows a mob of young black men viciously beating an older white man because he voted for Donald Trump, dragging him through the streets as he hangs out of the back of his car.

  The clip shows the thugs repeatedly screaming, “you voted Donald Trump” as they assault the victim from every angle while others steal his belongings.

  “You voted Trump,” the mob screams, “You gonna pay for that sh*t.”

  Another woman shouts “beat his ass,” while another man is heard laughing before remarking, “Don’t vote Trump.”

  A second video of the incident which is dubbed with the “F**k Donald Trump” song, a phrase now being chanted by “protesters” across the country, shows one of the attackers driving away in the man’s vehicle while his hand is still stuck in the window as the car drags him down the street.

  “The scene is frankly reminiscent of a lynching,” remarks Chris Menahan.

  It is not even clear if the victim was a Trump supporter. Presumably, the mob used that as an excuse to beat and rob him.

  YouTube quickly deleted the video, but it has been mirrored on numerous different websites.

  If the roles had been reversed, and Trump supporters had been caught on tape viciously beating a black Hillary voter, this would be a national news story right now.

  As it is, you won’t see this on CNN any time soon.

  

  Finally, here is SHFPlan.com’s Mac Slavo with his typically eloquent perspective on this deplorable behavior…

  Violence and retribution for the election of Trump has proven to be the result of a media-driven attack on his character. For months now, the pundits and columnists have done nothing but tell the population that Trump supporters are racists, etc. and now racially-motivated beatings are taking place in the street without any other pretext or provocation.

   

  Are they proud of themselves yet? And how far will this violence spread?

   

  read more here…

  

  

• Chart Of The Week: The Exodus Begins

  In March, hordes of 'triggered' and 'fearful' liberals began to investigate just what it would take to leave the country if – horror of horrors – Donald Trump should win the US presidential election. As the following chart shows, that 'blip' of search hysteria appears to have been nothing compared to the overwhelming exodus that just occurred…

  trends.embed.renderExploreWidget(“TIMESERIES”, {“comparisonItem”:[{“keyword”:”move to canada”,”geo”:””,”time”:”today 5-y”}],”category”:0,”property”:””}, {“exploreQuery”:”q=move%20to%20canada”});

  Of course, this has not gone unnoticed by the Canadians (who emigration website crashed on Wednesday), as Jim Quinn previously wrote, the flood of Trump-fearing American liberals sneaking across the border into Canada has intensified in the past week. The Republican presidential campaign is prompting an exodus among left-leaning Americans who fear they’ll soon be required to hunt, pray, pay taxes, and live according to the Constitution.

  Canadian border residents say it’s not uncommon to see dozens of sociology professors, liberal arts majors, global-warming activists, and “green” energy proponents crossing their fields at night.

   

  “I went out to milk the cows the other day, and there was a Hollywood producer huddled in the barn,” said southern Manitoba farmer Red Greenfield, whose acreage borders North Dakota. “He was cold, exhausted and hungry, and begged me for a latte and some free-range chicken. When I said I didn’t have any, he left before I even got a chance to show him my screenplay, eh?”

   

  In an effort to stop the illegal aliens, Greenfield erected higher fences, but the liberals scaled them. He then installed loudspeakers that blared Rush Limbaugh across the fields, but they just stuck their fingers in their ears and kept coming. Officials are particularly concerned about smugglers who meet liberals just south of the border, pack them into electric cars, and drive them across the border, where they are simply left to fend for themselves after the battery dies.

   

  “A lot of these people are not prepared for our rugged conditions,” an Alberta border patrolman said. “I found one carload without a single bottle of Perrier water, or any gemelli with shrimp and arugula. All they had was a nice little Napa Valley cabernet and some kale chips. When liberals are caught, they’re sent back across the border, often wailing that they fear persecution from Trump high-hairers.

   

  Rumors are circulating about plans being made to build re-education camps where liberals will be forced to drink domestic beer, study the Constitution, and find jobs that actually contribute to the economy.

   

  In recent days, liberals have turned to ingenious ways of crossing the border. Some have been disguised as senior citizens taking a bus trip to buy cheap Canadian prescription drugs. After catching a half-dozen young vegans in blue-hair wig disguises, Canadian immigration authorities began stopping buses and quizzing the supposed senior citizens about Perry Como and Rosemary Clooney to prove that they were alive in the ’50s.

   

  “If they can’t identify the accordion player on The Lawrence Welk Show, we become very suspicious about their age,” an official said.

   

  Canadian citizens have complained that the illegal immigrants are creating an organic-broccoli shortage, are buying up all the Barbara Streisand CD’s, and are overloading the internet while downloading jazzercise apps to their cell phones.

   

  “I really feel sorry for American liberals, but the Canadian economy just can’t support them,” an Ottawa resident said. “After all, how many art-history majors does one country need?"

  Finally, for those still thinking of leaving, our exclusive “Canadian insider” offered these tips and answers about making the move to Canada and what you can expect when you arrive:

  1. Are Canadians as polite as the jokes say?

  In fact they are. One joke that even Canadians laugh at goes, “How do you get 47 Canadians out of the pool as quickly as possible?” The answer: simply yell, “Get out of the pool!”

  2. Is the weather in Canada as bad as the jokes say?

  No; it is actually worse. The beautiful East Coast becomes an ice cube in the winter—an endurance test equaled only by the weather in the capital, Ottawa, where the main distraction (aside from watching your breath freeze) is skating on the central canal, which freezes solid during winter. The prairies are no better. The outdoor parking spots accompanying most condos and hi-rises each have a built-in electrical outlet. No, not for your orbital buffer; they’re for your block heater. (If you don’t know what a block heater is, perhaps the Dominican Republic should really be your first choice for bugging out…?)

  3. Of course, there is always Vancouver, which experiences the best winters in the country (like Seattle, but with fewer serial killings).

  Keep in mind, however, that Vancouver currently has the largest housing bubble on the planet. (Source: “This is Freaking Nuts — House sells $750K above Asking,” Zerohedge, March 1, 2016.)

  4. Canada has cross-country “value added tax” (VAT), called HST, that can add about 13% to a typical purchase in the mere blink of an eye.

  If you are in business, you may be able to reclaim it. Most Canadians just pay it. Americans will find this unsettling. Of course, the whole idea of a VAT is that it theoretically obviates the need for income tax. Unfortunately Canada has not figured this out yet. They introduced income tax right after WWI, swore it was just temporary, and yet it is still here…? If, however, you are seeking the comfort and nostalgia of politicians who say one thing and then do another, Canada could be a dream come true.

  5. Speaking of politics, the wise voters of Canada just threw out the most conservative leader in decades (that is “conservative” with BOTH a small “c” and a capital “C”).

  This was mainly because they were bored with his conservatism, and (the irony!) they felt he was too close to the U.S.

  6. Social medicine will be a kick if you are making the journey north.

  It has its plusses and minuses. If you are in dire need, it is there. I have a friend who recently received a lung transplant, did not pay a nickel, and now loves Canada so much he moved back to Toronto from the Czech Republic. On the other hand, if you are looking for a simple MRI in a non-urgent situation, be prepared to wait several months or (more irony!) be prepared to cross into a U.S. border town and pony up cold hard cash.

  7. Supermarkets will be a shocker.

  Imagine that 70% of all the products you have come to know and love disappeared in the blink of an eye, like in a sci-fi movie, and, in many cases, they were replaced by brands you have never heard of. Your first time grocery shopping may possibly bring a tear to your eye. Good news? They do stock Kleenex, just like in the U.S.

  8. No, you don’t have to learn French, in spite of the millions of dollars a year Canadians spend translating and labeling everything that moves or squeaks into the official “second language.”

  Learning French is mainly useful only if you plan to live in Quebec or run for federal office. And if you learned history via U.S. textbooks, be prepared for some revisionism. Turns out that France did not lose the war for Canada to the Brits at the Battle of the Plains of Abraham. It was actually a “draw.” (Luckily, nobody bothered to tell the British or every province in Canada would have two tax systems and two levels of government, just like those freethinkers in Quebec.)

  9. The thing you will notice the most?

  Well, the whole money thing will be uncomfortable. First of all, everything in Canada costs more, ceteris paribus, than the equivalent item in the U.S., even before taxes. Why? Mainly because of the higher costs of labeling and moving goods in the sparser geography (hey! those French labels don’t put themselves on the items, do they…). Next, if you factor in the weaker loonie, well, let’s just say that as a Canadian newbie, your first experience with socialized medicine might be for anti-depressants. The good news? The doctor’s visit, and part of the cost of your meds, will be picked up by the very same country that depressed you in the first place!

  

  

• As The Dust Settles: Goldman Q&A On Life In Trumplandia

  Expect the election result to increase policy uncertainty, warns Goldman Sachs, as a result of an increased pace of legislative action in 2017 without clarity, so far, regarding which issues the administration will prioritize. Over the near-term, much will depend on how financial conditions respond to the policy positions of the new administration. Despite today’s favorable market reaction, investors may take a dimmer view on proposals to raise tariffs or otherwise restrict international trade.

  Via Goldman Sachs,

  Q: Where do the final results stand?

  A: Republican sweep. At this point, Mr. Trump is likely to finish with 309 electoral votes but is slightly behind Sec. Clinton in the popular vote (the margin is likely to grow as votes are still being counted). In the Senate, one race has not yet been decided but Republicans look likely to hold 52 seats in the next Congress, two less than the 54 they hold currently. Likewise, in the House, four races have yet to be called, but Republicans look likely to hold 241 seats, down six from the their current level (including one vacant Republican seat).

  Q: What does this mean for policy in general?

  A: Overall, we think the election result implies greater policy uncertainty, for two reasons. First, the likelihood of significant legislative activity has increased as a result of single-party control for the first time since 2010, and Republican single-party control since 2006. In some areas, like fiscal policy, the question is now less if legislation passes, but what legislation passes. Second, uncertainty also looks likely to rise, at least temporarily, because it is much less clear what the priorities—or, on some issues, even the general views—of a Trump Administration are likely to be compared to most incoming administrations. As a first pass in thinking about policy under the new administration and Congress, we would categorize issues along two dimensions: how much political support Mr. Trump would need from Congress, and which issues have been key to his political success, suggesting a need to follow through directionally though not necessarily on the specifics.

  Q: What is likely to be on the Trump Administration’s agenda?

  A: The issues on Mr. Trump’s agenda are fairly apparent but it is less clear how priorities will be ordered. The campaign focused on tax reform, trade and immigration restrictions, easing of regulation, repeal of the Affordable Care Act (ACA, or Obamacare) and increased spending on infrastructure and defense. Some of these issues appear more likely to become priorities for the Trump Administration than others. For example, it is clear that congressional Republicans hold tax reform as a top priority, along with ACA repeal. While both of these issues likely resonated with many of Mr. Trump’s supporters, these are issues that congressional Republicans—and the 2012 Republican presidential candidate—have highlighted in the past, with mixed electoral success.

  By contrast, Mr. Trump focused new attention on trade policy and immigration, taking more restrictive stances in both areas than many Republican members of Congress support. While there were several factors behind Mr. Trump’s surprising victory, many of the states where he significantly outperformed were those with some of the highest shares of manufacturing-related employment (Exhibit 1). Given this, it would be surprising to see a Trump Administration distance itself entirely from commitments made on the campaign trail regarding trade. He also appears focused, as do many of his advisors, on reducing regulation, particularly in the energy and financial sectors. Some of these changes could require legislation, but many would be possible through executive action.

  Exhibit 1: Trump outperformed in manufacturing-intensive swing states

  
  Source: CNN, Department of Labor, Goldman Sachs Global Investment Research

  Q: How much congressional support will President Trump need for his agenda?

  A: It ranges from needing bipartisan support to unilateral executive authority, depending on the particular issue. He would need bipartisan support for regulatory-focused legislation, for example. Under current Senate rules, it usually takes 60 votes to pass major legislation dealing with most policy areas, such as regulatory changes affecting various sectors, legal changes (for instance, dealing with immigration or anti-trust laws) or labor laws like a minimum wage increase. In some cases, bipartisan support in the Senate might be possible in light of the fact that 10 Democratic senators representing states that Mr. Trump won will be up for reelection in 2018 (only one Republican senator representing a state that Sec. Clinton won will face reelection in 2018). Coalitions will differ based on the issue, but a deregulatory push in some areas, like energy, could receive sufficient support from these Democratic lawmakers to cross the 60-vote threshold. On many other issues, like comprehensive immigration reform, we expect that reaching a compromise would remain difficult.

  Fiscal policies could be addressed with only a simple majority in the House and Senate. Under the budget “reconciliation” process, the majority party can pass legislation to cut or raise taxes with only 51 votes in the Senate, rather than the usual 60 votes needed for most legislation. The two issues most likely to be addressed using this process would be tax reform and changes to the ACA. It is possible that certain aspects of federal spending, like Mr. Trump’s infrastructure program, might be addressed through this process as well.

  A third set of issues could be addressed without congressional involvement at all. The president has broad powers related to trade policy, as discussed below. Once in office, President-elect Trump could also reverse the “deferred action” policies for undocumented immigrants that President Obama put in place in 2012. Beyond this, there are a number of regulatory actions that the current administration has taken that could be modified or reversed, related to labor rules, energy exploration and production, carbon emissions and other aspects of environmental regulation, and financial regulation.

  Q: What has President-elect Trump proposed on taxes?

  A: Mr. Trump has proposed personal and business tax reform that would reduce tax revenues by an estimated $4.4 trillion over ten years, or roughly 1.9% of GDP over that period. Roughly half of this cost is estimated to come from his proposed corporate tax reform plan, which would reduce the corporate income tax rate to 15% and would impose a one-time 10% tax on all foreign earnings not yet taxed by the US. Companies would be free to repatriate earnings without additional tax once this tax has been paid. Like the House Republican proposal, this would involve a transition to a new corporate tax system for taxing foreign earnings. The two plans are similar in several other respects as well, including a top individual marginal tax rate of 33%. However, the House Republican plan is estimated to cost around half as much over the next ten years as Mr. Trump’s plan, at least in part because it proposes to go further in limiting or eliminating existing individual and corporate tax preferences (Exhibit 2).

  Exhibit 2: Tax plans compared

  
  Source: Office of Management and Budget, House Ways and Means Committee, Trump Campaign, Goldman Sachs Global Investment Research

  Q: Will his tax proposal pass?

  A: We expect that significant tax legislation has a good chance of passing in 2017, but we would not expect it to reduce revenues by as much as Mr. Trump has proposed. We note three potential obstacles to passing such a proposal:

  First, the cost is likely to be prohibitive for some members of Congress. While the majority party is able to pass tax legislation with only a simple majority in the Senate using the budget reconciliation process described above, it would require near-unanimity among the 52 Republicans in the Senate next year to do so. Our expectation is that some Republican lawmakers would balk at the deficit impact of his proposal.

   

  Second, while the House Republican proposal would increase the deficit less, it has also generally been proposed in the context of the broader Republican budget proposal, which would also reduce spending in several areas. Mr. Trump has not proposed a significant net spending reduction.

   

  Third, tax reform is complicated, and even under a unified Republican government, it may be too complex to resolve in a matter of months.

  Ultimately, the outlook for a tax cut depends on how willing marginal Republican lawmakers are to increase the deficit, and/or how willing they are to find offsetting savings elsewhere. Overall, our expectation is that there is a good chance that some type of tax legislation passes next year, but the obstacles to comprehensive tax reform go beyond partisan disputes, so we would expect tax legislation that is adopted in 2017 to be narrower in scope than the campaign proposal, and significantly smaller in its revenue effect.

  Q: What has Mr. Trump proposed in terms of infrastructure spending?

  A: His infrastructure plan calls for up to $1 trillion in additional spending over ten years, most of it privately financed. A memo released in late October by Mr. Trump’s economic advisors Wilbur Ross and Peter Navarro detailed a plan to finance up to $1 trillion in infrastructure spending over ten years, equal to $100bn per year or about 0.5% of GDP. We previously estimated that a spending boost of this size would reduce the unemployment rate by about 0.3pp and raise inflation a touch, leading the Fed to eventually hike one or two more times by 2019 relative to a baseline without the infrastructure package.

  The plan described by Ross and Navarro would be largely privately financed, but encouraged by tax credits. The plan would seek to incentivize the private sector to increase investment in infrastructure projects that would be supported by future usage fees, such as road tolls. Ross and Navarro suggest that 17% of the initial investments could be financed with equity and the remainder with debt. The government would then provide a tax credit equal to 82% of the equity to reduce the cost of financing. The large role of debt-financed private investment in Mr. Trump’s infrastructure plan implies that a significant increase in interest rates could be a hurdle for the plan’s feasibility.

  Ross and Navarro argue that the plan would be revenue neutral because the tax credit would be offset by revenue raised from taxes on income earned by workers employed by the infrastructure projects and on profits earned by contractors. However, their calculations both assume that the workers employed would not otherwise be earning taxable income and assume a tax rate that looks somewhat optimistic under the tax plan proposed by the Trump campaign. We expect that the Congressional Budget Office and Joint Tax Committee would find that the plan increased the deficit under their methodologies.

  Q: Will it pass?

  A: Mr. Trump appears to be more focused on infrastructure than many Republicans in Congress are. That said, his proposal, which relies on tax credits, might attract more Republican support than a spending plan of the same size. Moreover, there is significant Democratic support for additional infrastructure investment, which raises the possibility that it could be combined with the tax reform legislation discussed earlier to increase support for the overall package.

  Q: What does this signal regarding overall fiscal policy?

  A: We expect fiscal policy to loosen by about 0.75% of GDP, though there would be only a partial effect in 2017. Our very preliminary view is that fiscal policy might loosen by around 0.75% of GDP, with perhaps 0.5% coming through tax reductions and 0.25% through spending. Our expectation is that the effect in 2017 would probably be smaller, for two reasons. First, tax legislation would probably not pass until around mid-year, at earliest. Second, increases in infrastructure spending (or subsidies) and/or defense spending would likely take until 2018 to materially change spending levels.

  Q: What has President-elect Trump proposed regarding trade and tariffs?

  A: Mr. Trump has opposed existing trade agreements and suggested large tariff increases. He has proposed to renegotiate the North American Free Trade Agreement (NAFTA) and raised the possibility of withdrawing from the World Trade Organization (WTO). Mr. Trump also opposes the Trans-Pacific Partnership (TPP). In terms of explicit changes, Mr. Trump has suggested imposing a 35% tariff on imports from Mexico and a 45% tariff on imports from China. If tariffs on imports from Mexico and China only were raised to 35 and 45% respectively, the average effective tariff rate would rise by roughly 11-12 percentage points (pp) from 1.5% to roughly 13%, a level not seen since WWII (Exhibit 3).

  Exhibit 3: Will tariffs stay low?

  
  Source: International Trade Commission, Goldman Sachs Global Investment Research

  Q: What authority does the President have over trade and tariffs?

  A: Trade policy is an area of greater presidential discretion. The Constitution gives Congress the power to regulate commerce with foreign nations but as a practical matter Congress has ceded much of this power to the executive branch over the years. Congress approves trade agreements, but the actual legislation that Congress passes usually simply authorizes the president to enter into an agreement that has already been concluded. The consensus among legal scholars is that presidents generally have the authority to withdraw from bilateral and multilateral trade agreements approved this way.

  Tariff levels are technically under the purview of Congress, though most levels are governed by commitments in bilateral and multilateral agreements. The executive branch lacks the authority to make broad permanent changes to tariffs on a unilateral basis, such as Mr. Trump’s suggestion that imports from China should face a 45% tariff. That said, the president does have authority to raise tariffs broadly on a temporary basis, or to raise tariffs narrowly on a longer term basis. Regarding the former, authority exists under the Trade Act of 1974 that grants the president power to impose quotas and/or an import surcharge of no more than 15%, though neither could be left in place for longer than 150 days. Regarding the latter, the Department of Commerce and the International Trade Commission oversee anti-dumping and countervailing duty complaints from various US industries seeking relief from import competition. The tariffs imposed in these cases are often substantial, but they are limited to certain narrowly defined products from certain countries, rarely affecting more than 1% of annual imports and averaging less than 0.2% of imports since 1980.

  Q: What would be the effects of tariff hikes on the economy?

  A: Tariff increases would likely boost inflation, and have mixed short-run but negative long-run growth effects. We estimate that a hypothetical 10pp hike in US import tariffs would 1) depress imports by about 5% and 2) boost the core PCE price level by roughly 0.6% cumulatively. The decline in exports would depend on the extent to which trading partners retaliate.

  The growth effects of import tariff increases depend on the horizon. The short-term impact on GDP is uncertain and likely mixed. On the one hand, the shift from imports to domestic production contributes positively to short-term growth, and tariff revenues can finance fiscal stimulus. On the other hand, the real income loss from expensive imports lowers consumption and investment. Other important negative short-term effects include the decline in exports under retaliation, tighter monetary policy, and possibly broader FCI tightening. While trade raises important distributional questions, the long-term aggregate growth effects from trade restrictions are negative in our view. The academic trade literature has highlighted several channels through which trade fosters long-run welfare. Trade can boost output as countries specialize; raise the variety of available products; and increase productivity through larger and more competitive markets.

  Q: What are the President-elect’s views on monetary policy and the Federal Reserve?

  A: As a candidate Mr. Trump was sometimes critical of the Fed, but his views on the appropriate direction for policy are unclear. On the one hand, Mr. Trump has expressed support for low interest rates, given the current inflation backdrop: “If inflation starts coming in, and we don’t see any signs of that, inflation starts coming in, that’s a different story. You have to go up and you have to slow things down. But right now I am for low interest rates.” He has also expressed concern about excessive dollar appreciation, saying in the same interview: “If we raise interest rates, and if the dollar starts getting too strong, we’re going to have some very major problems.” He added: “While there are certain benefits, it sounds better to have a strong dollar than it actually is.” Mr. Trump has also often noted that, as a developer, he prefers low rates. For example, at the Economic Club of New York in September, he said: “As a real estate person, I always like low interest rates, of course.”

  On the other hand, Mr. Trump has said he worries low interest rates are artificially supporting asset prices: “In terms of real estate, if I want to develop … from that standpoint I like low interest rates. From the country’s standpoint, I’m just not sure it’s a very good thing, because I really do believe we’re creating a bubble.” Similarly, he has said Fed policy has created a “false stock market”, that the “only reason the stock market is where it is, is because you get free money”, and that the FOMC “should have raised the rates” at its September 2016 meeting. Many conservative economists favor tighter monetary policy, but Mr. Trump’s views appear more nuanced, and we are therefore unsure whether he would favor a more hawkish Fed stance after taking office.

  Similarly, Mr. Trump’s preferences for Fed Chair are still unclear. During the campaign he said clearly that he would want to replace Yellen: “She is not a Republican … When her time is up, I would most likely replace her because of the fact that I think it would be appropriate.” And earlier today, a campaign spokesperson said that Mr. Trump would prefer a Fed Chair “whose thinking is more in keeping with his own”. However, at other times during the last year Mr. Trump said that he has “great respect” for the Fed Chair, and that he is “not a person who thinks Janet Yellen is doing a bad job.” So while unlikely, we would not totally rule out a Yellen reappointment. Several past Fed chairmen have been reappointed after the White House changed parties, including Chairmen Martin, Volcker, Greenspan, and Bernanke (Exhibit 4).

  Exhibit 4: Fed Chairs have been reappointed by presidents of the other party

  
  Source: Federal Reserve Board, Goldman Sachs Global Investment Research

  Q: What changes have you made to your forecasts following the election result?

  A: We nudged down the odds of a Fed rate increase next month, but have made no other changes at this point. After the tightening in financial conditions immediately following the election results, we lowered our subjective probability of a December rate increase to 60% from 75% previously. Markets have now recovered substantially—the S&P 500 in fact closed 1.1% higher on the day. If financial conditions remain benign in the coming weeks, the odds of a December rate hike would rise.

  For now we are sticking with our forecast that real GDP will grow at a 2% pace in 2017. Over the near-term, much will depend on how financial conditions respond to the policy positions of the new administration. Despite today’s favorable market reaction, investors may take a dimmer view on proposals to raise tariffs or otherwise restrict international trade. Beyond the next couple of quarters, increased potential for fiscal stimulus may be a source of upside risk. Given that the US economy is already close to full employment, aggressive fiscal stimulus would also point to upside risks to inflation.

  

  

• Trading For A Living

  Submitted by Erico Matias Tavares via Sinclair & Co.,

  Adam Grimes has two decades of experience in the industry as a trader, analyst and system developer. His trading experience covers all major asset classes–futures, currencies, stocks, options, and other derivatives, and the full range of timeframes from very short term scalping to constructing portfolios for multi-year holding periods. Adam is currently Chief Investment Officer of Waverly Advisors, LLC, a research and advisory firm for which he writes daily market commentary and trade notes. He is also a contributing author for several publications on quantitative finance and related topics, and is much in demand as a speaker and lecturer on the topics of technical trading, risk management, and system development. When not doing finance stuff, Adam is also an accomplished musician and a classically-trained French chef.

  E. Tavares: Adam, you have dedicated most of your professional life to trading, as a private trader and later also including research publisher and coach. You have traded for a living since the 1990s and at this point have looked at all kinds of systems and approaches out there. This is actually a very valuable perspective today. In addition to a tough jobs market central banks have condemned savers – especially retirees – with zero interest rate policies, and so trading might be an alternative to generate income. Have you seen an increasing number of people trying to trade for a living in recent years?

  A. Grimes: I think it comes and goes with market cycles. When markets get difficult the number of people interested in doing this drop off because as we know trading profitably is a very hard skill to develop. I may have missed it but I have not really seen people driven by the low interest rates moving into active trading. However, there is a perennial ongoing interest from people trying to figure out the markets.

  ET: Your background is quite unique in that regard. You went from a trained musician to a full time trader. What prompted you to do that? Are there similarities between the two professions?

  AG: I honestly don’t know if there was any rationale for that. Trading caught my interest. I had some negative early experiences but then I was fortunate to figure some things out—I think the negative experiences were good learning experiences, and probably part of why I eventually did figure it out. It was more of a hobby which eventually grew into something significant.

  People talk a lot about the parallels between the two professions and maybe make too much of that. A lot of the skills and a lot of the intelligence we develop are very domain specific, meaning if you study chess it will make you a better chess player. I don’t know if studying chess makes you better or more intelligent at other tasks.

  Maybe the things that I carried from being a musician centered around focus. It was very natural for me to work six to eight hours a day, day after day, for months at a time in a project. That’s not a normal skill for people to have; and also the emphasis on basics, on the importance of really understanding the basic building blocks and how if you have a strong foundation you can build an impressive structure.

  It seems that many people just want to get to the cool stuff and they ignore the basics. They don’t understand that the soul of any discipline truly is the basics.

  ET: Indeed. Trading is very difficult, extremely difficult in fact, as it requires a range of skills and a level of performance that most people are not even aware of when they begin that journey. Today we would like to briefly explore three core trading fundamentals, or basics as you call them: technicals, risk management and psychology.

  Let’s start with technicals, meaning having the right tools. One concept that is enormously helpful particularly for new traders is a proper understanding of the expectancy formula, roughly speaking the number of times you win times the gain per trade less the number of times you lose times the loss per trade over time. Can you talk about this and the importance of developing a system that has a trading “edge”, meaning a sustainable positive expectancy (expected gains greater than expected losses)?

  AG: The key is that we have a positive expectancy and we hope that it is enduring. All of our system work, if done correctly, should point us towards having something that is robust, meaning that if it works today it should still continue to work tomorrow. Of course, depending on the system the edge may be more or less stable and may require some work here and there. There are plenty of quantitative systems that require a good deal of refitting and rework on a semi-regular basis and that’s fine, it’s part of the game.

  It’s very easy when you start trading to look at patterns, to start thinking about all the money you are going to make and to forget – coming back to those basic concepts – that if you don’t have an edge, a positive expectancy, then nothing else matters.

  One of the reasons why traders struggle is because they are using systems that don’t work and they cannot work because those systems just don’t have an edge. It is essential that you have an edge.

  ET: Yes, in fact there are thousands of trading systems out there being advertised to retail investors using every financial instrument possible, from buying stocks to highly sophisticated option strategies. Some promise very high win rates, meaning the chances of having a loss are small, which intuitively is appealing because nobody likes to lose money. But that is not the whole story, not if you want to make it in this business. How can you use that expectancy formula to evaluate the system you are looking at?

  AG: Well, for one there is a difference in quality in what I consider to be three types of data or system stats.

  First, doing some type of backtest, meaning going back in time and testing different parameters in search of that positive expectancy. You should never trust a backtests done by others, certainly from anyone wanting to sell you things. Even if they are not dishonest people make all kinds of mistakes, not to mention things like aggressive marketing and the like. You want to do your own backtest but even that I would not really trust because there are so many ways it can be wrong. In general, any backtest is highly suspect!

  The next piece is some type of forward test. Perhaps do some paper trading where you can execute the system without real money. Basically what you are looking for here is if the paper trading resembles the results of the backtest. In both of these cases we are looking for that positive expectancy.

  And then the third piece is trading with real money where what we are looking to do is see if each of these kind of link together. We are talking statistical measures with a good deal of variation, it is not always easy to say yes, they do look the same, but we want to have some consistency between all of these different expressions.

  You talk about the high win ration and this to me is pure marketing. There are a lot of people who have made a lot of money winning just 25% of the time. I can tell you from my own experience that you can win 90% of the time and not make money. What matters is that you have a positive expectancy.

  ET: Let’s focus on that trading edge now. Your research indicates that securities behave differently, something that perhaps is not widely understood: stocks trade differently from commodities and foreign exchange, for instance. As such, in order to find that edge your system either needs to be adapted to the asset class you are trading or be so robust that it can be applied across the board. How do you go about doing that?

  AG: You are correct. One of the great lies of technical analysis that is perpetuated in so many places today is that you can apply any tool to any market in any timeframe and you can make money. Somebody doing statistical tests with no more powerful tools than Microsoft Excel and freely available data can show you that there are basic differences between asset classes, for instance in the way they mean revert, and it’s illogical to think that you can apply tools the same way if markets behave differently.

  ET: If you do a backtest when stocks are at all-time highs this means by definition that you could have bought at any time in the past in any imaginable way and you would be in the money. So you can come up with any number of parameters and you will always end up with a system that has a positive expectancy, provided that you stay in the market. Can this stock market condition make people develop systems which are not as reliable going forward? Actually, this may be more relevant at this juncture into a seven year bull market in stocks. Investors seem to forget that in nature – as in markets – trees don’t grow to the sky…

  AG: If we take stocks that are at all-time highs and then look at statistical edges going forward that is different. Otherwise you are correct. If you take stocks now and look at how they have performed over the past you would have made money – in theory.

  There are things that we can do to have more robust results. One of the huge problems we need to account for is survivorship bias. In other words you want to make sure that in your backtesting you are somehow incorporating delisted stocks and stocks that are undergoing some type of market action.

  But in general you need to be very aware of how you are constructing your test and being aware of any leakage from the future, meaning that you have to make sure that your system does not in any way know about what will happen after.

  However, I consider that the stock market has a fundamental element in that stocks over any appreciable period of time always seem to go up. It is quite difficult to imagine anything happening that would move us out of that environment. So I would not have a problem dealing with stocks in the conditions you described. But you can develop systems and edges that are not conditional on this fundamental upward shift in stocks.

  ET: A quick note on market indicators, which seem to fill trading screens these days. Some are very sophisticated and based on exotic proprietary formulas. In your opinion are they worth the complexity and often the cost?

  AG: It’s definitely hard to make a hard generalization. But the efficiency of simple tools for instance ultimately depends on how they are applied. You can have a tool that works very well but if you don’t apply it properly you will not get good results. Complexity is not a bad thing but may not be necessary.

  ET: Can you comment on using purely mechanical systems, where the parameters are predefined (largely as a result of the backtesting we just discussed) and you just follow that plan day in day out, versus more discretionary systems, where you can add your own input to the final decision, some of it more subjective like economic conditions, supply and demand and so forth? It seems you use both in your work, do you favor one in particular?

  AG: There are certainly people who do both effectively, others who are more effective in just one. But particularly for developing traders, if you are going to be a discretionary trader you need to make sure that you are aligned with the market. You can’t just trade any old idea and hope that it works. So there needs to be some type of education there. Other than that I don’t have a particular bias towards any approach.

  ET: Is it fair to say that the quicker you turn over your positions (day trading being the most extreme for retail investors) the more technical systems you should use, and the longer your timeframe the more you should consider factors like longer term trendlines, fundamentals and economic conditions? Is it also fair to say that in trading the real money is made in the bigger moves, meaning trading less and being positioned for the bigger swings over time? The short term, especially day trading, appears to be very noisy, perhaps too noisy to consistently make money.

  AG: You certainly can make money day trading. More people talk about it than doing it effectively but it is possible. Most developing traders will probably find better success in longer time frames. I don’t think that a generalization is possible, other than using fundamental data for short-term systems makes less sense to me.

  ET: That gets us to risk management, another fundamental of trading, which in very simplified terms deals with how much you should invest in each trade. This is another area where that expectancy formula can be very helpful. If a trader is seeking to change her approach to limit her loss per trade she will very likely find that her win ratio will drop as a result, so that the expected result may not change that much. In other words, in efficient markets there are no free lunches; any improvement comes at the expense of something else. So can risk management really help you?

  AG: What you just outlined is a very good expression of the edge, the expectancy. Yes, you can change your win ratio and the relationship between average win and average loss but at the end of the day the other side will compensate such that your expectancy will be more or less the same within some limits.

  To me risk management is a bigger topic than just position sizing. How much you risk on each trade is certainly a part of that, but the idea is to maximize your equity curve while reducing the chance of something very bad happening. Basically position sizing lets you stay in the game, make the most money you can with the minimal chance of going broke.

  ET: Actually, we often hear that “you will not go broke by taking a profit”. That’s actually not quite true. If your system needs to have profits per trade 5x larger than your losses just to breakeven this means that if you always sell as soon as you reach 2x or even 4x you will eventually go broke. Your thoughts?

  AG: Yes, that saying is one of the great lies told to traders. That is absolutely untrue. In fact one of the biggest psychological barriers of developing traders is managing winning trades. I hear this over and over from people: “it’s very easy for me to get out of my losers but I can’t hold on to winners, I always take profits too early”. This is something that people don’t think about often enough but it is a serious problem.

  ET: That’s a great point. In fact, while it is hard to consistently make money over time there are things that will definitely put you on the losing side over time. Can you briefly talk about those?

  AG: The biggest, I think, is simply doing something that doesn’t work, having some trading system that you don’t understand because you got it off some chat room or bought it from someone else. Even if the system has an edge it’s not your system so you can’t execute it appropriately.

  And then there are things like sabotaging yourself, meaning taking the wrong size in trades, the behavioral issue of ignoring stops, getting lazy and not doing the necessary work, skipping trades, not managing your positions and so forth. There are many things you can do wrong that will effectively sabotage you.

  ET: How would you rate the importance of finding a trading edge versus risk management? You closely liken the two but some traders suggest that the latter is the absolute key and even propose different optimization formulas.

  AG: Yes, they’re equally important but the idea that you could go into a market and make money provided you have good risk management is incorrect. There’s this famous trading book where only one random test in a group of commodity markets is presented confirming this idea, but it was a bad test—the standard obviously should be the baseline drift, not that the tests made money, and it was just one result. Though this test is famous, it was poorly constructed as a statistical argument.

   Risk management is not enough. You can’t make money if you don’t have an edge and risk management does not solve that problem.  

  ET: So let’s look at psychology, the third fundamental which ties together all that we just discussed. Its importance is of course beyond dispute. If you have a winning system but the inevitable losses put you off trading then you can never be a trader. Full stop.

  It can also be more subtle than that, as each trader needs to find and adapt a trading system that truly suits his or her personality. In other words, to be a profitable trader there are no shortcuts, it requires a lot of introspection, research, hard work and confidence. Like every other challenging undertaking in life actually. Your thoughts here?

  AG: Again, trading psychology is not an edge by itself, but you can certainly have an edge and sabotage it with the wrong psychology. It is vital in many level and stages. You have traders who may do well for a while but then they struggle with some aspect and everything comes crashing down. You can also have inherent conflicts with money, the wrong reasons for trading or you are not a coherent human being, all of these can come out and affect your trading over the long run.

  All of this is important but it is critical to understand that you need these three pieces: the edge, the risk management to apply the edge and the psychology to make sure you do what you are actually supposed to do.

  ET: Should trading be boring or exciting, especially if you want to do it for a living? What should motivate you each day as a trader?

  AG: When I talk to a trader who wants to work with me as a coach or mentor, I get very concerned when somebody tells me that they are looking for excitement in trading. If that is your motivation you can have that; simply put on some positions that are too large or ignore your stops and all of the sudden your trading will be very exciting.

  To be a profitable trader this means that you find something that is robust and repeatable and sadly this means it’s boring. Effective professional trading is really doing the same thing over and over. One of my closest mentors said that the best definition of good trading is like being a stonemason or bricklayer. You put a brick down, then put the mortar, smooth it, then put another brick down, then the mortar, smooth it and so on. If you continue doing the same thing over and over at some point you will build a big wall. But the actual act of doing is the same boring, tedious routine. It is almost an insignificant thing.

  And by the way this parallel goes a bit further because most people can’t build a brick wall. It’s not as easy as it looks and they don’t have the skills to do it. Even though the basic elements seem to be simple, it takes real work to develop the skills—the same as in trading.

  Your motivation for trading cannot be excitement. An important stumbling block is once you become a successful trader it can get pretty boring. All of the sudden you realize you lack excitement, that you will not solve any of the world’s problems trading. You’re just doing the same thing over and over, it’s a reality shock that many people having difficulties coping with.

  ET: You have written extensively over the years on all these topics in your blog and even produced a video trading course, all which are available for free. We can’t recommend those enough to anyone wanting to think through and improve their trading skills. Why did you go through all that effort and then charge nothing for it? These are excellent resources that can be further explored in your book, The Art and Science of Technical Trading, which was very well received, and even help to better understand the thinking behind your excellent research product at Waverly Advisors, but aren’t you concerned about giving away your “secret ingredients”?

  AG: First of all thank you for your kind words on my work. Everything I do I try to put out information that I wish I had had when I started trading. I have certainly been immensely touched by the feedback that I have received and I think I’ve shortened the learning curve for some people.

  Regarding the trading course I wanted to put out a product that was equal to or better than courses that cost $10,000+, and I did that. This course has been very well received and has put me in touch with a lot of smart people, but it really did have an altruistic beginning.

  It’s been a great way to get in touch with a lot of intelligent people. It is free, there is no upsell, no hidden fees and it will always remain free. I very much believe that anyone starting from scratch will learn enough to build a profitable trading system, and that’s based on actual feedback.

  ET: That’s excellent. Final question. In light of everything we just discussed, can retail investors prevail in the markets and find consistent ways to supplement their income, if not outright trade for a living, or does it all boil down to a coin flip?

  AG: The answer is yes you can do this, but the way I would think about it is that you have a choice to make.

  If you treat trading as a hobby then you can certainly do that and there’s room in the market for that. But realize that this is entertainment and you probably will not make much money doing that. Your primary motivation is an interest in the financial markets, you want to solve the puzzle but let’s be honest: hobbies cost money.

  If you want to make money in the market then I think you need to make the commitment to trade with a professional mindset. This does not mean that it is your full time job necessarily, that you should take your focus away from your family and anything else that you are doing but it does mean that you approach the market with a full professional mindset, understanding that you operating within the bounds of probability and that you’re looking to apply the same simple system over and over.

  I don’t know how else to put it. You have to make the commitment to become a professional trader because I don’t think the hobbiest has much of a chance to make money. Having said that, virtually anyone in the world with that desire could commit to becoming a professional trader. If you want to do this, you can do it.

  ET: Adam, thank you very much for sharing your thoughts.

  AG: My pleasure, thank you.

  

  

• What "The World's Most Bearish Hedge Fund" Thinks Of The Trump Presidency

  October was not a good month for the “world’s most bearish hedge fund” Horseman Global Management, which suffered another steep drop, losing 5% in the month, and down 5.5% YTD. Absent a rebound in the last two months of the year, Horseman is set to have its worst year since 2009. Alas, with Horseman’s net exposure a whopping -84% (if fractionally more bullish than the -100% recorded in early 2016) as a result of an equity short and a bond long, November does not appear overly promising for the fund’s investors. Unless, of course, the market swoons as both yields and the dollar continue surging (as DB warned), and Horseman does have the final laugh.

  That, however, would be surprising considering that some of the most prominent billionaire mega-bears, such as Carl Icahn and Stanley Druckenmiller, both quikcly flopped to bullish in the aftermath of Trump’s election, on just one catalyst: more debt resulting in more stimulus, and (hope) for more growth.

  Yet Horseman refuses to change its thesis. Why? Instead of guessing, here is the answer straight from the “Horse’s mouth” – the following excerpt from the latest letter to investors by CIO Russell Clark lays out what the gloomy hedge fund believes will be the outcome from a Trump presidency.

  Your fund fell 4.96% last month. Losses came from the bond book, the forex book and the short book. The long book made money.

   

  First Brexit and now the Trump triumph has left many supporters of open liberal economies despairing. They feel that the world is turning in on itself and that perhaps a darker less safe world is emerging. And perhaps they are right.

   

  But in many ways, the great western democracies of the world, the UK and the US are working as they should. It is plainly obvious that large parts of the population in both the UK and the US feel that the system has not worked for them, and they have voted for change. And those voters have had their voices heard and change is on the way.

   

  Undemocratic regimes in the rest of the world look on in either horror or bemusement at the changes in the UK and US and congratulate themselves that their system is so safe and stable. And yet, the reality is that if the political system cannot provide the change that people seek, then eventually and inevitably, revolution becomes the only option for change. And revolution always extracts a very high price on those that have been in power.

   

  When thinking about a possible Trump victory, I perceived that the USD could be very weak, and that this weakness would lead to treasuries also being weak as foreign investors dumped their holdings. What has happened is that domestic US investors have reappraised their views of US domestic growth upwards, and have dumped treasuries to buy equities, and the US dollar has been very strong.

   

  While the stated aims of the Trump administration are very pro-growth, to me the actual effects seem likely to disappoint. Plans to allow more drilling will be dependent on a much higher oil and gas price. Scrapping car emission standards whilst good for SUV makers, will unlikely reverse the falling demand for cars due to high levels of auto debt. Lower taxes and more infrastructure spending may well be bullish for growth, but need to be balanced against the sell-off in the long end of bonds, which will have a negative effect on housing and with DR Horton reporting weak numbers makes, I feel growth will disappoint in the short term.

   

  The more apparent of the negative aspects is that higher bond yields are starting to cause some financial pressure in Hong Kong and Chinese interest rates. If a trade war, becomes more likely, then a large Chinese devaluation also becomes more likely. Furthermore, the Trump win makes the break up of the Eurozone far more likely in my mind.

   

  After Brexit, being short equities and long bonds was a fantastic trade for a week or two, but then reversed quickly after, causing severe pain for those that had reacted to the market quickly. I think the Trump win has seen many investors sell defensive positions and buy cyclical positions. I suspect they will come to regret that. Your fund remains long bonds and short equities.

  * * *

  Steepping away from Trump, here is Clark’s asset allocation and sector breakdown, and what appears to be a wager that Trump is about to end the record wave of industry consolidation in a move straight out of Teddy Roosevelt’s playbook:

  This month losses in the short portfolio, in particular from the European and Japanese banks and the automobile sectors, were partially offset by gains in the banks and oil sectors in Brazil and the defence contractors in the long portfolio.

   

  In the US the value of announced mergers and acquisitions (M&A) reached $337 billion in October, making it the biggest deal-making month ever. 2015 was the biggest M&A year ever globally with total deals of about $4.3 trillion dollars (source: Bloomberg). High M&A activity may give the impression that the economy is robust, but in our opinion it merely reflects a sluggish economic environment as companies struggling to grow their revenues and profit margins organically, and turn to mergers and acquisitions instead.

   

  QE monetary policies have supported M&A activity by allowing ample availability of funding, as investors searching for yield are eager to buy corporate debt and drive credit margins lower.

   

  M&A activity causes a decrease in the number of firms and an increase of their respective market shares. This can result in significantly reduced competition between firms. In economic theory, when a few large firms dominate a market there is the potential to engage in collusive behaviours such as deliberately joining together in cartels in order to increase prices. In extreme cases a company that becomes too dominant develops the power to influence market price, run competition out of business or not allow competitors to emerge. Once enough other companies are bankrupt or bought off, the remaining company can stop improving its product, lower the quality and raise prices as much as it wishes, because consumers have no choice.

   

  It has been argued that some companies with large market shares can employ what game theorists call a “trigger strategy,” whereby they signal to their competitors that if they lower their prices, they will start a vicious retail war. If a rogue player refuses to play the game, it becomes the target of an aquisition, not because it makes great products, but because owning it allows an oligopolist to raise prices.

   

  Another detrimental effect of low competition to the consumer was illustrated by an article in The New York Times entitled ‘Arbitration Everywhere, Stacking the Deck of Justice’, about the rise of private arbitration clauses in consumer services contracts, which allow large companies to avoid the court system and prevent consumers from joining together in class-action lawsuits.

   

  The Herfindahl-Hirschman index (“HHI”) measures market concentration by industry and is used by regulators when reviewing mergers, values between 1,500 and 2,500 are defined as “moderately concentrated,” while values above 2,500 are defined as “highly concentrated”.

   

  The US beer market has a high HHI of 2696, it is dominated by one large producer, whose current market share is 46%. The company recently made a large acquisition, but subsequently was forced by the Department of Justice to sell part of the acquired business as the combined market share of 70% would have resulted in almost monopolistic conditions.

   

  At the turn of the 20th century, Teddy Roosevelt became president. He realised that for capitalism to maintain popular support, the monopolists and oligopolists of his time had to be taken on, and his presidency was driven by Trust busting. This set of policies looks set to re-appear.

   

  The fund maintains short positions in airlines, banks, and certain consumer staples, primarily because we think that margins will remain under pressure due to the macro-economic environment and specific sectoral issues (please refer to Russell Clark’s Market views). These are not monopolistic sectors, however they are concentrated, should competition increase at some point, stock prices could de-rate even further.

  Finally, here are Horseman’s Top 10 long positions as of this moment. Alas, the far more useful, top 10 shorts, are not public.

  

  

  

• "The Economic Peace Is Over" – Get Ready, Change Is Upon Us

  Submitted by Chris Martenson via PeakProsperity.com,

  “After four years of warfare that tore the world apart like never before, a peace was finally reached.  But it was a peace which one man in particular vociferously condemned — and that man was John Maynard Keynes.

   

  In just two months, Keynes wrote the book that would make him a household name around the world — The Economic Consequences of the Peace.

   

  In the book, Keynes was highly critical of the deal struck at Versailles, which he felt sure would lead to further conflict in Europe — describing the agreement as a “Carthaginian peace” — and with the passing of a surprisingly short period of time, he would be proven correct.”

   

    ~ Grant Williams in The Economic Consequences of Peace

  After WWI, a particularly noxious set of treaties and economic reparations agreements were put in place that all but guaranteed a future WWII.   Mr. Keynes sniffed that out and, sadly, was proven correct.

  The lesson from this is that, at certain times, it’s really not that hard to predict "what" is going to happen next after disastrously short-sighted and self-interested policies are enacted. Predicting the "when", with precision, is much trickier. But obvious misguided economic policies are destined to have a limited period of apparent (but false) prosperity, after which they end with a nasty Bang!.

  We have entered just such a time. This isn't a Trump vs. Clinton thing; I'd make this claim regardless of who won this week's presidential election — as our plight is much bigger than a single Administration. And my observation is that neither political party had much interest beyond some temporary election year lip-service to the economic plight of the middle class.

  And by “middle class” I mean anybody not in the top 5% economic bracket. For those doing the math at home, that leaves the remaining 95% of us stuck in the meat grinder.

  WTF Happened?

  I know a lot of people who are suffering very raw emotional wounds from the harsh negativity and divisiveness of the seemingly never-ending election we just went through.  There will be a period of healing and adjustment for many, and I can fully empathize with how they feel.

  For the Clinton supporters stunned that she didn't experience the victory so many predicted, here's a “what went wrong” post-mortem given by the brilliant British comedian Jonathan Pie that I think hits close to the mark (caution: it's a pretty heated rant):

  Pie asks some very important questions, chief among them: Have we lost the ability to entertain alternative points of view? Are we ready to begin finally talking to each other again?

  The Left has a lot of soul searching to do. As does the Right.  Because let’s be clear: Trump wasn’t the Republican’s preferred choice either.  They fought him tooth and nail. In terms of the traditional Left vs Right rivalry, both sides lost this time.

  If we're to heal and progress from here, it's critical that we take the time to understand why.

  The conversation has to begin here, I believe, with this excellent article that I ran across in Cracked – yes, the comedy alt-everything online outfit – explaining how it's the rural vs urban divide more than anything else that's pulling our society apart at the moment.

  For those desperately seeking answers to Trump's surprise win, this article, of which I have reproduced only a small part, provides essential context. It's explanation has done wonders for everyone I have shared it with who was struggling:

  How Half Of America Lost Its F**king Mind

  Oct 12, 2016

  [Note: please go to the article to read reasons #6 through #3 as they are very important for understanding the two I have snipped out below]

  (…)

   

  Reason #2:  Everyone Lashes Out When They Don't Have A Voice

   

  [To a rural person] it really does feel like the worst of both worlds: all the ravages of poverty, but none of the sympathy. "Blacks burn police cars, and those liberal elites say it's not their fault because they're poor. My son gets jailed and fired over a baggie of meth, and those same elites make jokes about his missing teeth!" You're everyone's punching bag, one of society's last remaining safe comedy targets.

   

  They take it hard. These are people who come from a long line of folks who took pride in looking after themselves. Where I'm from, you weren't a real man unless you could repair a car, patch a roof, hunt your own meat, and defend your home from an intruder. It was a source of shame to be dependent on anyone — especially the government. You mowed your own lawn and fixed your own pipes when they leaked, you hauled your own firewood in your own pickup truck. (Mine was a 1994 Ford Ranger! The current owner says it still runs!)

   

  Not like those hipsters in their tiny apartments, or "those people" in their public housing projects, waiting for the landlord any time something breaks, knowing if things get too bad they can just pick up and move. When you don't own anything, it's all somebody else's problem. "They probably don't pay taxes, either! Just treating America itself as a subsidized apartment they can trash!"

   

  The rural folk with the Trump signs in their yards say their way of life is dying, and you smirk and say what they really mean is that blacks and gays are finally getting equal rights and they hate it. But I'm telling you, they say their way of life is dying because their way of life is dying. It's not their imagination. No movie about the future portrays it as being full of traditional families, hunters, and coal mines. Well, except for Hunger Games, and that was depicted as an apocalypse.

   

  So yes, they vote for the guy promising to put things back the way they were, the guy who'd be a wake-up call to the blue islands. They voted for the brick through the window.

  It was a vote of desperation.

   

  #1. Assholes Are Heroes

   

  But Trump is objectively a piece of shit!" you say. "He insults people, he objectifies women, and cheats whenever possible! And he's not an everyman; he's a smarmy, arrogant billionaire!"

   

  Wait, are you talking about Donald Trump, or this guy:

   

  

  Marvel Studios

   

  You've never rooted for somebody like that? Someone powerful who gives your enemies the insults they deserve? Somebody with big fun appetites who screws up just enough to make them relatable? Like Dr. House or Walter White? Or any of the several million renegade cop characters who can break all the rules because they get shit done? Who only get shit done because they don't care about the rules?

   

  "But those are fictional characters!" Okay, what about all those millionaire left-leaning talk show hosts? You think they keep their insults classy? Tune into any bit about Chris Christie and start counting down the seconds until the fat joke. Google David Letterman's sex scandals. But it's okay, because they're on our side, and everybody wants an asshole on their team — a spiked bat to smash their enemies with. That's all Trump is. The howls of elite outrage are like the sounds of bombs landing on the enemy's fortress. The louder the better.

   

  Already some of you have gotten angry, feeling this gut-level revulsion at any attempt to excuse or even understand these people. After all, they're hardly people, right? Aren't they just a mass of ignorant, rageful, crude, cursing, spitting subhumans?

   

  Gee, I hope not. I have to hug a bunch of them at Thanksgiving. And when I do, it will be with the knowledge that if I hadn't moved away, I'd be on the other side of the fence, leaving nasty comments on this article.

  The essential context is simply that rural residents are drowning under chronic economic blight. And when they dare to complain about it, they're castigated and humiliated by the dominant city culture that has no awareness of or sympathy for their troubles.

  We've NAFTA'd away millions of manufacturing jobs (and those that served manufacturing communities) without providing the displaced labor a path to reskill and apply itself. Instead, we've left a patchwork of bomb crater communities across the heartland, where there are no employers and no prospects. To these rural folks, being cast as racist, misogynist, ignorant, or uneducated buffoons for being angry about their plight just adds kerosene to the fire that's been smoldering within theem. A fire which just conflagrated during this week's election.

  So to reiterate: the cultural divide that's really in play here is not between the 'enlightened/progressive' people and their supposed opposites. Rather, it's Urban vs Rural.  

  And as the rural dwellers have increasingly felt marginalized, demonized and otherwise unfairly treated, they are now angry enough at the perceived injustice to lash out against the status quo and roll the dice with an outsider who promises to shake things up. It's not surprising, really — as I've written about before, we humans are wired to reject unfairness. This next short video is a favorite of mine, because it perfectly demonstrates how it's in our genes to become enraged when we perceive we're being unjustly treated:

  To put in in monkey terms: since surbanites set the rules because they happen to outvote the rural people, and those same urbanites don't have to live with the consequences of their decisions, then it's cucumbers for rural people and grapes for the urban folks.

  Adding to this understanding is today's article by our good friend Charles Hughes Smith, who validates the rage the downtrodden are feeling these days:

  The Source of our Rage: The Ruling Elite Is Protected from the Consequences of its Dominance

   

  There are many sources of rage: injustice, the destruction of truth, powerlessness.

   

  But if we had to identify the one key source of non-elite rage that cuts across all age, ethnicity, gender and regional boundaries, it is this: The Ruling Elite is protected from the destructive consequences of its predatory dominance.

   

  We see this reality across the entire political, social and economic landscape. If I had to pick one chart that illustrates the widening divide between the Ruling Elite and the non-elites, it is this chart of wages as a share of the nation's output (GDP): 46 years of relentless decline, interrupted by gushing fountains of credit and asset bubbles that enriched the few while leaving the economic landscape of the many in ruins.

   

  

   

  The Ruling Elite once had an obligation to uphold the social contract as a responsibility that came with their vast privilege, power and wealth (i.e. noblesse oblige).

   

  America's Ruling Elite has transmogrified into an incestuous self-serving few unapologetically plundering the many. In their hubris-soaked arrogance, their right to rule is unquestioningly based on their moral and intellectual superiority to "the little people" they loot with abandon.

   

  Rather than feel a responsibility to the nation, America's Elite views the status quo as a free pass to self-aggrandizement. Much has changed in America in the past 46 years. Not only have wages and salaries declined as a share of "economic growth," but the wealth that has been generated has flowed to the top of the wealth/power pyramid (see chart below).

   

  

   

  Social mobility has also declined drastically: Restoring America’s Economic Mobility, as has trust in government and key institutions.

   

  As Frank Buckley, the author of The Way Back: Restoring the Promise of America observed: "In a corrupt country, trust is a rare commodity. That’s America today. Only 19 percent of Americans say they trust the government most of the time, down from 73 percent in 1958 according to the Pew Research Center."

   

  The top .01% has seen its share of the household wealth triple from 7% to 22% in the past four decades, while the share of the nation's wealth owned by the bottom 90% has plummeted from 36% to 23%.

  Look at that.  The share of the national wealth has been steadily, if not increasingly, siphoned away from the 95% and towards the 5%.  In reality, it's almost entirely gone towards the 0.1%.

  The economic “peace” we’ve seemingly enjoyed over the past number of decades turned out to be no peace at all. It was the same sort of peace that existed between the Treaty of Versailles and the outbreak of WWII — a crippling arrangement that overwhelmingly favored one side over the other. Germany eventually had no choice but to rebel.

  Similarly, by failing to protect anyone but their cloistered and wealthy friends, the elites of both current US political parties has laid the fuel for the fire that now burns.

  Bernie Sanders’ post-election statement had this to say about the economics that drove the result:

  "Donald Trump tapped into the anger of a declining middle class that is sick and tired of establishment economics, establishment politics and the establishment media. People are tired of working longer hours for lower wages, of seeing decent paying jobs go to China and other low-wage countries, of billionaires not paying any federal income taxes and of not being able to afford a college education for their kids — all while the very rich become much richer.”

  Bernie would have easily bested Trump in my opinion. It was a huge twin set of mistakes by the DNC to first hamper his primary efforts, and then fail to at least make him Clinton's running mate. 

  Redistribution of money and power seem to happen peacefully only rarely among humans and virtually never in America.  Labor rights?  Fought and died over.  Women’s right to vote?  Fought and died over.  Environmental rights?  Brought kicking and screaming across the moats.  Racial rights?  Only partially achieved after the greatest amount of violence and bloodshed of all these causes.

  Can we do better? Absolutely, in theory.  But so far we don’t a lot of better examples to point to inside the US.

  So this battle is just getting started and will far outlive Trump and everybody reading this. Decades of ill-advised growth and financial squandering cannot be wished away — we, and our children (and likely our grandchildren, too), will be cleaning up the messes of our profligacy for a long time.

  And just as one can easily peer at Charles Hughes Smith's charts and conclude that eventually a rebellion of sorts is inevitable, there’s an even more startling chart you need to see. If you can truly internalize it, you'll understand why the new era of status quo rejection is just getting underway.

  Promises That Can’t Be Kept

  There's a lot of data I can provide here, but I’ll go with a single — but critically important — chart from Ray Dalio’s Bridgewater Associates, one of the largest money management firms out there.

  I’m sorry that you have to squint a little to see this, but here’s all you need to know: when you add up both the debts and the liabilities of the US, those are more than 1,000% of current GDP:

  

  (Source)

  One thousand one hundred percent?!?!?  As in eleven times GDP??  You might as well say eleventy gajillion because there’s no sense in any of these numbers.

  Yep.  No country has ever dug out from under such a load. None have even come close.  The “prediction,” which is so simple it’s not really a prediction at all, that flows from the above chart is this: Somebody is going to have to eat the losses.

  Massive, fabulously enormous losses. 

  Trillions and trillions of losses in current dollars. Even if the economic elites don’t try to force all of those losses on the ‘little people’, the pain is still going to be so extraordinary that serious political and social crises will erupt.

  You can count on it.

  You can already see that larger future predicament playing out painfully around us. One example is how pensions are cutting back benefits, lowering expectations, demanding higher funding payments by taxpayers, and otherwise displaying signs of distress.

  And this is with equity markets perched at all-time highs (at the moment of this writing, the Dow is at a new record).

  So our recent decades of economic peace must end, given the thousand percent indebtedness predicament revealed by the chart above.

  We got into that thousand percent predicament the exact same way the DNC lost to Trump: by failing to address things that plainly needed to be dealt with.  We proved to ourselves, yet again, that pretending something uncomfortable doesn’t exist doesn’t make it go away.

  “Well, we might just grow out from under those debts and obligations” some might be tempted to say. My response is to ask you to go back and look at that chart again and note that it has grown from 700% to 1,100% since 2001.  If GDP had been growing at the same pace, the ratio value wouldn't have budged. It would have remained at 700%.

  But it grew to 1,100%, which means the debts and obligations were growing much faster than GDP.

  So for the past 15 years the “grow out of it” mantra — which has been echoed ad nauseum — has been a complete train wreck of a failure.  How many more years before we can all just admit the obvious?

  Just as both the RNC and DNC opted to ignore the extreme damage their policies had been inflicting on the upper, middle and lower classes, sparing only the very tippy-top elites (but hand-feeding those elites peeled grapes it should be noted, because their lot improved wildly over the past decades), everybody in power has been steadfastly ignoring our massive debt and liability problems, too.

  Those are going to shape the future, and that future is going to be plenty painful. The longer we wait, the more painful it will be. This has been our steady message at Peak Prosperity for a very long time, and we are actually hopeful that now, finally, we can speak about the unspeakable to those who had no willing ear for it just a short week ago.

  Conclusion

  The political upheaval of Donald Trump is best understood through the lens of economic erosion suffered by the vast majority of people.  If a democracy is measured in how well it serves the interests of the majority, the United States is not a democracy at all.

  Of course, nearly everyone already knows this. But it's been all but unspeakable in polite circles to say so.

  Now, it is finally becoming okay to voice.

  Which is, admittedly, a breath of fresh air for us at Peak Prosperity.  Because not only are massive, obvious economic issues going to unavoidably visit the US in the not-too-distant future, but they'll be doing so at a time when many critical resources will be in decline.

  Chief among those? Oil, of course.

  To skirt the impact of a future oil supply crunch, we'll need an incredible effort of joined forces and strict prioritization to assure that whatever transition we can effect will be a smooth as possible.  Even then, we’ll be lucky to evade painful disruption.

  But if we don't begin to view our future with clear eyes and a united sense of what the predicaments are, if we instead turn to another version of four more years of preservation of the status quo, then we will face a future of disruption so painful it will make the worst of post-election Wednesday for the most ardent liberal seem like a minor inconvenience (by comparison, I mean, of course). 

  It will take an enormous amount of effort simply to stem the tide of economic erosion that now besets the land.  And that’s just as true for the US as it is for Japan, Europe and the UK.  The same forces are at play in all of these centers.

  It will take another massive bowlful of effort to begin to address the debts and liabilities issues.  And yet another cauldron of effort to revamp our energy infrastructure in parallel with all the other challenges.  Put it all together and you can begin to understand why, if we're going to deplore something from the recent election, it should be the running of an intentionally divisive set of campaigns that have driven as large a wedge between people in the US as has existed in a very long time.

  We need to be working together on the common predicaments that care not if we are liberal or conservative, religious or not, male or female, or which race or sexual persuasion best applies to us. Declining global net energy per capita. Our massive fiscal over-indebtedness. The collapse of too many ecosystems we depend on for food and drinkable water. The list is sadly long…

  It’s not just time to heal; it’s imperative that we do. So that we stand united to deal with these predicaments as they arrive in full force.

  There’s really not a moment to spare.

  And for those looking to get a jump on what's coming, we need to better understand the implications of what just happened this week. The Trump upset has changed all of the probabilities that we track.

  I've been keeping a running update of the developing situation in OK, Here's What We Think Is In Store After Trump's Win (free executive summary, enrollment required for full access). We'll be continuing to update this important assessment as new information filters in over the next few days.

  

  

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• Do Progressives Really Find "White Trash" More Threatening Than Nuclear War?

  Authored by Paul Craig Roberts,

  The American electorate’s preference for Donald Trump and Bernie Sanders has established two facts. One is that the majority of the American people do not believe the media presstitutes. The other is that only the “progressives” and “liberals” who inhabit the Atlantic Northeast and Pacific West coasts believe the presstitutes.

  Trump’s election to the presidency has confirmed these holier-than-thou souls in their strongly held belief that America is a white trash racist country. They have told us this all day long today.

  From these people and from the presstitutes we hear that white supremacy elected Trump. This is their propaganda, the intention of which is to discredit a Trump administration before it is inaugurated. Funny how white supremacy elected black Obama twice previously.

  Truthout has lost it completely. John Knefel declares “The David Dukes of the World Prevail.”

   

  Kelly Hayes declares “White Supremacy Elected Donald Trump.”

   

  William Rivers Pitt declares “We have elected a fascist that Mussolini would have recognized on sight.”

   

  Hillary carried only a handful of states, the states that comprise the One Percent’s stomping grounds. Yet Amy Goodman of Democracy Now sees meaning in political writer John Nichols claim that as Hillary carried New York and California, she won the popular vote and should be in the White House. I remember a few days ago George Soros saying that Trump would win the popular vote, but that the electoral vote would go to Hillary, thus ridding the oligarchs of Trump.

   

  Earth Justice promises to hold Trump accountable. Trump who promises to end the threat of nuclear war with Russia and China, thereby doing more to save animal and human life than the entirety of the Democratic Party and environmental organizations, is going to be held accountable by an organization that allegedly is beyond politics and is dedicated to preserving animals from destruction.

   

  The ACLU, of which I am a member, has also put “on notice” the president-elect who has said he will save us from nuclear war. Faced with this idiocy from the ACLU, I will not renew my membership.

   

  Feminists tell us that we are “grieving, scared, and in shock,” and that “it is critical that we stand together and support each other.”

   

  Jeremy Ben-Ami of the J Street Jewish Community tells us that it is “an incredibly sad and difficult day. For tens of millions of Americans who share a core belief in tolerance, decency and social justice, the election results are a severe shock. In this challenging moment, we turn to one another for comfort and community. During this election, J Street made unequivocally clear our conviction that Donald Trump is not fit to be president of the United States.”

   

  Van Jones, a CNN commentator, said that Trump’s election is a nightmare, “a deeply painful moment,” a “whitelash” against minorities. While he bemoaned the pain inflicted upon poor little presstitute Van Jones, he didn’t mind insulting the American electorate and the President-elect of the United States. After all, Van Jones sees that as his racist prerogative.

  And so, the holier-than-thou crowd prefers Hillary, despite her unambiguous position that she would maximize conflict with Russia and China, provoke direct military conflict between the US and Russia by imposing a no-fly zone in Syria, attack Iran and other of Israel’s targets, further enrich her Wall Street handlers by privatizing Social Security, and prevent any dissent from the lowly people class of her high-handed ways. If William Rivers Pitt sees Trump as a Mussolini fascist, Trump is too mild for Pitt. He prefers Hillary, a Hitler to the third power.

  The progressives have totally discredited themselves just as the presstitutes have done. Their need for a bogyman to nourish their hysteria indicates serious psychological disturbance. They actually prefer the risk of Armageddon to peace among nuclear powers. As their 501(c)3s live off corporate contributions, they prefer globalist corporate profits to jobs for ordinary Americans.

  These are the people who think of themselves as our instructors and our betters.

  If only Trump could exile the lot of them. They are anti-American to the core.

  

  

• OreGONE – Oregon Joins California In Proposal To Secede After Trump Victory

  Just yesterday we wrote about the “Calexit” proposal that was starting to gather steam after Trump’s historic victory on Tuesday night.  Now The Oregonian points out that a group in Oregon has also filed the “Oregon Secession Act” in response to the perceived notion that “Oregonian values are no longer the values held by the rest of the United States.”  But, unlike the Calexit proposal, the distraught Hillary supporters in Oregon are thinking big picture and have invited the states of California, Washington, Hawaii, Nevada and Alaska to all band together to form a new nation.

  On Thursday morning, Jennifer Rollins, a lawyer, and Christian Trejbal, a writer, filed the Oregon Secession Act.

   

  “Oregonian values are no longer the values held by the rest of the United States,” Trejbal said over the phone Thursday.

   

  Those values? “Life, liberty, the pursuit of happiness,” Trejbal said, “plus equality.”

   

  “Obviously,” he said, the ballot proposal “came about partially in response to the election results on Tuesday.”

   

  Trejbal said that joining forces with other states like Washington, California and Nevada is “a viable way to go forward.”

   

  These states, he said, “could all get together and form a nation that uphold the values that we share.”

   

  To start the ballot title drafting process, the Oregon Secession Act must receive 1,000 signatures. Trejbal said he and Rollins would be at Pioneer Courthouse Square in Portland on Thursday night to begin the process of getting those signatures.

  And here is the full 1-page proposal…clearly they put a lot of time and effort into this between their violent protest sessions and crying fits.

  

   

  The good thing is that the devastated Hillary supporters are moving through the “7 Stages of Grief” pretty quickly as they seem to have already reached stage 4 after only 3 days.  That said, we suspect the depression stage could last for a little while…college professors shouldn’t expect our snowflakes to be taking tests for at least another couple of weeks.

  

  

  

• Paul Joseph Watson Crushes The Hypocrisy Of The Left And Their "Temper Tantrum"

  Earlier today, Paul Joseph Watson posted the following epic video in which he systematically destroys the utter hypocrisy of the left for, among other things, failing to denounce the violent riots flaring up across the country in response to Trump’s victory.  The whole video is a must see but below is just a small selection of our favorite quotes:

  “After weeks of taunting Trump supporters, over Trump’s suggestion that he might not immediately accept the election results, Hillary voters came together preached the message of unity and graciously accepted Donald Trump’s victory.  Oh no, they actually rioted, attacked people in the street and threatened to kill Donald Trump and his supporters.“

   

  “All year they denounced us as being hateful and intolerant.  And what’s the first thing they do after the election?  Engage in rampant hateful intolerance.“

   

  “Seriously, has anyone told you people you can’t change the outcome of democratic election by throwing a temper tantrum.”

   

  “Your behavior is why Trump won in the first place.  Do you understand that yet?“

  

  

• Never Forget!

  Thank you…

   

  

  Source: MichaelPRamirez.com

  Veterans Lives Matter…

  98 years ago today, the guns of the Great War fell silent after four years of unimaginable suffering and destruction. The Battle of the Somme was the largest battle on the Western Front during World War 1 with more than a million men killed or wounded. Today is Armistice Day and Statista's infographic below looks at at the estimated casualties of World War 1's most horrific battle.

  
  You will find more statistics at Statista

   

  Americans shed some guilt for sending young soldiers to war by saying “thank you for your service” but it’d be better to ask vets about their war experiences, says ex-U.S. Army chaplain Chris J. Antal who served in Afghanistan (via ConsrtiumNews.com)…

  Veteran’s Day too often only serves to construct and maintain a public narrative that glorifies war and military service and excludes the actual experience of the veteran. This public narrative is characterized by core beliefs and assumptions about ourselves and the world that most citizens readily accept without examination.

   

  The U.S. public narrative reconciles deep religiosity with a penchant for violence with an often unexamined American National Religion. The core beliefs of this religion include the unholy trinity of governmental theism (One Nation Under God, In God We Trust, etc.), global military supremacy, and capitalism as freedom. These core beliefs provide many U.S. citizens with a broad sense of meaning and imbue the public narrative with thematic coherence.

   

  War is a Force that Gives Us Meaning, as Christopher Hedges wrote. Yet this kind of coherence has a moral and psychological cost. The consequence of an unexamined faith in American National Religion is a moral dualism that exaggerates U.S. goodness and innocence and projects badness on an “other” who we then demonize as the enemy and kill.

   

  Walter Wink described this moral dualism as a “theology of redemptive violence,” the erroneous belief that somehow good violence can save us from bad violence.

   

  Veteran’s Day, in the context of American National Religion, enables selective remembering, self-deception, and projected valorization. In short, it serves to perpetuate lies in order to avoid facing uncomfortable truths about who U.S. citizens are and what kind of people we are becoming.

   

  Imagine a Veteran’s Day where citizens gathered around veterans and asked, “what’s your story?” Citizens who risk this bold step begin to bridge the empathy gap between civilians and veterans and open up the path for adaptive change and post-traumatic growth.

   

  I believe one citizen who approaches a veteran with the invitation, “what’s your story?” does more for the veteran than a thousand patriotic platitudes like “Thank you for your service” could ever do.

   

  Only a First Step

   

  Asking the question is only the first step. A citizen who wants to give back to veterans should cultivate narrative competence, the capacity to recognize, absorb, interpret, and be moved by the stories one hears or reads. The voice of veterans, if we open our ears to hear them, often provides an essential counter-narrative to the U.S. public narrative.

   

  

   

  Violent, sudden, or seemingly meaningless deaths, the kind of deaths often experienced by veterans, can make the world appear dangerous, unpredictable, or unjust. The experience of warfare can often undercut our sense of meaning and coherence and shatter assumptions. Because of this many veterans carry a depth of pain that is unimaginable to many citizens.

   

  The voice of the veterans often reveals uncomfortable truths and invites collective examination of core beliefs and assumptions, especially those that form the bedrock of American National Religion.

  Imagine a Veteran’s Day where communities join together for authentic dialogue between veterans and civilians. Such a gathering would empower veterans to share the kind of stories that would help the community face real problems. What new story might emerge in the process? How might we become a better people as a result?

  

  

• The Clintons And Soros Launch America's Purple Revolution

  Submitted by Wayne Madsen via Strategic-Culture.org,

  Defeated Democratic presidential candidate Hillary Rodham Clinton is not about to «go quietly into that good night». On the morning after her surprising and unanticipated defeat at the hands of Republican Party upstart Donald Trump, Mrs. Clinton and her husband, former President Bill Clinton, entered the ball room of the art-deco New Yorker hotel in midtown Manhattan and were both adorned in purple attire. The press immediately noticed the color and asked what it represented. Clinton spokespeople claimed it was to represent the coming together of Democratic «Blue America» and Republican «Red America» into a united purple blend. This statement was a complete ruse as is known by citizens of countries targeted in the past by the vile political operations of international hedge fund tycoon George Soros. 

  The Clintons, who both have received millions of dollars in campaign contributions and Clinton Foundation donations from Soros, were, in fact, helping to launch Soros’s «Purple Revolution» in America. The Purple Revolution will resist all efforts by the Trump administration to push back against the globalist policies of the Clintons and soon-to-be ex-President Barack Obama. The Purple Revolution will also seek to make the Trump administration a short one through Soros-style street protests and political disruption.

  It is doubtful that President Trump’s aides will advise the new president to carry out a diversionary criminal investigation of Mrs. Clinton’s private email servers and other issues related to the activities of the Clinton Foundation, especially when the nation faces so many other pressing issues, including jobs, immigration, and health care. However, House Oversight and Government Reform Committee Chairman Jason Chaffetz said he will continue hearings in the Republican-controlled Congress on Hillary Clinton, the Clinton Foundation, and Mrs. Clinton’s aide Huma Abedin. President Trump should not allow himself to be distracted by these efforts. Chaffetz was not one of Trump’s most loyal supporters.

  America’s globalists and interventionists are already pushing the meme that because so many establishment and entrenched national security and military «experts» opposed Trump’s candidacy, Trump is «required» to call on them to join his administration because there are not enough such «experts» among Trump’s inner circle of advisers. Discredited neo-conservatives from George W. Bush’s White House, such as Iraq war co-conspirator Stephen Hadley, are being mentioned as someone Trump should have join his National Security Council and other senior positions. George H. W. Bush’s Secretary of State James Baker, a die-hard Bush loyalist, is also being proffered as a member of Trump’s White House team. There is absolutely no reason for Trump to seek the advice from old Republican fossils like Baker, Hadley, former Secretaries of State Rice and Powell, the lunatic former U.S. ambassador to the United Nations John Bolton, and others. There are plenty of Trump supporters who have a wealth of experience in foreign and national security matters, including those of African, Haitian, Hispanic, and Arab descent and who are not neocons, who can fill Trump’s senior- and middle-level positions.

  Trump must distance himself from sudden well-wishing neocons, adventurists, militarists, and interventionists and not permit them to infest his administration. If Mrs. Clinton had won the presidency, an article on the incoming administration would have read as follows:

  «Based on the militarism and foreign adventurism of her term as Secretary of State and her husband Bill Clinton’s two terms as president, the world is in store for major American military aggression on multiple fronts around the world. President-elect Hillary Clinton has made no secret of her desire to confront Russia militarily, diplomatically, and economically in the Middle East, on Russia’s very doorstep in eastern Europe, and even within the borders of the Russian Federation. Mrs. Clinton has dusted off the long-discredited ‘containment’ policy ushered into effect by Professor George F. Kennan in the aftermath of World War. Mrs. Clinton’s administration will likely promote the most strident neo-Cold Warriors of the Barack Obama administration, including Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland, a personal favorite of Clinton».

  President-elect Trump cannot afford to permit those who are in the same web as Nuland, Hadley, Bolton, and others to join his administration where they would metastasize like an aggressive form of cancer. These individuals would not carry out Trump’s policies but seek to continue to damage America’s relations with Russia, China, Iran, Cuba, and other nations.

  Not only must Trump have to deal with Republican neocons trying to worm their way into his administration, but he must deal with the attempt by Soros to disrupt his presidency and the United States with a Purple Revolution

  No sooner had Trump been declared the 45^th president of the United States, Soros-funded political operations launched their activities to disrupt Trump during Obama’s lame-duck period and thereafter. The swiftness of the Purple Revolution is reminiscent of the speed at which protesters hit the streets of Kiev, the Ukrainian capital, in two Orange Revolutions sponsored by Soros, one in 2004 and the other, ten years later, in 2014.

  As the Clintons were embracing purple in New York, street demonstrations, some violent, all coordinated by the Soros-funded Moveon.org and «Black Lives Matter», broke out in New York, Los Angeles, Chicago, Oakland, Nashville, Cleveland, Washington, Austin, Seattle, Philadelphia, Richmond, St. Paul, Kansas City, Omaha, San Francisco, and some 200 other cities across the United States. 

  The Soros-financed Russian singing group «Pussy Riot» released on YouTube an anti-Trump music video titled «Make America Great Again». The video went «viral» on the Internet. The video, which is profane and filled with violent acts, portrays a dystopian Trump presidency. Following the George Soros/Gene Sharp script to a tee, Pussy Riot member Nadya Tolokonnikova called for anti-Trump Americans to turn their anger into art, particularly music and visual art. The use of political graffiti is a popular Sharp tactic. The street protests and anti-Trump music and art were the first phase of Soros’s Purple Revolution in America.

  President-elect Trump is facing a two-pronged attack by his opponents. One, led by entrenched neo-con bureaucrats, including former Central Intelligence Agency and National Security Agency director Michael Hayden, former Homeland Security Secretary Michael Chertoff, and Bush family loyalists are seeking to call the shots on who Trump appoints to senior national security, intelligence, foreign policy, and defense positions in his administration. These neo-Cold Warriors are trying to convince Trump that he must maintain the Obama aggressiveness and militancy toward Russia, China, Iran, Venezuela, Cuba, and other countries. The second front arrayed against Trump is from Soros-funded political groups and media. This second line of attack is a propaganda war, utilizing hundreds of anti-Trump newspapers, web sites, and broadcasters, that will seek to undermine public confidence in the Trump administration from its outset.

  One of Trump’s political advertisements, released just prior to Election Day, stated that George Soros, Federal Reserve chair Janet Yellen, and Goldman Sachs chief executive officer Lloyd Blankfein, are all part of «a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities». Soros and his minions immediately and ridiculously attacked the ad as «anti-Semitic». President Trump should be on guard against those who his campaign called out in the ad and their colleagues. Soros’s son, Alexander Soros, called on Trump’s daughter, Ivanka, and her husband Jared Kushner, to publicly disavow Trump. Soros’s tactics not only seek to split apart nations but also families. Trump must be on guard against the current and future machinations of George Soros, including his Purple Revolution.

  

  

• What Donald Trump's Proposed Tax Cut Means For You

  Now that Trump is president, both individual and corporate tax-payers are taking a second look at Trump’s proposed tax regime to see how it will impact their bottom line.

  Here is a quick primer.

  Trump has proposed personal and business tax reform that would reduce tax revenues by an estimated $4.4 trillion over ten years, or roughly 1.9% of GDP over that period. Alternatively, this also means that GDP will grow by roughly the same amount, all else equal, with incremental debt use to fund the shortfall.  Roughly half of this cost is estimated to come from his proposed corporate tax reform plan, which would reduce the corporate income tax rate to 15% and would impose a one-time 10% tax on all foreign earnings not yet taxed by the US.

  Companies would be free to repatriate earnings without additional tax once this tax has been paid. Like the House Republican proposal, this would involve a transition to a new corporate tax system for taxing foreign earnings. The two plans are similar in several other respects as well, including a top individual marginal tax rate of 33%. However, the House Republican plan is estimated to cost around half as much over the next ten years as Mr. Trump’s plan, at least in part because it proposes to go further in limiting or eliminating existing individual and corporate tax preferences.

  This is summarized in the chart below. The good news is that virtually all entities and income tax brackets will pay less taxes compared to Obama’s 2017 Budget (assuming Trump does not change his mind on this framework). The bad news, is that even more debt will be used to replace it, and should foreign buyers balk at US obligations it will require more deficit monetization courtesy of the Fed and another QE episode.

  

  Which brings us to the second point: will Trump’s tax plan pass? According to Goldman Sachs, the tax legislation has a good chance of passing in 2017, but it is not expected to reduce revenues by as much as Trump has proposed. There are three potential obstacles to its passage:

  • First, the cost is likely to be prohibitive for some members of Congress. While the majority party is able to pass tax legislation with only a simple majority in the Senate using the budget reconciliation process described above, it would require near-unanimity among the 52 Republicans in the Senate next year to do so. The prevailing expectation is that some Republican lawmakers would balk at the deficit impact of his proposal.
  • Second, while the House Republican proposal would increase the deficit less, it has also generally been proposed in the context of the broader Republican budget proposal, which would also reduce spending in several areas. Mr. Trump has not proposed a significant net spending reduction.
  • Third, tax reform is complicated, and even under a unified Republican government, it may be too complex to resolve in a matter of months.

  Ultimately, the outlook for a tax cut depends on how willing marginal Republican lawmakers are to increase the deficit, and/or how willing they are to find offsetting savings elsewhere. Overall, there is a good chance that some type of tax legislation passes next year, but the obstacles to comprehensive tax reform go beyond partisan disputes, so one should expect tax legislation that is adopted in 2017 to be narrower in scope than the campaign proposal, and significantly smaller in its revenue effect; in other words much of this week’s market rally – driven by hopes of tax-cut boosted economic growth  and consumer spending – will be for nothing.

  

  

• This Trophy Of Mainstream Media Arrogance Can Be Yours For Only $250

  As we pointed out last weekend, with several days to go before the presidential election on November 8th, bookstores around the country started receiving a curious commemorative edition of Newsweek with their chosen candidate on the cover.  As Infowars reported, the magazines went viral when a Twitter user, who works at one of those bookstores, tweeted the images with the comment, “I work at a bookstore and we typically get magazines early and lookie what we got here.” 

  While Newsweek later explained that they had created 2 versions of the magazine with Trump and Hillary on the cover, apparently they made a “business decision” to only print the “Madam President” version.

  Bet @mghnbtts wishes she didn’t break @Newsweek embargo.
  Shut down account after fueling Trumpists’ hysteria about “rigged” #Election2016 pic.twitter.com/ZvsPyjUOVn

  — Luke Costin (@LukeCostin) November 7, 2016

   

  Now, you too can own your very on own piece of the mainstream media’s arrogance courtesy of numerous Ebay auctions looking to fetch a couple hundred dollars for the ill-advised magazines.  Somehow we suspect these “collectors editions” will end up as stocking stuffers for many Hillary supporters this holiday season.

  

   

  And while this is certainly embarrassing for Newsweek, it’s not the first time the arrogant mainstream media got caught off guard.

  

  

  

• A Visit To Trump's America

  Authored by retired bank CEO Edward Speed, originally posted at TheRivardReport.com,

  Two months ago, when I was in Ohio visiting my daughter, I was given an insight into the early indicators of a Trump victory. The clues were there, but I didn’t fully understand what I was seeing. At that time, I had no inkling of the depth and breadth of rural dissatisfaction that would elect a Donald Trump as President.

  I’m a photographer and the coordinator of The Texas Farm and Ranch Photography Project, photographing the daily lives of farm and ranch families, their work, meals, worship, and family life. In September, I drove almost 300 miles up and down the rural roads east of Dayton and south of Columbus, Ohio, to add some farm images to my portfolio.

  Mile after mile, farm after farm, town after town, ag business after ag business, I saw only Trump signs. It was obvious that if Ohio was going to block Trump, it would have to be in the cities because agricultural Ohio was overwhelmingly Trump country. This mirrored the same Trump support that I saw in the agricultural communities I have been photographing across Texas for the past year.

  

  As I engaged in countless conversations in both rural Ohio and Texas, I tried to understand how any farming or ranching family could even remotely identify with a brash, thrice-married, womanizing, bankruptcy-declaring, New York billionaire. 

  What I learned is that agricultural America felt not only ignored and forgotten, it felt rejected and despised by America’s political elite, and that any candidate who could hurt that elite was worth their vote.

  No story brought this home to me more powerfully than a grandfather who spoke of national news stories about what he described as the whining and crying on elite college campuses by those who demanded “safe places” and “safe zones” where they will be sheltered from anything that remotely offends them. He spoke of ingrates wanting special “only me” safe places where they do not have to do anything, hear anything, see anything, or be around anyone or anything they don’t like.

  In that farmer’s mind, while the safe-space crowd whined about its “offendedness” and demanded entitlements, children of agricultural families were up early in the morning working on their chores and projects, followed by a full day at school, coming home to more work – all while being part of a family, a community, and a nation.

  He described watching youngsters at county fairs and livestock shows hauling feed, cleaning stalls, washing and grooming livestock, shoveling manure, unloading and loading their family trucks and trailers, and trying to sleep in uncomfortable chairs – all while ungrateful elite college students failed to appreciate their pampered lives.

  

  In this gentleman’s world view, it was not black versus white, rich versus poor, feminism versus patriarchy, illegal versus citizen; rather, it was those who produce nothing believing themselves entitled, without appreciation, to the goods produced by others versus those who actually produce.

  Although this grandfather did not use the exact words, he pretty much described a political elite and liberal establishment as thinking of American agriculture families as nothing more than serfs in a self-protecting, self-serving feudal system.

  A ranch mom whose family I photographed in far West Texas alluded to the Black Lives Matter movement by telling me that unless America starts recognizing that Farm Lives Matter, no lives are going to matter.

  Rural and agricultural America has revolted against this perceived feudal system in an unimaginable way. It voted not only out of feelings of rejection and abandonment, but also out of the sentiment of being taken for granted. The result was an agricultural electorate that rose up against urban elites who they believed show only disdain and ridicule to those who endure the back-breaking work and financial hardships required to feed our nation.

  As a result, hard-working, long-suffering agricultural families sent Hillary Clinton, the Democratic Party, and the perceived political establishment to bed without their supper.

  They also sent a powerful message and reminder that our food does not spring magically from grocery stores.

  Agricultural America helped deliver the White House to Trump, then got up early the next morning and went back to its daily, unending chores.

  

  

• ObamaTrade Is Dead: White House Abandons TPP As EU Halts Trade Talks After Trump Victory

  It appears the entire ‘ObamaTrade’ farce is collapsing under the weight of its secrecy and corporatocracy in the immediate aftermath of Trump’s triumph. First this morning, Bloomberg reported that EU Trade Commissioner Cecilia Malmstrom said EU-U.S. negotiations on a free-trade agreement are on hold, and now WSJ reports that the Obama administration on Friday gave up all hope of enacting its sweeping Pacific trade agreement, denting American prestige in the regions at a time when China is flexing its economic and military muscle.

  Just days after Donald Trump won the election, all of Washington’s major trade deals are dead or dying.

  
  

  First, NAFTA

  As Joe Joseph reports, both Mexico and Canada have agreed to re-negotiate the North American Free Trade Agreement (NAFTA) signed under President Clinton.

  You have the Canadian Prime Minister and his Mexican counterpart that are now saying, “hey buddies… hey United States… we want to renegotiate NAFTA.”

   

  …Maybe, just maybe, we might actually have a little bit of justice… he hasn’t even taken the oath of office yet.

  Second, TTIP

  Trump lashed out at market-opening initiatives such as the planned Trans-Atlantic Trade and Investment Partnership, or TTIP, during his successful campaign to succeed U.S. President Barack Obama. Trump, the Republican Party’s candidate, defeated Democrat Hillary Clinton in the Nov. 8 election.

   

  “With the new president-elect, we don’t really know what will happen,” Malmstrom told reporters on Friday in Brussels. “There is strong reason to believe that there will be a pause in TTIP, that this might not be the biggest priority for the new administration.”

   

  The EU and U.S. have spent three years working on an accord to expand the world’s biggest economic relationship by eliminating tariffs on goods, enlarging services markets, opening public procurement and bolstering regulatory cooperation. Obama and European leaders such as German Chancellor Angela Merkel had called TTIP a policy priority.

   

  Both sides have held 15 rounds of talks since 2013. The last round took place in October in New York.

   

  “Whether it makes sense to have new rounds — well probably not,” Malmstrom said on Friday.

  And Finally, TPP

   Just days after Donald Trump surprise victory, U.S. officials said Republican congressional leaders had made clear that they wouldn’t consider the 12-nation Trans-Pacific Partnership in the remainder of Mr. Obama’s term. The White House had lobbied hard for months in the hope of moving forward on the pact if the Democratic nominee, Hillary Clinton, had won.

   

  The failure to pass what is by far the biggest trade agreement in more than a decade is a bitter defeat for Mr. Obama, whose belated but fervent support for freer trade divided his party and complicated the campaign of Mrs. Clinton.

   

  The TPP’s collapse also dents American prestige in the region at a time when China is flexing its economic and military muscle.

  The 2016 election season has shown that domestic concerns about globalization, the trade deficit and stagnant wages easily beat out the appetite for international engagement. The TPP became a symbol Washington pursuing policies that disproportionately favor wealthier Americans over ordinary workers. Mr. Trump blamed the TPP on special interests trying to “rape” the country.

  As we detailed previously, Trump was right on Trade Agreements.

  

  

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