• Most Dangerous Person On The Planet Today: Hillary Clinton

  Submitted by Michael Shedlock via MishTalk.com,

  On Monday, Hillary Clinton accused Donald Trump of giving “aid and comfort” to Islamic terrorists, and that terrorists use his rhetoric to recruit fighters.

  On fighting terrorism, she chastised Trump “I Know How to Do This“.

  “I’m the only candidate in this race who’s been part of the hard decisions to take terrorists off the battlefield. I have sat at that table in the Situation Room,” said Clinton.

  Here’s my counterclaim: Hillary Clinton not only sponsors terrorism, she is a terrorist.

  I sent this as an Op-Ed to the New York Times. Rejected as expected.

  Irony of the Year

  The irony of the day, week, month and year is Hillary’s statement “I Know How to Do This“.

  • Hillary supported Bush’s inane war in Iraq.
  • Hillary supported Bush’s inane war in Afghanistan.
  • Hillary was the mastermind of US failed strategy in Libya.
  • Hillary is the single person most responsible for Benghazi.
  • Hillary supports president Obama’s drone policy.
  • There has never been a war Hillary did not support.

  The most surefire way to make a terrorist out of a non-terrorist is to kill an innocent child or bomb an innocent person’s home. Doing so is sure to radicalize friends and family.

  String of US Terrorism

  There is nothing more un-American or unconstitutional than bombing other countries indiscriminately with no declaration of war, and with little or no regard to the lives of innocent victims.

  Hillary Clinton supported those policies as Secretary of State. Hillary Clinton, like George Bush, like Dick Cheney, and like president Obama are all guilty of terrorism.

  If you disagree, please put yourself in the shoes of a mother whose 4-year old daughter was “accidentally” killed by a US drone. Envision your neighbor’s house “accidentally” blown to smithereens by drones.

  Is it not terrorism because it’s an accident? What practical difference does it make?

  In the eyes of the families of innocent victims, no words better describe such actions than “US terrorism“. I guarantee that is precisely how you would feel if it was your son or daughter killed, or it was your house blown up.

  On April 23, 2015 the New York Times reported Drone Strikes Reveal Uncomfortable Truth: U.S. Is Often Unsure About Who Will Die.

  “Mr. Obama and his top aides have repeatedly promised greater openness about the drone program but have never really delivered on it,” said the Times, quoting Rachel Stohl, of the Stimson Center, a Washington research institute.

  On October 20, 2015, the Huffington Post reported Nearly 90 Percent Of People Killed In Recent Drone Strikes Were Not The Target.

  “U.S. drone strikes have killed scores of civilians in Afghanistan, Pakistan, Yemen and Somalia,” said the article, emphasis mine.

  US Policy Radicalizes Terrorists

  How many terrorists did the US radicalize in the process?

  How many innocent civilians died? How much compensation did the US pay? Sorry, that’s classified information.

  Given US drone policy, it’s a wonder there has not been more terrorists incidents in the US. One surefire way to have more incidents in the US is to accept Obama’s plan to take in 65,000 Syrian refugees.

  Hillary Promises More of the Same

  Hillary’s refugee policies would ensure we would have more terrorist attacks in the US.

  Globally, her statements prove she will continue the disastrous, counterproductive, and illegal policies of the Bush and Obama administration.

  Logically speaking, Hillary Clinton is the biggest threat to world peace and the most dangerous person on the planet.

  That’s what I will take with me to the election booth on November 8. What about you?

  

  

• It's Official: America Is Not The Greatest Country On Earth… It's 28th!

  Violence, alcoholism, and obesity pose the biggest risks in the U.S.

  

  But the rest of the world isn’t doing much better.

  

  As Bloomberg reports, Iceland and Sweden share the top slot with Singapore as world leaders when it comes to health goals set by the United Nations, according to a report published in the Lancet. Using the UN’s sustainable development goals as guideposts, which measure the obvious (poverty, clean water, education) and less obvious (societal inequality, industry innovation), more than 1,870 researchers in 124 countries compiled data on 33 different indicators of progress toward the UN goals related to health.

  The massive study emerged from a decadelong collaboration focused on the worldwide distribution of disease.

  About a year and a half ago, the researchers involved decided their data might help measure progress on what may be the single most ambitious undertaking humans have ever committed themselves to: survival. In doing so, they came up with some disturbing findings, including that the country with the biggest economy (not to mention, if we’re talking about health, multibillion-dollar health-food and fitness industries) ranks No. 28 overall, between Japan and Estonia.

  

   

  Bloomberg notes that the U.S. scores its highest marks in water, sanitation, and child development. That’s the upside. Unsurprisingly, interpersonal violence (think gun crime) takes a heavy toll on America’s overall ranking. Response to natural disasters, HIV, suicide, obesity, and alcohol abuse all require attention in the U.S. Also noteworthy are basic public health metrics that America. doesn’t perform as well on as other developed countries. The U.S. is No. 64 in the rate of mothers dying for every 100,000 births, and No. 40 when it comes to the rate children under age five die.

  

  “The U.S. isn’t doing as well as it perhaps should compared with some countries in Western Europe,” Murray said.

  Finally, it's an oldie, but a goodie…

  

  

• Caught On Tape: Did The US Target Syrian Aid Convoy With Hellfire Missile?

  Via Signs Of The Times blog,

  Hellfire Signature?

  

  Footage of the nighttime attack on the Syrian aid convoy in Aleppo has surfaced. But there's something curious about how the footage has been appearing on Western news reports. A commenter on the Moon of Alabama blog, PavewayIV, made the following observations about what appears in the video, and what it suggests. First, however, here's an unedited version of the blast, courtesy of ABC:

   

  In the screen cap above, you can see what looks to be a cloud of sparks following an initial explosion. According to PavewayIV, this is a signature of the Metal-Augmented Charge (MAC) Hellfire AGM-114N, the Predator drone's typical payload.

  The fiery cloud is produced by the residue of the fine-mesh fluorinated aluminum particles (the "metal augmentation"). Aside from the ABC footage, most other networks have shown edited versions that make this signature difficult to detect.

  For example, here's AP's version:

  '

   

  Shakey-cam added for jihadi-vision effect? Why would they do this?

  Thermobaric Hellfire air-blasts don't leave craters, and they typically start fires. No craters are visible in footage of the burned convoy.

  The Russians have thermobaric bombs, too, according to PavewayIV, but they use different particles and their blast patterns are different: either no "sparkles" or long-duration "sparkles", not the fast-duration flash as seen in the video of the Aleppo blast.

  As we reported yesterday, the Russians detected a Predator drone which took off from Incirlik airbase in Syria, flew to the precise location of the convoy, arrived before the strike, stayed for a while, then left after the damage was done.

  Surely just a coincidence…

  

  

• The Black-White Wage Gap Continued To Expand Under Obama

  According to a new report from the Economic Policy Institute, the wage gap between white and black Americans was 18.1%in 1979. Astonishingly, as Statista’s Niall McCarthy reports, it has continued to expand ever since. By 2015, whites earned an average hourly real wage of $25.22 compared to $18.49 for blacks, making for a 26.7% wage gap.

  
  You will find more statistics at Statista

  EPI cited discrimination and growing earnings inequality in general as the primary reasons for America’s huge racial pay gap. Which is odd considering that after 8 years of a black president things got worse faster… with the biggest jump (2.8 percentage points) in 36 years.

  

  Chart: Bloomberg

  

  

• Why Europe Secretly Roots For Donald Trump

  Submitted by Matthew Karnitschnig via Strategic-Culture.org,

  Careful observers of European politics might be forgiven for asking if — behind the exclamation of shock and horror over the prospect of a Donald Trump presidency — they don’t detect the occasional wry smile or hint of giddiness when the conversation turns to the U.S. Republican presidential candidate.

  To be sure, hardly a day goes by without some senior European official voicing grave concerns over the possibility that Trump might win the elections. European Parliament President Martin Schulz warned recently that Trump “would be a problem not just for the EU but for the whole world.”

  And yet, in some quarters at least, the Trump cloud carries with it at least a sliver of silver lining. No European politician will say so publicly, but to some on the Continent, Trump presents a once-in-a-generation opportunity for emancipation from American influence.

  To varying degrees, America-bashing has been a mainstay on both the Right and Left of European politics for decades. From GMOs to Guantanamo, from the drone war to the death penalty, European politicians have rarely had difficulty finding reasons to rail against the U.S.

  In fact, the evils of U.S. influence is one of the few things that European politicians from nearly every slice of the political spectrum can agree upon. In Germany, for example, one is just as likely to see an “Ami Go Home” (Ami is German slang for American) poster at a rally for the Left party as at a gathering of the far-right Alternative for Germany.

  Just as the EU served as a convenient whipping post for British politicians of all stripes in recent decades, culminating in the Brexit vote, the U.S. serves a similar purpose for many European politicians. Even those who profess a deep commitment to the transatlantic relationship often can’t resist using the U.S. as a rhetorical foil to deflect attention from their own vulnerabilities.

  As long as moderate politicians occupy the White House, anti-American politicians will find it difficult to turn their rhetoric into reality. A Trump presidency would force a rethink.

  Just last week, Jean-Claude Juncker, hailing the Commission’s crackdown on Apple’s Irish tax penalty in his State of the Union speech, declared: “Europe is not the Wild West.” Anyone listening knew that “Wild West” means America. “We are not the United States of Europe,” Juncker added, to applause from the assembled MEPs. “We are much more diverse in Europe and stronger.”

  Most Europeans at the center of Europe’s political spectrum genuinely fear the consequences of a Trump victory and a weakening of the Transatlantic relationship. But others smell an opportunity too good to be allowed to pass.

  As long as moderate politicians like President Barack Obama or U.S. Democratic candidate Hillary Clinton occupy the White House, anti-American politicians will find it difficult to turn their rhetoric into reality. A Trump presidency would force a rethink.

  Here are five reasons some European politicians are secretly rooting for Trump:

  The end of free trade: From the outset, European trade negotiators warned that anti-Americanism posed the biggest threat to a sweeping transatlantic trade deal. The Transatlantic Trade and Investment Partnership (TTIP), the free-trade pact being negotiated by the U.S. and Europe, has been on life support for months. A Trump victory wouldn’t just douse any remaining hope for success, it would put a stake through the heart of the negotiations.

   

  Opponents of the deal see it as the Trojan Horse of trade, designed to give U.S. companies even more influence in Europe. Trump has argued the opposite, that free-trade deals hurt American workers. The bottom line: a Trump victory would put a free-trade pact between the U.S. and Europe of any kind firmly off the table.

   

  The birth of an EU army: The U.S. has guaranteed Europe’s security for decades through NATO, effectively placing a giant security umbrella over most of the Continent. That reliance doesn’t sit well with everyone.

   

  Though Europe doesn’t have anywhere near the military resources of the U.S. (American military spending accounts for about 75 percent of the NATO total), politicians in France and Germany are eager to get to work on a European defense force. The idea isn’t new and faces myriad hurdles, mainly the question of how to finance it on Europe’s shoestring budget.

   

  Nevertheless, a Trump victory would give the initiative a major boost. As with the trade deal, Trump would likely be happy to let the Europeans fend for themselves. He has made no secret of his distaste for Europe’s reliance on the U.S. military. Conversely, few Europeans would welcome Trump as commander-in-chief. If he wins, proponents of a European army would finally have the compelling argument they’ve been looking for.

   

  Breaking up big brother surveillance: Europe’s most emotional gripe about American influence in recent years has revolved around mass surveillance. Edward Snowden’s revelations have convinced Europe that nobody — be it Angela Merkel or the man on the street — is safe from the NSA’s digital dragnet.

   

  Though the reality is somewhat less dramatic, that narrative has carried the day and many Europeans are convinced the U.S. is listening to their phone calls. Snowden, a man Trump argues should be executed, has become a modern-day Che Guevara for Europe’s youth. For all the transatlantic tensions around mass surveillance, Europe still cooperates with the U.S., mainly to get access to intelligence on Islamic terrorists. A Trump victory would be welcome news to those opposed to such cooperation.

   

  Cracking down on Wall Street: The influence of Wall Street banks in Europe has long been a bee in the bonnet of Europe’s anti-American elites and populists alike. No conspiracy theory about the eurozone debt crisis, for example, is complete without dark hints about suspected machinations in New York’s financial district.

   

  The recent brouhaha about former Commission president José Manuel Barroso joining Goldman Sachs illustrates the depth of the distrust. “Goldman Sachs was one of the organizations that contributed to the financial crisis in 2007-2009, so we wonder about this particular bank,” Juncker last week, explaining why he called for an investigation into Barroso’s move. Never mind that the EU has no specific ban on officials working for Goldman or that plenty of European banks, such as Deutsche Bank, also had a hand in the turmoil.

   

  Justified or not, the bottom line is that Wall Street is considered a toxic force in Europe. Politicians on the Left have had Wall Street banks in their sights for some time. A Trump win would present a good opportunity for a crackdown.

   

  Schadenfreude: The most powerful force driving Europe’s secret hopes for a Trump victory is simple schadenfreude. Most Europeans never bought the U.S.’s “city on a hill” claims of exceptionalism. And yet for decades, they’ve been subjected to American claims of moral superiority.

  Not only did the U.S. liberate Europe from fascism, it also freed the Continent from the clutches of communism, goes a common refrain. To more than a few Europeans, President Trump would prove that the U.S. is really no different than the Continent: just as dysfunctional, just as vulnerable to its basest instincts and just as susceptible to the false promises of a demagogue.

  

  

• New DHS Emails Reveal Efforts To Rush Citizenship Grants "Due To Election"

  Just a couple of days ago we noted that the Department of Homeland Security (DHS) had “mistakenly” granted citizenship to over 850 immigrants from “countries of concern to national security” even after they had been flagged for deportation by U.S. Immigration and Customs Enforcement (ICE) (see “DHS Admits “Mistakenly” Granting Citizenship To 858 Immigrants From ‘Countries Of Concern To National Security’“).  Now, newly disclosed DHS emails, indicating a rush to “process as many [citizenship] cases as possible due to the election year,” may help explain why so many “mistakes” were made. 

  A recent letter from Senator Chuck Grassley (R – Iowa) to the DHS, expressed concerns over the newly revealed emails and whether there may be efforts within U.S. Customs and Immigration Services (USCIS) to naturalize as many potential voters as possible before election day.  Per Grassley’s letter (which can read in it’s entirely below), someone in the Houston USCIS field office sent the following email to office staff asking employees to consider working overtime in order to process as many naturalization applications as possible before the election: 

  “The Field Office due to the election year needs to process as many of their N-400 cases as possible between now and FY 2016.”

   

  “If you have cases in this category or other pending, you are encouraged to take advantage of the OT if you can.  This will be an opportunity to move your pending naturalization cases. If you have not volunteered for OT, please consider and let me know if you are interested.”

  Another person within the Houston field office forwarded the message saying “it’s the end of the year crunch time!”

  “I couldn’t have said it better!  It’s the end of the year crunch time, so let’s get crunchy! Go Team Houston! Thanks for all your hard work!”

  Grassley’s letter to Jeh Johnson of the DHS, blasts efforts to hastily grant citizenship as “an attempt to create as many new citizen voters as possible.“

  “We write to express serious concern about an apparent push by your department to rush the adjudication of naturalization applications before the upcoming presidential election, presumably in an attempt to create aa many new citizen voters as possible.“

  Grassley also points out that this is not the first time efforts have been taken to rush the approval of citizenship applications for election purposes.  Apparently similar efforts were made ahead of the 1996 election when citizenship grants soared by nearly 4x.

  “Unfortunately, we have been down this road before.  In the year preceding the 1996 presidential election the Immigration and Naturalization Service (INS), the predecessor agency for USCIS, established the notorious “Citizenship USA” (CUSA) initiative.  Previously, the INS had been granting citizenship to 300,000 to 400,000 aliens per year, but under CUSA that increased to 1.1 million cases.  The apparent push to naturalize as many aliens as possible in time for them to vote in the election resulted in cut corners that endangered national security and public safety.”

  Any other election year this news might be shocking but this year, for some reason, we’re not terribly surprised.

  Watch the latest video at video.foxnews.com

   

  Senator Chuck Grassley’s letter to the Department of Homeland Security

  

  

• State Street: "Move Over Zero Hedge, There Is A New Bear In Town"

  By Mr. Risk – State Street Global Markets

  

  Unleash Volatility Beast

  Thanks for nothing, central banks!

  1. If central banks provided the prototypical inflection point, risk assets should get destroyed next week.
  2. Feast your eyes on a compendium of volatility charts. The beast wants out.
  3. Keys to watch: DXY, EURAUD, and 10-year yields. Move over ZEROHEDGE. There is a new BEAR in town,

  * * *

  Ahead of the BOJ and Fed meetings, volumes slowed to a trickle, traders got back to flat, and algos reached for the offswitch. Now that event risk is in the rear view mirror, it is time to vote. Buy-the-dip or ‘‘sell everything?’’ If classic market reflexes are in play, a market meltdown following the passing of event risks is by far the more likely outcome. That US equities launched higher is nothing, because it  always does that on Fed day. The obligatory central bank forensic is a good place to begin.

  Expectations as measured by overnight volatility ahead of the BOJ were the third highest in 3-years. Notably, 7 out of the 10 highest readings have occurred in 2016, which says something about the growing perception about policy failure. Expanding monetary base has not delivered higher inflation expectations or a weaker currency. Just about every 2016 meeting USDJPY sunk like the proverbial stone.

  The ‘‘monetary assessment’’ conducted by the BOJ was an admission that QQE was unsustainable, and needed to be tweaked. Plan B is ‘‘QQE with yield curve control.’’ No, that is not a new shampoo. Here is the stripped down ghetto-economist version.

  1. Negative interest rate
  2. Stabilize 10-year yields at 0%
  3. Keep asset purchases at ¥80 tn/year
  4. Abandon monetary base target
  5. Aim to overshoot the 2.0% inflation target
  6. Rebalance ETF by buying less Nikkei 225 linked ETFs and more Topix, removing a well-flagged distortion.

  On the day, Topix banks were big winners (6.97%) versus Topix (2.7%). Not going negative and signalling a steeper curve was reasons to celebrate. As for yen it was rinse, repeat. Ostensibly ease, watch the currency weaken for a nanosecond before a violent reversal. Collectively, it was along the lines of ‘‘hey, its BOJ day, aren’t we supposed to sell USDJPY? What the heck is it doing above 102? Sell it.’’ As for the boldness of the policy these are Mr Risk’s conclusions:

  1. Policymakers have not lost their appetite for untested monetary experimentation.
  2. Pure Krugman — credibly promise to be irresponsible.’’
  3. It’s radical. The question is how credible.
  4. On the flipside: BOJ opens the door to ‘‘stealth tightening’’, as one commentator worries.

  Inviting an inflation overshoot when not a single economist believes that the BOJ will achieve its 2.0% inflation target in FY 2017 sounds like a sick joke, but really it is a radical. Even more radical is the commitment to hold JGB 10-year yields at zero. If inflation is rising as the economy heats up, they are pledging to cap nominal 10-year yields and thus keep lowering real rates, adding juice to the inflation trend. Alternatively, what happens if the global factor driving all global bond yields goes even lower? Then BOJ has committed to selling JGBs, thereby tapering and draining liquidity. This could get interesting.

  In the Q&A, Kuroda talked about the unwanted negative impacts on credit creation from yield curve flattening. It hurts banks NIM and threatens pension funds ability to deliver on promises. The BOJ wants to steepen the curve, but not by increasing longer yields because that is a monetary tightening. By deduction the market factors in a lower deposit rate going forward. FX traders don’t like it, but bank stocks might. Perhaps that links the two different outcomes.

  Confused? Tim Graf says the BOJ embraces uncertainty. That nails the zeitgeist. The world just got a little crazier and a little more dangerous. Central banks need to learn that when you are in a hole, stop digging.

  Mr Risk’s takeaway is in line with Greg Ip’s who said ‘‘central banks have shown the will to hit their growth and inflation targets but do they have the way?’’ Read his article. Central bank tools are losing their edge. The BOJ gets full marks for monetary experimentation, but investors are increasingly set to question why previous innovations have fallen short. This marks the most worrying thing possible, namely, the popping of the central bank bubble.

  YELLEN: NOTHING TO SEE HERE

  The headline is ‘‘open warfare’’ at the Fed with three Fed Presidents voting for a hike, the first time that three members have dissented in favour of tighter policy since September 2011 under previous Chairman Bernanke, before that it was 1990. Lee Ferridge pens the analysis with a cheeky title: We will hike in December; honest we will. In the most simplistic terms it appears as if the Brainard stock went up. Let the labour market run hot carried the day.

  Forget the ‘‘dots.’’ Put no stock in the idea that the Fed makes the case for a year-end hike, as argued by Hilsenrath. Uncertainty ahead of the election is the real reason the Fed stood pat, fearing what might happen to financial markets and economic data if ‘‘the Donald’’ wins.

  In the medium term, the issue with the ‘‘dots’’ boils down to a credibility problem. Michael Metcalfe writes that the ‘‘FOMC is caught in a potentially vicious circle. The market has had a run where it appears to be a better forecaster of the policy rate than the FOMC. This limits the ability of FOMC to guide market expectations because the market believes it knows better. If policy makers are then unwilling to surprise the market, as they have been historically, this reinforces the market’s better run at forecasting the policy rate and makes it even harder for the policy makers to guide expectations.’’

  

  Now something interesting that many may not know. While a dissent from Fed Presidents happens quite a lot, only three times have Fed Governors dissented. Even more interesting is the power to change rates rests with the 5 Governors — Yellen, Fischer, Tarullo, Powell and Brainard. That is not a typo. Yes just these five. The Financial Services Regulatory Relief Act of 2006 amended the 1913 Federal Reserve Act to give the Fed the authority to pay interest on reserves beginning Oct 1, 2011. Did you know that it is only these 5 Fed Governors who have the power to set the rate of interest of excess reserves? Now that is interesting right?

  After a press conference with plenty of the usual waffle, financial markets do what they always do on Fed day; they rallied. So far it’s carrying on today, giving the buy-the-dip crowd something to crow about.

  

  TECHNICAL DOLLAR

  DXY is setting up for a monster move. It can go either way, but there is an excellent chance this launches higher. It’s not like the Fed can do anything more on the policy front to crush it. Moreover, the a-b-c-d-e triangle may resolve higher in an explosion of volatility. Mr Risk is in wait mode. Let market forces tell us which way it breaks.

  

  BULL LOGIC

  While trolling Twitter, Mr Risk came across the following from Anil@anilvohra69. You just have to laugh at fitting the facts to the story or is it the story to the facts, Mr Risk forgets.

  Yields

  • High yields signal stronger growth
  • Low yields make stocks more attractive via a lower-discount rate.
  • Either way, buy stocks

  Volatility

  • Low volatility is good — it reflects confidence
  • High volatility is good — as it declines stocks rally
  • Either way, buy stocks

  Oil

  • Low oil is a tax cut for consumers
  • Higher oil boosts investment
  • Either way, buy stocks

  DISTURBING FUN FACTS

  • Factset reports S&P500 quarterly buybacks declined 6.8% y-o-y% in Q2 to $125 billion. This is uber-positive for volatility as buybacks are one of the key variables suppressing it.
  • The last day of summer (21 Sept, or if a weekend, the previous trading day) has only 4 previous times since 1994 been an up day. Yesterday made it 5.
  • The week after September options expiration has only been higher 4 times in the last 26 years or (15% of the time). It is down 1.1% on average. That does not bode well for Friday.
  • What does 2016 have in common with 1986, 1990, 2001, and 2008? Bloomberg story says: falling profit margins, LMCI negative 12-month change, Capex negative, and Speculative grade defaults above 5.5%. Only 1986 escaped recession, but remember that energy consumption share was larger and we did not have shale production.
  • The $400bn risk parity is in the crosshairs. It is estimated that there could be ‘‘$50bn of bond selling from risk parity type investors.’’ Read this: is the latest risk-parity blow up just starting and is a VaR shock just starting: here is the checklist. Honestly, this is one of the hottest topics right now.

  UNLEASH THE VOLATILITY BEAST

  If central bank bubble is popping then all of these following charts might actually mean something. If not, they are just a bunch of charts that look incredible but mean nothing. Let the reader decide.

  Let’s begin with the 1-year average of the VIX which catches the long cycle. It shows the two phases. Below 16, is benign, above 16 is disturbing. It has popped above the threshold and if history repeats is in the beginning of the high volatility phase which can last for the next year.

  

  The 3-month change in S&P 12-month forward earnings peaked in July (2.76%), turning down in August (2.20%). ISM points to a further decline. This is pointing to a higher VIX reading.

  

  Profit margins have declined 8 quarters on the trot. Consequently, the corporate financing gap has turned south which means increased dependence on external sources of liquidity, aka, debt. In the past such moves in the financing gap signal a downturn as well as boost the VIX.

  

  What is absolutely critical for unleashing volatility is a US or global recession. Expansions are not supposed to die of old age, but nonetheless the current expansion is the 4th longest based on NBER dating. There is a plethora of economic and financial series pointing towards recession. A full piece on that is on the ‘‘to-do’’ list.

  

  The yield curve slope adjusted for the level of yields warns of recession. Keen followers of demographics like Mr Risk’s pal Michael Green (Ice Farm Advisors) argue that the incentives are set to disappear to work past 70.5 years from a Social Security benefits standpoint. This is critical. The baby boom began in 1946. Do the math. Add 70.5 to 1946 and you get 2016.5. What do retirees not do? They don’t work. They don’t spend. Still not convinced? Consider the Social Security Act was passed August 14, 1935. While not the primary reason for the 1937-38 recession, payroll taxes were first collected in 1937. These things matter.

  

  The flattening yield curve slope (3m-10y) is another useful indicator when advanced 2-years against the VIX.

  

  The Fed’s Senior Loan Survey percent of banks tightening lending standards points to the beginnings of a credit crunch. Wait, are you saying that we should worried about not just energy loans, but car loans and commercial property loans? Oh, this is starting to get interesting.

  

  If that chart did not get the visceral juices flowing, wait for this next one. C&I delinquency rates deviation from its 12- month average not only is ripping higher but in fact hit the worst readings of all time. When will the VIX wake up?

  

  Markets are interconnected. Positive SPY/TLT says there is little diversification value, which adds to pressure to deleverage positions.

  

  SEXY SEPTEMBER SEASONAL

  2016 Dow price action is tracking the 1900-2012 Presidential-cycle September returns like a glove. Note that the real serious waterfall style declines are historically next week, which by the way coincides with the Trump-Clinton first debate. Also note that the incredible fit to the historical trend so far this month.

  

  USDJPY — GET A GRIP

  Normally, we expect USDJPY to behave in line with US 10-year yields, the Nikkei and volatility. For one of the longest stretches in a while, this currency pair has misbehaved. Mr Risk is sending it to its room with no dinner, no Facebook, and taking away its stash of Cohibas. More seriously, this persistence dislocation speaks to positioning, top side export sellers, and ultimately a lack of faith in the BOJ to deliver  a weaker currency. Hope springs eternal for this USDJPY bull!

  

  

  

• "FBI Is Handing Out Deals Like Candy" – Cheryl Mills And 2 Other Clinton Aides Get Immunity

  We’re beginning to think the entire FBI investigation into Hillary’s private email servers was just a ruse to grant immunity to her entire staff.  According to the AP, the House Oversight Committee has just learned that Hillary’s top aide, Cheryl Mills, was also granted immunity along with John Bentel (Director of the State Department’s Office of Information Resources Management) and Heather Samuelson (Clinton aide). 

  For those of you keeping count, we are now aware of a total of 5 immunity deals offered to people directly involved in the Hillary email scandal:

  Cheryl Mills – Clinton’s top aide

  Heather Samuelson – Clinton aide

  John Bentel – Director of the State Department’s Office of Information Resources Management

  Bryan Pagliano – Clinton technology aide

  Paul Combetta – Platte River Networks

  The Chair of the House Oversight Committee, Jason Chaffetz (R-Utah), expressed his complete disbelief over the number of immunity deals granted in this investigation.  Per The Hill, Chaffetz said that he has “lost confidence in this investigation” noting that “immunity deals should not be a requirement for cooperating with the FBI.”

  “This is beyond explanation. The FBI was handing out immunity agreements like candy,” House Oversight Committee Chairman Jason Chaffetz (R-Utah) said in a statement.

   

  “I’ve lost confidence in this investigation and I question the genuine effort in which it was carried out. Immunity deals should not be a requirement for cooperating with the FBI.”

  The latest immunity discoveries were first revealed by the AP in the following tweet:

  Congressman: FBI gave immunity to Hillary Clinton’s ex-chief of staff, Cheryl Mills, in now-closed email case. https://t.co/gDb60PH2Gt

  — The Associated Press (@AP) September 23, 2016

   

  For those of you who “do not recall” the specific involvement of Cheryl Mills and Heather Samuelson in the Hillary email scandal, here is brief recap.

  Shortly after providing the initial set of Hillary’s emails to the State Department, in “December 2014 or January 2015,” both Heather Samuelson and Cheryl Mills requested that all emails be removed from their computers using “a program called BleachBit to delete the e-mail-related files so they could not be recovered.” 

  Per the excerpt below from the FBI’s investigation notes, Mills was also the Clinton aide who instructed Paul Combetta (the “Oh Shit” guy) to “modify [Hillary’s] e-mail retention policy” to 60 days…in other words get rid of everything. 
  

  

   

  Can the FBI just save us all some time and admit that literally everyone interviewed in this case received an immunity deal from the DOJ?

  

  

• How Trump Wins The Debate

  Having earlier heard president Obama's advice for how Hillary Clinton can win the debates, Patrick Buchanan offers his advice to Donald Trump…

  

  On one of my first trips to New Hampshire in 1991, to challenge President George H. W. Bush, I ran into Sen. Eugene McCarthy.

  He was returning to the scene of his ’68 triumph, when he had inflicted the first crippling wound on Lyndon Johnson.

  “Pat, you don’t have to win up here, you know,” he assured me. “All you have to do is beat the point spread.”

  “Beat the point spread” is a good description of what Donald Trump has to do in Monday night’s debate.

  With only a year in national politics, he does not have to show a mastery of foreign and domestic policy details. Rather, he has to do what John F. Kennedy did in 1960, and what Ronald Reagan did in 1980.

  He has to meet and exceed expectations, which are not terribly high. He has to convince a plurality of voters, who seem prepared to vote for him, that he’s not a terrible risk, and that he will be a president of whom they can be proud.

  He has to show the country a Trump that contradicts the caricature created by those who dominate our politics, culture and press.

  The Trump on stage at Hofstra University will have 90 minutes to show that the malicious cartoon of Donald Trump is a libelous lie.

  He can do it, for he did it at the Mexico City press conference with President Pena Nieto where he surprised his allies and stunned his adversaries.

  Recall. Kennedy and Reagan, too, came into their debates with a crucial slice of the electorate undecided but ready to vote for them if each could relieve the voters’ anxieties about his being within reach of the button to launch a nuclear war.

  Kennedy won the first debate, not because he offered more convincing arguments or more details on the issues, but because he appeared more lucid, likable and charismatic, more mature than folks had thought. And he seemed to point to a brighter, more challenging future for which the country was prepared after Ike.

  After that first debate, Americans could see JFK sitting in the Oval Office.

  Reagan won his debate with Carter because his sunny disposition and demeanor and his “There you go again!” airy dismissal of Carter’s nit-picking contradicted the malevolent media-created caricatures of the Gipper as a dangerous primitive or an amiable dunce.

  Even George W. Bush, who, according to most judges, did not win a single debate against Al Gore or John Kerry, came off as a levelheaded fellow who was more relatable than the inventor of the internet or the windsurfer of Cape Cod.

  The winner of presidential debates is not the one who compiles the most debating points. It is the one whom the audience decides they like, and can be comfortable taking a chance on.

  Trump has the same imperative and same opportunity as JFK and Reagan. For the anticipated audience, of Super Bowl size, will be there to see him, not her. He is the challenger who fills up the sports arenas with the tens and scores of thousands, not Hillary Clinton.

  If she were debating John Kasich or Jeb Bush, neither the viewing audience nor the title-fight excitement of Monday night would be there. Specifically, what does Trump need to do? He needs to show that he can be presidential. He needs to speak with confidence, but not cockiness, and to deal with Clinton’s attacks directly, but with dignity and not disrespect. And humor always helps.

  Clinton has a more difficult assignment.

  America knows she knows the issues. But two-thirds of the country does not believe her to be honest or trustworthy. As her small crowds show, she sets no one on fire. Blacks, Hispanics and millenials who invested high hopes in Barack Obama seem to have no great hopes for her. She has no bold agenda, no New Deal or New Frontier.

  “Why aren’t I 50 points ahead?” wailed Hillary Clinton this week.

  The answer is simple. America has seen enough of her and has no great desire to see any more; and she cannot change an impression hardened over 25 years — in 90 minutes.

  But the country will accept her, if the only alternative is the Trump of the mainstream media’s portrayal. Hence, the strategy of the Democratic Party for the next seven weeks is obvious:

  Trash Trump, take him down, make him intolerable, and we win.

  No matter how she performs though, Donald Trump can win the debate, for he is the one over whom the question marks hang. But he is also the one who can dissipate and destroy them with a presidential performance.

  In that sense, this debate and this election are Trump’s to win.

  

  

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• Italy Is The EU's Weakest Link

  Authored by George Frideman via MauldinEconomics.com,

  German Chancellor Angela Merkel, French President François Hollande, and Italian Prime Minister Matteo Renzi met Aug. 22 on an Italian aircraft carrier. They said they were meeting to talk about European policy after Brexit. The real discussion was about Italy’s economy and the steps needed to revive it.

  The EU’s Integrity Is in Question

  The location of their meeting is notable. It is a more militaristic location than Europeans normally prefer. The choice is even more interesting in light of the rumors that Germany might resume the military draft.

  The US has been increasingly critical of Europe’s contribution to NATO. The EU’s GDP is larger than that of the US, but the EU’s contribution to its own defense does not reflect that fact. Europe’s limited militaries make it dependent on the US.

  Holding the meeting on the aircraft carrier was meant to show that Europe has some defense capability. But it also shows how Brexit diminishes the EU’s military power. It was a good place to have a meeting as European unity is in question, with Italy as a weak link.

  Italy’s Crisis Is Worsening

  Italy’s economy is weak. There is no growth. The banking system is in bad shape. Unemployment is high. There is substantial public unrest, and Renzi’s standing is weakening. Italy has been somewhere between recession and stagnation since 2008. After eight years, the situation shows no signs of improving.

  The Italians want to run a substantial budget deficit to stimulate the economy. The EU operates under a “stability pact.” This requires countries to keep deficits within certain limits but allows for exceptions.

  France has operated outside the boundaries of the stability pact for years. Spain and Portugal were given exceptions as well. As Merkel put it, “The stability pact has a lot of flexibility, which we have to apply in a smart way.”

  I’m not sure what “a smart way” looks like, but the issue does not apply to Italy. Renzi said, “Italy’s deficit has been at the lowest level of the last ten years.” He said that he “would go ahead with structural reforms and deficit reductions for the good of [Italy’s] children.”

  In other words, Renzi said that he would further tighten spending. Merkel called his stance “courageous.” Hollande mentioned that the UK’s decision to leave the EU at some point in the future “requires a response by EU leaders.” Merkel agreed that they need to “deliver results.”

  She was not clear on what those results would be.

  Renzi’s Motives

  Increased austerity has not worked in eight years. Accepting that Renzi is not insane, it is hard to understand why he thinks this move will work any time soon.

  Merkel conceded that these actions “won’t show results in four weeks, but it sets the parameters for a sustainable and successful Italy.” No one expects it to work in four weeks, but the question is why it should work at all.

  This means the Germans and French are going to use Brexit to explain why increased austerity is needed. It is not clear to me how Brexit leads to austerity, but Merkel seemed to be saying that. Also, Merkel made it clear that the European Commission might be willing to accommodate Renzi.

  But Renzi’s proposed strategy hardly begs for accommodation. Renzi, who was seen as a maverick in Europe, is now being more austere than required. If Merkel offers congratulations, she has gotten everything she wants.

  Part of this might be political gamesmanship. Renzi needs a victory. He could propose deep austerity and then demand concessions from the EU Commission. Once granted, he can be hailed as a tough negotiator.

  But he would be bargaining against his own budget. Politics is strange enough that he might pull it off. An alternative is that by conceding this point, he is setting up an EU concession on the banks. That is pure guesswork, as there wasn’t a hint of it in the talks.

  Nationalism in Italy Is on the Rise

  In either case, the budget will be extremely unpopular and impose several more years of austerity. It will generate an exit movement, with proponents arguing that EU-imposed austerity caused these problems in the first place. The faster they get out of the EU the better.

  For all I know, maverick Renzi lives, and he is doing this to trigger this movement. But whether or not he favors leaving the EU, there will be a movement as a result of this budget.

  The argument for staying in the EU will be that Italy can’t get better without the EU. The argument for leaving the union will be that Italy will never get better if it stays.

  In any case, the malaise that has gripped Italy for years will continue. It is important not to expect solutions in four weeks.

  The problem with European unity is that after eight years, no one expects an improvement in four weeks. The question is whether this is the permanent condition of Europe. Perhaps this is the best Italy will do for a long time.

  The scene on the aircraft carrier was designed to remind everyone that Europe has military power and to legitimize European unity in the face of Britain’s decision to leave. But it is not clear whether the Italian public will applaud or demand that the carrier be sold.

  It isn’t clear that Italy will choose to leave by any means. But it is clear that the Italian economic crisis is not on its way to clearing up.

  *  *  *

  Watch George Friedman’s Ground-breaking Documentary Crisis & Chaos: Are We Moving Toward World War III?

  

  

• German Politicians Are Getting Nervous About Deutsche Bank

  Just a few short days after Germany’s premier financial publication Handelsblatt dared to utter the “n”-word, when it said that in the aftermath of last week’s striking $14 billion DOJ settlement proposal, “some have even raised the possibility of a government bailout of Germany’s largest bank, which would be a defining event and a symbolic blow to the image of Europe’s largest economy”, German lawmakers are finally starting to get nervous.

  According to Bloomberg, Deutsche Bank’s suddenly troubling finances, impacted by the bank’s low profitability courtesy of the ECB’s NIRP policy as well as mounting legal costs courtesy of years of legal violations, “are raising concern among German politicians.” At a closed session of Social Democratic finance lawmakers on Tuesday, Deutsche Bank’s woes came up alongside a debate over Basel financial rules. Participants discussed the U.S. fine and the financial reserves at Deutsche Bank’s disposal if it had to cover the full amount.

  

  While the participants in the meeting did not reach any conclusions on the likely outcome, the discussion signals that the risks facing Deutsche Bank have the attention of Germany’s political establishment. Which means it’s almost serious enough where the politicians, in the parlance of Jean-Claude Juncker, “have to lie” or in this case redirect attention, ideally abroad: the German Finance Ministry last week called on the U.S. to ensure a “fair outcome” for Deutsche Bank, citing cases against other banks where the government settled for reduced fines.

  Actually lying also works: on February 9 German Finance Minister Wolfgang Schaeuble told Bloomberg Television that he has “no concerns about Deutsche Bank.” That has probably changed.

  The solvency problems facing Germany’s biggest bank have been widely documented: it is already ranked among the worst-capitalized lenders in European stress tests before U.S. authorities demanded $14 billion as an RMBS settlement, more than twice the €5.5 billion the bank has set aside for litigation and almost 80% of the bank’s market cap. Also, as we pointed out first in 2013, and as Matteo Renzi takes every chance to remind Germany, Deutsche Bank has a gargantuan €42 trillion in gross notional derivatives on its balance sheet. Just this week, the Italian PM told Bundesbank chief Jens Weidmann not to worry so much about Italy’s massive debt load but instead to solve the problems of German banks which had “hundreds and hundreds and hundreds of billions of euros of derivatives” on their books.”

  But what may be most troubling is not what German politicians are talking about behind closed door, but what they are not talking about in public. Bloomberg notes that Merkel’s government is now maintaining a public silence on Deutsche Bank’s woes. Then again, what is there to say: if DB is indeed approaching the cliff, any discussion of the bank would only lead to more concerns about the bank’s viability. There was some discussion of DB, however, during a September 16 meeting of Germany’s Financial Stability Committee, a group of German finance officials and regulators, whose members concluded that the fine demanded by the U.S. government would probably be lowered, Handelsblatt newspaper reported. In other words, hope is once again a strategy. Sadly, when it comes to banks with multi-trillion balance sheets, this may not be the best approach.

  And just to make sure that German politicians have even more to talk about, earlier today the Brussels-based Single Resolution Board, the resolution authority for 142 banks (including Deutsche Bank) warned that EU bank may need rescue funds equaling twice their ECB capital.  As Bloomberg reported today, requiring banks to have at least that same amount as the minimum capital requirement set by the ECB in loss-absorbing liabilities will ensure that they can recapitalize themselves quickly after restructuring, SRB head Elke Koenig said.

  The European Banking Authority said in July that the region’s banks may need as much as 470 billion euros ($524 billion) in additional MREL-eligible funding under conditions similar to those cited by Koenig. The EBA sample consisted of 114 banks representing 70 percent of the EU’s banking assets, including lenders not overseen by the SRB.

  And the bulk of these funds will have to be procured by Europe’s largest bank: Deutsche Bank.

  

  

• Who Is Behind The Riots? Charlotte Police Says 70% Of Arrested Protesters Had Out Of State IDs

  Confirming what many had suspected when viewing the sudden and intense collapse into anrchy that occurred in Charlotte this week, Todd Walther, spokesman for the Charlotte-Mecklenburg Fraternal Order of Police told CNN's Erin Burnett:

  "This is not Charlotte that's out here.  These are outside entities that are coming in and causing these problems. These are not protestors, these are criminals."

   

  "We've got the instigators that are coming in from the outside.  They were coming in on buses from out of state.  If you go back and look at some of the arrests that were made last night.  I can about say probably 70% of those had out-of-state IDs.  They're not coming from Charlotte."

   

  #Charlotte police: 70% of arrested protesters had out of state ID's, outside entities are causing these problems https://t.co/Kwya2xXerk

  — OutFrontCNN (@OutFrontCNN) September 22, 2016

   

   

   

  As shocking as this statement is, it should not be a total surprise. 18 months ago, as the riots flared in Ferguson, there was one man pulling the strings of this 'domestic false flag'… George Soros. In an apparent effort to  "keep the media’s attention on the city and to widen the scope of the incident to focus on interrelated causes — not just the overpolicing and racial discrimination narratives that were highlighted by the news media in August," liberal billionaire George Soros donated $33million to social justice organizations which helped turn events in Ferguson from a local protest into a national flashpoint.
  
  As The Washington Times explains,

  There’s a solitary man at the financial center of the Ferguson protest movement. No, it’s not victim Michael Brown or Officer Darren Wilson. It’s not even the Rev. Al Sharpton, despite his ubiquitous campaign on TV and the streets.

   

  Rather, it’s liberal billionaire George Soros, who has built a business empire that dominates across the ocean in Europe while forging a political machine powered by nonprofit foundations that impacts American politics and policy, not unlike what he did with MoveOn.org.

   

  Mr. Soros spurred the Ferguson protest movement through years of funding and mobilizing groups across the U.S., according to interviews with key players and financial records reviewed by The Washington Times.

  Still not buying it? As The New American recently reported, Ken Zimmerman, the director of U.S. programs at Soros’s Open Society Foundations (OSF), denied last year that Soros had funded BLM, saying it was just a rumor. 

  That was before hackers with DCLeaks.com published OSF documents showing that the Soros group had already given at least $650,000 directly to BLM.

   

  Those same documents reveal the reason for OSF bankrolling BLM: the “dismantling” of America so that it can be recast according to the vision of Soros and his leftist cohorts.

   

  The communist-on-its-face nature of these and other demands of the organizations under the BLM umbrella are a clear indicator of the real intent of BLM. The deep-pocketed funding by the likes of Soros, the Center for American Progress, the Ford Foundation, and Borealis Philanthropy show that BLM is the means, not the end.

   

  BLM is little more than a tool of social revolutionaries hell-bent on destroying America so they can build their long awaited dystopia which they attempt to pass off as a utopia.

  So with Hillary's poll numbers decling rapidly, and a debate looming that she would desperately like to be focused on domestic division as opposed to every email, pay-to-play, foreign policy misstep, and cough or stumble she has taken; is anyone shocked that 'out of state' protesters would turn up in Charlotte suddenly turning a peaceful but angry protest into tear-gas-filled deadly riots? And who is a big donor to Clinton?

  George Soros: $7 million

  

  Financier George Soros founded what would become the Quantum Fund in 1969 with $12 million. According to the Bloomberg Billionaires Index, he's now worth $24.7 billion and continues to invest through Soros Fund Management, a family firm. As a political donor, Soros has been mercurial. In 2004, he contributed $23.5 million to organizations opposing George W. Bush's reelection effort. In 2008, he donated $2,300 to both Clinton and Barack Obama, and that was it. Soros's Open Society Policy Center, the advocacy arm of his philanthropic network, spent $8.2 million on lobbying Washington in 2015. It focuses on international human rights, immigration, foreign aid, public health and criminal justice reform, among other issues. Since 2003, Soros has contributed $54 million to federal candidates and committees.

   

  

  

• Bill Fleckenstein Slams CNBC "Jerk" – "Don't Get In My Face Because I Won't Join Your Party"

  Having been invited on to CNBC to discuss his views of the market, famous short-seller Bill Fleckenstein explained rather eloquently that QE4 is coming and people will wake up to the fact that central bankers “are the arsonists that create the fire, not the firemen that put it out.” This non-mainstream view was treated with disdain by CNBC host Tim Seymour who slammed Fleckenstein for “missing out” on the “artificial market’s” (because even CNBC now admits that’s what it is) gains. The response was epic.

  “Don’t be such a jerk… I don’t ask to come on this show, you invited me… and don’t get in my face because I won’t join your party…”

  Enjoy:

  

  

• Dear Obama, How Does A 60% Increase In NYC Homelessness Constitute A Recovery?

  Last week, we wrote a post entitled “Harvard Crushes The “Obama Recovery” Farce With 9 Simple Charts” in which we reviewed a report from Harvard Business School on the true health of the U.S. economy.  Given the title, it’s probably not terribly surprising that Harvard was somewhat “underwhelmed” with the Obama recovery after taking a multi-decade look at various economic metrics like labor force participation rates, new business formation, productivity and real household income. 

  Now, courtesy of data from the New York City Department of Homeless Services, we have a couple of additional charts to add to the list like the one below that shows a ~60% increase in the number of NYC families living in homeless shelters over the past five years.  Aside from an increse during the “great recession”, the number of New York City families living in homeless shelter remained fairly constant at around 8,000 from July 2008 through July 2011.  That said, over the following 5 years beginning in August 2011 through today, NYC has experienced a nearly 60% increase in the number of families living in homeless shelters to nearly 13,000. 

  Ironically, the increase in homelessness experienced during the “great recession” was just a blip on the radar compared to the past five years as residential rental rates in NYC have soared.  

  

   

  Alternatively, we offer up the following statistics from Mayor Bill De Blasio’s Fiscal 2016 “Mayor’s Management Report” highlighting a 42% increase in applications for “Emergency Rent Assistance” from New York City families at risk of losing their housing. 

  

   

  If this is what a “recovery” looks like to Obama we would certainly like to better understand how he would define a recession.

  

  

• Un-Becoming American – One Man's Painful Journey To Renouncing Citizenship

  Submitted by 'Kevnice' via ForeignByNature.com,

  In April 2012, I returned to Switzerland – my country of birth – to commence a new phase of my adult life.

  Naturally, one of the first steps to undertake when establishing oneself in a new country is to open a bank account.

  I went down to the local Raiffeisen bank branch in the village of Aesch, Luzern, where my relatives and ancestors had lived and worked as farmers for over 10 generations.

  At the bank I received the standard application forms required to open a basic checking account. The form asked me about my nationality. I marked Swiss as my nationality, and the United States as my second nationality.

  The clerk reviewed the forms I had submitted. After careful consideration and some internal discussion she said, “I am sorry, we cannot open a bank account for you because you are a US citizen”.

  “But I am a Swiss citizen!” I complained, in Swiss-German.

  “I know, but you have the US nationality. Earlier this month we received a directive from top management not to open any more accounts for US passport holders, even if they are also Swiss. I am really sorry, but we cannot do anything for you”, she said.

  I left the bank angry and confused.

  I checked with several other banks. It was the same story with all of them.

  I told the story to my Swiss relatives. They all had the same reaction: “But you’re Swiss!”

  Nobody could understand.

  At that time I was completely ignorant of FATCA, the global taxation of US citizens, the requirement to report foreign bank account balances over 10,000 USD to the US Treasury (FBAR), and all these compliance matters that – at least among US expats – have become hot button topics in recent years. I left the US at the age of 22 after university, never having really worked there beyond the part time student job, and had been living in Japan and Taiwan for the previous 7 years teaching English before moving to Switzerland.

  It’s not as though the US government gives you an exit interview when you leave the country, explaining to you how to comply with all of their cumbersome laws. The burden is on you – the taxpayer – to inform yourself, or face heavy penalties – up to $10,000 for each year of non-compliance.

  You’re guilty until proven innocent.

  Suddenly, I realized that I had technically been non-compliant with the US for years, although I never made much money.

  I was furious. What right did the US government have to try to tax me or make me declare anything to them, not having lived there for almost 10 years? No other developed country in the world requires this. I didn’t make enough money to actually have to pay US tax (you can exclude around $100K as foreign income), but the very principle of having to comply enraged me.

  This was when I first considered renouncing my US citizenship.

  I contacted the embassy in Bern, who quickly sent me an information package. All I had to do was back-file five years of returns (I could exclude all my earnings from US taxation), make an appointment at the US embassy in Bern, and pay a $450 administration fee. As I was already a citizen of Switzerland at birth I wouldn’t have to pay any exit tax. It only took 2-3 weeks to receive an appointment. It seemed quick and easy.

  However, I hesitated.

  What about my mother? She still lived in the US. What if she got sick or something? What if Switzerland or Europe becomes a terrible place to be in the future? What if the EU breaks up?

  I thought it might be wise to keep my US citizenship, just in case. A second nationality is like an insurance policy against economic and social decline in the country of your first nationality.

  But what to do, exactly? Should I go through the rest of my life outside of the US lying about it, maintaining that I am only Swiss?

  I had been non-compliant for years already and had never heard anything from the US authorities. Maybe I could just continue under the radar forever?

  Or should I just swallow my dignity and comply with all their rules? I only had to file a simple tax return and the FBAR form. As mentioned, I made too little money to owe tax anyway.

  How did this concern my wife? What happens when we have children, and I die – wouldn’t they have to pay US inheritance tax on everything I owned? What would be the point of keeping US citizenship if I wasn’t planning on passing it on to my children?

  I went back and forth like this in my mind for a couple of years. I couldn’t make a decision. I did not want to lie for the rest of my life, but neither did I want to comply.

  Then in September 2014 came the tipping point for me: The US State Department raised the administration fee for renunciations by 522%, from $450 to $2,350!

  I realized then that I was dealing with a criminal institution. They were the Mafia – either pay protection money your whole life, or pay one lump sum to get out.

  What was preventing them from deciding to raise the fee to $5,000, or even $10,000?

  Nothing prevents them. They could do whatever they wanted. There had been record numbers of renunciations over the past few years. It was good business. It’s not like there existed a powerful expat lobby in Washington pressuring them to change their policies on renunciation.

  Rage took hold of me again. I was also angry at myself for hesitating on my first instinct and that my hesitation would cost me $2,000.

  I let my rage stew for a few months. I researched the various forms of relinquishment, to see if I could find a way out of paying the fee (Renunciation is one type of relinquishment, and certain types of relinquishment do not require payment of the fee).

  However I wasn’t ready to pledge allegiance to al-Qaeda and none of the other situations or criteria applied to me, so I finally bit the bullet and made an appointment for renunciation.

   

  The Administrative Process Begins

  My appointment was set at the embassy in Bern for February 20, 2015.

  I had been told by the embassy beforehand that it generally took 2-3 months to process the Certificate of Loss of Nationality (CLN), the document which officially states that you are no longer a US citizen.

  A few days before my appointment, I went to a networking event where I spoke with two insurance professionals who served foreign clients. They both related stories to me of US citizens in Switzerland that had renounced their citizenship. For one client it took the government 1 year to process his CLN. The other client had renounced 18 months earlier and still hadn’t received his CLN.

  What the hell was going on?

  February 20^th arrived. My appointment was at 3 pm so I took the afternoon off work and headed to Bern.

  It was an unseasonably warm and sunny day. People relaxed on benches and parks throughout the city as I walked. The sapphire blue sky was completely clear of clouds and there was no haze. You could see the awe-inspiring Alps in the distance with total clarity, the glimmering snowy tops providing a stunning backdrop to the gorgeous architecture of Bern.

  I was early for my appointment so I relaxed in one of the parks near some teenagers. I wished I could worry about music and girls and who was cool in school instead of fretting over nationality and tax compliance. I collected my thoughts.

  I went to enter the embassy about 15 minutes before my appointment. There were several US flags flying outside. I felt no emotion when I looked at them.

  The entrance was guarded by some kind of African military guy wearing a bulletproof vest who opened the door after I rang a bell.

  I had my work laptop with me. He gestured toward my laptop bag.

  “Is that a laptop? Sorry, no laptops allowed in here”, he said in accented English.

  Of course they were concerned with terrorists. I had heard that the Swiss branch of the CIA was headquartered in the same building.

  But what the hell? There was never any mention about a No Laptop Policy in the information package I had received from Bern. I thought that it could be rather common for people to have a laptop with them.

  I looked around. There was nowhere to put it.

  “Uhhh… what do I do then? Where can I put this?” I asked him.

  “Go see the lady outside by the security box”, he replied.

  I asked her and she told me in Swiss-German that there was a police station a couple of short blocks down the way where I could leave it.

  I headed down the street and looked around. I went left, then right. I did not see any police station.

  I asked a guy on the street. He didn’t know anything about a nearby police station.

  I checked the time on my mobile. I had less than 10 minutes. I didn’t want to be late for this appointment. I thought that they might cancel on me if I was a minute late – you never know with bureaucrats.

  I jogged back to the lady at the security box.

  “Sorry”, I said, “I looked around but did not see any police station. Can you indicate it again please?”

  “It’s that building with the red awning”, she told me while pointing to the end of the street.

  I went back to that building. There was something that looked like a bakery with a red awning, but it certainly wasn’t a police station.

  I checked my mobile again. 5 minutes until my appointment. I started to sweat.

  Next to the bakery there was an apartment building. I checked the entrance and it was open. I ran in there, quickly stashed my laptop bag behind some plants in a common/smoking area on the first floor, and jogged back to the entrance with 2 minutes to spare.

  Once inside the building I went through the metal detector and checked my mobile phone in with security. They directed me down some stairs to a basement level.

  As I walked into this area a female security guard greeted me.

  “Good afternoon. I need to ask you to take off your sunglasses”, she said.

  “They aren’t sunglasses”, I said. They are regular prescription glasses that tint when exposed to UV rays.

  “What do you need them for?” she asked.

  “To move through space”, I informed her.

  “Well we don’t allow sunglasses in here. So please take them off until you reach the seating area.”

  I took off my glasses and used sonar to find a seat, then put my glasses back on.

  Once I regained my vision I saw that there were 3 other renunciants waiting before me, with expressions of resignation on their faces.

  I was feeling too somber and involved in my own thoughts to make chit chat. I sat there silently.

  While I was waiting, I eavesdropped on a British-accented woman talking with one of the other renunciants. She also had brought a laptop with her and in the course of conversation confirmed that the building with the red awning was indeed a bakery. They permitted her to store her laptop there for 3 Swiss francs.

  What kind of an embassy is this? Running a cash-for-laptop-storage scam? Is this the embassy of the leader of the free world or that of a banana republic?

  I only had to wait about 5 minutes. First, you go to a window and answer a few basic questions. They give you a pay slip which you then take to another window to make the payment of the $2,350. I got to the payment window which required you to ring a bell to open. I rang the bell and waited about 2 full minutes before someone answered.

  I made the payment and they gave me a receipt. Then I took my receipt with me back to the waiting area.

  While I was waiting, I watched and heard two other people go through the entire renunciation process, which takes less than 5 minutes. So it was anti-climactic when it was finally my turn as I had just heard everything twice.

  My turn. I met with the consul, a big friendly portly man behind a bulletproof window. I had to confirm some information in writing. Then he recited the Oath of Renunciation; I didn’t even need to say it myself. When he finished, I signed a statement which includes the text of the Oath.

  I handed over my US passport which he then took and punched a few holes in, invalidating it.

  The consul then informed me that it would take 3-5 months before I would receive my CLN. It would be mailed from Washington to the embassy in Bern, and they would contact me when they received it.

  He then asked me if I had any plans to travel to the US during this time. I said No.

  He explained to me that until I receive my CLN, I would not yet be officially non-American. US immigration law however states that US citizens must enter the United States on their US passport, which the embassy had just confiscated. This meant that it was very likely that I would be barred from entry if I tried to enter the US, unless it was an emergency such as a funeral, in which case they might let me in provided that I could document as much as possible (i.e. provide a death certificate).

  I told him that was fine. I didn’t need to enter the US in the next 3-5 months.

  That concluded my renunciation. The whole thing was over in about 30 minutes. I grabbed a can of beer on the way to the train station and headed home, feeling the whole experience to be surreal.

   

  Administrative Ping Pong

  It was August 2015. Six months had gone by and I had not heard anything from Bern.

  My mother suggested that I called the embassy. Of course US consular services are only available for calls during a 2 hour window each day.

  Once I got through and identified myself, I explained that I had been told it would take 3-5 months to process my CLN and that now 6 months passed by without news.

  “Yeah”, began the counselor, “it has been taking a lot longer lately due to some IT issues. I see that your application is still open but it is somehow hung up in the system in Washington. I am afraid there is nothing we can do about this from here.”

  “OK, that’s fine, I will just wait a bit longer”.

  I waited longer. The temperature cooled down and the leaves changed color.

  Then it was October. My mom was starting to freak out a little and suggested that I call again. I explained that they had said there was nothing they could do. She insisted that I try again.

  So I called again.

  “Yeah”, began the counselor, “it has been taking a lot longer lately due to some IT issues. I see that your application is still open but it is somehow hung up in the system in Washington. I am afraid there is nothing we can do about this from here.”

  “OK, that’s fine, I will just wait a bit longer”.

  I practically gave up at this point. My mom started writing letters to her local Congressman.

  The leaves fell from the trees and were replaced with snow. Christmas and New Year’s came and went.

  Over the holidays, I had an idea. I recalled that a college buddy of mine was in the Peace Corps and had later been placed at the US Department of the Treasury. So I called in a favor. I asked him if he knew anyone in the State Department, specifically US Citizens Services.

  It turns out he did. He put me in touch with someone at State named Eric, who knew someone else that handled renunciations.

  I wrote an e-mail to the contact. She responded, saying that my case had been resolved already in April 2015 and that Bern should have my paperwork.

  Incredulous, I called Bern a few days later in early January 2016.

  “Hey Bern, Washington told me that my case had been resolved already 9 months ago and that you should have my paperwork”, I complained.

  “That is incorrect”, replied Bern. “It was with Washington until only a few days ago when it was sent back over to us”.

  “I see. Do you think that Washington just forgot to click a button or something in the system? And that it came back to you because I contacted them, and they finally moved it forward?” I asked.

  “We can’t be sure, but that sounds about right”, they replied.

  Sure enough, a week later I finally received my Certificate of Loss of Nationality.

   

  Final Thoughts

  My experience with the delays and the experiences of those others I mentioned (plus other similar experiences that I read about on various message boards) left my Spider Sense tingling. While I can never be sure, the conspiracy theorist in me wonders whether certain administrators in Washington don’t intentionally delay finalizing renunciation cases as a form of administrative punishment. They know that you are in administrative limbo and cannot visit the US during this time. Could it be a final, spiteful, parting middle finger in your face from the US government?

  That’s the kind of high level service you get for paying exorbitant government fees. You would think that with such a price tag you’d at least get quick service. In the end I needed to use government contacts and pull administrative strings to finally receive the service for which I paid so generously.

  It didn’t do much to diminish the impression I had of dealing with a banana republic, rather than the greatest superpower the world has ever known.

  • That said, I am truly grateful. I consider myself to be quite lucky.
  • I am grateful to have been a citizen at birth of one of the most prosperous, most developed, and most democratic societies in the world. Without Swiss citizenship it would have been a much more difficult decision.
  • I am grateful that I did not have any assets or much money when I renounced, which made compliance easier and virtually costless.
  • I am grateful that I was not subject to exit tax. For those subject to exit tax, upon renunciation the IRS taxes you as if you had sold all of your assets.
  • Finally, I am grateful that I do not have to vote in the 2016 US presidential election.

  

  

• Doctor: Hillary's "Abnormal Eye Movements" Hint At Serious Health Issues

  By John R. Coppedge, MD, FACS is a general surgeon from Texas, originally posted on The Hill

  In 2014 Conan O’Brien did a spoof of Hillary Clinton‘s interview with Diane Sawyer about her lack of lingering health issues following her 2012 concussion. In an obviously photoshopped version Clinton’s eyes are made to oscillate crazily.

  It was a very funny piece. Now, it may not seem so funny.

  Hillary Clinton exhibited abnormal eye movements during her recent speech in Philadelphia and they were not photoshopped.

  Her eyes did not always move in the same direction at the same time. It appears that she has a problem with her left sixth cranial nerve. That nerve serves only one function and that is to make the lateral rectus muscle contract. That muscle turns the eye in the direction away from the midline. 

  It comes out of the base of the brain and runs along the floor of the skull, immediately beneath the brain before coursing upward to the eye. Dysfunction of that muscle causes the striking picture of the eyes not aiming in the same direction and causes the patient to suffer double vision.

  Like all things medical, there is a long list of potential causes but in my opinion the most likely one, based on Clinton’s known medical history is an intermittent lateral rectus palsy caused by damage to or pressure on her sixth cranial nerve.

  It is known that she suffered a traumatic brain injury in late 2012 when she fell and struck her head. What is also known is that she was diagnosed with a transverse sinus thrombosis — blood clot in the major vein at the base of the brain. Almost all patients with a transverse sinus thrombosis suffer swelling of the brain and increased intracranial pressure. Most have headaches, balance issues and visual disturbances — all of which Clinton was reported to have following that event.

  Clinton’s physician reported that she was placed on Coumadin (a blood thinner) to dissolve the blood clot. Actually, that is incorrect, because Coumadin has no effect on an existing clot. It serves only to decrease the chance of further clotting occurring Clinton’s physician has also reported that on follow up exam, the clot had resolved. That is surprising since the majority of such clots do not dissolve. The way it was documented that the clot had resolved has not been reported.

  If, as is statistically likely, Clinton’s transverse sinus is still blocked, she would still have increased pressure and swelling and decreased blood flow to her brain. That swelling would place pressure on the exposed portion of the sixth cranial nerve at the base of her brain, explaining the apparent lateral rectus palsy. And such a deficit can be partial and/or intermittent. 

  Additionally, when patients who have decreased intracranial blood flow becoming volume depleted (dehydrated) or have a drop in blood pressure loss of consciousness can occur. That could explain her witnessed collapse in New York City on 9/11.

  One thing that is taught early in medical school is that a patient’s history, physical exam, signs and symptoms should usually lead to a single diagnosis.

  Crudely put “when you itch, it is probably not lice and fleas but one or the other.” More professionally put, in most cases the patient’s symptoms can be explained by one unifying diagnosis, not a constellation of disparate ones. The admittedly speculative scenario I propose is an attempt to understand and rationally explain what is going on, based on known facts and the observable signs exhibited by Clinton.

  Having previously written about this, I once again suggest that she undergo an independent neurologic exam and have proper studies to determine whether or not she still has a blood clot at the base of her brain, swelling of the brain, increased intracranial pressure and whether or not her 2012 traumatic brain injury was accompanied by a skull fracture with or without bleeding around or in the brain itself and if there are any residual areas of scarring of the brain.

  Critics will rightly point out that I have not examined Clinton. They will point out that I am not ophthalmologist or a neurologist. But I am a physician and the concepts discussed above are taught to every medical student early in their education. Her traumatic brain injury, transverse sinus thrombosis, subsequent symptoms, falling, passing out and now the obvious problem with eye movement are all fact, not speculation.

  It would be very helpful if Clinton agreed to an independent exam and to have the questions raised here answered. It is too important not to get this right.

  

  

• Retired Green Beret Warns "We Haven't Been This Close To Nuclear War In A Long Time"

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

  

  As can readily be seen by the current events, the world has not been this close to a nuclear war and World War 3 in a long time.  There are four major flashpoints right now that could easily escalate and ignite a powder keg, transforming from a regional conflict or conflicts into a world war: Syria, the South China Sea, Ukraine, and North and South Korea.  The “reconstruction” of a Cold War-type faceoff, initiated by the U.S. and NATO building up forces in Eastern Europe and facing off against Russia.

  A nuclear war will be initiated by an EMP (Electromagnetic Pulse) detonation over the continental U.S., followed by a nuclear exchange and a war with conventional forces.

  As of this writing, the U.S. has “mistakenly” bombed Syrian governmental military forces, causing at least 60 deaths with more than 100 others wounded.  The Russian government is sizzling, especially with the response by (of all people) Samantha Power, U.S. Ambassador to the UN had this to say to the media, as reported by CNN:

  “We are investigating the incident.  If we determine that we did indeed strike Syrian military personnel, that was not our intention. And we of course regret the loss of life.”

  True humanitarians, all, and especially she, the wife of Cass Sunstein and a true Marxist disciple of the Weather Underground (along with Cass) regrets the loss of life.  The airstrikes occurred just two days before the U.S. and Russia were supposed to have joint airstrikes against ISIS.  As ISIS is a creation of the U.S. State Department and the administration, it seems the U.S. decided to strike their true intended target…the Assad government forces…as it wants to topple Syria, and escalate things with the Russians.

  Meanwhile last week, the U.S. flew two B-1B nuclear bombers along the DMZ to bluster North Korea with a show of force in response to the nuclear bomb test they conducted just a week prior.  South Korea also threatened to reduce Pyongyang to ashes, while North Korea prepares for yet another nuclear test in the near future.  More than 20 missile tests have been conducted by North Korea just this year alone.  This is not counting the satellite launch at the beginning of the year in which they placed their second satellite into orbit…a path of trajectory, mind you, that takes it over the continental U.S. several times per day.

  Ukraine cease fire agreements between the populist forces (rebels) in the eastern provinces and the U.S.’s puppet Poroshenko-government has been violated innumerable times as the fighting in Donetsk continues.  In the meantime, the IMF just approved a 2-billion-dollar loan to Ukraine and the U.S. is supplying Poroshenko’s government with “nonlethal” U.S. military equipment.  Russia has been posturing a tremendous number of troops (some DOD estimates range as high as 150,000) on its western border facing Ukraine: they have conducted military exercises, including some within Crimea, which they annexed from Ukraine in 2014.

  The United States has been beefing up its presence in the Baltic States of Latvia, Lithuania, and Estonia, as well as in Poland and Moldova, the latter emplacing U.S. missile systems for “defense” that can be converted to offensive, nuclear missiles in hours.  In addition to this, the U.S. is deploying B-61 nuclear bombs to Germany’s Buchel airbase.  Russia has countered with ordering the deployment of the Iskander-M missiles to Kaliningrad, Russia’s westernmost military base in a direct standoff against the U.S. buildup in Germany and Eastern Europe.

  Meanwhile things in the South China Sea are heating up as the U.S. has moved naval assets into the area in a show of force in support of Japan over the disputed Senkaku islands face-off between Japan and China.  Last week the Russian navy linked its assets with China’s in the two countries’ joint naval exercises that could turn into a combat operation and a Chinese invasion at the drop of a hat.

  There is a slow buildup and preparation of media coverage that is trying to paint Russia in the leading role of the aggressor in all of this.  It isn’t working, except with those who are ill-informed.  The bottom line: with the U.S. election year in complete disarray and civil unrest lurking as a result of social and economic breakdowns, a war would be the perfect thing to justify suspension of the elections and the inculcation of martial law in the “interests of national security.”  The general civilian publics of all of the nations would be the ones to suffer, and it wouldn’t be the first time that it happened.  Politicians – the ones who “regret the loss of life” in a war – are not the ones to lose their own lives or the lives of their children when the balloon goes up.

  

  

• Spot The Odd (Hedge Fund Strategy) Out

  The trend is your friend… until the end. August was a great green month for many hedge funds (with Multi-Strategy and Event-Driven strategies doing best). But, as RBC notes., ‘trend-following’ CTA/Managed Money funds “got smoked.”

  Spot the odd strategy out…

  

   

  As Bloomberg reports,

  Commodity trading advisers, the catch-all phrase for a breed of quantitative investors who use trends in asset prices and volatility as trading signals, posted some of the hedge fund industry’s worst losses in August — and it isn’t getting better. The group is down between 1 percent to 1.5 percent this month, according to Credit Suisse Group AG.

   

  Wrong-way bets on everything from Treasury rates to commodities have cost trend followers as market correlation whipped up before this week’s meeting of the Federal Reserve. In particular, CTAs paid a price for betting interest rates would fall in the second half of the year, Credit Suisse said.

   

  

   

  “The trend-following CTAs have given back the vast majority of a profitable first half of 2016 as their long equities, long rates and short crude gambit results in losses,” wrote Mark Connors, Credit Suisse’s global head of risk advisory in New York, in a note to clients Tuesday.

  It’s a reversal of fortune for the group, which by Credit Suisse’s estimate had been one of the best hedge-fund categories in the nine months through June, rising 5.4 percent. As RBC explains,

  STRATEGY PERFORMANCE UPDATE SEES SYSTEMATIC / CTA / TREND-FOLLOWING SMOKED QTD (2nd column from right) FOLLOWING THE VaR SHOCK: That said, those with shorter-term models have likely profited from the pivot back into the old ‘long fixed income / long equities / long crude / long gold / short volatility regime seen over the past few sessions, so expect these strategies turn again turn higher imminently as leverage is re-deployed.

  

  Given the force and speed at which they ditched equities, it’s likely CTAs contributed to the recent bout of volatility, said Credit Suisse’s Connors, particularly since equity long-short funds increased stock holdings to near-peak levels. During the stretch, the VIX spiked 40 percent in one day and the S&P 500 Index had its worst daily loss since the British vote to leave the European Union. The stage was set for a rough patch starting in June, when crude’s decline caused the trend-following managers to bet against the commodity. While that bet worked as oil dropped 14 percent in July, it burned shorts the following month when crude snapped back 7.5 percent.

  “When trends switch, they have a short-term model and can pick up on that, and they caught the move in oil in June,” said Connors by phone. “The frequency of shifts in oil are hard to trade.”

  

  

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• State Department Admits: Islamic State Terrorists Trying To Pose As Refugees

  Submitted by Pete Kasperowicz via Washington Examiner,

  State Department spokesman John Kirby acknowledged Wednesday that Islamic State terrorists are trying to mingle with refugee populations overseas in the hopes of making it to the U.S. posing as a refugee.

  "I wouldn't debate the fact that there's the potential for ISIS terrorists to try to insert themselves, and we see that in some of the refugee camps in Jordan and in Turkey, where they try to insert themselves into the population," Kirby said on "Fox and Friends."

  .@statedeptspox: I wouldn't debate that there's potential for ISIS terrorists to try to insert themselves into the refugee population pic.twitter.com/zlIthXPm66

  — FOX & Friends (@foxandfriends) September 21, 2016

   

  Still, he argued that the vetting process for these refugees is tough, and should be enough to keep terrorists out, although he admitted it's not a perfect process.

  "The vetting process, while not perfect, is a very, very stringent, and it can take almost up to two years for a single refugee to make it into the country," he said.

  He said in the same interview: "Is it perfect? Can it be perfect? Can it be foolproof? Well, probably not, no."

  Questions about refugee vetting have been raised again after the weekend bombings in New York and New Jersey, which police believe may have been done by a U.S. national who was born in Afghanistan.

  Just days later, President Obama met with world leaders in New York to ask them to accept more refugees, even as Republicans in Congress and Donald Trump have said the U.S. needs to slow down the process of accepting people.

   

  

  

• The "Deplorables" – Who We Are And What We Want

  Submitted by Brandon Smith via Alt-Market.com,

  In numerous articles over the past several years I have made observations on a rule of life that I strictly adhere to: that all social conflicts can be boiled down to the reality of two opposing groups — those people who want to control the lives of others, and those people who simply want to be left alone.  You can read more about my philosophy on this in an article I published in 2014 titled 'Why Is Independence So Frightening To Some People?'

  The mainstream media and establishment institutions focused on propaganda will tell you that there are hundreds or thousands of dangerous cultural enclaves and ideologies out there that you should fear.  They will tell tales of rage and suspicion between the rich and the poor, haves and have-nots, whites and blacks, gays and straights, academics and working class, believers and atheists, Muslims and Christians, Republicans and Democrats, Eastern nations and Western nations, etc.  The establishment relies on these divisions as a rationale for the homogenization of cultures — they argue that if we erase borders, religion and sovereignty while enforcing multiculturalism and wealth redistribution, then these groups will have no reason to fight anymore and a Utopian fever orgy will be our inevitable reward.  Yes, it sounds quite magical.

  That said, I don’t hold any claims against any of these groups per se, as long as they respect my inherent and individual freedoms.  If they are determined to impose their ideology on me through force, that is another matter entirely.

  This is the only paradigm that actually matters in the end.  All other paradigms are a means for the powers that be to pit the masses against each other.  When you look at the world in this way, it is easier to let go of all the “sacred cows” and learned biases that blind us to the truth.

  I don’t affiliate with Republicans, but I am happy to support a Republican that proves he or she has no interest in dictating my principles or my future.  Same with a Democrat. Same with any black or white or brown person. Same with any gay or straight person.  I really don’t care; stay out of my way and I’ll stay out of yours. Get in my way, however, and I will step on you.  If you’re bigger than me, I’ll dislocate your kneecaps and then step on you.  There is no despot so big that they are immune to the heel of a strategically placed boot.

  This, I would say, is a defining principle behind those of us who make up the so-called “alt-right;” the people Hillary Clinton recently referred to as “the deplorables.” When describing this subculture of “miscreants” I often use the title of the “liberty movement.” We are defined and unified by our desire for a society based on the integral love of freedom and a fervent opposition to collectivism and totalitarianism.  For this, we are called “deplorable.”  But let’s extrapolate on that a little…

  In our era, certain organizations have adopted a hard-line love affair with collectivism, and most of these groups today are allied with the far Left (socialist) side of the political spectrum.  This includes “neo-conservatives” who have never been conservative and, just like the socialists, have only ever pursued policies of bigger and more intrusive political and cultural bureaucracy.  Therefore, the paradigm of left vs. right now becomes tangible, because it is the left that seeks control, and the true right that wants to be left alone.

  To clarify even further, people who actually understand the false left/right paradigm only mention it when they are referring to the political class.  At the top of the pyramid and at the top of either major American party, there is no "Left", or "Right", there is only globalism.  However, for average people there is indeed an ideological spectrum.  This would not be such a problem except that at this time, it is people on the far LEFT of that spectrum that are in support of multiculturalism and globalization.  They are the group scrambling for control over everyone else and they are the group with funding and legal support from the elitist establishment.  Social justice lunatics and Black Lives Matter advocates have fashioned themselves as weapons for the elites.  Therefore, in this way, they have made the left/right paradigm real for those at the bottom of the pyramid.

  It’s interesting to me that the left, once considered the bastion citadel of rebellion against the machine, is now willingly diving head-first into the intestinal apparatus of the system to be mulched for fuel for the very same beast.  It just goes to show you how easily these fraudulent paradigms can change and how easily groups can be co-opted when they are oblivious to their own weaknesses.

  If you really want to know who we “deplorables” are it’s rather simple — we are the ones who refuse to participate in the operation of the machine.  We are the cogs who refuse to cooperate.  We will not grease the gears.  We will not stoke the furnace.  We will stop the whole damn thing in it’s tracks, because, for the sake of future generations, we must.

  This is why we are hated by socialists, cultural Marxists and the general inbred animal farm of the progressive zeitgeist.  We suggest that, in fact, not all steps forward are equal to “progress,” and not all progress is moral.  We maintain that what progressives call “progress” is actually classic and archaic barbarism wearing the silky lingerie of of humanitarianism.

  To assert that some progress is immoral is a sure way to trigger the modern collectivist left.  They just can’t fathom that anyone sane would disagree with the grand schemes of multiculturalism and economic harmonization.  We must be crazy.  We must be violent and aberrant monsters.  We must be filled with hate and racism and misogyny.  We must be “dealt with.”

  But here’s the deal…

  The institutions and people so desperate to define the deplorables never actually ask us to define ourselves for the public record.  They don’t WANT to hear what we have to say about ourselves.  They prefer to construct straw men.  It’s much easier to set fire to us that way.

  Oh sure, they’ll interview us once in a while, but an interview does not constitute an honest record of anything.  Just take a look at Bloomberg’s “interview” with Milo Yiannopoulos entitled The Pretty, Monstrous Face Of The Alt-Right in which they focus more on his salary, shopping habits and flamboyant homosexuality than his actual political or philosophical positions.  And, yet again, they call on the Southern Poverty Law Center, the cultural Marxist propaganda arm of the establishment, to give their take on who Yiannopoulos is.  Welcome to the club, Milo.

  Even I have been approached in the past by mainstream outlets including the BBC and The Economist for such interviews.  In the case of the BBC, I told them I would be happy to participate as long as I could bring my own video equipment to record the entire exchange.  They agreed, then never called me back.  I just ignored requests from The Economist; they are the rotting left ventricle of the heart of darkness.

  These people have no intention of letting us speak for ourselves.  They want to use us for ratings and then edit us into oblivion.

  The media certainly won’t refer to us as “the liberty movement” or as freedom fighters or any other label that might find favor with the general public.  Instead, they call us “populists,” which is a term with a decidedly fascist flavor to it.  The truth is, the rhetoric of elitists in Europe and in the U.S. is that those against globalism and multiculturalism are legitimate fascists.  If average people only understood the totalitarian leanings of your run-of-the-mill globalist they might find this accusation hilariously ironic.

  Alan Greenspan calls us “crazies” who will undermine the U.S. system.  Which is also ironic when you understand that it was Greenspan’s Federal Reserve that created the artificially low interest rate environment that initiated the derivatives bubble and credit crisis that has sealed America’s fiscal fate eight years later.  Greenspan even admitted back in 2013 that the Fed knew there was a debt bubble and “missed the timing” in dealing with it.  Yet, he blames us for America’s problems.

  In the past these hucksters ignored us.  We were a burgeoning movement rallying around marginalized figures like Ron Paul back then. It was better for them to pretend we didn’t exist.

  Now, we seem to be everywhere — busting up the EU with the Brexit referendum, overwhelming Merkel’s political power base in Germany, and pushing Donald Trump into what I have argued since the primaries will be a sure entry into the White House.  Now, all the full attention of the establishment is on us.  Imagine that.

  So, instead of listening to hypocrites and liars like those listed above, why not go to the source and ask a deplorable what we want.  I’ll be happy to explain our goals in my next article in this series, and set out to identify the movement that seems to have dumbfounded the progressive left and globalist acolytes alike.

  For now, I want to acknowledge that the rise of the deplorables does not necessarily ensure victory in the face of the elites.  As I have mentioned many times since before the success of the Brexit, it is possible that the elites are trying to give traditional conservative movements enough rope with which to hang ourselves.  That is to say, we are working to wrestle back control of a ship that is already sinking.  They might just step aside as we mutiny because in the end, they don't think it will matter.  Let’s not kid ourselves that this fight will be anything other than long and painful.

  Economically as well as socially, there is little chance of avoiding serious multiple crises over the course of the next few years.  It seems to me rather convenient that the catalysts for these crises are boiling over at a time of great awakening for the conservative guard and the liberty minded.  I do not think this is a coincidence.

  This is why I repeatedly remind people that a successful Brexit vote or a Trump presidency might send a message, but they are not solutions.  Do not be surprised if a Trump victory is followed by a global deluge of financial instability — instability that will be blamed on us.

  The narrative is already being set.  International financiers, central bankers and media personalities are consistently mentioning the great danger of the “populists.”  They say the deplorables are going to destroy the world.  This is nonsense, of course.  The world has already been destroyed by the banking elite and their cronies, but, the average person doesn’t really grasp this.  We have to educate them quickly because we are about to be targeted as scapegoats for one of the greatest engineered fiscal catastrophes of all time.

  In my next installment I will examine a list of issues that are at the core of "the deplorables" and our shocking ascendance in the sociopolitical sphere.  I will conclude by pointing out that every totalitarian action produces an equal and opposite reaction.  The progressive left and the globalists have become so intoxicated with collectivist power and so abusive in their application of the government authority that they have chiseled from the public, that now, everyone hates them.  Many people WANT to see the deplorables win.  It's not even necessarily about the viability of Trump.  They just want to watch as the pretentious faces of social justice thugs twist in shrieking horror when Trump takes the Oval Office, or as Britain flips the bird to the EU, or as Europe breaks apart over the madness of forced refugee policies.

  If anyone is to blame for the popular rise of the deplorables, it is the very leftists and globalists who despise us.

  

  

• Texas Governor Threatens To Exit The Federal Refugee Program: "Empathy Must Be Balanced With Security"

  After taking in more refugees over the past 12 months than any other state in the U.S., Texas is threatening to exit the federal refugee program, effective 9/30/16, unless the Obama administration agrees to new security measures intended to protect Texas citizens.  The demands by Texas Governor Greg Abbot come just days after the recent bombings in New York and New Jersey and in response to Obama's recent announcement of plans to accept 110,000 refugees in 2017, up 57% since 2015

  Abbott released the following comments on his website saying, among other things, that the "refugee settlement program is riddled with serious problems" and that the "federal government lacks the capability or the will to distinguish the dangerous from the harmless."  Abbott also took the opportunity to blast Obama for "ineptly proposing a dramatic increase in the number of refugees" in 2017 saying that the U.S. is incapable of fully screening immigrants from nations like Syria.   

  “The federal government’s refugee settlement program is riddled with serious problems that pose a threat to our nation. The Director of the Federal Bureau of Investigation and the Director of National Intelligence have repeatedly declared their inability to fully screen refugees from terrorist-based nations. Even with the inability to properly vet refugees from Syria and countries known to be supporters or propagators of terrorism, President Obama is now ineptly proposing a dramatic increase in the number of refugees to be resettled in the U.S."

   

  “Empathy must be balanced with security. Texas has done more than its fair share in aiding refugees, accepting more refugees than any other state between October 2015 and March 2016. While many refugees pose no danger, some pose grave danger, like the Iraqi refugee with ties to ISIS who was arrested earlier this year after he plotted to set off bombs at two malls in Houston."

   

  “Despite multiple requests by the State of Texas, the federal government lacks the capability or the will to distinguish the dangerous from the harmless, and Texas will not be an accomplice to such dereliction of duty to the American people. Therefore, Texas will withdraw from the refugee resettlement program. I strongly urge the federal government to completely overhaul a broken and flawed refugee program that increasingly risks American lives.”

  Over the past 12 months, Texas has accepted 7,205 refugees, more than any other state in the country, with ~750 of them from Syrian.

  Source: Graphiq

   

  Below is the letter sent by the Texas Health and Human Services Commission to the Federal Office of Refugee Settlement earlier today. 

  

  

  

• Charlotte Riots Night 2: Police Unleash Tear-Gas, NC Governor Calls National Guard As Protests Turn Deadly – Live Feed

  Update 2: The situation is escalating quickly

  North Carolina Governor Pat McCrory declares state of emergency on request of Charlotte police chief

   

  North Carolina governor is also sending in the National Guard amid protests

  Update 1: The man shot earlier has died…

  As WSJ reports, the man fatally shot downtown just after 8 p.m. was shot by a civilian, according to the city of Charlotte.

   

  

   

  The Charlotte-Mecklenburg Police Department “did not fire the shot,” the city said in a tweet. City officials also confirmed that a police officer had been transported to a hospital for injuries.

  As we detailed earlier, night 2 of the protest in Charlotte following the shooting death of Keith Lamont Scott – an allegedly armed black man – by a black policeman, has turned considerably more violent. 

  

  As YourDailyDish repoerts,

  The Charlotte-Mecklenburg Police Department released a press release on the incident that read, “Officers observed a subject inside a vehicle in the apartment complex. The subject exited the vehicle armed with a firearm. Officers observed the subject get back into the vehicle at which time they began to approach the subject. The subject got back out of the vehicle armed with a firearm and posed an imminent deadly threat to officers who subsequently fired their weapon striking the subject.”

   

  On Wednesday morning, Police Chief Kerr Putney held a news conference regarding the killing. He provided new details, which seemed to corroborate the press release, contradicting the version of events that played out on social media Wednesday.

   

  Putney began by saying, “It’s time to change the narrative. Because I can tell you from the facts, that the story is a little bit different as to how it’s been portrayed so far, especially through social media.”

   

  The chief went on to describe the incident as such:

   

  “The officers gave loud, clear verbal commands that were also heard by many of the witnesses. They were instructing the subject, once he got out of the vehicle, to drop the weapon. Despite the verbal commands, Mr. Scott exited the vehicle as the officers continued to yell at him to drop it. He stepped out, posing a threat to the officers, and Officer Brentley Vinson subsequently fired his weapon, striking the subject.”

   

  The chief went on to describe what was found at the scene. “I can tell you a weapon was seized, a handgun, I can also tell you we did not find a book that was made reference to. We did find a weapon, and the witnesses corroborated it to, beyond just the officers.”
   

   

   

  Here's the Charlotte chief of police and the officer who shot Keith Lamont Scott. To say the narrative is confusing is an understatement. pic.twitter.com/BV7frx15NG

  — Brett Ruiz (@BrooklynBrett) September 22, 2016

  This should not be a total surprise as we noted earlier comments:

  “We out like the Taliban!” one rioter was heard yelling on a live Facebook stream.

   

  “This ain’t no one-day action!” another shouted. “This is the first time people standing up!”

   

  “We ain’t playin’ no motherfuckin’ games, nigga!” asserted another individual.

  One person has been shot in Charlotte, North Carolina protests against the fatal police shooting of Keith Lamont Scott. Riot police are firing tear gas into the crowd.

  

  

  WCNC reported medics confirmed a gun shot wound on the corner of College and Trade. The victim had life-threatening injuries.

  Live Feed:

  Alternative Live Feed:

  This is reportedly the pool of blood from tonight's shooting…

  

   

  But tonight is worse than last night – considering it is early…

  BREAKING: 1 shot in Charlotte protests against police killing of #KeithScott https://t.co/sLCF6QInJH pic.twitter.com/VnTgMvtyqf

  — RT America (@RT_America) September 22, 2016

  Most of uptown Charlotte shutdown. Protestors and police in riot gear in the streets. @WLOS_13 pic.twitter.com/mbMUOL6L7J

  — Jerrika Insco (@JerrikaWLOS) September 22, 2016

  Updates: Protestors Confront Police After Shooting in Charlotte https://t.co/EbA5Vnf4tt pic.twitter.com/hNIHW90TgJ

  — Lauren Jones ???????? (@LaurenJonesGOP) September 22, 2016

   

  And now even the media is being targeted…

  LIVE VIDEO: CNN reporter hit by rioters. #Charlotte pic.twitter.com/L5bZ9v7Qla

  — TheAnonMessage ???? (@TheAnonnMessage) September 22, 2016

   

  

  

• Wall Street Goes "All In" For Hillary Clinton

  Submitted by Mike Krieger via Liberty Blitzkrieg blog,

  

  Hordes of industry executives will descend on the city to celebrate Hillary Clinton’s nomination for president and renew close associations that vexed the Democratic standard-bearer throughout her primary battle with Bernie Sanders.

   

  Blackstone, one of the nation’s largest private equity firms, will hold an official reception in Philadelphia on Thursday featuring its president, Tony James, sometimes mentioned as a possible Treasury Secretary in a Clinton administration.

   

  The financial contingent will be in an especially good mood following Clinton’s selection of Virginia Sen. Tim Kaine as her running mate. Kaine has shown a willingness to fight for regional bank relief from the Dodd-Frank financial reform law. But more than that, he’s not Elizabeth Warren, the potential VP pick that long had Wall Street terrified.

   

  Republicans with ties to the financial industry will also be there, a sharp contrast to Donald Trump’s convention in Cleveland, which Wall Street largely shunned over fears of the GOP nominee’s populist agenda on trade, immigration and Wall Street reform.

   

  – From July’s post: Hillary Clinton is in Deep Trouble – “Hordes of Wall Street Executives” Descend Upon Philly

  Wall Street, America’s most despised industry, is putting all of its eggs in the Hillary Clinton basket. I must say, I’m actually pretty shocked at the extent to which the industry’s heavyweights are backing her. There’s really only one explanation – they know she’s a sure thing.

   

  You don’t go into Wall Street to help the world. You go in to make money, stroke your ego and perhaps one day be lucky enough to be deemed “master of the universe” by some finance humping media outlet like Bloomberg or CNBC. Wall Street oligarchs aren’t rallying around Hillary because they find Trump offensive. The only thing these people find offensive is not making money. They know Hillary, they’ve paid Hillary, and they are 100% confident she will do their bidding. Trump on the other hand is unpredictable and injects into the environment what the current crop on Wall Street hates more than anything else, risk.

  The U.S. economy is totally rigged. While in the past, you were expected to take on a great deal of risk to earn an outsized return, most large returns these days have been gamed to such and extent that they amount to riskless schemes through which the U.S. taxpayer funnels money upward to a handful of oligarchs. Hillary will unquestionably keep this system in place. Trump, we just don’t know.

  This is why the real players Wall Street want Hillary. They want the riskless pillaging of society to continue uninterrupted. As usual, money talks.

  As The Hill reports:

  Hedge fund moguls are pouring stunning amounts of cash into the main super-PAC supporting Hillary Clinton’s presidential campaign.

   

  George Soros and Donald Sussman, liberal financiers based in New York, have now given at least $10.5 million each to Priorities USA, an outside group that has already reserved more than $150 million in advertising to help Clinton win the White House.

   

  Pushing him over the $10 million mark, Soros sent the super-PAC an additional $2.5 million in August, according to the latest reports from the Federal Election Commission.

   

  Sussman sent $2 million in August too, giving him an identical total donation to Soros.

   

  Soros scaled back his political spending during the Barack Obama years. Stories later emerged suggesting he’d been unhappy with the way he’d been treated by the president.

   

  An email released last year by the State Department showed Clinton ally Neera Tanden telling the then-secretary of State that when she spoke with Soros at a dinner, he’d told her he regretted supporting President Obama over Clinton in the 2008 Democratic primary.

   

  Recounting her conversation with Soros, Tanden told Clinton: “He’s been impressed that he can always call/meet with you on an issue of policy and said he hasn’t met with the President ever (though I thought he had.)”

   

  The latest injections of cash from Soros and Sussman continue a trend of Wall Street money flowing overwhelmingly to Clinton over her Republican rival Donald Trump.

   

  It’s highly unusual — perhaps unprecedented — for a Democratic presidential candidate to out-raise a Republican among the financial sector by the margin by which Clinton is out-raising Trump. 

   

  Citing data from the nonpartisan Center for Responsive Politics, the Wall Street Journal reported in July that “seven financial firms alone have generated $47.6 million for groups working on Mrs.Clinton’s behalf.”

   

  The comparable amount raised for Trump at that time was $19,000. And though his haul from the financial industry has increased substantially by now, it still pales in comparison to Clinton’s.

   

  Any questions?

  

  For prior articles on Hillary Clinton’s love affair with Wall Street, see:

  Hillary Clinton is in Deep Trouble – “Hordes of Wall Street Executives” Descend Upon Philly

  Hillary Consolidates Wall Street Support as Republican Financiers Shift to Clinton

  The Real Reason Hillary Clinton Refuses to Release Her Wall Street Transcripts

   

  COMPROMISED – How Two of Hillary Clinton’s Top Aides Received Golden Parachutes from Wall Street

  

  

• House Oversight Committee Orders Reddit To Preserve "Oh Shit" Guy's Posts

  The House Oversight Committee, chaired by Jason Chaffetz (R-Utah), has issued a preservation order to Reddit related to all threads posted by Hillary’s tech guy from Platte River Networks, Paul Combetta (aka the “Oh Shit” guy).  The preservation order comes just days after a political researcher exposed a Reddit thread from July 2014 in which Combetta sought tech advice on how to “strip out a VIP’s (VERY VIP) email address from a bunch of archived emails” (all of the details can be found in our previous post here:  “Dear FBI, This Is Intent: Hillary’s “Oh Shit” Guy Sought Reddit Advice On How To ‘Strip VIP’s Emails’“).

  In comments to The Hill, Chaffetz confirmed that the House Oversight Committee is pursuing the new Reddit discovery “with vigor” but noted that precautions were required to “verify the authenticity” of Combetta’s posts.  Meanwhile, Chaffetz did confirm that Reddit is “cooperating” with the preservation order. 

  The order “has the weight of law, you can’t destroy things and hope things magically get erased,” he told The Hill Wednesday.

   

  The allegations “fit the pattern of what we think was happening,” Chaffetz said.

   

  “We have to verify the authenticity but we are pursuing it with vigor,” Chaffetz said. “On the surface it may be accurate, but we’ve got to make sure [the Reddit posts] are preserved and we have to dive deeper into the authenticity.”

  Let’s just hope that Reddit takes these preservation orders more seriously than Combetta who admitted to the FBI in March 2015 that he “was aware of the existence of the preservation request and the fact that it meant he should not disturb Clinton’s e-mail data on the PRN server” even though he went ahead and deleted her emails anyway.  

  We first wrote about the “Oh Shit” guy three weeks ago when the FBI decided to dump their redacted investigation notes on the world on a Friday afternoon before Labor Day weekend (see “The “Oh Shit” Moment: Hillary Wiped Her Server With BleachBit Despite Subpoena“).  After reviewing all of the FBI notes in detail, we concluded that post by noting that “something tells us this “Undisclosed PRN Staff Member” [Combetta’s identity had not been revealed at that point] is not going to make out as well as Hillary when all the dust settles”…With each passing day that prediction seems to be drawing closer to reality.  

  

  

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

  Due to the events in Charlotte, of which the participants are mostly of the lower class, and spectators of the upper; we thought it timely to release Part 2 in our Redneck series, Redneck Investin’ – a Look from the other side.  You can read part 1 here.  We released Splitting Pennies – Understanding Forex for the common man to understand the financial system from another perspective.  We encourage all rioters to pick up a copy and understand ‘the man’ instead of vandalizing private property and becoming 5 second celebrities on the local news.  

  So you don’t have any money to invest?  Think again!  The only capital is in between your ears (intelligence).

  Redneck Investin’ 1.1

  Gift Card Arbitrage

  It’s possible on ebay to buy a face value gas card or gift card for less than the face value.  The amount less will depend on the auction – you won’t have any guarantees here.  But for example it’s possible to buy a gift card for a retailer, 20% or even 40% discounted!  That means you could theoretically buy a $100 gift card for $50, $60, $70, or $90.  In many cases they’ll be in the money or in some strange cases out of the money.  We’re not going to point to any particular ebay listings to be fair – but they’re there.  Know what to look for!  Be sure you’re bidding on a GIFT CARD or GAS CARD that can be used to BUY GAS, or in a retail shop to buy PRODUCTS.  Make sure you are NOT bidding on a REWARDS CARD or other form of ‘special discount’ card.  Gift cards are no different than cash insofar as their spending ability.  Good luck!

  Crisp $100 Bill sales

  For some reason unbeknownst to the author, buyers are willing to pay more than $100 for a crisp, unused $100 bill.  Why?  Don’t ask – we don’t know!  But it’s legal, and the premium can be upwards of 20% or even greater!  But there’s a catch, getting fresh bills aren’t easy.  Plus, if you want to buy a whole ‘strap’ it’s going to cost you $10,000 for the whole 100 lot of $100 bills, which may be beyond your 401 Keg budget.  So you’ll have to get a few individually broken out of the strap, which will need to be organized by your local bank branch.  They probably won’t call you when they come in, so this may involve you going into the branch daily at a certain time (usually, banks will receive money deliveries at the same time daily or weekly depending on the population of the local area.)  Anyway, as many as you can obtain, you can load them up on ebay and rake in a risk free tidy profit!  Don’t forget to calculate ebays fees, and shipping.

  Fountain Coin Cleaning

  WARNING – THIS MAY BE ILLEGAL IN SOME AREAS.  CHECK WITH LOCAL LAWS AND LANDOWNERS BEFORE TRYING THIS.  Some fountain owners may want a cut!

  Many people believe that it’s ‘good luck’ to throw coins into fountains.  Other people think it’s ‘good luck’ to collect these coins and deposit them into their bank account!  Do this at night, around 3am – 5am when there’s the least chance of a coin tosser seeing you.  It will depress them and they will not throw coins in other fountains, thus damaging your future income.  NEVER COLLECT ALL COINS IN A FOUNTAIN – it will confuse coin tossers the next day, they will think this is a ‘no toss’ fountain.  Always leave 20% of coins to remind tossers that this is a ‘please toss’ fountain.

  Golf Ball recovery and sales

  Golfers are, well, there’s a lot of golf balls in lakes and water traps near golf courses.  Public courses are not as highly protected as the “Elite” country clubs, and it’s more likely to find a fellow Redneck groundskeeper willing to let you in at night to go night diving for balls.  He may want a cut of your spoils – be fair and share!  This is an honest job; the balls are in the water usually rotting away covered with moss and other lake elements that will ultimately deteriorate the balls.  Fancy courses have systems to rake the balls out of the water, but most municipal courses don’t.  Be fair, show you care!  Don’t charge more than $1 or $2 per ball.  If you’re in Florida – beware of Alligators.  

  Be sensitive to the local culture.  Remember this sign, in California – no martinis in the pool, please!

  

  If you want a quick Forex education, checkout Splitting Pennies – the pocket guide designed to instantly make you a Forex genius!

  If you want to get started looking at investing, checkout Fortress Capital Forex

  For financial institutions, checkout Liquid Claims Securities Settlement Serivces.

  

  

• CLiNToN PaY To PLaY…

  

  

• Not Even Goldman Has Any Clue How The BOJ Will "Control" The Yield Curve

  The biggest news overnight, and certainly far bigger than this afternoon’s non-event from Janet Yellen, was the significant change in monetary policy announced by the BOJ which (belatedly) unveiled its re-revised “QQE”… this time “with Yield Curve Control” (or “QQEWYCC“), a phrase used in lieu of “Reverse Operation Twist”, whereby the BOJ is hoping to steepen the yield curve and undo the damage it itseld created in January when it introduced NIRP for the first time to Japan, without doing much of anything else.

  While we laid out the theoretical big picture elements of QQEWYCC both earlier, and two weeks ago, there is a small problem when one gets into the practical nuances of the proposed monetary experiment: nobody really knows how it will work, not even Goldman Sachs, whose BOJ expert Naohiko Baba admitted that he has no clue how the BOJ will actually execute its vision.

  Confirming that the “JGB market has become increasingly distorted”, Baba says that

  “it is very unclear at this time exactly how the BOJ intends to “control” the yield curve in the future. Based only on the official statement, we think it is likely it will maintain the yield curve at more or less the current level for the time being. However, the question is how it will control the overall level and shape of the curve when financial and economic conditions change in the future. While the JGB market needs to take time to study the BOJ’s intentions, with interest rate movements lessening, we think the pricing function of interest rates as a mirror reflecting real economic and financial conditions will be increasingly lost.”

  Ah yes, the old problem with nationalizing a market – whether it’s bonds or stocks – is that it is no longer, by definition, a market but merely a policy tool which has ceased to delivers any informational value whatsoever.

  And before market participants get too gloomy contemplating the existential void of participating in something that no longer exists, Goldman has some theoretical considerations on what the BOJ’s announcement meant, namely that under all that unclear verbiage unveiled last night, the central bank has begun a “stealth taper.” To wit:

  The BOJ emphasized that it has four means of easing at its disposal going forward: (1) the negative interest rate (short-term policy interest rate) on policy-rate balances in current accounts, (2) 10-year JGB yields (long-term interest rate), (3) expansion of asset purchases, and (4) expansion of the monetary base. The BOJ will continue to apply a negative rate of 0.1% for (1), while purchasing long-term JGBs so as to maintain long-term interest rates at around zero. We think the BOJ aims to control the yield curve by controlling these two interest rate targets, together with the introduction of new market operations as a backstop when interest rates rise.[1] The BOJ decided to maintain the pace of JGB purchases at around ¥80 tn a year for the time being, but it has effectively abandoned its previous monetary base target.

   

  Governor Kuroda of course denied this, but we think the introduction of yield curve control could be considered as paving the way for future tapering of JGB purchases. We think it is likely that by substantially changing the framework, the BOJ aims to attract the market’s focus to yield curve control and slowly move toward tapering in the background. In addition to the high likelihood that it will become increasingly difficult to maintain its large-volume JGB purchase program for technical reasons, the marginal benefits from expanding JGB purchases have already diminished vs. costs involved, as we have repeatedly mentioned. However, as many market participants forecast the forex rate based on the monetary base ratio between two countries, there is an obvious large risk to reducing purchases. Accordingly, we think the BOJ has judged that it needs to divert the market’s attention as early as possible in advance. As we mention later, our impression is that an exit from unprecedented easing is now much more distant. In our view, the BOJ needed to minimize market shock accompanying a shift in policy targets and also make the easing system longer-lasting and more sustainable.

  On this we agree with Goldman for one simple reason: in his erudite “take” of the BOJ’s announcement, Ben Bernanke (who was surely dejected that Kuroda did not take his advice to unleash helicopter money) today blogged that “it was puzzling that the BOJ retained its 80-trillion-yen quantity target for JGB purchases; one of these two targets is redundant. I presume that the BOJ was concerned that dropping the quantity target would lead market participants to infer (incorrectly) that the Bank was scaling back its program of monetary easing.”

  The fact that Bernanke said that it was incorrectly perceived that the BOJ is scaling back easing, is all we need to know that the BOJ is doing precisely that and by implication, that Goldman is right. In which case, watch out below,  USDJPY, not to mention Nikkei, and therefore Abe approval ratings.

  

  

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• Could Germany Ever Allow Deutsche Bank To Go Under?

  Via Golem XIV blog,

  Deutsche Bank, one of Europe’s behemoths, is in very deep trouble having lost 90% 0f its share price value since 2007, has been falling sharply all this last year (48% loss this year) and, with its $42 Trillion in Derivatives exposure was singled out by the IMF, as the bank which ,

  “appears to be the most important net contributor to systemic risks…”

  Of course Deutsche agues the standard ‘derivatives-aren’t-a-problem’ line, that this 42 trillion all nets out and their real exposure is a fraction of that vast figure. Which is fine as long as you think that in the event of Deutsche coming unstuck, 42 trillions-worth of derivatives contracts can be held in abeyance for the time it would take for all those contracts to be netted out.  As I’ve said before netting out is akin to getting a rowing boat full of people to all change places  without the boat overturning.

  And now Deutsche has been threatened by the US DoJ with a $14 billion fine for its crimes for selling knowingly over-valued RMBS (Residential Mortgage Backed Securities) in the build up to the financial crash of 2007.

  Deutsche cannot pay $14 billion without raising a great deal of cash. Deutsche has put aside $5.5 billion for paying fines. A mere 9 billion short. So could Deutsche go down? Financially yes it could. But politically, I doubt it. And it’s the tension between these two answers, between the parlous financial state and the huge political significance of Deutsche, that I find interesting.

  Deutsche is Germany’s only G-SIB (Global Systemically Important Bank).

  

  Deutsche is Germany’s financial flag carrier. It stands at the centre of Germany’s long held desire to have Frankfurt eclipse London as Europe’s financial centre. Although Germany also has Allianz as a G-SII (Global systemically Important Insurer), without Deutsche Bank Germany ceases to be a globally significant financial nation (G-SFN – OK I made that one up). Without Deutsche Germany would not sit at the top table of global finance. France would. France has three G-SIBs. The balance between France and Germany within Europe would shift. Maintaining that balance between France and Germany, at the heart of Europe, has been critical in European affairs since WWI.

  Could Germany ever allow Deutsche Bank to go under?

  Officially the global framework for G-SIFI resolution in bankruptcy has been laid down by the FSB and agreed by all. And interestingly, though they are touted as the result of new thinking since the financial crisis, they are not. I recently received an EU document marked ‘Secret’, entitled  “Overview of Financial Stability Resolution Issues” and dated Feb 2008 which describes pretty much what the FSB has now settled upon now. I mention this because almost every word in it was completely ignored once the crisis hit and each country viewed the imminent demise of their major, flag-carrying banks. Which leads me to wonder why I should believe it would be any different next time? I think this question is particularly critical to Germany because Deutsche is its only G-SIB. In the next massive implosion of debts, France could afford to let one of its G-SIBs go down and still have two seats at the top table. England could do the same.

  How will G-SIBs  be wound down?

  The not-so-new rules for how a G-SIB should be wound down begin by stating that,

  Resolution should be initiated when a firm is no longer viable or likely to be no longer viable, and has no reasonable prospect of becoming so.

  But no one has wanted to state exactly what the trigger is, for deciding that a bank is no longer viable. Except to say the global regulators will leave it to national regulatory authorities to decide. So Germany will decide when Deutsche is no longer viable. Sure, that’ll be grand.

  Should an authority take the fatal stop of admitting one of their G-SIBs is no longer viable then things are supposed to move with wonderful efficiency. Resolution of netting out is to be speedily concluded (in as little as two days!) No sniggering please. And then as the gruesome business of sorting the living from the dead parts of the bank gets going  the authorities must definitely NOT rely

  …on public solvency support and not create an expectation that such support will be available;

  Instead the dead parts will inflict losses first on share holders and then on bond holders in the time honoured order of unsecured first. And then those parts which are not completely dead and might be cut away to live again in a different body, are to be sold off by means of sale or merger.

  1. As a last resort and for the overarching purpose of maintaining financial stability, some countries may decide to have a power to place the firm under temporary public ownership and control in order to continue critical operations, while seeking to arrange a permanent solution such as a sale or merger with a commercial private sector purchaser.

  So public bail outs are supposed to be strictly temporary. No holding 80% of RBS for most of a decade. Really? But that’s not the point which is important for Deutsche Bank. The important point is that in any sale of the viable parts of Germany’s only G-SIB, the brutal fact of the matter is that there is no other German financial institution that could afford to buy any of it. Commerzbank? Allianz? Letting an insurer buy a bank? So imagine the situation for Germany. They lose their seat at the top table and then they watch as France, England, American or perhaps China buy the crown of German financial might.

  So I don’t think it will ever happen.  Or at least it will only happen when Germany is truly out of any other options.

  So if Deutsche is not going to be declared “no longer viable” what are the alternatives?

  One option is the UniCredit route. UniCredit was a trillion euro bank. It was Italy’s flag carrier. It had bought Bavaria’s banks and some of Austria’s as well. And yet it’s share price was always   paltry.  Just 7.6 Euros at the market top in May ’07.  And since then it has been a hollow and enfeebled giant. Lumbering and ineffectual. It has been the laughing stock of European banks. But Italy doesn’t seem to mind. They seem content to let UniCredit be the quintessential Zombie bank. Would Germany be as sanguine to leave Deutsche to go the same way?  This would, I suggest, be almost  as injurious to German pride and industrial policy as letting Deutsche go down completely.

  But if Germany decided it could not face the financial consequences of obeying the letter of the resolution law nor leave the bank to be a bloated and useless zombie then the alternatives bring in their train even greater political upheavals.  Imagine the German government decides that not bailing out Deutsche just inflicts too much damage on Germany – potentially reducing Germany from the front rank of globally significant nations to  something lesser. It becomes a matter of national pride if not of survival.

  

  So Germany ignores all the FSB rules and regulations and bails Deutsche bringing it into government ownership/protection –  call it what you like. In so doing it demolishes the entirety of European policy regarding bail outs, government debts and austerity. Where then all the German insistence on fiscal discipline it has forced upon Greece, Ireland, Portugal, Spain and Italy? The Bundesbank, Berlin and the ECB would have no authority at all. Every country would have a green light to do the same for their flag carriers.

  It would be the end the European experiment. Or the European system would have to try to continue without Germany. And that could only happen if all debts to Germany were repudiated.

  I realise all this is speculation. But Deutsche has lost 90% of its value. Only RBS has lost more.  Deutsche has 7000 legal cases against it. Frau Merkel is losing her grip, Brexit rocked the complacent rulers of Euroland and  Madame Marine Le Pen would like to push France to do the same.

  And on top of it all NOTHING has been fixed financially at all. There is more debt more leverage, more and more liquidity achieving less and less, interest rates are negative, pensions  are going nowhere, insurers are grasping for risk even as they fear what it will do to them when the next crisis hits and governments are all, every one of them, preparing their armed forces for widespread civil unrest.

   

  

  

• Bank Of Japan Maintains Bond-Buying Pace With "Yield Curve Control", Leaves Rates Unchanged, But Offers Hope For Moar

  With SocGen and Goldman expecting nothing, but many others desperately hoping for more (2Y pricing in moar negative rates), tonight's Japanese trade deficit disappointment (11th monthly decline in a row) did nothing to help the chaos… and The BoJ waited the longest since 2014 to release its statement. Markets did their usual turmoiling bit with JPY dropping and Nikkei rallying from 2300ET… (on no news whatsoever) before the big decision was unveiled.

  

   

  The BoJ waited the longest since 2014…

  10/07/2014 12:57
  10/31/2014 12:44
  11/19/2014 11:24
  12/19/2014 11:28
  01/21/2015 11:29
  02/18/2015 10:49
  03/17/2015 11:04
  04/08/2015 11:36
  04/30/2015 12:04
  05/22/2015 10:49
  06/19/2015 11:04
  07/15/2015 11:18
  08/07/2015 11:18
  09/15/2015 11:07
  10/07/2015 11:00
  10/30/2015 11:22
  11/19/2015 11:17
  12/18/2015 11:50
  01/29/2016 11:38
  03/15/2016 11:35
  04/28/2016 11:01
  06/16/2016 10:45
  07/29/2016 11:44

   

  Since the last policy action (in Jan)…

  

   

  Bonds were expecting a lot…

  

  *  *  *

  And then the decision hit:

  Disappointment on rates (no change)

  • *BOJ MAINTAINS POLICY BALANCE RATE AT -0.100%

  But it appears BoJ unleashes its reverse twist idea…

  • *BANK OF JAPAN TAKES ADDITIONAL ACTION
  • *BOJ TO INTRODUCE QQE WITH YIELD CURVE CONTROL
  • *BOJ SCRAPS AVG MATURITY TARGET OF JGB HOLDINGS
  • *BOJ TO BUY JGBS IN LINE WITH CURRENT PACE (disappointing)

  And ups it ETF-buying…

  • *BOJ: 2.7T YEN OF ETF BUYS FOR ETFS THAT TRACK TOPIX

  Will do more jawboning…

  • *BOJ TO ENHANCE FOWARD GUIDANCE
  • *BOJ TO EXPAND MONETARY BASE UNTIL INFLATION STABLE ABOVE 2%
  • *BOJ BOARD VOTES 7-2 ON GUIDELINES FOR MARKET OPERATIONS

  So the bottom line is – bigger ETF buying, maintains rates (no easing), maintains bond-buying (no easing), unveils "yield curve control" (steepens curve but crushes bank balance sheets through long bond MTM losses)

  But then they dropped the final tape-bomb…

  • *BOJ: MONETARY BASE MAY FLUCTUATE TO ACHIEVE YIELD-CURVE CONTROL

  In other words – QQE size may increase… which the market liked…

  

   

  And the yield curve is steepening notably…

  

   

  And banks are outperforming on the steepening…

  

   

  "Whatever it takes" moment…

  • *BOJ: COMMITTED TO EXPANDING MONETARY BASE UNTIL CPI EXCEEDS 2%

  But as Enda Curran, Bloomberg's  Chief Asia Economics Correspondent, notes,

  there's a risk of disappointment here. It's far from the shock and awe we've seen before from the BOJ and the moves to control the yield curve appear modest, at first glance.

  And one can see the disappointment in the market's response… 150 NKY points and one big fugure in JPY?

  

  The BOJ says it will buy JGBs "more or less in line with the current pace" of 80 trillion yen. Most observers would have said such a change in commitment meant the BOJ was tapering, and would have anticipated gains in the yen. That may still be the interpretation and reaction in time.

  And as far as the policy review, Bloomberg's Ken McCallum remarks,

  Quick read through BOJ policy review suggests, surprise! It thinks the policy is doing a good job. Says expansion of monetary base has led to a rise in inflation expectations, while negative rates have pushed down the yield curve.

  *  *  *

  Finally, because it's been a long night (and tomorrow will just make it longer), here is a littel humor (or not) as to where this leads…

  

  h/t @Colgo

  

  

• With Trump Regaining North Carolina Lead, Hillary Unexpectedly Postpones Local Fundraiser "Without Reason"

  If there was a time Hillary needed to make a public appearance in the key battleground state of North Carolina to drum up voter support, it was today, if for no other reason than a just released Elon University poll finding Trump now has a modest 44% advantage among likely voters in the Tar Heel State, with 43% going to Clinton.

  

   

  According to the poll, most voters felt Trump would be better for rich people, white people and men, while most believe Clinton would be better for poor people, women and minorities.  “This election is so tight right now, that small swings of a few points should be expected between now and November,” said Jason Husser, assistant professor of political science at Elon and director of the Elon University Poll. “North Carolina has been extremely important over the last several election cycles with very tight election outcomes. These numbers suggest that will continue to be the case, and both campaigns would do well to continue to focus on the Old North State.”

  It’s not just the closeness of the poll that makes NC so critical; it’s also Trump’s recent rebound, which as shown in the following chart from Real Clear Politics has him taking the lead for the first time since late June.

  

  Which is why we find it surprising that with Hillary’s desperately needing to make an appearance, overnight CBS reported that Clinton campaign officials said that a Tuesday fundraiser in Chapel Hill was postponed.

  The Clinton event was billed as “lunch with Hillary Rodham Clinton” and had four donation levels to attend. Those contribution levels were described as $100,000, which featured “chair reception with Hillary,” $33,000, which included a “host reception with Hillary,” $5,000, which included “preferred seating” and $2,700.

  No reason was given for postponement of the Clinton event, which was planned to take place at the home of Betty Craven and Michael Warner.

  Is Hillary’s health once again becoming an issue?

  We don’t know, although based on a video recording of Hillary during a speech last night in Philadelphia, some neurological issues may have returned. As The American Mirror reported, “Hillary’s eyes appeared not in-sync with one another.” A montage of Hillary’s eye-catching moments before a small group of Temple University students can be seen below in footage by The American Mirror.

   

  Whatever the reason, Trump would take full advantage of Hillary’s absence to build on his momentum in the state: a small Eastern North Carolina town is preparing for Donald Trump’s appearance Tuesday. Trump will hold a rally in Kenansville Tuesday just two weeks after making a stop in Greenville. The rally will be held at the Duplin County Event Center and it is likely to be the largest event ever held in Kenansville, with a population of about 855.

  For Trump’s event, Between 7,000 and 10,000 people are expected to attend the rally, which could mean heavy traffic for the usually quiet town. Multiple law enforcement agencies in and around Duplin County are working together to prepare for the event.

  Pocket knives, handguns and other firearms are also not allowed in the event center. Sheriff Blake Wallace said there will be a designated area for any protesters as well. Doors for the event will open at 3 p.m. with Trump scheduled to speak at 5 p.m. Trump also plans to hold a rally in High Point around noon on Tuesday.

  Trump also took the opportunity to take a jab at Clinton’s over today’s surprising fundraiser “postponement.”

  Hillary Clinton is taking the day off again, she needs the rest. Sleep well Hillary – see you at the debate!

  — Donald J. Trump (@realDonaldTrump) September 20, 2016

   

  Has Hillary’s health deteriorated again to the point where she can’t make public appearances due to pneumonia? We should know soon: her next public appearance is scheduled for tomorrow, when she is due to speak at a rally in Orlando, Florida.

  

  

  

• Police Unleash Tear-Gas To Quell Riots In Charlotte After Police Shoot, Kill Black Male – Live Feed

  Large protests are taking place in Charlotte…

  

  As ABC30 reports, protesters gathered in Charlotte on Old Concord Road and police in riot gear are on the tense scene after police shot and killed a person carrying a gun Tuesday afternoon at a Charlotte apartment complex, officials said.

  The member of the Charlotte-Mecklenburg Police Department that was involved in the shooting has been identified as Officer Brentley Vinson. As is standard procedure with any officer involved shooting, Vinson has been placed on paid administrative leave. Vinson has been employed with the CMPD since July 21, 2014 and is currently assigned to the Metro Division.

   

  The man fatally shot was identified as Keith Lamont Scott. His family has been notified of his death. Both the officer and the dead man were identified by police as African-American.

   

  Charlotte-Mecklenburg police officers were at the complex about 4 p.m. looking for a suspect with an outstanding warrant when they encountered the person – not the suspect they were looking for – inside a car, the department said in a statement.

   

  The person exited the car with a gun, and then got back in, the statement said. When officers approached the car, the person got out of the car with the gun again.

   

  At that point, officers considered the person a threat and fired their weapons. Police Chief Kerr Putney told reporters at the scene that at least one officer shot the person.

  At least 100 protesters gathered to demonstrate the shooting Tuesday night. Police blocked access to the area, which is about a mile from the campus of the University of North Carolina at Charlotte. As Charlotte Observer reports,

  Police fired tear gas late Tuesday at several hundred people protesting an officer-involved fatal shooting in the University City area earlier in the day.

   

  Several dozen police officers in riot gear faced off with the shouting protesters on Old Concord Road at Bonnie Lane.

   

  A CMPD helicopter was circling very low over the crowd with a searchlight illuminating the protesters. Old Concord Road was shut down, with people standing in the middle of the road.

  At 10:53, police donned gas masks after a half-dozen water bottles were thrown. Tear gas was soon deployed.

  

  Live Feed:

  Alternate Live Feed:

   

  This just about summed it up…

  Doing a live phone interview with FOX News Channel @JackieibanezFNC at midnight regarding the ongoing protests in Charlotte. pic.twitter.com/moFaun4BG3

  — Bill Melugin (@BillFOX46) September 21, 2016

  #BlackLivesMatter is in black power phase of its existence. It's a racial hate group built on lies. #Charlotte #KKKBLM #BlackPrivilege pic.twitter.com/u2OvM89EMu

  — ????? ??? Deplorable (@FacMagnaAmerica) September 21, 2016

  #KeithLamontScott
  Charlotte#BlackLivesMatter pic.twitter.com/Wha8b1VpxS

  — Mike Niobe (@BLAQ6) September 21, 2016

  Protests erupt after a fatal officer-involved shooting in northeast Charlotte >> https://t.co/iQQKp4Q49U pic.twitter.com/Du5RE3wwjc

  — WAFB (@WAFB) September 21, 2016

  

  

• U.S. Big Banks: A Culture of Crime

   

   

   

  U.S. Big Banks: A Culture of Crime

  Written by Jeff Nielson

  
  

  
  

  

   

  Organized crime. This phrase is now a precise synonym for big-banking in the United States. These Big Banks commit big crimes; they commit small crimes. They cheat their own clients; they swindle outsiders. They break virtually every financial law on the books. What do all these crimes have in common? The Big Banks commit all these crimes again and again and again – with utter impunity.

  
  

  These fraud factories commit their serial mega-crimes, year after year, because the Big Banks know that they will never, ever be punished. On rare occasions, their crimes have been so egregious that U.S. ‘justice’ officials could no longer pretend to be oblivious to them. In such cases, there was a token prosecution, there was a settlement where the law-breaking banks didn’t even have to acknowledge their own criminality, and there was a microscopic fine – which didn’t even force the felonious financial institutions to disgorge all of their profits from these crimes.
  

  
  

  Criminal sanctions, by definition, are supposed to deter criminal conduct. The token prosecutions against U.S. Big Banks didn’t deter Big Bank crime, they encouraged it. But even these wrist-slaps were becoming embarrassing for this crime syndicate, so they dealt with this problem. The Big Bank crime syndicate told its lackeys in the U.S. ‘justice’ department that they were not allowed to prosecute one of its tentacles, ever again.
  

  
  

  The lackeys, as always, obeyed their Masters, and issued a new proclamation. The U.S. ‘Justice’ Department would never prosecute a U.S. Big Bank ever again – no matter what crimes it committed, no matter how large the crimes, no matter how many times the same Big Banks committed the same crimes. Complete, legal immunity; totally above the law. A literal culture of crime.
  

  
  

  What happens when you create a culture of crime in (big) banking? Not only the banks break laws – with impunity – their bank employees do so as well. Case in point: Warren Buffett’s favorite Big Bank – Wells Fargo. Wells Fargo employees came up with a good idea for boosting their salaries: stealing money directly out of the accounts of the bank’s clients.

  
  

  Consider how large this crime became, in just one of these tentacles of organized crime.
  

  
  

  L.A City Attorney Mike Feuer announced a $185 million settlement reached with Wells Fargo, after thousands of bank employees siphoned funds from their customers to open phony checking and savings accounts raking in millions in fraudulent fees. [emphasis mine]

  
  

  Thousands of bank employees stealing millions of dollars from bank customers, in tiny, little increments, again and again and again. But the story gets much worse. Why was a lowly city attorney involved with the prosecution of this organized crime?
  

  
  

  So where is the FBI? Where is the Department of Justice? How about California Attorney General Kamala Harris? Too busy campaigning for the Senate to notice? How about L.A. District Attorney Jackie Larry?
  

  
  

  Only City Attorney Mike Feuer took action, and he only has the authority to prosecute misdemeanors…

  
  

  There are only two ways in which the non-action of the U.S. pseudo-justice system can be explained:
  

  
  

  1. All of the layers of “justice” above the City Attorney, are completely bought-off, and refuse to prosecute one of the corporate fronts of their (real) Masters.
     
  2.  All of the layers of “justice” above the City Attorney considered this systemic crime by Wells Fargo’s employees to be nothing more than a misdemeanour.
     

   

  Take your pick. The U.S. pseudo-justice system is used to seeing so many multi-billion dollar mega-crimes being committed by these fraud factories that the systemic crime at Wells Fargo (which was ‘only’ in the $millions) didn’t even attract their attention. Or, the entire U.S. pseudo-justice system is completely bought-off and corrupt – and they refuse to prosecute Big Bank organized crime.

  
  

  A culture of crime.

  
  

  It gets still worse. Thousands of Wells Fargo employees stole millions of dollars, from countless clients. They were caught. But not even one banker was sent to jail. In a real justice system, systemic crime of this nature would/could only be prosecuted in one of three ways. Either every Wells Fargo criminal would be prosecuted to the full extent of the law (given the egregious nature of the crime), or Wells Fargo management would be prosecuted – because they would have/should have known about this crime-wave. Or else both.
  

  
  

  Bankers stealing money, directly and brazenly, right out of customer accounts, but no one goes to jail? A culture of crime.
  

  
  

  Understand that endemic, cultural changes of this nature don’t originate at the bottom of the corporate ladder. They originate at the top. In the case of the Wall Street crime syndicate; we already know that their management personnel are criminals, because they have admitted to being criminals.

  
  

  Many Wall Street executives says [sic] wrongdoing is necessary: survey

  
  

  If the ancient Greek philosopher Diogenes were to go out with his lantern in search of an honest man today, a survey of Wall Street executives on workplace conduct suggests he might have to look elsewhere.
  

  
  

  A quarter of Wall Street executives see wrongdoing as a key to success, according to a survey by whistleblower law firm Labaton Sucharow released on Tuesday.
  

  
  

  In a survey of 500 senior executives in the United States and the UK [New York and London], 26 percent of respondents said they had observed or had firsthand knowledge of wrongdoing in the workplace, while 24 percent said they believed financial services professionals may need to engage in unethical or illegal conduct to be successful… [emphasis mine]
  

  
  

  One-quarter of Big Bank management admitted that they “need” to commit crimes. A culture of crime. More needs to be said about the rampant, disgusting criminality among upper management in the Big Banks of the U.S. (and UK).

  
  

  A known whistleblower was conducting a public survey, asking known criminals how many of them were engaging in criminal behavior. What percentage of respondents would lie when answering such a survey? Three-quarters sounds about right. One-quarter of Wall Street executives admitted that committing crimes was a way of life. The other three-quarters lied about their criminal acts.
  

  
  

  Monkey see; monkey do. The lower level foot soldiers see their Bosses breaking laws, with impunity, on a daily basis. Their reaction, at Wells Fargo? “Me too.”
  

  
  

  Most if not all of the Wall Street fraud factories conduct detailed “personality testing” on their bank personnel. Are they looking to weed-out those with criminal (if not psychopathic) inclinations? Of course not. They conduct this personality testing to find which employees have no reservations about engaging in criminal conduct – so they can be fast-tracked for promotion.

  
  

  There is no other way in which the systemic criminality of senior banking personnel can be reconciled with the detailed personality-testing in which they participated, in order to reach that level of management. The Wall Street fraud factories look for the most amoral criminals which they can find. And with the exorbitant, ludicrous “compensation” they award to these criminals for their systemic crimes, they end up with (literally) the best criminals that money can buy.
  

  
  

  A culture of crime.

  
  

  As a final note; the U.S. system of pretend-justice already has a powerful weapon in its arsenal to fight organized crime: the “RICO” act. This anti-racketeering statute was created for one, precise purpose: to not merely prosecute/punish organized crime, but to literally dismantle the crime infrastructure which supports the organized crime.
  

  
  

  Not only does the statute confer strong (almost limitless) powers in gathering evidence of organized crime, it also permits mass seizures of assets – anything/everything connected to the organized crime of the entity(ies) in question. In the case of the Big Bank crime syndicate, where all of its operations are directly/indirectly tied into criminal operations of one form or another, if RICO was turned loose on these fraud factories, by the time the dust had settled there would be nothing left.
  

  
  

  Oh yes. If the U.S. ‘Justice’ Department ever went “RICO” on U.S. Big Banks, lots and lots and lots of bankers would go to prison, for a very, long time.
  

   

   

   

  
  

  Please email with any questions about this article or precious metals HERE

   

   

   

   

  U.S. Big Banks: A Culture of Crime

  Written by Jeff Nielson

  
  

  

• Protecting America's Children From Police-State Goons, Bureaucratic Idiots, & Mercenary Creeps

  Submitted by John Whitehead via The Rutherford Institute,

  When an opponent declares, ‘I will not come over to your side,’ [Hitler] said in a speech on November 6, 1933, “I calmly say, ‘Your child belongs to us already.’”

  -As reported by historian William L. Shirer

  It’s not easy being a parent in the American police state.

  Danger lurks around every corner and comes at you from every direction, especially when Big Brother is involved.

  Out on the streets, you’ve got the menace posed by police officers who shoot first and ask questions later. In the schools, parents have to worry about school resource officers who taser teenagers and handcuff kindergartners, school officials who have criminalized childhood behavior, school lockdowns and terror drills that teach your children to fear and comply, and a police state mindset that has transformed the schools into quasi-prisons.

  In your neighborhoods, you’ve got to worry about the Nanny State and its network of busybodies turning parents in for allowing their children to walk to school alone, walk to the park alone, play at the beach alone, or even play in their own yard alone.

  And now in the last refuge for privacy—one’s home—parents are being put through the grinder, their actions scrutinized and judged by government goon squads armed with outrageous, overreaching, egregious laws that subject families to the hyped-up, easily offended judgment of the Nanny State.

  The latest slap in the face comes from the Arizona Supreme Court whose 3-2 ruling in Arizona v. Holle paves the way for parents to be charged as child molesters or sexual abusers for such innocent acts as changing their children’s diapers or taking baths with their kids.

  Now the court is not fully to blame for this idiotic ruling.

  That prize goes to the well-meaning idiots in the Arizona legislature who drafted legislation that criminalizes any contact between an adult and a child’s genitals, whether or not improper sexual intent was involved.

  By allowing this legislation to go unchallenged, however, the Arizona Supreme Court has created a paradigm in which parents are de facto sexual predators who, if formally charged, have the burden of proving their innocence “after a lengthy, expensive, and reputation-tarnishing trial,” as legal reporter Mark Joseph Stern writes for Slate.

  Not only would a parent accused under this law have to prove his or her innocence to the jury “by a preponderance of the evidence,” but they could be forced to spend an undetermined amount of time in jail just waiting to prove their innocence.

  The message is chillingly clear: your children are not your own but are, in fact, wards of the state who have been temporarily entrusted to your care. Should you fail to carry out your duties to the government’s satisfaction, the children in your care will be re-assigned elsewhere.

  In other words, the government believes it knows better than you – the parent – what is best for your child.

  This criminalization of parenthood has run the gamut in recent years from parents being arrested for attempting to walk their kids home from school to parents being fined and threatened with jail time for their kids’ bad behavior or tardiness at school.

  This doesn’t even touch on what happens to your kids when they’re at school—especially the public schools—where parents have little to no control over what their kids are taught, how they are taught, how and why they are disciplined, and the extent to which they are being indoctrinated into marching in lockstep with the government’s authoritarian playbook.

  The harm caused by attitudes and policies that treat America’s young people as government property is not merely a short-term deprivation of individual rights. It is also a long-term effort to brainwash our young people into believing that civil liberties are luxuries that can and will be discarded at the whim and caprice of government officials.

  This draconian mindset that sees young people as wards of the state is in keeping with the government’s approach towards individual freedoms in general.

  Surveillance cameras, government agents listening in on your phone calls, reading your emails and text messages and monitoring your spending, mandatory health care, sugary soda bans, anti-bullying laws, zero tolerance policies, political correctness: these are all outward signs of a government—i.e., a monied elite—that believes it knows what is best for you and can do a better job of managing your life than you can.

  This is tyranny disguised as “the better good.”

  Indeed, this is the tyranny of the Nanny State: marketed as benevolence, enforced with armed police, and inflicted on all those who do not belong to the elite ruling class that gets to call the shots. This is what the world looks like when bureaucrats not only think they know better than the average citizen but are empowered to inflict their viewpoints on the rest of the populace on penalty of fines, arrest or death.

  Unfortunately, even in the face of outright corruption and incompetency on the part of elected officials, Americans in general remain relatively gullible, eager to be persuaded that the government can solve the problems that plague us—whether it be terrorism, an economic depression, an environmental disaster, how or what we eat or even keeping our children safe.

  We have relinquished control over the most intimate aspects of our lives to government officials who, while they may occupy seats of authority, are neither wiser, smarter, more in tune with our needs, more knowledgeable about our problems, nor more aware of what is really in our best interests. Yet having bought into the false notion that the government does indeed know what’s best for us and can ensure not only our safety but our happiness and will take care of us from cradle to grave—that is, from daycare centers to nursing homes—we have in actuality allowed ourselves to be bridled and turned into slaves at the bidding of a government that could care less about our freedoms or our happiness.

  The lesson is this: once a free people allows the government inroads into their freedoms or uses those same freedoms as bargaining chips for security, it quickly becomes a slippery slope to outright tyranny.

  Nor does it seem to matter whether it’s a Democrat or a Republican at the helm anymore, because the bureaucratic mindset on both sides of the aisle now seems to embody the same philosophy of authoritarian government, whose priorities are to remain in control and in power. 

  Having allowed the government to expand and exceed our reach, we find ourselves on the losing end of a tug-of-war over control of our country and our lives. And as long as we let them, government officials will continue to trample on our rights, always justifying their actions as being for the good of the people.

  Yet the government can only go as far as “we the people” allow. Therein lies the problem.

  The choice before us is clear, and it is a moral choice.

  It is the choice between tyranny and freedom, dictatorship and autonomy, peaceful slavery and dangerous freedom, and manufactured pipedreams of what America used to be versus the gritty reality of what she is today.

  Most of all, perhaps, as I point out in my book Battlefield America: The War on the American People, the choice before us is that of blindly obeying, never questioning, and marching in lockstep with the police state OR asking hard questions, challenging injustice, standing up to tyranny, and owning up to our responsibilities as citizens, no matter how painful, risky or uncomfortable.

  As Franklin D. Roosevelt observed, “We cannot always build the future for our youth, but we can build our youth for the future.”

  

  

• Money Laundering Scheme Exposed: 14 Pro-Clinton Super PACs & Non-Profits Implicated

  Submitted by Andrew Kerr via The Citizens Audit,

  This is serious.

  • David Brock operates over a dozen pro-Clinton organizations from his office in Washington DC.
  • Uncovered records expose a constant flow of money between his organizations.
  • Brock’s unregistered Professional Solicitor, the Bonner Group, receives a 12.5% cut every time money is moved.

  There’s a reason why David Brock chooses to house an unregistered Professional Solicitor in his office to raise money for his conglomerate of Super PACs and non-profits.

  Professional Solicitors are required to disclose their active solicitation contracts.  Brock wants his unregistered solicitor, the Bonner Group, to keep their client list hidden for a very specific reason.

   

  David Brock is laundering money

  David Brock has 7 non-profits, 3 Super PACs, one 527-committee, one LLC, one joint fundraising committee, and one unregistered solicitor crammed into his office in Washington DC.

  Uncovered records expose a constant flow of money between these organizations.

  The Bonner Group, his professional solicitor, works off a commission.  Every time money gets passed around, Bonner receives a 12.5% cut.

   

  Follow the money

  Nonprofits are required to disclose who they give cash grants to.

  But they aren’t required to disclose who gave them cash grants.

  This weak system of one way verification is being abused by Brock.  He’s been cycling money between his organizations for years, and the Bonner Group’s 12.5% commission gets triggered after every pass.

  In 2014, Media Matters for America raised $10,021,188.

  The Bonner Group was credited for raising these funds.  Media Matters paid them a $1,147,882 commission.

  

   

  That same year, Media Matters gave a $930,000 cash grant to David Brock’s Franklin Education Forum, an organization that shares office space with Media Matters.

  

  In 2014, the Franklin Education Forum reported $994,000 in total contributions.  93.6% of that total came from Media Matters!

   

  Surprisingly, though, the Franklin Education Forum gave full credit to Bonner for raising that money.  They paid the fundraiser a $124,250 commission in 2014!

  

   

  Notice what happened?

  1. David Brock’s Media Matters gave a $930,000 cash grant to David Brock’s Franklin Education Forum
  2. David Brock’s Franklin Education Forum credited the Bonner Group for raising those funds, triggering the 12.5% commission
     • David Brock paid the Bonner Group a $124,250 commission to solicit a cash grant … from himself!

   

  It doesn’t stop there

  After the Franklin Education Forum retained $869,750, they sent a $816,224 cash grant to David Brock’s The Franklin Forum:

  

  Note: The ‘Franklin Education Forum’ is a 501(c)3, and ‘The Franklin Forum’ is a 501(c)4. They are not the same company.

  Since The Franklin Forum 501(c)4 paid Bonner a commission in 2013, it’s safe to assume fundraiser received a $102,028 commission in 2014. Unfortunately, it’s hard to tell for sure. They still haven’t filed their taxes for 2014!

   

  Let’s recap

  Say, for example, you donate $1,062,857 to Media Matters for America.   This is how David Brock would have used your charitable donation in 2014:

  1.  Media Matters would receive your $1,062,857 donation
     • The Bonner Group would earn a $132,857 commission
     • Media Matters would retain $930,000
  2. Next, Media Matters would give what’s left of your entire donation, $930,000, to the Franklin Education Forum
     • The Bonner Group would ‘earn’ a $116,250 commission
     • The Franklin Education Forum would retain $813,750
  3. The Franklin Education Forum would then forward the remaining $813,750 to The Franklin Forum
     • The Bonner Group would ‘earn’ a $101,718 commission
     • The Franklin Forum would retain $712,031

  In the end, Brock’s solicitor would have pocketed $350,825, almost a third of your initial donation! That’s a far cry from the advertised 12.5% commission.

  As bizarre as that scenario may sound, this is exactly what David Brock did in 2014.

   

  How can we be sure this is intentional?

  David Brock is the Chairman for each of these organizations!  How could he not know what’s going on?

  He’s a hands-on Chairman.  According to their tax returns, Brock allocates time, weekly, to his organizations:

  • Media Matters: 31.50 hours per week
  • Franklin Education Forum: 3 hours per week
  • The Franklin Forum: 1 hour per week

  Furthermore, the New York Times reports that David Brock shares a summer rental in the Hamptons with Mary Pat Bonner, the President of the Bonner Group!

  David Brock will have a hard time claiming ignorance on this.  These transfers are intentional.  He vacations with his solicitor.  Case closed.

   

  Still not convinced?

  David Brock didn’t even bother to give his organizations different phone numbers.  They all share the same phone number!

  

   

  What if…?

  We even located the Bonner Group’s solicitation agreement with Media Matters on Florida’s Gift Givers’ Guide.  Clarification on their commission can be found on page 2:

  

  In English:  Contractually, David Brock has the option to exclude certain contributions from triggering the commission.  In spite of this option, he intentionally chooses to trigger the 12.5% commission for money grants between his organizations.

  Note: Yes, we are making the assumption that all of Brock’s organizations have the same solicitation agreement with the Bonner Group.  Given that his organizations share the same address, board members, and telephone number, we feel it’s safe to assume they also share the same solicitation agreement.

   

   

  This barely scratches the surface

  Utilizing public facing tax returns, along with records submitted to the FEC, we mapped out all the significant money transfers from 2014 that took place in Brock’s office:

  

  

  This is all from just one year!  No further commentary required.

  We understand this may be hard to believe.  We first came across this in July, and are still having a hard time wrapping our heads around it.

  All of the data referenced in this article originated from publicly accessible sources.  Check for yourself – we provided links to the source material in our article exposing the organizations operating in Brock’s office,  This data has been sitting out in the open, gathering dust for years! 

   

  Summary

  If it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck.

  We’ve spent months trying to find some sort of loophole to justify this activity.  But there aren’t any loopholes.  David Brock has something to hide.  Just last week, The Daily Caller reported the following:

  “Brock’s former long-time live-in boyfriend William Grey (whom Brock has thanked in several of his books) threatened to go to the IRS with damaging information about how Brock was running his Media Matters empire.  What did Brock do? He paid Grey $850,000 to keep quiet. Brock reportedly had to sell his home in Rehoboth, Delaware to come up with the money. This certainly seems to indicate that Brock was terrified about what the authorities would uncover.”

  Adding to this, Fox News reported the following:

  “Grey accused Brock of “financial malfeasance” and threatened to undermine Brock’s fundraising efforts.

  “Next step is I contact all your donors and the IRS,” Grey wrote in an email dated May 19, 2010. “This is going to stink for you if you do not resolve this now.””

  We believe that the information presented in this article is what has Brock so terrified.  We feel confident in saying, with close to absolute certainty, that David Brock is laundering money through his Media Matters conglomerate.

  Look at the argument we’ve been making on The Citizens Audit:

  • The 14 organizations stuffed into Brock’s office in Washington DC
  • The fraudulent tax returns filed by Media Matters for America
  • The dirty money flowing into the conglomerate via his unregistered solicitor, the Bonner Group
  • The records exposed and analyzed in this article

  

  

• "We Haven't Seen This Since The Great Depression" – Gallup CEO Destroys The "Recovery" Lie

  By Jim Clifton, Chairman and CEO at Gallup

  The Invisible American

  I’ve been reading a lot about a “recovering” economy. It was even trumpeted on Page 1 of The New York Times and Financial Times last week.

  I don’t think it’s true.

  The percentage of Americans who say they are in the middle or upper-middle class has fallen 10 percentage points, from a 61% average between 2000 and 2008 to 51% today.

  

   

  Ten percent of 250 million adults in the U.S. is 25 million people whose economic lives have crashed.

  What the media is missing is that these 25 million people are invisible in the widely reported 4.9% official U.S. unemployment rate.

  Let’s say someone has a good middle-class job that pays $65,000 a year. That job goes away in a changing, disrupted world, and his new full-time job pays $14 per hour — or about $28,000 per year. That devastated American remains counted as “full-time employed” because he still has full-time work — although with drastically reduced pay and benefits. He has fallen out of the middle class and is invisible in current reporting.

  More disastrous is the emotional toll on the person — the sudden loss of household income can cause a crash of self-esteem and dignity, leading to an environment of desperation that we haven’t seen since the Great Depression.

  Millions of Americans, even if they themselves are gainfully employed in good jobs, are just one degree away from someone who is experiencing either unemployment, underemployment or falling wages. We know them all.

  There are three serious metrics that need to be turned around or we’ll lose the whole middle class.

  1. According to the U.S. Bureau of Labor Statistics, the percentage of the total U.S. adult population that has a full-time job has been hovering around 48% since 2010 — this is the lowest full-time employment level since 1983.
  2. The number of publicly listed companies trading on U.S. exchanges has been cut almost in half in the past 20 years — from about 7,300 to 3,700. Because firms can’t grow organically — that is, build more business from new and existing customers — they give up and pay high prices to acquire their competitors, thus drastically shrinking the number of U.S. public companies. This seriously contributes to the massive loss of U.S. middle-class jobs.
  3. New business startups are at historical lows. Americans have stopped starting businesses. And the businesses that do start are growing at historically slow rates.

  Free enterprise is in free fall — but it is fixable. Small business can save America and restore the middle class.

  Gallup finds that small businesses — startups plus “shootups,” those that grow big — are the engine of new economic energy. According to the U.S. Small Business Administration, 65% of all new jobs are created by small businesses, not large ones.

  Here’s the crisis: The deaths of small businesses recently outnumbered the births of small businesses. The U.S. Census Bureau reports that the total number of business startups and business closures per year crossed for the first time in 2008. In the nearly 30 years before that, the U.S. consistently averaged a surplus of almost 120,000 more business births than deaths each year. But from 2008 to 2011, an average of 420,000 businesses were born annually, while an average of 450,000 per year were dying.

  Bottom line: The two most trusted institutions in the U.S. are the military and small business. Most people know about our military’s importance, but not as many appreciate the role small business plays in creating the majority of new jobs and in national security itself.

  America needs small business to boom again. Small businesses are our best hope for badly needed economic growth, great jobs and ultimately accelerated human development. When we get small business to boom, we can save America, restore our middle class and once again lead the world.

  

  

• Metals Producer Is China's First State-Owned Company To Liquidate In Bankruptcy

  After a struggle to repay its debts since 2015, Guangxi Nonferrous Metals Group, a regional Chinese state-owned metal producer, has finally been declared bankrupt by a Chinese court, becoming the country’s first interbank bond issuer to fail. It is also China’s first bankruptcy case in which a state-owned company has liquidated.  As Caixin first reported, nine months after the state-owned Guangxi first filed for bankruptcy, a Nanning court on Sept. 12 granted the company’s application to liquidate.

  What makes this bankruptcy unique is that while several state-owned enterprises have already gone bankrupt in the past two years due to a failure to repay bank or corporate debt, until recently an unheard of event in China, Guangxi Nonferrous is the first SOE to fail after defaulting in the highly liquid interbank bond market.

  The implications will be substantial in a market in which the central bank “put” when it comes to bond issues, had been pervasive until recently.

  According to Caixin, the bankruptcy will likely deter foreign investors from China’s bond markets, which are facing increasing risks of default as the country embarks on supply-side reform to cut industrial overcapacity. More than 30 bonds have defaulted as of June, according to data provider Wind. Dongbei Special Steel, a producer of alloys for automakers and other manufacturers, defaulted on seven bonds with a combined value of 3.1 billion yuan between March 28 and late July.

  The Guangxi Nonferrous bankruptcy had been closely followed as a case study of how China will resolve complex bankruptcies that mixed private and public funding.

  Based in the southern Guangxi region, the company succumbed after three years of losses and, despite government subsidies, failure to repay its debt. Problems started to surface in June 2015 when the metals company said it was having trouble repaying rmb 1.3 billion of principal and rmb 62.92 million of interest on its private placement note.

  Despite a subsequent bailout by its lender, China Development Bank, one of the country’s three policy banks which later stepped in to rescue Guangxi Nonferrous, the metals maker defaulted, again, just a few months later on three other bond payments that were due in November, February and most recently in April, when it missed payment on a rmb 500 million yuan 3 year private placement note with a 5.56% coupon (which was rated BB). The metals producer cited in the notice “consecutive losses and the fact that it has already entered bankruptcy reorganization procedures” as reasons for the missed payment.

  Which is a valid point: you can’t go more bankrupt if you are already bankrupt.

  Based on company filings, Guangxi Nonferrous owed a total of rmb 14.51 billion to 108 creditors, including China Development Bank, Minmetals International Trust and Shanghai Pudong Development Bank.

  Founded less than a decade ago in 2008 by the SOE regulator State-owned Assets Supervision & Administration Commission (SASAC) in Guangxi, the company engaged in mineral exploration and mining development. But its troubles started long ago, when it reported a combined loss of rmb 2.29 billion from 2012 to 2014 as the industry was struggling with declining demand and a supply glut amid an economic slowdown. “The nonferrous metal industry has been in a downturn, and also the company faced limited returns from previous investments,” said a person close to the firm cited by Caixin, adding the two factors eventually led to a negative cash flow.

  Despite its second default in early 2016, the company was once again given a 6-month leeway by the government to find a way to continue as a going concern, preferably with a vastly deleveraged balance sheet. In a February statement to the Shanghai Clearing House, a government financial institution for the interbank market, the metals company said it filed an application for bankruptcy in Nanning Intermediate People’s Court in December. However, the court gave the company a grace period of six months and set up a committee made of local government and party officials to restructure the debts.

  However, the third time would not be the charm for the insolvent, cash-bleeding SOE: a person inside Guangxi Nonferrous told Caixin that the committee reached out to more than 100 investors to bail out the firm, but only five expressed interest. No deals were reached.

  Creditors apparently were dissatisfied with the results of the negotiations and blamed their failure on the local SOE regulator. “As far as we know, Guangxi SASAC did not provide any detailed plans or give any promises to potential investors,” one creditor said. “Inviting investors was just a formality.”

  In August, creditors submitted a written complaint to the National Association of Financial Market Institutional Investors, which oversees the interbank bond market, accusing the reorganization committee of ignoring creditors’ interests. “The committee did not follow rules to reveal information regarding the restructuring to the public; neither did it communicate with creditors.”

  “The key question now is how much money bondholders can claim,” said Ivan Chung, managing director and head of China credit research at Moody’s Investors Service in Hong Kong. Citic’s Ming expects that the “the claim ratio for creditors will not be high.”

  And thus concludes China’s ad hoc attempt to implement Chapter 11 reorgnization in a corporate culture that has rarely if ever dealth with multiple stakeholders seeking to split apart a bankrupt entity. In liquidation disaster.

  According to Caixin, it is not clear how Guangxi Nonferrous Metals will be liquidated. According to China’s Company Law, the court will administer a bankruptcy auction to sell the company’s assets. The gains will be used to pay employees first, then taxes and eventually creditors. The restructuring committee estimated that the company will need to raise 16 million yuan from the auction to pay around 110 employees. The payment is calculated based on how long an employee worked at the firm and the average salary for the 12 months before the bankruptcy, the person inside the company said. The decision has upset some employees because the company reduced the average salary by almost 50 percent at the beginning of this year.

  Where it will get hairy is once the company’s already unhappy workers realize there is no more job for them. “Employees are still calm, but once the liquidation plan becomes clear, I’m afraid the conflict between the company and the workers increase,” the Caixin source said.

  And while one liquidation of a SOE will be manageable, even if it means all workers have to be transplanted elsewhere, what happens next, now that the seal has been broken, and many more state-owned companies follow in Guangxi’s footsteps. Can China keep a lid on all the upcoming “conflicts between company and workers”, which as we have said since 2013, is the main reason why China is so terrified of terminal corporate failure.

  

  

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• Europe Is Doing Its Best To Pull Itself Apart

  By Richard Breslow, a former FX trader and fund manager who writes for Bloomberg

  At the end of last week, the EU-27 held what was meant to be a reaffirmation of their joint commitment to solidarity and outline their plan to make Europe great again. It was all laid out in the loftily titled “The Bratislava Declaration.” Unfortunately, the document was about as far as things got.

  But for the fact that it’ll be quickly and mercifully forgotten, the summit would go down in history as highlighting the very issues that render the continent dangerously divided. We no longer talk about the “sick man of Europe,” rather that Europe is sick.

  The meeting was preceded by European Commission President Juncker’s 2016 State of the Union speech. He reminded the parliamentarians that “the next 12 months are decisive if we want to reunite our union.” How many times have we heard that before?

  His punchline was ironic, given the ensuing finger-pointing and anger. “Europe is a cord of many strands -– it only works when we are all pulling in the same direction.”

  Hungary Prime Minister Orban blasted the group’s efforts on immigration in vitriolic terms. Vowing to submit counter- proposals on behalf of eastern countries. Ideas in direct contravention of Merkel’s ideas.

  Luxembourg, you’ll remember, recently suggested that Hungary should be excluded from the Union altogether for its “massive violation” of the core values of the EU. Now that’s cohesion for you.

  Italian Prime Minister Renzi refused to take part in a joint press conference with Merkel and Hollande. He shed any diplomatic niceties over the unwillingness of those heads of state to give him the budgetary flexibility he needs to deal with a banking crisis in full bloom. He accused them, and Spain, of breaking Union rules while putting his economy at full risk.

  About the only thing they all do agree on is that European banks can’t afford the capital levels suggested by Basil III. Not very comforting coming from a continent with nearly half of the world’s systemically important banks.

  Angela Merkel said, “Europe is not at all in a good state.” And Europe is famous for waiting until the last second to actually address crises. The danger is that threats are flowing from so many holes that plugging up the leak at the last moment may take more fingers than the Little Dutch Boy of myth has.

  *  *  *

  Full Bratislava Declaration below…

  Bratislava Declaration

  

  

• The Grand Global Circus: 2016 US Presidential Elections

  Submitted by Gulam Asgar Mitha via Orientalreview.org,

  Politics is the art of looking for trouble,
  finding it everywhere, diagnosing it incorrectly
  and applying the wrong remedies—Groucho Marx

  When I was young I remember how excited many of us children would be to visit the circus when it came to town. For us the best part was the opening, the clown or the joker. We’d have bundles of laughs with their slapstick humour and pranks. Sometimes the clown would be a male and sometimes a female but that did not matter. It was the entertainment. After the laughter came the juggler with either 6 or 8 or 10 balls going from one to the other hand. Not one would drop. Incredible! Sometimes instead of the balls, it’d be rings of fire. Awesome! Breathtaking! There’d be few more circus acts that used to follow but nothing quite like the clown’s or the juggler’s entertainment.

  Several decades have passed since I last visited a circus and now that I’m a grown-up, the circus is here on the global stage in the year 2016. I’m referring to the US Presidential elections in November, the last act of the circus whose outcome is known. However what is most interesting has been the clown and the juggler acts for this grown-up child. These two players have kept the world fully entertained.

  The clown: Donald Trump. His verbiages and sarcasms are laughing matter and one wonders when they’ll change in the next few minutes because they’re so entertaining. Even when he does not speak, his silent facial expressions captured by the media are equally entertaining. At best he is honest.

   

  The juggler: Hillary Clinton. Her very few verbiages and sarcasms are missing and she is a serious entertainer, unlike the clown. She even came with an assistant Bernie Sanders. The juggling is no laughing matter because it is a very serious act.

  None of the Republicans even care to support their clown. They all want Hillary to be the successor to the incumbent Obama. She did a fantastic job in Libya as Obama’s Secretary of State, bombing the country to shambles and leaving a legacy of disarray and mayhem.

  In one of my previous article “Beyond the Nuclear Deal: A Civil War in the Middle East“, I’d written that the two US political parties hiding under the garbs of “democracy” are both right wingers (conservatives, liberals, neocons, fascists, capitalists etc.) pursuing the same geopolitical agenda in the Middle East. On one hand the Republicans are pursuing a belligerent agenda while the Democrats are pursuing a diplomatic agenda. The goal for both parties is exactly the same, that being global hegemony and survival as an empire. This ideology is shared among their right wing NATO partners and all are beating on the war drums while at the same time working hypocritically for peace. It is lamentable that Muslims and their leaders fail to understand the obvious.

  Tehran Times of 5 August 2016  reported Ali Akbar Velayti (close confidante of Iran’s supreme leader Ali Khamenei) stating that “There is no difference between the Republicans and Democrats in terms of their stance on our country and as we see the Democrats also create obstacles to the JCPOA agreement (of 14 July 2015) with Iran.” Khamenei asserted that “We do not violate the deal, but if the other party violates it, if they tear the agreement up, we will light it on fire,” He was referring specifically towards US belligerence with Iranian missile program and most recently after US Republican Congressman Peter Roskam’s bill of 9 July got passed blocking sale of Boeing and Airbus aircrafts without any significant Democratic opposition. Roskam cited that Iran would use the aircrafts for military purposes.  Both US political parties are sowing the seeds of the great Shia-Sunni civil war.

  

  The final act will be played out between the clown and the juggler and the winner will be declared by the media on 8 November. In the meantime, pollsters will be handing out questionnaires to the circus participants for their feedback and reporters will go around with questions as to who has been the best performer.

  Now let’s get serious. I’m one of the circus participants, a Muslim. I’ve hated Trump because of his anti-Muslim or anti-immigrant verbiages and sarcasms so on the poll card I’m going to give him very low marks and when the reporter comes to me with his microphone, I’ll just say, without any thoughts, that I’m going to vote for Hillary, a pro-Muslim, pro-immigrant Presidential candidate.

  Khizr Khan whose son died for America some few years ago did not come on his own to the DNC; he was invited because as a Muslim he’d be in a better position to convince his compatriots. Many things are known about him – some rumors, some facts – but one is that, as an attorney, he also used to work for Hogan, Hartson and Lovells law firm within Washington DC which has direct ties to the Clinton Foundation.

  Khizr came to the DNC to convince Muslims (and immigrants) that Hillary is the hope for them. Not Trump. At least Trump is honest to state that “the elections are rigged in favor of the ‘Devil Hillary Clinton’?”. There is no doubt that the elections will be staged in favor of Clinton.

  Very few Americans can see through Clinton’s design which will be revealed after she moves in to occupy the White House and forms her cabinet. One sure sign of an impending civil war will be the neo-cons in the cabinet. Victoria Nuland is Hillary’s protégé at the State department. Will she or her husband Robert Kagan, one of the co-founders of PNAC (Project for the New American Century) be selected Secretary of State in the cabinet? There are the other influential neo-con Kagans namely Fredrick Kagan (brother of Robert Kagan) or his wife Kimberly Kagan who founded the Institute for the Study of War- a hawkish Washington group favoring an aggressive American foreign policy. Clinton also has a Muslim protégé – Huma Abedin (fluent in Arabic as she had lived in Saudi Arabia with her Indian mother and Pakistani father) appointed as Clinton’s deputy chief of staff and vice chairwoman for 2016 campaign for president. Khizr will have good company in the state department.

  On Election Day all the Muslims and the immigrants will vote for Hillary as the first woman President who will follow the first black president into the White House. The US does not tolerate gender, religious, color, ethnic or race discrimination. But what will Hillary do for Muslims in return that Trump would never have been able to do? You guessed it – start a Shia-Sunni civil war. For her it’ll be a simple matter, exactly what she did in Libya. John Kerry has prepared the groundwork for her with the Iran card to get the war started on a yet unknown pretext.

  The civil war in the Middle East will not only be about Israel’s security but also an American imperative as a global empire and for the control of the vast energy resources under the desert sands.

  

  

• Chinese Loan Demand Drops To All Time Low

  With China’s latest housing bubble once again in full swing, when as reported overnight the average new-home price in China’s 70 cities rose 1.2% in August, the biggest monthly increase in six years…

  

   

  … the euphoria for home purchases can be easily explained: an epic burst of mortgage loan issuance, serving as the false foundation for China’s latest home buying spree.

  

  However, step away from the residential housing market, and things turn decidedly sour. As Caixin reported overnight, loan demand in China, as opposed to record supply, 

  

  … has plunged to all time lows. Specifically, the willingness of Chinese companies to borrow reached dropped to the lowest print in the series’ 12 year history, according to a survey published by the country’s central bank on Sunday.

  Amid China’s accelerating economic slowdown, the country’s overall index of loan demand was at 55.7 in the third quarter, the lowest since the People’s Bank of China started to compile the data in 2004. The index of loan demand from medium-sized enterprises fell to 52 and for small business to 55.8, both historic lows. However, the figure for large corporations slightly rebounded at 51.4, up 0.1 points from a quarter earlier.

  

  Faced with a slower economy, small and medium-sized enterprises (SMEs) now find it difficult to expand their businesses, said an SME loan manager at one of China’s midtier commercial banks who did not want to be named, citing bank policy against speaking to the media. He said his bank has been losing borrowers since the first half of 2015.

  Additionally, banks have imposed tougher rules on approving loans to SMEs amid rising non-performing loans. Tighter restrictions, in turn, have cooled companies’ enthusiasm to seek new funds from banks, the SME loan manager said.

  And here is a stunning statistic you will likely not hear anywhere else as it may shake the very foundations of China’s house of cards: “20% to 30% of his business customers haven’t repaid their debt, he said.”

  As we have reported for years, in the latest period, 12 out of China’s 16 publicly listed banks saw a rising level of non-performing loans in the first half of 2016 compared with the same period a year before.

  At the same time, and explaining the rise in NPLs, the demand by manufacturers for loans declined in the third quarter, falling to 46.8 from the second quarter’s 48.

  Chinese manufacturers’ growth stagnated in August, with the Caixin China Purchasing Managers’ Index coming in at 50, down from 50.6 the previous month. The PBOC’s index of loan demand from the non-manufacturing sector remained unchanged at 55.1.

  Some more Chinese fiction peddling: more than half of the bankers from the 3,100 institutions surveyed by the central bank said the national economy in the third quarter was “cooling down,” while 44.6 percent of them thought the overall trend looked “normal.” That’s more than half who said China’s economy was set for more economic deterioration.

  Finally, of the 20,000 residents surveyed, 53.7% said the housing prices are “high and unacceptable,” 0.3 percentage points more than in the second quarter. Only 3.4 percent described prices as “satisfactory,” and the remaining 42.9% considered them “acceptable.” Then again, if loan demands continues to collapse at this record pace, the clearest indication yet that China is indeed headed for a hard landing despite the trillions in new loans created (which go who knows where if they are not actually demanded), all those house prices will soon become far more affordable.

  

  

• US Supplies Saudi Arabia With White Phosphorus, Provided Bombs Used In Strike On MSF Hospital

  Three years ago, the great democracies of the west used a specially produced media campaign in which they paraded a doctored YouTube clip showing a chemical attack allegedly perpetrated by the Assad regime against his own people, to unleash the first military intervention in Syria, with the intention of removing the country’s president; a military campaign that has not only gone nowhere, but has led to the deterioration of a bloody and relentless civil war whose refugees may soon cost Angela Merkel her political legacy, led to the advent of the Islamic State one year later, and the intervention of not only Russia one year ago but – most recently – China, also on the side of the Saudi regime.

  Much less has been said about a the deadly military campaign waged by US ally, and generous Clinton Foundation donor, Saudi Arabia, which on March 26, 2015 began carrying out airstrikes in Yemen and imposing an aerial and naval blockade on the country, allegedly in response to requests for assistance from the contested government of president Manusur Hadi, who asked for help to quell an uprising by Houthi forces loyal to former president Ali Saleh, who had been deposed in the 2011 Arab Spring uprisings.

  The reason why this particular campaign, which continues to this day with thousands of innocent civilian casualties, has been largely swept under the rug is because of the direct and indirect involvement of US support which according to a new report, may include the highly controversial compound, white phosphorus.

  According to WaPo, Saudi Arabia appears to be using U.S.-supplied white phosphorous munitions in its war in Yemen, based on images and videos posted to social media, raising concerns among human rights groups that the highly incendiary material could be used against civilians, something which is banned by the Geneva convention. Under U.S. regulations, white phosphorous sold to other countries is to be used only for signaling to other troops and creating smoke screens. When the munition explodes, it releases white phosphorous that automatically ignites in the air and creates a thick white smoke. When used against soldiers or civilians, it can maim and kill by burning to the bone.

  

  The WaPo reports that while it is unclear exactly how the Saudis are using the munitions, the government has already received widespread condemnation for its indiscriminate bombing in civilian areas since its campaign against rebel forces in Yemen began in 2015. U.S. officials confirmed that the American government has supplied the Saudis white phosphorous in the past but declined to say how much had been transferred or when. After reviewing a social media image taken from the battlefield that showed a white phosphorous mortar shell, a U.S. official told the Washington Post it appeared to be American in origin but could not trace it to a particular sale because some of the markings were obscured.

  “The United States expects any recipient of U.S. military assistance to use those items in accordance with international law and under the terms and conditions of any U.S. transfer or sale,” said a State Department official, who spoke on the condition of anonymity to discuss politically sensitive issues. Only in this case, Saudi Arabia appears to have an exemption.

  The official said the department was looking into reports of Saudi forces’ improperly using U.S.-supplied white phosphorous munitions. “If a country is determined to have used U.S.-provided weapons for unauthorized purposes, the U.S. will take appropriate corrective action,” the official said.

  While the United States has grown wary of its material support to the Saudi military, it continues to provide Saudi Arabia with billions worth of weapons in periodic “deals.” Still, in May, the Obama administration halted the sale of roughly 400 cluster bombs to the Saudis after human rights organizations documented the weapons’ use in civilian areas. This week, lawmakers on Capitol Hill moved to delay a $1 billion arms deal that would replace some of Saudi Arabia’s U.S.-supplied tanks that have been damaged in the conflict.

  International humanitarian law does not ban the use of white phosphorous outright, but there is a strict requirement that it be used only in areas clearly separated from civilians. Even using it against enemy combatants has raised concerns, given that the munitions can cause particularly horrific injuries. In the case of Saudi Arabia, neither consideration has prevented the kingdom from using the substance under any conditions.

  * * *

  But it’s not just the use of US-supplied white phosphorus that is an issue, however.

  A report by Amnesty International confirmed that a US-made explosive was used in an attack on a Yemeni hospital on August 15. The medical facility – Abs Rural Hospital, run by Doctors Without Borders (MSF/Medecins Sans Frontieres) – was hit by a strike that left 11 people dead and 19 others injured. Over 4,500 patients had been treated in the hospital since MSF began supporting it. he attack was the fourth over the last 10 months on an MSF facility in Yemen, and led the organization to close its hospitals in the north of the country.

  
  Damage is seen inside a hospital operated by Medecins Sans Frontieres
  after it was hit by a Saudi-led coalition air strike

  Experts analyzed photos of munitions used in the bombing and concluded that a US-made precision-guided Paveway-series aerial bomb was among them. “Any attack on a medical facility in a war zone is an affront to humanity, yet this bombing is sadly just the latest in a grim series of attacks on hospitals and clinics by the Saudi Arabia-led coalition,” Philip Luther, Research and Advocacy Director for the Middle East and North Africa at Amnesty International, said in the official press release. “Deliberate attacks on hospitals and medical facilities are serious violations of the laws of war and can never be justified. Hospitals, which have special protection under international humanitarian law, should be safe places of treatment and recovery,” he added.

  “It is outrageous that states have continued to supply the Saudi Arabia-led coalition with weapons, including guided and general purpose aerial bombs and combat aircraft, despite stark evidence that those arms are being used to attack hospitals and other civilian objects and in other serious violations of international humanitarian law.”

  

  Cited by RT, Luther called for a “comprehensive embargo on all weapons that could be used by any of the warring parties in Yemen,” and punishment for those behind the attack. Since he was referring to the US, that will not happen.

  * * *

  Finally, and most troubling, two days ago the Guardian found that one third of 8,600 Saudi-led strikes in Yemen since March 2015 have targeted civilian sites such as hospitals, schools, and mosques. It comes as the US Senate is set to vote on a draft bill that could stop a $1.15 billion weapons and military equipment delivery by the US to Saudi Arabia. The bill was approved in August, but later that month 64 Senators signed a letter to halt the sale – ensuring that the Senate would discuss it.

  Last November, the US State Department okayed the delivery of weapons worth $1.29 billion to Saudi Arabia, despite the fact that Amnesty International had repeatedly revealed they were being used in illegal and deadly attacks on civilians.

  Since coming to office seven years ago, the Obama administration has made over $115 billion worth of arms sales to the Saudis – more than any other US presidential administration, a report in the Security Assistance Monitor said.

  Over 3,700 civilians have been killed and some 2.8 million displaced by the ongoing war in Yemen, now in its second year, according to the latest estimates by the UN Office of the High Commissioner for Human Rights. Which is also why while the US airwaves are constantly bombarded with news about the Syrian conflict, hardly any major outlet will touch the just as deadly Yemen war with a ten foot pole.

  

  

• Why Is There So Much Confusion In Macroeconomics?

  Submitted by Frank Hollenbeck via Mises.ca,

  Should we print, not print? Stimulate, not stimulate? Is austerity the right or wrong policy? Is government spending or printing effective? If we ask two economists these questions, we will likely get three opinions for each question. Economists seem confused, yet these questions are more important today than ever. Where does this confusion come from? Doesn’t economic theory give us clear-cut answers? It does, but poor terminology and a lack of focus have muddied the waters. Many macroeconomic disagreements can be elucidated with a better understanding of the role played by holding cash, or hoarding, in economics.

  To a large degree, Keynes is to blame for much of this confusion by using a double entendre. In his “General Theory,” he did not clearly distinguish between savings (correctly defined) and hoarding. The paradox of thrift is a misnomer. Thrift is both savings and hoarding. It should correctly be called the “paradox of hoarding”. Economists should not be this careless with terminology.

  Even today, confusion persists. When Paul Krugman discusses thrift he is alluding to the impact of hoarding. When Austrians talk of thrift they are referring to savings. Keynesians and Austrians seem to be on different planets and some of the blame can be attributed to poor terminology.

  In a circular flow economy, the value of output must be equal to income. Income represents claims on goods and services, and can be divided into three categories. It can be consumed, saved or hoarded. Consumption is using claims on goods and services for personal satisfaction. The correct narrow definition of savings is a transfer of claims from one group to another. This is the definition found in the classical loanable funds theory of interest rates. The saver is giving up his claims to be able to consume more goods and services in the future. He makes this transfer to investors who use these claims to purchase plants and equipment to produce goods and services in the future. The last category is hoarding, or holding cash, which is the equivalent of stuffing money in your mattress. From income, it is the only claim that is not used to purchase currently produced goods and services. Keynes, and his followers, constantly uses the word “savings” to imply two very different and distinct acts: the activity of transferring claims and the activity of holding claims. Classical economists were never this careless.

  Since these claims are unused, Keynesians fear, in a circular flow economy, the value of output would be higher than the amount of claims used to purchase that output. Since some output would remain unsold, inventories would rise, output would be curtailed, and a downward spiral in output would ensue. Any future shift in hoarding will create another spiral in output. In this scenario, prices do not fall to bring the value of output in line with the value of claims. In a Keynesian framework, prices are sticky downward.

  Let me explain this point with a very uncomplicated example. Suppose you have 10 pencils and $10. What is the price of a pencil? It can’t be $2 since we would have pencils that remain unsold, so the price would tend to fall. It can’t be 50 cents since people would have money and nothing to buy. Prices would be bid up. This would lead to equilibrium where pencils would be sold for $1 each.

  Since the government does not create pencils, the only way it can obtain pencils is by taking claims from others by borrowing, taxing or printing. If it prints $10 and used it to buy pencils, the price of pencils will increase to $2 (inflation) since we now have $20 chasing 10 pencils. The government will obtain 5 pencils by lowering the purchasing power of money. It has taxed cash balances the equivalent of 5 pencils. The same logic applies to taxes or borrowing. Every dollar printed, borrowed or taxed to finance government spending displaces an equivalent purchasing power from private consumption or investment spending. Government spending is robbing Peter to pay Paul. It rearranges the deck chairs, but does not add deck chairs.

  Most economists would agree with this “crowding out” example. Why then do some economists advocate more government spending if government spending displaces an equivalent amount of private spending? The answer lies in the role played by hoarding.

  From our initial example, suppose we hoard $5. The price of output will fall to $0.50, a period of deflation, since we now have a money supply of $5 chasing 10 pencils. If input prices also fall proportionately from $0.80 to $0.40, we are still making the same profit rate and the economy has simply adjusted input and output prices to a new level of hoarding. Hence, the level of hoarding is immaterial and the economy is operating as though we had started out with a money supply of $5 and 10 pencils.

  The Keynesian fear is twofold.

  If output prices are sticky, the price of a pencil will remain stuck at $1, or will only drop with a long lag. In this situation, with $5 chasing 10 pencils at a price of $1, we will be left with 5 unsold pencils. This excess output will lead businesses to curtail output, fire workers, until we are left with a new equilibrium of maybe only 5 pencils. The entire adjustment process has been in output and not in price.

   

  The second fear is even if output prices adjust, input prices do not adjust quickly enough. If input prices remain at $0.80 while output prices are at $0.50 we are producing at a loss, which leads to less output, more hoarding, and a downward deflation-depression spiral in the economy.

  The Keynesian prescription to avoid this depression in output is to have the government substitute its own claims for those being hoarded. The government’s claims are substituting for claims not being used. The price of pencils would remain at $1, with $5 of private demand and $5 of government demand. The government would have to print and use $5. It can neither borrow nor tax to finance this government spending since that would be mostly displacing claims that are not being hoarded.

  According to the well know Keynesian balance budget multiplier, if the government spends $1 and taxes $1, output will rise by $1. This output magic occurs because the amount taxed reduced consumption and hoarding. If, instead, the amount taxed had reduced savings, in the place of hoarding, $1 of government spending will displace $1 of consumption and (savings) investment spending: the multiplier is zero, and government spending, fiscal policy, has no direct aggregate demand influence on output. Of course, if we consider the supply side, the multiplier is negative. As Murray Rothbard eloquently said, this is a transfer of “resources from the productive [private sector] to the parasitic, counterproductive public sector.”

  Much of Keynes’s economic analysis was to disproportionately elevate the importance of hoarding. Classical economist considered the level of hoarding inconsequential, and its changes even less so.

  From this analysis we can draw the following conclusions from a Keynesian perspective. Government spending is only effective if it substitutes for claims that are being hoarded. This spending must occur while the public is increasing its desire to hoard, such as after a crash such as 2000 or 2008, and only justifiable if there is a slow adjustment of both output and input prices. Also, this substitution is only effective if it is done through monetary and not fiscal policy.

  Of course, this analysis has only looked at the direct aggregate demand effects of such printing, and has not examined the microeconomic impacts, supply side and other negative effects of printing money.

  Such printing is distortive (altering absolute and relative prices) and will cause a misallocation of resources since the new money will not be spent in the exact same areas or proportions as the money that is now being hoarded. Furthermore, even if the government could find the right areas or proportions, it would still lead to misallocations, since the hoarding reflects a desire to realign relative prices closer to what society really wants to be produced. The printing of money may actually increase the desire to hold cash, as we see today. Holding cash may be the preferred choice over consumption or investment (savings) when relative and absolute prices have been distorted by the printing press.

  Of course, no one is asking the critical questions. Why did holding more cash, or hoarding, change the money supply, and why did the public and banks decide to increase their cash holdings in the first place? Without fractional reserve banking, neither the public nor the banks could significantly change the money supply by holding more cash, nor could banks extend credit faster than slow-moving savings. The boom and ensuing malinvestments would be a thing of the past and, thus, so would the desire to hold more cash during the bust phase of the business cycle.

  If Keynesians are really concerned about this deflation-depression spiral, they should be addressing the cause — fractional reserve banking — and not the result. Telling a drunk that he can avoid the hangover by drinking more is simply making the situation worse. The real solution is to have him stop drinking.

  In addition, what happens when the economy improves and people reverse their hoarding? We will now have 10 pencils and $15. Other things being equal, prices will rise from $1 to $1.50, unless the government retires the $5 it put into the system. If they do, this will create another round of altered relative prices. The medicine is likely to be worse than the disease.

  While Keynesians may have been able to make a case for printing press money as a substitute for hoarding in 2008, it is impossible to do so today. Current government spending or printing is simply displacing claims from the private sector. Today, there is no theoretical justification for the current overzealous printing, borrowing and taxing. Economists should be united against this displacement of claims. Growth and employment are simply more likely if claims are in private hands than in public hands.

  Surprisingly, Keynesians and Austrians should be uniting to achieve the same goal, albeit for different reasons. Austrians fear the boom caused by excessive credit growth, while Keynesians (and Monetarists) fear the bust created by increases in hoarding. End fractional reserve banking and satisfy two birds with one stone.

   

  

  

• MeRKeL UNDeR RePaiR…

  

  

• Italy's PM Unloads On Deutsche Bank's Unfixable Problem: "Hundreds And Hundreds Of Billions Of Derivatives"

  After a tumultuous week for Deutsche Bank which saw the DOJ demand a $14 billion settlement for the bank’s past RMBS transgressions, it was another bad day for the giant German lender, whose stock and contingent converts tumbled after the investing community realized that even a modest $5.5 billion final settlement would leave it perilously undercapitalized and likely scrambling to raise more cash.

   

  

  As SocGen’s Andrew Lim calculated, Germany’s biggest bank would be “significantly undercapitalized” even if an eventual settlement with the DoJ can be covered by the bank’s reserves. Any settlement above €5.4 billion would imply a capital increase is needed just to pay the fine, he wrote.

  Taking prompt remedial action, news leaked over the afternoon that Deutsche Bank was hoping to bolster its balance sheet and boost its capitalization, when The Street first reported that it was trying to securitize at least some $5.5 billions of corporate loans to offload risk. The problem for Deutsche Bank, already ranked among the worst-capitalized lenders in European stress tests before the DOJ’s $14 billion demand, is that by admitting it is in balance sheet “recovery” mode it would make shareholders even more nervous: what if the bank failed to securitize those loans? Or what happens if yet another legal settlement arrives? Or, worst of all, what if Mario Draghi cuts rates again and pressures the bank’s inceome statement even more? There is little the bank can cut as is: CEO John Cryan already suspended the bank’s dividend to preserve capital and has repeatedly ruled out tapping investors for more; but if he has to, he surely will.

  But not even that is the biggest problem facing Deutsche Bank.

  Recall that several years ago, we were the first to point out the true “elephant in the room”, namely Deutsche Bank’s $75 trillion at the time in gross notional derivatives which as we said then was about 20 times bigger than Germany’s GDP, and 5 times bigger than the entire economic output of the Eurozone.” Much to the chagrin of those who did (and still do) accuse of being conspiratorial something or another, since then Deutsche Bank stocks has plunged, reaching all time lows as recently as a few months ago.

  Still, Deutsche Bank’s “derivative problem” was largely ignored by the “experts” because why bring attention to something which is fundamentally a devastating break in the narrative that “Europe is fine” and the financial crisis is contained.

  Fast forward to today when Europe is once again not fine, only this time one can’t blame Europe’s problems on Greece or Brexit, when in a surprising admission of reality, none other than Italy’s prime minister Matteo Renzi, “went there” and slammed Deutsche Bank as the true “derivative problem” facing Europe.

  To be sure, Renzi has his own problems, chief among which is how to conclude the latest and greatest bail out of Italy’s third largest and most insolvent bank, Monte Paschi, a process which we hear is not going well at all, without resorting to a government-funded rescue – a plan which the Germans have repeatedly frowned upon. 

  So it is not surprising that when faced with stiff resistance from the Germans, Renzi decided to call a spade a spade when, as Reuters reports, he said that the difficulties facing Italian banks over their bad loans are miniscule by comparison with the problems some European banks face over their derivatives.

  As Reuters reports, Renzi once again broke with the fine European tradition of ignoring the massively overlevered elephant in the roon, and said on Monday that Germany’s central bank chief Jens Weidmann should concentrate on fixing the problems of his own country’s banks, after Weidmann had urged Italy to cut its huge public debt.

  Specifically, Renzi told reporters in New York that Weidmann needed to solve the problem of German banks which had “hundreds and hundreds and hundreds of billions of euros of derivatives” on their books.

  He was, of course, referring to Deutsche Bank.

  Renzi, who has staked his career on a referendum on constitutional reform this autumn, has repeatedly criticized other European leaders in the last few days over what he sees as an inadequate European Union response to the problems of his country’s economy and Europe’s immigration crisis, which in 2016 has slammed Italy most acutely, largely bypassing Germany for the time being. In this particular case, Renzi was responding to an interview Jens Weidmann gave to daily La Stampa on Monday, in which the German said Italy needed to consolidate its budget to avoid doubts emerging about the sustainability of its public debt.

  Renzi’s angry response was predictable: stop worrying about Italy’s debt problem, after all that’s what the ECB is for, to monetize it and keep rates artificially low indefinitely. Instead worry about your own mega bank, which judging by its stock price, is something the market has been doing for quite a few months now.

  And while Renzi may be wrong about almost everything else, he is right about Deutsche Bank’s “hundreds and hundreds and hundreds of billions of euros of derivatives.”

  €42 trillion to be precise.

  

  Then again, it’s more than just Deutsche Bank’s problem; more than just Germany’s problem. If something bad happens to DB, it is Europe’s problem.

  

  So while DB may or may not find a few billion under the rug to plug its latest leaking hole, the real question is what happens when, not if, another crisis flares up and one or more counterparties to the bank’s trillions in various derivatives suddenly is unable to post margin, as its obligation becomes a pre-petition claim, sticking DB with the entire gross notional derivative amount and forcing the German giant to foot the gross, not net. Something tells us that like in 2013, nobody will acknowledge the biggest elephant in the room: after all, at this point financial liabilities are now a political issue (especially when one can blame Putin). The only difference with 2013 is that as Europe continues to splinter, more disenchanted political leaders (because the “enemy of my enemy is my friend”) will join Renzi in admitting that Europe’ emperor – Germany – and its mega bank, is not only naked but one needs scientific notation to express just how big its financial problems truly are.

  

  

• The Gravest Threat To Your Retirement

  Submitted by Tom Dyson via InternationalMan.com,

  It’s one of the most exciting, most incredible charts in human history…

  Unfortunately, it’s also one of the scariest.

  Take a look:

  

  It’s a chart from the U.S. Census Bureau. It shows the centenarian population.

  A centenarian is a person aged 100 or older.

  The arrow shows how many centenarians exist in America today. The curved line after it shows the explosion of the 100-year-old population in the years to come.

  In every developed nation worldwide (such as the United Kingdom, Canada, Australia, and Japan), you’ll see the same trends.

  Lifespans are increasing at an unprecedented rate. And the 100-year-plus age bracket is the fastest-growing group of people.

  Let that sink in for a minute.

  Right now, the U.S. has an estimated 72,000 centenarians.

  If the population of centenarians continues to increase at its current rate, the U.S. will have close to 500,000 people over the age of 100 by 2055. A sixfold increase from today’s numbers.  

  Some of you reading this will live to 100. Many experts believe the first humans to live past 125 have already been born.

  Thanks to advances in medicine, diet, lifestyle, and hygiene, we’re living longer than ever before. And it’s only going to get better (or worse, depending on how you look at it).

  Living to 100 is an amazing prospect. It means more time with grandkids… more time with friends… more time to see the world… more books to read… additional hobbies to learn.

  That’s the exciting, incredible part of getting older in America.

  The scary part is paying for it all.

  Those additional years will also contain health care bills, food bills, electric bills, insurance bills, and dozens of other bills. That’s why one of your greatest concerns should be running out of money in retirement.

  Thirty years ago, the solution to money worries in retirement was relatively simple.

  There was no concern about the solvency of Social Security.

  Many corporations paid their retired employees pensions.

  Back then, you could put your saved money in safe corporate bonds that paid over 9% in interest. Even short-term government bonds paid over 6% in interest.

  These days, the solvency of Social Security and just about every government program is in question. Pensions from corporations have all but disappeared. And with interest rates near zero percent, government bonds yield less than 2%.

  Add to this the coming volatility in the stock market as The Great Unwinding unfolds.

  (The Great Unwinding is what I call the largest credit contraction in history. The world has binged on debt since the Great Depression in the 1920s and ‘30s. We’re now at the breaking point. Trillions in debt are starting to go bad and leave the system. I think the market is now in a primary downtrend. This means we’re in a bear market where assets and markets will fall steadily for a long time.)

  The risk of running out of money because of all these factors is real… and growing.

  It’s perhaps the scariest time to be a retiree.

  I don’t think many see it coming. And I don’t see many people preparing for it.

  Now, most people are counting on Social Security to bail them out. After all, with Social Security, you get steady, consistent income not tied to volatility in the stock market… for the rest of your life.

  But if you rely, or will rely, on Social Security for a big portion of your retirement income, it’s time to start paying close attention.

  With increasing life expectancy rates, I have serious concerns many retirees aren’t taking their financial futures into their own hands. And that they don’t have another plan in place. 

  If this sounds like you, don’t lose hope. A longer life is a blessing. And no matter how unprepared you may feel at the moment… there’s still time to set yourself up for a fulfilling, worry-free retirement. But you must start taking the right steps to prepare.

  

  

• House Committee Reviewing "Oh Shit" Guy's "Troubling" Reddit Thread

  Earlier today we wrote about a Reddit thread that was allegedly created by Paul Combetta, the “Oh Shit” guy of Platte River Networks, seeking tech advice on how to “strip out a VIP’s (VERY VIP) email address from a bunch of archived emails” (see details here: “Dear FBI, This Is Intent: Hillary’s “Oh Shit” Guy Sought Reddit Advice On How To ‘Strip VIP’s Emails’“). 

  “Ironically,” the day before the Reddit thread appeared, the Benghazi Committee reached an agreement with the State Department on the production of email and other records related to their investigation.  How weird, right?
  

  Well, it seems as though the Reddit thread is getting some attention on Capitol Hill as well.  Earlier, Mark Meadows (R-NC), Chair of the Government Operations subcommittee of the House Oversight Committee, told The Hill that committee staff are reviewing the Reddit thread and find the “date of the Reddit post in relationship to the establishment of the Select Committee on Benghazi [to be] troubling.”
  

  “The Reddit post issue and its connection to Paul Combetta is currently being reviewed by OGR staff and evaluations are being made as to the authenticity of the post.”

   

  “If it is determined that the request to change email addresses was made by someone so closely aligned with the Secretary’s IT operation as Mr. Combetta, then it will certainly prompt additional inquiry.  The date of the Reddit post in relationship to the establishment of the Select Committee on Benghazi is also troubling.”

   

  Of course, as we mentioned a couple of weeks ago, the “Oh Shit” guy was granted immunity by the DOJ for cooperating with the FBI’s investigation into Hillary’s email scandal (see “The “Oh Shit” Guy That Wiped Hillary’s Server With BleachBit Was Just Granted Immunity“).

  Therefore, the only question left to answer is what recourse, if any, Congress and/or the FBI has to nullify Combetta’s immunity agreement with the DOJ if he is found to have withheld information and/or committed perjury while being questioned by federal agents?

  

  

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• On Europe's Train Wreck Of Monetarist Absurdity

  Authored by Constantin Gurdgiev via True Economics blog,

  One chart that really says it all when it comes to the fortunes of the Euro area economy:

  

  And, courtesy of these monetary acrobatics, we now have private corporates issuing debt at negative yields, nominal yields… 

  The train wreck of monetarist absurdity is now so far out on the wobbly bridge of economic systems devoid of productivity growth, consumer demand growth and capex demand that even the vultures have taken into the skies in anticipation of some juicy carrion. With $16 trillion (at the end of August) in sovereign debt yielding negative and with corporates now being paid to borrow, the idea of the savings-investment link – the fundamental basis of the economy – makes about as much sense today as voodoo does in medicine. Even WSJ noted as much.

  As I recently quipped to an asset manager I used to work with:

  "A mudslide off this mountain of debt will have to happen in order to correct the excesses built up in recent years. There is too much liquidity mass built into the markets devoid of investment demand, and too weak of an economy holding it. Everywhere. By fundamental metrics of value-added growth and organic demand expansion potential, every economy is simply sick.

   

  There is no productivity growth. There is no EPS growth, even with declining S down to waves of buy-outs. There is debt growth, with no capex & no EPS growth to underwrite that debt. There is a global banking system running totally on fumes pumped into it at an ever increasing rate by the Central Banks through direct monetary policies and by indirect means (regulatory shenanigans of ever-shifting capital and assets quality revisions). There is no trade growth. There is no market growth for trade. Neither supply side, nor demand side can hold much more, and countries, like the U.S., have run out of ability to find new lines of credit to inflate their economies. Students – kids! – are now so deep in debt before they even start working, they can't afford rents, let alone homes. Housing shortages & rents inflation are out of control. GenZ and GenY cannot afford renting and paying for groceries, and everyone is pretending that the ‘shared economy’ is a form of salvation when it really is a sign that people can’t pay for that second bedroom and need roommates to cover basic bills. Amidst all of that: 1% is riding high and dragging with it 10% that are public sector ‘heroes’ while bribing the 15% that are the elderly and don't give a damn about the future as long as they can afford their prescriptions.

   

  Take kids out of the equation, and the outright net recipients of subsidies and supports, and you have 25-30% of the total population who are carrying all the burden for the rest and are being crushed under debt, taxes and jobs markets that provide shit-for-wages careers. Happy times! Buy S&P. Buy penny stocks. Buy bonds. Buy sovereign debt. Buy risk-free Treasuries… Buy, Buy, Buy we hear from the sell-side. Because if you do not 'buy' you will miss the 'ladder'… Sounds familiar, folks? Right on… just as 2007 battle cry 'Buy Anglo shares' or 2005 call to 'Buy Romanian apartments' because, you know… who wants to miss 'The Ladder'?.."

  Which brings us to the simple point of action: don't buy bonds. Don't buy stocks. Hold defensive assets in stable proportions: gold, silver, land, fishing rights… anything other than the fundamentals-free paper.

  

  

• Silver Rocket and Gold Moribund, Report 18 September, 2016

  The prices of both metals were down again this week.

  We would guess that it has something to do with the fact that everyone knows: higher rates are coming to the dollar. The yield on the 10-year Treasury closed the previous week at 1.762% and this week at 1.701%. It may not look like much, but this is a change of +1.7%.

  Just repeat after me: “the Fed makes the economy more stable.”

  In any case, there are a few holes in the “bonds are in a bubble” bubble. One is that the worldwide trend for 35 years is falling rates. If one wishes to argue that this trend is over, one would have to acknowledge its cause and argue that this cause is no longer in effect (one would need a real theory, not just the old “inflation expectations” saw).

  More immediately, why are junk bonds and equities not dropping commensurately? If you look at a chart of junk bond yields, you see less volatility and the opposite trend. Since July 1, the Bloomberg High Yield Corporate Bond index is up 3.8%. In the same period, the Bloomberg US Treasury Bond Index is down 1.1%. When a bond price falls, that means the interest rate is higher.

  For reference, 6-month LIBOR is up from 0.92% to 1.25%, or +36% (thirty six, not a typo).

  We aren’t bond or equity traders, but we think it’s crystal clear that if rates are truly moving up, a lot, and durably, then all assets will be repriced lower. And if the US dollar is alone in bucking the falling rates trend, then look for a rising dollar index (i.e. all the other currencies will fall further, as traders will short them to get the even-greater interest rate differential).

  Needless to say, the idea of a rising dollar does not fit the bond-bubble-burst rising-rates Narrative.

  So for the moment, the prices of the metals—silver more than gold—are driven by this Narrative. How long until this Narrative bursts?

  There was an interesting news item this week, CME Group announced that it will presently launch a futures contract for the gold-silver ratio. This security will make it easier for the public to trade the gold-silver ratio. We think this is good, as it encourages arbitrage thinking. Of course, like every product in the market-casinos today, this one is designed to generate dollars (unlike our fund, which deals in physical metal, and generates gains in gold). We will have more to say about this contract as it gets closer to launch (Oct 24).

  Read on for the only true picture of the fundamentals of the monetary metals. 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 did not change this week.  

  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
  
  

  We switched from the October to December contract this week.

  The price of gold fell this week, as did the basis.

  The Monetary Metals fundamental price of gold is down just about as much as the market price.

  Let’s look at silver.

  The
  Silver Basis and Cobasis and the Dollar Price
  
  

  The price of silver dropped just as much as gold, in proportion. The basis dropped more.

  Our fundamental price is now two bucks under the market price. Does this mean the market price has to drop immediately, now that we know this? No, right now the market is in the grips of a mini silver mania (we would not dare say bubble, at least not without trigger warnings). Like the interest rate anomalies, it would be strange to see the price of silver take off like the famed mythological silver bug rocket while the price of gold languishes, moribund.

   

  © 2016 Monetary
  Metals

  

• US Desperately Pumps "Humanitarian" Smokescreen For Failing Syria Ceasefire

  Submitted by Finian Cunningham via Strategic-Culture.org,

  Washington’s lie about seeking a genuine ceasefire in Syria is in danger of being exposed for the world to see. So, hilariously, a charade is being hurriedly orchestrated in order to hide this ignominy. As usual, the Syrian government is being scapegoated for the real cause of violence in the country. That real cause is Washington’s state-sponsored terrorist-fueled war for regime change.

  After four days of continuing deadly breaches by US-backed «rebels» since the Kerry-Lavrov ceasefire deal was implemented last Monday, Washington and the dutiful Western mainstream media are preparing the inevitable excuses.

  Rather than focusing on ongoing «rebel» violence in contravention of the truce, US Secretary of State John Kerry fingered the Syrian government for preventing humanitarian access to insurgent-held eastern Aleppo as the reason for why the ceasefire is in danger of collapsing.

  Kerry accused the Syrian government of causing «unacceptable repeated delays» in delivery of humanitarian aid convoys to the northern city. Some 300,000 people are estimated to be stuck in dire conditions in the eastern side of Aleppo, which has become a key battleground in the five-year war.

  Western media reports followed suit with Reuters reporting: «Syria ceasefire deal in balance as Aleppo aid plan stalls». Another publication, USA Today, made the more pointed claim: «The regime has broken its pledges on the distribution of life-saving supplies».

  So, in Washington’s artful spin of events, it is the Syrian government of President Bashar al Assad which is reneging on the ceasefire arrangement by blocking food and medical supplies to starving civilians. This, of course, plays handily into the broader Western narrative that the Syrian «regime» is the ultimate villain of the piece. The vile Assad is mercilessly denying children food and water, goes the spin.

  Based on that premise, Washington is giving notice that it will not follow through on its ceasefire commitment to join with Russian air forces for targeting terror groups like ISIS (Daesh) and al Nusra Front. Those anticipated «joint operations» between US and Russian aircraft were supposed to be the highlight of the ceasefire plan worked out last weekend in Geneva by Kerry and his Russian counterpart Sergey Lavrov.

  But that supposed «breakthrough» is now in doubt. McClatchy News reported at the end of the week: «US to Russia – Syria military cooperation not guaranteed».

  US State Department spokesman John Kirby told reporters four days into the truce: «If, by Monday we have continued to see reduced violence and no humanitarian access, there will be no Joint Implementation Center [with Russian military]».

  Washington is mendaciously trying to pretend that there have been no breaches of the ceasefire and that the whole problem revolves around «no humanitarian access» being granted by the Syrian authorities. If the US does indeed backtrack from its stated prior commitment to cooperate with Russian forces for targeting terror groups then it is safe to assume that the entire ceasefire «deal» will be dead, even as a rhetorical concept.

  Admittedly, the level of violence in Aleppo and across the country subsided when the US-Russian ceasefire pact came into effect on September 12. Russian and allied Syrian forces halted their campaign of air strikes. Opposition violence appeared to abate too. Nevertheless, the truce was reportedly violated multiple times by anti-government militias, not just in Aleppo, but in other locations, such as Latakia, Hama and Homs.

  Furthermore, there was no apparent distinction between so-called US-backed moderate rebels and recognized terror groups in carrying out these violations. All insurgents groups were engaging in sporadic attacks – in contravention of the putative ceasefire.

  Credible Russian military reports confirmed that Syrian army units had observed the truce and had begun demilitarizing a major access road into eastern Aleppo. Syrian troops are being replaced by Russian units to safeguard the route. However, it is the militants who are refusing to withdraw from the Castello Road area, which would provide the humanitarian aid convoys access to the city.

  Indeed, insurgent factions openly declared that they would continue shelling and sniping in the Castello Road precisely in order to prevent the aid convoys arriving because they opposed the ceasefire accord even being implemented.

  Russia has correctly criticized the US as using a «verbal smokescreen» to conceal why the ceasefire is failing. The point is that Washington has negligible control over its declared moderate rebels. In fact, there is no control because in practice there is no distinction between the myriad illegally armed insurgents.

  Like the ceasefire called earlier this year in February, this latest one is breaking down because all the militants continue to breach any cessation. As Lt General Vladimir Savchenko, chief of the Russian Center for Reconciliation in Syria, points out, the US-backed opposition is using the ceasefire simply as an opportunity to rearm and regroup.

  And Washington’s policy is impotent about altering that. The CIA and Washington’s allies in Britain, France, Saudi Arabia, Qatar and Turkey armed the anti-government insurgents, including the known terror groups. The regime-change conspirators created a veritable Frankenstein monster over which they now have little control even to the point of getting it to at least appear to be complying with a ceasefire for tactical reasons. 

  The latest ceasefire is floundering like the previous attempt because Washington’s assertions about «moderate rebels» dissociating from «terror» groups is total and utter humbug.

  Risibly, as one could have predicted, John Kerry’s bombastic appeal last weekend for US-backed «rebels» to «separate» from the extremists so that American and Russian forces could then get on with the task of eliminating the terrorists has been subsequently shown to be the consummate delusion that it is.

  Washington and its allies are being caught out spectacularly in their lies over the Syrian conflict. The stone-cold truth is that they have been sponsoring terrorist proxies for the criminal purpose of regime change.

  So conspicuous and damning is Washington’s nefarious role in Syria’s conflict – which has resulted in 400,000 dead and millions turned into desperate refugees – that this crime has to be covered up at all costs. But covering it up is becoming futile because of the increasing glaring reality.

  Syria’s ceasefire is flawed because Washington, the supposed co-architect of the truce along with Moscow, is not motivated by finding a peaceful resolution to the conflict. The conflict is all about regime change and deploying terrorist agents to achieve that. That is why the ceasefire is failing – yet again.

  The unbearable truth about Washington and its criminal gang of state-sponsors of terrorism has to be concealed from public view. And that is why Washington and the dutiful Western media lie machine are cranking up the «explanation» for the ceasefire unravelling as being due to the fault of the Syrian «regime» and its Russian ally for not delivering on humanitarian commitments.

  This American smokescreen has been pumped out for nearly six years in Syria. It is really galling to hear the likes of John Kerry and Barack Obama talk about «human suffering» and the need for humanitarian ceasefires.

  The suffering and violence in Syria will stop when Washington is seen for the criminal regime that it is. That day is coming. The American smokescreen is dissipating with each passing day because of its absurd contradictions.

  And the terrorists – state sponsors and proxies alike – are finally being exposed.

  

  

• Japandemonium: Government Blasts "Sexual Apathy" Amid Worrying Number Of Virgins

  Japan’s demographic challenges are well-known: It’s home to the world’s oldest population and has a shrinking birthrate and an astonishing number of single people. But, as The Independent reports, it seems that, despite government efforts to incentivize marriage and child-rearing, things aren’t quite trending in the right direction.

  According to the Japan Times, a new survey of Japanese people ages 18 to 34 found that 70 percent of unmarried men and 60 percent of unmarried women are not in a relationship. It gets worse: Around 42 percent of men and 44.2 percent of women admitted that they were virgins.

  As The Indepdent explains, the Japanese government under Prime Minister Shinzo Abe has said it wants to raise the nation’s fertility rate from 1.4 to 1.8 by 2025. It’s offering better child-care services and tax incentives for married couples, though such programs have yet to bear statistical fruit.

   Most people surveyed said they want to get married at some point. It’s just not clear when.

  “They want to tie the knot eventually. But they tend to put it off as they have gaps between their ideals and the reality,” Futoshi Ishii, head researcher for the study, told Japan Times. “That’s why people marry later or stay single for life, contributing to the nation’s low birthrate.”

  This is not unique to Japan — in various parts of the developed world, economic uncertainty is reshaping the way millennials and other young people conceive of their sex lives and marital choices. But it’s particularly pronounced in the Asian nation, where experts and government officials have spent the better part of a decade fretting over the country’s population decline and, as WorldViews once put it, “sexual apathy.”
  

  

  

• Police Seek Motive Behind NYC Bombing, As Strange SJW Manifesto Take Credit For Explosion

  In a day in which the Islamic State claimed responsibility for a “soldier” who stabbed nine people in a Minnesota Mall, authorities were urgently trying to avoid labeling last night’s IED explosion in midtown Manhattan which injured 29 people, as the second terrorist attack in the same day. So, it not terrorism, what was it? According to the latest attempt to steer the narrative, and as we reported last night, investigators are treating the explosion as an “intentional act,” and while they haven’t ruled out terrorism, weren’t willing to label the explosion as a terrorist act until authorities had a better idea of a motive, Mayor Bill de Blasio said.

  Manhattan: New video shows moments before the explosion that went off at West 23 St 7th Ave. pic.twitter.com/I2Bhav2KBx

  — NYC Scanner (@NYScanner) September 18, 2016

  Investigators had recovered bomb components near the explosion scene that are “indicative” of an improvised explosive device, NYC’s new Police Commissioner, James O’Neill said. Additionally, officials said they were trying to determine if the explosion in Manhattan, an unexploded device that was found four blocks away, and a blast earlier in the day about 80 miles away in New Jersey, were the work of the same individual or group, even if – as mayor de Blasio would like you to believe – there was no element of actual terrorism.

  According to the WSJ, authorities on Sunday said they see similarities between the bombs—cellphones were used in all three devices—but that they hadn’t made a clear connection. The main focus remains on the Manhattan blast. “I’m concerned,” said NYPD Commissioner James O’Neill. “We did have a bomb that was detonated…and we have no one apprehended so of course I’m concerned.” The explosion came on Mr. O’Neill’s second day on the job.

  Investigators were also working to analyze the bomb in search of any DNA material and evidence from both devices is being sent to the FBI bioterrorism lab in Virginia for further analysis.

  Luckily, nobody was seriously hurt: all of those injured were released from hospitals as of Sunday morning, authorities said. Most of the injuries were the result of flying debris and glass. One person suffered a serious injury that was described as a puncture wound, officials said.

  Meanwhile, an odd manifesto posted on Tumblr by someone claiming to have orchestrated the bombing on behalf of the LGBTQ society, was being vetted by authorities. Investigators are scrutinizing the posting but haven’t yet determined if it is authentic, according to two people familiar with the investigation.

  The manifesto consists of two Tumblr posts that went up Sunday: “I’m the NY Bomber,” the blog post claims, with the nameless writer claiming the bomb had been planted in protest of Donald Trump and broader mistreatment of the LGBT community. While New York officials have not announced a motive or suspect in the explosion, that hasn’t stopped some from circulating and crediting the page. As Pix11 first reported, the blog is titled, “I’m the NY bomber. This will be my manifesto,” and contains two entries:

  Taking a human life

   

  I don’t know exactly how I feel about taking human lives
  However, what I do know is that If I don’t do what needs to be done nobody will pay attention. LGBTQ+ people are much more likely to commit suicide than straight cisgendered people. It seems that nobody cares, however what if people from the LGBTQ+ community started lashing out in response to the violence and oppression we face with violence and possibly oppression? I’m sure that would give people a reason to not stand by while so many people are being oppressed. I suppose I’m just going to have to move forward knowing that what I am doing had a purpose and will in fact make a difference. I’ll keep you all posted.

  * * *

  Manufacturing Test Explosives

   

  Hi.

   

  You probably have all seen the news by now, the explosives detonated in New York City, that was me. Those were just some tests, I know where I have made errors and I will not make the same mistake next time.
  I did it because I cannot stand society.
  I cannot live in a world where homosexuals like myself as well as the rest of the LGBTQ+ community are looked down upon by society.
  It is 2016 and we are still being viewed as mentally ill, sinners, attention seekers, and just plain weirdos in general. I am not going to stand by while under classed and underprivileged people are oppressed. I am not going to stand by while there is inequality in my country such as the racism being seen in white police officers all over the country. I am not going to live in a country where it is OK to have a misogynist, xenophobic, racist Islamophobic, republican candidate running for President of The United States! That’s implying that republicans in general should even be taken seriously as they are all cisgendered privileged white people.
  This is not the end, this is just the beginning. I will be remembered. I will make a difference. I will eliminate my targets before it is too late.

  The blog, whose author claimed to be a member of the LGBT community and threatened to plant more explosives, was inexplicably scrubbed from Tumblr shortly after 2 p.m. Sunday.

  For now, NYPD Commissioner James O’Neill has repeated what he said since last night: “Right now we don’t have enough information to make any final conclusion… During the course of the investigation we are going to determine what the motivation is at some point. We’ll say it loud and clear and if it is an act of terrorism we’re going to come out and say it.”

  The second IED device was considered to be the best lead, federal and local officials cited by the WSJ said. Authorities moved the device to a secure NYPD facility in the Bronx around 2:30 a.m. Sunday morning. Authorities were able to successfully open the device Sunday evening so it didn’t explode in the process. Investigators found what appeared to be explosives in the device and have turned it over to the Federal Bureau of Investigation for further testing, a senior law enforcement official said.

  Whether the anonymous blogging SJW is the culprit behind the bombing, or if this is indeed the lethal act of some local terrorist cell, remains to be seen.

  We many not have to wait long for an answer: the explosion comes just as the city prepares to host the United Nations General Assembly, an annual gathering of top leaders from around the world that historically has put authorities in the city on high alert.

  “You will see a very substantial NYPD presence this week, bigger than ever,” Mr. de Blasio said. “We would normally have an expanded presence. You will see an even stronger presence now.”

  In other words, anyone who needs to travel in or through Manhattan over the next week, find alternative plans.

  

  

• China 'Banking Stress Indicator' Spikes To Record High

  China’s credit-to-gross domestic product “gap” has reached 30.1%, the highest for the nation in data stretching back to 1995, according to the Basel-based Bank for International Settlements. As Bloomberg points out, the warning indicator for banking stress rose to a record in China in the first quarter, underscoring risks to the nation and the world from a rapid build-up of Chinese corporate debt.

  The gap is the difference between the credit-to-GDP ratio and its long-term trend. As BIS explains:

  The build-up of excessive credit features prominently in discussions about financial crises.

   

  While it is difficult to quantify “excessive credit” precisely, the credit-to-GDP gap captures this notion in a simple way.

   

  Importantly from a policy perspective, large gaps have been found to be a reliable early warning indicator (EWI) of banking crises or severe distress.

  Readings above 10 percent signal elevated risks of banking strains. A blow-out in the number can signal that credit growth is excessive and a financial bust may be looming.

  

  While the BIS says that credit-to-GDP gaps have exceeded 10 percent in
  the three years preceding most financial crises, China has remained
  above that threshold for most of the period since mid-2009, with no
  crisis so far.

  But, according to BIS data, in the first quarter, China’s gap exceeded the levels of 41 other nations and the euro area.

  

   

  This feeds into the debate earlier that China “needs a recession.”

  

  

• ReaDY Fo KiLLeRY…

  

  

• Michael Pento: "These Are The Most Dangerous Markets I've Ever Witnessed"

  Submittted by Adam Taggart via PeakProsperity.com,

  In this week's podcast, Michael Pento, fund manager and author of The Coming Bond Bubble Collapse, explains how the United States is fast approaching the end stage of the biggest asset bubble in history. He describes how the bursting of this bubble will cause a massive interest rate shock that will send the US consumer economy and the US government—pumped up by massive Treasury debt—into bankruptcy, an event that will send shockwaves throughout the global economy:

  These are the most dangerous markets I have ever witnessed in my entire life, and I’ve been investing for over 25 years. Let’s go over some numbers to let you know exactly how tenuous this bubble is. Its membrane has been stretched so wide and so tight that it’s about to burst, and any semblance of even maybe a little sharp object, something even a hemophiliac wouldn’t be afraid of, sends the market careening downward.

   

  Global central bank balance sheets are up from $6 trillion in 2007 to $21 trillion today and they are still being expanded at the pace of $200 billion each and every month. What’s happening is that the robotraders, the algorithms, the frontrunners on Wall Street and around the world are just gaming the system, looking for the next increase in central bank credit to take their collateral to the ECB or to the Bank of Japan or to the Fed and buy more stocks and bonds.

   

  That’s the game we’re playing. Even a hint that it might someday end sends the entire investment community scampering for the door; and that door is very, very narrow and can only fit a few people through it. So let’s go through a couple of more data points to emphasize just how big this bond bubble is and why it’s so important.

   

  So the European Central Bank is buying corporate bonds. I hope everybody knows that. So much that there's now 30% of investment-grade debt in Europe trading with a negative yield. This is not sovereign debt (as asinine as it is to ever be able as a sovereign nation to issue debt and get paid to do so). Investment grade bonds in Europe now trade with a negative yield.

   

  The Bank of Japan owns 50% of all Japanese government bonds, JGBs.

   

  About 25 percent (and this number vacillates between days where the German tenure goes north or south of the flat line) of global sovereign debt trades with a negative yield.

   

  So what happened on September 8^th? Last Thursday, Mario Draghi came out and gave a press conference after leaving rates unchanged in the European Union. The audience was asking questions like: Did you discuss helicopter money? No, we really didn’t discuss it. Did you discuss extending the QE program beyond March of 2017? No, we didn’t discuss extending the 80 billion purchases of assets beyond March. There was a stirring in the audience, the reporters were beside themselves. They couldn’t believe that Mario Draghi, even though he didn’t even hint about stopping QE, he didn’t extend its duration or its quantity. That sent markets cratering. The Dow fell 400 points. The U.S. 10-year yield jumped from 1.52% to 1.68% in one day.

   

  Now, the market had a bounce back the next day, then was down again more than 200 points on the Dow. So you can tell, anybody with any objective, critical, independent mind can tell this is an unsustainable, very ephemeral rally in stocks that has occurred since 2009. And when the bond market breaks, when that bubble bursts, it will wipe out every asset — everything will collapse together — because everything is geared off of that so-called 'risk free' rate of return.

   

  If your risk free rate of return has been warped down to 0% for 96 months, then everything — and I mean diamonds, sports cars, mutual funds, municipal bonds, fixed income, REITs, collateralized loan obligations, stocks, bonds, everything, even commodities — will collapse in tandem along with the bond bubble burst.

  Click the play button below to listen to Chris' interview with Michael Pento (27m:46s).

   

  

  

• Is This What Panic Looks Like? Reuters Polls Show Huge Shift In Electoral Map Toward Trump

  A few weeks back, Reuters/Ipsos released a fun, interactive electoral college map that allowed users to model their own expectations of how the 2016 presidential election would play out.  Reuters also offered up their own scenario based on their internal polling data from all 50 states.  And, as early as August 26, 2016 Reuters was predicting a landslide victory for Clinton.

  

   

  But, now it’s looking increasingly likely that Reuters will have to “tweak” their polling data again as recent results show a massive Trump surge that have thrust him into the lead. 

  

   

  Here is Reuters’ latest prediction of what the 2016 electoral college map will look like once all the votes are counted.  Notice that the entire central portion of the U.S. has turned red (including Colorado and New Mexico) along with Florida and South Carolina in the Southeast.  And perhaps even more shocking is that Reuters has been forced to move Pennsylvania out of the Democrat column and into the “Too Close To Call” column. 

  

   

  So, here is a comparison of some of the Reuters polling data by states that have shifted since late august.

  Florida has swung 11 points toward Trump moving the state from solid Hillary to marginal Trump.

  

   

  Pennsylvania has swung 5 points toward Trump moving the state from solid Hillary to “Too Close To Call.”

  

   

  Nevada has also swung 5 points toward Trump moving the state from marginal Hillary to marginal Trump.

  

   

  South Carolina has swung 8 points toward Trump moving the state from “Too Close To Call” to solid Trump.

  

   

  Colorado has swung 6 points toward Trump moving the state from marginal Hillary to marginal Trump.

  

   

  And Iowa has swung 11 points toward Trump moving the state from marginal Hillary to solid Trump. 

  

   

  New Mexico also moved from “Undecided” to Trump though Reuters didn’t have polling data as of August 26, 2016 for that state.

  And let the mainstream media panic continue…

  

  

Digest powered by RSS Digest

• What Is A Globalist?

  If you've been following this election at all, you have probably heard the words "globalist" and "globalism" thrown around a lot.

  As The Rebel's Lauren Southern explains, some of the people using it are nationalists, or patriots (they see globalism as a threat to the sovereignty of their nation… whichever nation that happens to be). Others argue that the term "globalism" is just a scary catch-all word invented by Trump supporters, or the alt right. A word that means nothing at best, and is a racist code at worst.

  The reality is that globalism means something very specific, and very dangerous, if you value democracy, individualism, or any of the values of Western civilization.

  

  

• IED Explodes In New York City; 29 People Injured, 1 In Serious Condition

  Update 2: Fox News is reporting a second explosion on 27th street.  The NYPD reportedly moved the media to safety before the blast indicating that it may have been a controlled explosion by police.  The device is believed to be a “pressure cooker” device similar to the one used in the Boston Marathon bombing with a cell phone and wires attached.   

   

  UPDATE: Device on 27th St. is pressure cooker with cell phone and wires attached found in a plastic bag, sources say https://t.co/jNYOEi2Sqe

  — ABC News (@ABC) September 18, 2016

   

   

  BREAKING NEWS: NYPD URGING RESIDENTS ON W. 27 BETWEEN 6TH & 7 AVE TO STAY AWAY FROM WINDOWS AFTER PRESSURE COOKER FOUND WITH WIRES ATTACHED.

  — Breaking News Feed (@pzf) September 18, 2016

  * * *

  Update 1:  The NYPD has potentially located a 2nd device on 27th Street in Manhattan.

  A possible secondary device has been located @ 27th Street, 6th – 7th Avenues. #NYPD nvestigations are ongoing. Avoid the area @NYPD13Pct

  — NYPD Special Ops (@NYPDSpecialops) September 18, 2016

  * * *

  An explosion occurred at 8:30PM this evening in New York City at 135 23rd Street (between Sixth and Seventh Avenue).  Early reports suggested the explosion came from an improvised explosive device (IED) stuffed inside a dumpster. 

  Mayor De Blasio confirmed at a press conference earlier that the explosion was believed to be an “intentional act” though noted there are no known links to any terrorist organizations at this time.

  The NYPD has confirmed that 29 people have sustained injuries and 1 is in serious condition.

  The NYPD Counterterrorism Unit has arrived at the scene and is conducting searches for other devices.  At least two buildings were evacuated in the vicinity of the incident.

  Earlier today a pipe bomb exploded in Seaside Park, New Jersey, as about 5,000 people were set to run a 5k Marine charity race (see: “Pipe Bomb Explodes At Marine Charity Run In New Jersey“).  It is unknown at this time if the two events are linked. 

  MANHATTAN EXPLOSION:
  – Downtown Manhattan
  – At least 14 injured
  – Reports of second IED found
  – Evacuations orderedpic.twitter.com/tuOlLCJaGA

  — Breaking News Feed (@pzf) September 18, 2016

   

  DEVELOPING: NYC Mayor @BilldeBlasio says explosion in the Chelsea section of Manhattan was an ‘intentional act.’ pic.twitter.com/rj6ErIiP5k

  — NBC Nightly News (@NBCNightlyNews) September 18, 2016

   

  #US #Latest CCTV video reportedly showing moment of the blast at #Chelsea #NY pic.twitter.com/Zs9sWzsQp2

  — José Miguel Sardo (@jmsardo) September 18, 2016

   

  Video of first few secs in #nyc #newyorkcity huge bombing pic.twitter.com/aOLWyvQTTB

  — Itay Cohai (@itaycohai) September 18, 2016

   

  #BREAKING: police dogs searching for secondary device; #FDNY confirms 25 injuries; 24 minor 1 serious. pic.twitter.com/K29leIuufC

  — Josh Einiger (@JoshEiniger7) September 18, 2016

   

  I have not idea of what just happened . A huge explosion next to my building in #Chelsea #nyc #manhattan #explosion pic.twitter.com/p71SJDR10Q

  — Danilo Gabrielli (@DaniloGabrielli) September 18, 2016

   

   

  25 injuries to civilians confirmed at 133 W 23 St #Chelsea. None appear to be life-threatening at this time

  — FDNY (@FDNY) September 18, 2016

   

  BREAKING: Explosion rocks Manhattan as multiple injuries are feared https://t.co/J3PPcsJnTW pic.twitter.com/MBPCoJirHy

  — ????????? ????? (@beaver_ch5) September 18, 2016

   

  Manhattan *IED Explosion* W 23 St & 7th Ave. Photo By: @itaycohai video by: @itaycohai pic.twitter.com/spaIg1uCYN

  — NYCFireWire (@NYCFireWire) September 18, 2016

   

  RT @pzf: BREAKING PHOTO: REPORTED DUMPSTER EXPLOSION IN MANHATTAN. AT LEAST 25 INJURED. FBI AND ATF EN ROOUTE. pic.twitter.com/2dS9uZaCcd

  — ? Jay ? (@Ms_Jaydee) September 18, 2016

  

  

• This 40 Sq. Ft. New York Apartment Could Be Yours For $450 Per Month

  Ever feel like you just don’t have enough space to entertain guests or otherwise enjoy your New York City apartment?  Well don’t complain to this guy.

  Meet Jack Leahy and his 40 square foot apartment in Williamsburg, Brooklyn.  According to the New York Times, Leahy pays $450 per month for his pad, or $11.25 per square foot.  The apartment is 9 feet in length and 4.5 feet wide which is just enough room for a twin-sized futon mattress.  And standing room is not included throughout with the ceiling measuring only about 5 feet high on one end of the apartment. 

  

   

  While $450 per month may seem like a bargain to most New Yorkers we think Leahy may have been taken for a ride.  We found some “nice” 700 square foot pads just across the bridge in Greenwich Village for $9.25 per square foot and they even come with a bathroom.  Though we suspect Leahy’s not too worried about the math, he’s just “happy to be in New York.”

  “I think I was happy to be in New York and that I actually had a place,” Mr. Leahy said. “It was just kind of comical. It is comical. Whenever I show people where I live, they always laugh.”

  
  

  

   

  Leahy also loves hanging out with the 7 other “artists and creative types” in his building which is fantastic news given that he shares 1 kitchen and 1.5 bathrooms with them.

  He awakens many mornings to the sounds of experimental theater: strange clanging, performers speaking in gibberish, chants. The space is ovenlike in the summer, cozy in winter.

   

  And though he doesn’t see much of them, he likes his quasi-roommates: seven other artists and creative types who live in the warren of more traditional rooms at the back of the building. “Though I’m always jealous when I see them sitting on chairs in their rooms,” he admits.

  We’re not contractors, but something tells us that Leahy’s apartment may not meet all of New York’s building codes (e.g. the need for two exits in case of a fire) and he may have just sacrificed his living space for his 15 minutes of fame.

  

  

• On The Process Of Awakening

  Submitted by Charles Hugh-Smith via OfTwoMinds blog,

  We cannot help but feel a hunger for authenticity, honesty, spiritual solace and human connection, but these are precisely what is scarce in our social and economic structure.

  There is a tremendous amount of pain in our society. There are many sources of this pain: the emotional desertification of dysfunctional families, the knowledge that we don't fit in and never will, a widening disconnect between the narratives we're told are true and our experience, and a social and economic structure that tosses many of us on the trash heap.

  The lifestyle we're told we need to be happy is unattainable to many, and disconcertingly unsatisfactory to the top 10% who reach it.

  

  We cannot help but feel a hunger for authenticity, honesty, spiritual solace and human connection, but these are precisely what is scarce in our social and economic structure.

  The process of awakening has many paths. For some, the path starts with the incoherence of official explanations and narratives. For others, it's the inner search for truth via psychotherapy or spiritual practice.

  For some, it's an investigation into the way our economic and political hierarchy function. For others, art is the starting point: a film, a novel, a comic, a song.

  For many of us, it begins with this simple but devastating realization: I don't fit in. I don't fit in, have never fit in and never will fit in. I play along because it's easier on me and everyone I interact with to do so, and I value my independence which means I have to find a way to support myself. That is difficult, as what I like to do has little to no value in our economy.

  What interests me is how the epidemic of pain and alienation that characterizes our society is the direct result of how our economy and social order is structured. Incoherence, self-destruction, pain and alienation are the only possible outputs of the system we inhabit.

  I have explored this dynamic in my books, starting with Survival+ in 2009 and working forward to my latest book, Why Our Status Quo Failed and Is Beyond Reform. (My other books are: A Radically Beneficial World: Automation, Technology and Creating Jobs for All; Get a Job, Build a Real Career and Defy a Bewildering Economy; The Nearly Free University and the Emerging Economy: The Revolution in Higher Education; Resistance, Revolution, Liberation: A Model for Positive Change; Why Things Are Falling Apart and What We Can Do About It and An Unconventional Guide to Investing in Troubled Times.)

  I recently had an amazing free-form 1:50 hour conversation on these topics with New Zealand talk-show host Vinny Eastwood. Any conversation that stretches from the erosion of community to loneliness to Daniel Ellsberg to Marx to Taoism to alienation to Michelangelo Antonioni and on to the process of awakening is amazing in my view.

  Here's Vinny's page with listening/viewing/downloading options, and the program on Youtube (please ignore my goofy expressions): The magic of bitcoin and cryptocurrencies (1:49:54)

  My conclusion may strike many as radical, but to me it is self-evident: the primary source of the rot, insecurity, inequality and alienation of our society is the way we create and distribute money, which is the conduit for creating and distributing political power.

  I explain why this is so in my books A Radically Beneficial World: Automation, Technology and Creating Jobs for All and Why Our Status Quo Failed and Is Beyond Reform.

  If we don't change the way money is created and distributed, we change nothing. Money = power. If we don't devise a form of money that is beyond the reach of central banks and states, all "reform" is just window-dressing, simulacra of "change" that simply solidifies the system's bogus claim of being reformable.

  Cryptocurrencies are in their infancy. There will be many more iterations of Cryptocurrencies beyond bitcoin and Ethereum; recall that bitcoin went public in 2009.

  There are security challenges with cryptocurrencies, and the potential for central-state meddling via backdoors in computer operating systems. But once we understand that community and the potential for a less toxic society and economy are crippled by the centralized structure of the state and its money, then there is no way forward but to develop structures of money, work, community, purpose and meaning that are outside the direct control of the state and central bank.

  This sort of "crazy talk" is unwelcome. As I noted earlier this week on my chart of the Ministry of Propaganda, in the status quo, skepticism is always a conspiracy or a hoax.

  So instead we consider an exploding opiate epidemic, an epidemic of obesity and metabolic illnesses, a discourse of inchoate rage and a Grand Canyon-sized gap between what we're told is true and what we experience as true "normal." These things are not normal; they are manifestations of a system that can only generate one output: self-destruction.

  

  * * *
  My new book is #6 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition) For more, please visit the book's website.

  

  

• String Of Deadly Arsons Strike Chicago Leaving 1 Dead And Dozens Homeless

  The level of crime in Chicago these days is more on par with certain violent third-world countries than other U.S. cities.  In fact, we recently pointed out that Chicago has recorded more homicides so far in 2016 than Los Angeles and New York, combined, despite having a fraction of the population (see “Chicago Records “Most Violent Month In 20 Years“). 

  With 3 days left in the month of August, the city of Chicago has recorded 84 homicides making it the deadliest month since October 1996 when 85 homicides were committed.  In fact, as the Chicago Tribune points out, YTD through August, Chicago has recorded more homicides than New York City and Los Angeles, combined.  So far Chicago has recorded 487 homicides in 2016 compared to 222 in New York and 176 in Los Angeles.  This staggering data comes despite the fact that Chicago’s total population is roughly 20% the size of New York and Los Angeles.

  The latest wave of violent crime came on Friday when an arsonist set 7 fires in the Lower West Side neighborhood of Chicago.  The fires killed at least one man and has left as many as 40 people homeless according to The Chicago Tribune and ABC.

   

  At least seven separate fires were reported around 3 a.m., apparently set in alley trash cans that spread to garages and homes.  Around 100 firefighters from across the city were required to help extinguish the flames.

  

  

  

   

  According to The Chicago Tribune, residents were slow to respond to the fires after dismissing “noises” from the flames as firecrackers from a nearby celebration of Mexican Independence Day. 

  #Chicago #Pilsen 7 Arson Fires left one man dead and 25 people displaced in Pilsen on 9/15/2016 #Donations https://t.co/2w8XrBYLVA

  — Ability Chicago Info (@AbilityChicago) September 17, 2016

   

  The latest round of arsons come just days after Reginal Hester appeared in court for a blaze he set in the city’s South Chicago neighborhood that killed 4 people and injured two others.  According to ABC, Hester torched an apartment building after one its residents borrowed $10 and refused to repay him with sexual favors.

   

  Alas, we’re sure the Black Lives Matters folks will dismiss these recent arsons as just another unfortunate side effect of Chicago’s “racist” police force.

  

  

• "Why Don't They Trust Her": A Look At One Of Hillary Clinton's Early Scandals

  In recent months the mainstream media has worked itself into a frenzy trying to defend Hillary from the various scandals surrounding her campaign.  There is seemingly no end to the “plumes of smoke” emanating from the Clinton camp including questions over Benghazi, missing emails, pay-for-play at the Clinton Foundation, strange “medical episodes”, etc, etc, etc.  All the while, the press simply can’t bring themselves to understand why voters never quite view her as a trustworthy candidate. 

  The problem, says Peggy Noonan of the Wall Street Journal, is that the Clinton’s have been embroiled in so many scandals dating all the way back to the 1970’s that their name has been branded into the American psyche as being synonymous with the word “scandal” itself.  While millennial voters are most familiar with the recent scandals (and we all know how well that is playing out for her, see: “Hillary’s Growing “Millennial Problem” Forces A Reset“), older voters have been hearing about the Clinton escapades for over a quarter century since they first entered public life on the national level in the early 90’s. 

  As such, the Wall Street Journal took a walk down memory lane by recounting one of Hillary’s early scandals that emerged shortly after she entered the White House and came to be known afterward as “Travelgate.”  It was out of this first scandal that Hillary’s critics said she first “revealed the soul of an East German border guard.”

  Then she—not he—messed it up. It was the first big case in which she showed poor judgment, a cool willingness to mislead, and a level of political aggression that gave even those around her pause. It was after this mess that her critics said she’d revealed the soul of an East German border guard.

  It all started less than four months after the Clinton’s moved to D.C. when 7 men working in the White House travel office were suddenly fired.  The same people had been running the White House travel office for 30 years and had successfully served multiple Presidents of both parties along the way.

  

   

  Needless to say, the press at the time was very surprised by the move to brutally fire non-political, career White House staff so early into Bill’s term.  Under pressure to answer for the firings, the White House initially offered up multiple stories that seemed to evolve daily.  Per the Wall Street Journal:

  Under criticism the White House changed its story. They said that they were just trying to cut unneeded staff and save money. Then they said they were trying to impose a competitive bidding process. They tried a new explanation—the travel office shake-up was connected to Vice President Al Gore’s National Performance Review. (Almost immediately Mr. Gore said that was not true.) The White House then said it was connected to a campaign pledge to cut the White House staff by 25%. Finally they claimed the workers hadn’t been fired at all but placed on indefinite “administrative leave.”

  Sound familiar?  It’s just a cough…no, it’s just allergies…no, it’s heat and dehydration…no, it’s pneumonia…

  Hillary even alleged that Bill Dale, a 30-year veteran of the travel office, was embezzling funds and called into the FBI to investigate.  While the FBI initially balked at the case due a lack of any evidence, they eventually relented and indicted Dale on embezzlement charges.  The trial lasted two weeks but it only took the jury two hours to acquit Dale of all charges. 

  Then, suddenly new details emerged from the notes of a White House staffer that suggested Hillary’s plan all along was to privatize the White House travel office and put it out for “competitive bid” to private companies.  And, as it turns out, Hillary had already identified the perfect winner of the “competitive” bidding process as none other than Harry Thomason, who just happened to be a long-time friend and fundraiser for the Clintons and had provided travel services for their 1992 campaign. 

  It emerged in contemporaneous notes of a high White House staffer that the travel-office workers were removed because Mrs. Clinton wanted to give their jobs—their “slots,” as she put it, according to the notes of director of administration David Watkins—to political operatives who’d worked for Mr. Clinton’s campaign. And she wanted to give the travel office business itself to loyalists. There was a travel company based in Arkansas with long ties to the Clintons. There was a charter travel company founded by Harry Thomason, a longtime friend and fundraiser, which had provided services in the 1992 campaign. If the travel office were privatized and put to bid, he could get the business.

  As the scandal grew, Hillary repeatedly denied any knowledge of the the firings, claiming under oath that she had “no role in the decision to terminate the employees” and that she did not “direct that any action be taken by anyone.”  Unsurprisingly, Hillary also had a difficult time remembering the specifics of her conversations with various staffers connected to the scandal.  Perhaps she fell and bumped her head back in the early 90’s as well?

  Of course, after 3 years passed an investigation by the GAO found that, in fact, Hillary did play a direct role in the firing of the 7 travel office employees.  Moreover, a memo originally written by White House Chief of Staff, David Watkins, surfaced which directly connected Hillary to the event saying “there would be hell to pay” if staffers did not conform “to the first lady’s wishes.”

  But, of course, by that time, the scandal had passed, the press had moved on and Hillary was able to simply dismiss any new questions as a futile effort of right-wing conspiracy nuts to raise doubts about a scandal that had been put to bed long ago.  A plan that the Wall Street Journal dubbed the “Clinton Scandal Ritual”:
  

  “Clinton Scandal Ritual: lie, deny, revise, claim not to remember specifics, stall for time. When it passes, call the story “old news” full of questions that have already been answered. ‘As I’ve repeatedly said . . .'”

  Seemingly not much has changed over the past 25 years….

  

  

• DoNaLD TRuMP SLaYING THe MaNY HeaDeD MeDiA MoNSTeR…

  

  

• Previewing Next Week's Main Event: What Will The BOJ Do? (Spoiler Alert: Probably Nothing)

  One week after we explained not once but twice that next week’s main central bank event is not the Fed – which won’t do anything – but the Bank of Japan, even CNBC has finally figured it out, observing with about a 7 day delay that “Everyone’s waiting for the Federal Reserve in the week ahead, but the real action may be coming out of Tokyo.” Well, thanks for that.

  But while it’s clear that Yellen won’t dare shock the market (which now trades with a 20% probability of a September rate hike and as we showed a year ago, the Fed has never hiked unless the market is already pricing in at lest 60% odds), the question remains – just what will Kuroda and the BOJ do, especially since as we wrote last week, not even the BOJ knows what it will do, and has instead flooded the market with news report trial balloons covering every possible, even contradictory, possibility. Which also makes the BOJ’s decision that much more important.

  As DB points out, “this week will be the litmus test for whether central banks are in shift mode as regards ongoing accommodative monetary policy. Investor consensus revolves around the notion that monetary policy has run its course and it “needs” to be supplanted by fiscal policy or at least combined with fiscal policy, via helicopter money, to be effective. The potential for a BoJ move on short rates and a shift in QE plus a Fed insistence on hiking despite market expectations (including a “hawkish” hold for September) might be considered to be consistent with a steeper curve.”

  Here is what DB’s Dominik Constam, one of Wall Street’s best credit strategists expects the BOJ will reveal on Wednesday:

  The BoJ is conducting a comprehensive review of monetary policy. It is fair to say that there is substantial uncertainty as to what they may choose to do but recent policy speak has suggested that further cuts in the deposit facility rate are possible as well as a shift in the duration target away from the 7-12 year sector towards the 3-5 year sector. The proposed logic would be to steepen the yield curve, offering extra NIM to banks whilst also alleviating pressure on the entitlement industry. Some Fed officials meanwhile have also chimed in regarding the concern for financial stability that emanates from low long yields that in turn have compressed risk premia across asset classes as part of a “hunt for yield”. The implication is that if long rates stay artificially low, there may be a case for earlier moves higher in short rates to compensate even if the data itself was less compelling for such a move, all else equal. In both cases the potential for a BoJ move on short rates and a shift in QE plus a Fed insistence on hiking despite market expectations (including a “hawkish” hold for September) might be considered to be consistent with a steeper curve. Even the ECB could be added to this mix after the recent “disappointment” around not committing to an extension of its QE program nor adjusting the parameters.

  In other words, in line with what we predicted ten days ago, Japan may engage in a reverse Twist, where it cuts short end rates while slowing down purchases of longer maturities to force the JGB curve steeper. Citigroup’s Brent Donnelly caught up to this idea this over the past week, and added the following notable color:

  there is an interesting and lively debate going on here at Citi and elsewhere about the JPY impact of the recently-touted BoJ actions. If they cut front end rates and reduce 30-year purchases in a Twist-type operation, is that good or bad for USDJPY? I feel it is 100% terrible for USDJPY but there are enough smart people disagreeing that I’m not fully confident. I think it is negative USDJPY because:

  1. It’s not great for Japanese banks (see Chart1, note they gapped lower overnight after the rate cut story came out in NY time).
  2. The last time the BOJ cut (and the last time the ECB cut) the currency ripped. There is no empirical evidence that rate cuts below zero are bad for a currency. There is a small body of evidence that rate cuts below zero are good for a currency.
  3. When the US did Twist, the currency ripped and equities tumbled aggressively as you can see in the next two charts.

  Overall I think what the market wants from the BoJ is pretty simple: Incremental stimulus. The composition of current stimulus, the shape of the yield curve and all that is just noise. If the BoJ buys foreign assets, USDJPY will explode higher and if they do not, it will go down. I really think trading the BoJ meeting is that simple… Note one important point made by Deegs this morning: US Twist flattened the curve and Japanese Twist would steepen the curve so it’s not unreasonable to guess the reaction in the currency would be opposite. That’s not my view but it’s certainly a reasonable view.

  So while DB and Citi agree on what the BOJ may (or may not do) with Japan’s interest rate (cut from -0.1% to -0.2%), and shifts to QE (fewer purchases on the long end, perhaps shifting the focus from 7-12 to  7-10 to 5-10 year bonds), others like CLSA take aim at a different aspect of the BOJ’s monetary lunacy, namely the ongoing nationalizaton of the stock market.

  According to Bloomberg, CLSA’s Nicholas Smith says he’s “absolutely certain” the Bank of Japan will stop buying exchange-traded funds tracking the Nikkei 225 Stock Average amid criticism its use of the measure is distorting the market.

  The central bank will make the change at its meeting next week, shunning ETFs following the price-weighted stock gauge in favor of those linked to more modern indexes, Smith said. He says he’s been talking to BOJ officials within the last three days, while declining to name them. BOJ board members have made no public indication of an impending shift in the ETF program ahead of announcing their monetary policy review on Sept. 21.

   

  The Nikkei 225 gives undue influence to certain stocks because it determines its rankings by the price of one share, rather than market capitalization. Fast Retailing Co., for example, accounts for 8 percent of the gauge, versus just 0.3 percent of the Topix. That means it benefits disproportionately from the central bank’s Nikkei 225 purchases. Since the BOJ almost doubled its annual budget for ETFs on July 29, the issues associated with the Nikkei 225 have become more pronounced, Smith said.

   

  “I am absolutely certain that they will shift their buying to pretty much Topix-based,” Smith, a Tokyo-based strategist at the brokerage, said by phone Friday. “The Nikkei 225 is a Flintstones index from the abacus era,” he said. “It’s been a laughing stock for a long time.”

  Perhaps he is right, although adjusting ETF purchases would be peanuts in the grand scheme of things, where the BOJ needs to inject trillions instead of trifling with billions in stocks here and there.

  * * *

  Finally, the most comprehensive assessment of the BOJ’s “comprehensive assessment” due next week, comes from Goldman’s Naohiko Baba, who has a rather unexpected conclusion: don’t expect much if anything, at all.

  Here is Goldman’s full report:

  Final update on BOJ’s “comprehensive assessment”

  At the next Monetary Policy Meeting (MPM) on September 20-21, the Bank of Japan (BOJ) will conduct a “comprehensive assessment” of trends in economic activity and prices under the current policy framework, as well as the policy impact, with a view to achieving its 2% price stability target at the earliest possible time. We gave our take on this in our August 5 Japan Views and September 7 Japan Views, and our overall view remains essentially unchanged. Below we provide a final update of our view in a Q&A format ahead of next week’s MPM, focusing on the most common queries we have fielded, particularly from overseas investors, since our last report.

  Key points

  • We believe the BOJ’s comprehensive assessment has four main objectives: (1) reiterate the positive aspects of its easing policy (quantitative/qualitative easing with a negative interest rate); (2) switch from quantitative easing to a negative interest rate policy (NIRP) as its primary policy tool; (3) correct the excessive impact of the easing policy on the yield curve; and (4) curve excessive market expectations of additional easing by extending the policy timeframe.
  • We expect the BOJ to retain its 2% target due to the risk of severe yen appreciation if scrapped.
  • The BOJ will highly likely move towards negative interest rates as its primary policy tool, as quantitative and qualitative easing are approaching the limits of their effectiveness. The BOJ also sees negative rates as an effective tool for combating the strong yen.
  • We think possibilities of both helicopter money and foreign bond purchases by the BOJ as extremely unlikely.
  • Although taking interest rates deeper into negative territory is likely to be seriously discussed at the policy meeting next week, we expect the BOJ ultimately to opt to push back the rate cut until a later date.

  Q1: What are the purposes of the BOJ’s comprehensive assessment?

  A1: We believe the BOJ’s review has four main objectives: (1) reiterate the positive aspects of its three-dimensional monetary easing policy (quantitative/qualitative easing a with negative interest rate); (2) switch from quantitative easing to a negative interest rate policy (NIRP) as its primary policy tool; (3) correct the excessive impact of the easing policy on the yield curve; and (4) dampen excessive market expectations of additional easing by extending the policy time-frame.

  Below we touch on each of these points.

  1. We believe the BOJ will attribute its inability to reach the 2% inflation target so far to deflationary pressure from external factors beyond its control, including lower crude oil prices, a slowdown in emerging market economies, and greater-than-expected downward pressure on the economy following the consumption tax hike, and explain how this impact has spread to backward-looking inflation expectations. In other words, we expect the BOJ to stress that its QQE with NIRP policy would have had sufficient clout to achieve its objective if not for the impact of such factors out of its control, and that this policy could still be effective moving forward.
  2. The BOJ faces various issues relating to its “quantitative” easing (QE) policy, such as (1) the likelihood that it will eventually reach a physical limit to its large-scale JGB purchases, (2) excessive flattening of the yield curve due to the combination of large-scale JGB purchases and the NIRP, and the concerns this has generated for financial intermediation, and (3) the drying up of liquidity in the JGB market. As such, we believe the BOJ has a strong desire to shift from QE to the NIRP as its primary policy tool (see Q3 below). At the same time, we think the BOJ seeks to remove uncertainty over the future direction of policy by clearly defining the fulcrum of its policy framework. In a recent speech, BOJ Governor Haruhiko Kuroda said that “in order to ensure the effectiveness of monetary policy…the important thing is…to maintain consistent and predictable policy responses.”[1]
  3. The excessive decline in interest rates, particularly in the super-long zone, has raised concerns over the potential impact on life insurance and pensions, and thus we believe the BOJ could well shorten the maturity of JGBs it purchases. However, we believe it will not shift its annual purchase target from ¥80 tn to a more flexible range of ¥70-¥90 tn, for example, as has been suggested by some observers (Sankei newspaper, August 9), given the risk of further yen appreciation should the market focus only on the lower figure of ¥70 tn.
  4. We expect the BOJ will effectively scrap its two-year time-frame for achieving its 2% inflation target in favor of the less defined and more ambiguous wording, “at the earliest possible timing.” This is not just because 3.5 years have passed already since the launch of the easing program, but because we believe the BOJ also aims to curb excessive market expectations for additional easing by redefining the QQE with NIRP as a long-term strategy, strengthening the bias towards status quo, rather than a quick-fix policy.

  Q2: Will the BOJ stick to its 2% inflation target?

  A2: We expect the BOJ to retain its 2% target due to the risk of severe yen appreciation if scrapped.

  The BOJ originally chose 2% as its inflation target primarily focusing on the impact on the exchange rate. The widely held view is that long-term exchange rate trends are formed based on purchasing power parity (PPP: a comparison of inflation levels between two countries). In many developed economies, such as the US, long-term inflation (or inflation expectations) is viewed as anchored around the 2% level, whereas in Japan, inflation levels were markedly lower. This is perceived to have formed the long-term trend in yen appreciation, from a PPP perspective. For this reason, the BOJ has had to make a strong commitment to achieving 2% inflation, an international norm, in order to reverse the long-term trend of yen appreciation. If it were now to scrap its 2% inflation target, forex market expectations could reverse completely as the BOJ would be viewed as tolerating a severe appreciatory yen trend. Also, we expect the BOJ not to adopt a more flexible band target such as between 1% and 3% at least at this stage.

  Q3: Why is the BOJ likely to choose the NIRP as its primary policy tool?

  A3: Within the current policy framework, QQE is approaching the limits of its effectiveness, so we think the BOJ wants to place the NIRP as its primary policy tool before this occurs. Another important reason is that the BOJ sees negative rates as an effective tool for combating the strong yen.

  We touched on the “quantitative” aspect of easing in Q1 (2) above. The “quality” aspect of the current policy, which centers on the purchase of equity exchange-traded funds (ETFs), has already seen purchases balloon out to ¥6 tn annually, and there is strong recognition now of three potential side-effects (see our August 3, 2016 Japan Economics Analyst).

  First, there is the possibility of across-the-board rises in share prices, including for companies that should be exiting the market or else languishing at low valuations due to poor earnings prospects. Second, stocks that are substantially overvalued by the market may become even more so on the influx of funds. Third, from a corporate governance perspective, we think the market’s surveillance function could be diminished. This last point, in particular, would appear to run contrary to the Abe administration’s corporate governance reform efforts.

  Furthermore, a simple estimate of potential risk from the BOJ’s equity holdings suggests this will likely surpass the BOJ’s capital even for a 1-year holding period. Under the current BOJ Act, the BOJ is prohibited from receiving loss compensation from the government. Because erosion of a central bank’s balance sheet could undermine confidence in the value of the currency, further expanding ETF purchases could be difficult. 

  We believe there is a strong willingness at the BOJ to move the focus on to its NIRP not only because its QQE options are approaching their limits, but also because the BOJ considers the NIRP to be an effective means of countering the strengthening yen.

  In a recent speech, Governor Kuroda stated that “The basic mechanism of monetary policy … is to drive the real interest rate higher or lower than the “natural rate of interest”. In normal times, this can be achieved by adjusting short-term rates; namely, simply lifting or lowering them.” He went on to say, “Any additional monetary easing entails ‘costs’ which negatively affects some sectors. That said, we should not hesitate to go ahead with it as long as it is necessary for Japan’s economy as a whole; namely, if its ‘benefits’ outweigh its ‘costs’”[2]. We think both statements can be seen as very supportive of the NIRP.

  Q4: What is the likelihood of helicopter money and foreign bond purchases by the BOJ?

  A4: We think both possibilities are extremely unlikely.

  Both helicopter money and foreign bond purchases are in a legal gray zone and therefore cannot be ruled out entirely (see our July 15 Japan Views, and August 30 Japan Views). With helicopter money, however, we see a major risk of the BOJ having difficulty exiting such a policy once it has been set in motion. This is because of the high possibility that giving the government a really convenient tool, namely monetary financing, would cause it to lose fiscal discipline. Given Governor Kuroda is a notable proponent of fiscal consolidation, we think the likelihood of him agreeing to such a policy is extremely low.

  With foreign bond purchases, we think they cannot be dismissed if positioned as a means of expanding the monetary base and not for the purpose of influencing foreign exchange rates. However, even if foreign bond purchases were positioned as a means of monetary base expansion by the BOJ, they would almost certainly be seen by the international community as an attempt to influence foreign exchange rates, in our view. We think foreign bond purchases would be very difficult, especially in light of the US Treasury including Japan on its new currency monitoring list in April 2016.

  Q5: What is the likelihood of the BOJ easing further at the September MPM (next week)?

  A5: If the BOJ were to position the NIRP at the center of its easing policy, we think that it would be only a matter of time before it takes interest rates deeper into negative territory, and that there will be serious discussions on the topic at the September MPM next week. However, we expect the BOJ ultimately to opt to push back additional easing until a later date.

  If the comprehensive assessment was to result in negative interest rates becoming the central pillar of the BOJ’s efforts to achieve its 2% inflation target, it may be natural to think the BOJ would then seek to immediately show a strong commitment to the NIRP, and therefore a deeper negative rate at the September meeting is a possibility. At the next meeting, however, we believe the BOJ will ultimately opt to stand pat and is likely to postpone a deeper interest rate cut for the following three reasons.

  First, in its July Outlook Report, the BOJ sharply raised its GDP growth forecast for FY2017 (to +1.3%, from +0.1%), and kept its bullish inflation forecast (+1.7%) for the same period. Behind this are two main measures on the fiscal front, including a postponement of the second consumption tax hike, and the formation of an economic stimulus package. By the time of the September MPM, however, the only additional macro data available to the BOJ since the July-end Outlook Report will be that for July. While the figures are mixed, we think macro data are unlikely to be weak enough to warrant a major downgrading of the overall economic assessment (see our September 5 Japan Economic Flash).

  The BOJ identified overseas economic developments as the largest downside risk to the economy and prices, but we note that the turmoil in the wake of the Brexit decision has eased, and Chinese macro data, among others, have somewhat improved. Based on the BOJ’s most fundamental approach, we believe that it would see no need to urgently implement additional easing measures if there was no basis for downgrading its economic assessment. 

  Second, because the September MPM and the US FOMC meeting will be held on the same day, the BOJ will need to make its monetary policy decision half a day ahead of the FOMC due to the world time differences. This means that, even if the BOJ were to decide to cut interest rates further, there is a risk of the FOMC decision nullifying the impact on the markets (especially the foreign currency market) of any additional BOJ easing. Considering the possible side-effects and the limited number of chances the BOJ has to take negative interest rates deeper, we believe it will need to think very carefully about the optimal timing when making its next move.

  Third, we believe there is considerable risk in the BOJ cutting rates further before ensuring a more stable steepening of the yield curve. While the yield curve has steepened significantly of late on anticipation of more flexibility on the maturity of JGB purchase, we think this mainly reflects expectations running ahead and that the curve may not stabilize based solely on any news of a more flexible purchase maturities. Rather, with market expectations driving wild fluctuations in yields, we think an actual decision could invite more volatility. If the yield curve fails to steepen in a stable manner in spite of the BOJ taking the negative rate deeper, we think this could have consequences for the financial intermediation function. Consequently, we expect the BOJ to adopt a phased approach, and to consider the timing of future rate cuts only after adjusting the maturity of its JGB purchases first.

  

  

• Alabama, Tennessee, & Georgia Declare States Of Emergency As Gas Shortages Loom After Pipeline Leak

  As Native Americans protesters face arrest in North Dakota for blocking the construction of the Dakota Access Pipeline, TheAntiMedia's Carey Wedler reports a gasoline pipeline spill is currently unfolding in the South. The leak has prompted Alabama Gov. Robert Bentley, Tennessee Gov. Bill Haslam, and Georgia Gov. Nathan Deal to declare states of emergency.

  The Colonial Pipeline, which runs from Houston to New York, began leaking on September 9, spilling 250,000 gallons of gasoline, or 6,000 barrels. The pipeline was built in 1962, and the current leak in Helena, Alabama, is the largest one Colonial Pipeline has experienced in 20 years, Reuters noted.

   

  

   

  AL.com reported that according to the Colonial Pipeline company’s spokesperson, Bill Berry, the pipeline could still be leaking:

   

  “The leaking pipeline was shut down [last] Friday after the leak was discovered, but Berry said there may be additional gas still inside the pipeline. The leaking section of pipeline hasn’t been excavated yet due to safety precautions, so Berry said the condition of the pipeline and cause of the leak is still unknown.”

   

  

   

  Hundreds of employees and contract workers face health risks from inhaling vapor as they work overtime to clean up the spill, which the company says is contained to a mining retention pond. AL.com reports “the leak was discovered at the inactive mine site by employees of the Alabama Surface Mining Commission.”

  The governors of Georgia, Tennessee, and Alabama have declared states of emergency, not due to environmental concerns, but over the gas shortage that will result from the leak. After Colonial Pipeline announced Thursday there would be a delay in restarting the pipeline because “work activity was intermittent overnight due to unfavorable weather conditions that caused gasoline vapors to settle over the site,” the price of gasoline futures rose six percent… even as crude futures prices tumbled…

  

   

  As CNN reports, The major pipeline, one pipe of which has been severed, provides gasoline for an estimated 50 million people on the East Coast each day, according to company estimates. The cause of the leak has yet to be determined, according to the company's most recent statement.

  The pipeline's operator has said full service will not be restored until at least next week. The closure has set off an industry-wide scramble as suppliers seek alternative ways to transport gasoline to the East Coast.

   

  According to reports, the leak will likely start affecting drivers in the nearby states of Georgia, Tennessee, North Carolina and South Carolina within a matter of hours and may spread in coming days. Colonial Pipeline Co., which transports some 40% of the gas along the I-95 corridor says at least 250,000 gallons of gasoline have already been lost.

   

  Senior petroleum analyst Patrick DeHaan warned that some stations may run out as primary gasoline transportation shipping routes along the East coast have been temporarily closed.

   

  Not every station will be able to get the gasoline it needs, he said.

   

  “You’re going to see some places without gasoline,” he said. “It’s like a mini-hurricane.”

   

  The pipeline operator said that based on its current projections, parts of Georgia, Alabama, Tennessee, North Carolina and South Carolina will be the first markets to suffer potential supply disruptions.

  And sure enough the price of East Coast gasoline is soaring relative to the slide in West Coast… (4month highs for East Coast vs 1-month lows for West Coast)

  

  Gas prices typically fall at this time of year. Thursday was the day that stations in most of the country could start using the cheaper winter blend of gasoline rather than the summer blend, which is formulated to combat smog. But East Coast gas prices are spiking already…

  

   

  As SHTFPlan's Mac Slavo notes, the massive pipeline leak in Alabama is threatening widespread gas shortages and significant price hikes on the East Coast of the United States. Though the leak reportedly poses no danger to the public, officials say it stands to affect drivers all along the I-95 corridor from Florida to Maine.

  If you live in any of the aforementioned states then you may want to head to your local gas station and fill up the tanks. Though any shortages will be temporary, not being able to get gas for several days or a week could prove troublesome to the 50 million residents served by the Colonial pipeline. The shortage may also impact grocery store deliveries, so if you have anyessential items you absolutely must have it may be a good idea to pick those up before trucks stop delivering.

   

  The declared states of emergency highlight the fragility of just-in-time delivery systems that include critical goods like gasoline, food and medicine. As we’ve previously noted, even a small emergency could wreak havoc on a local, state or nationwide basis with immediate and catastrophic consequences for the populace.

  Mansfield Oil, a fuel distributor, has warned its customers to take fuel savings measures and to place their orders early. The company said the supply of gasoline is currently very thin along the closed pipeline, and that it was trucking in supplies from the coast to meet demand. The company said it was treating the situation "with the same importance and urgency as a natural disaster."

  

  

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• The Existential Madness Of Putin-Bashing

  Submitted by Robert Parry via ConsortiumNews.com,

  Official Washington loves its Putin-bashing but demonizing the Russian leader stops a rational debate about U.S.-Russia relations and pushes the two nuclear powers toward an existential brink.

  Arguably, the nuttiest neoconservative idea – among a long list of nutty ideas – has been to destabilize nuclear-armed Russia by weakening its economy, isolating it from Europe, pushing NATO up to its borders, demonizing its leadership, and sponsoring anti-government political activists inside Russia to promote “regime change.”

  This breathtakingly dangerous strategy has been formulated and implemented with little serious debate inside the United States as the major mainstream news media and the neocons’ liberal-interventionist sidekicks have fallen in line much as they did during the run-up to the disastrous invasion of Iraq in 2003.

  

  Russian President Vladimir Putin addresses UN General Assembly on Sept. 28, 2015. (UN Photo)

  Except with Russia, the risks are even greater – conceivably, a nuclear war that could exterminate life on the planet. Yet, despite those stakes, there has been a cavalier – even goofy – attitude in the U.S. political/media mainstream about undertaking this new “regime change” project aimed at Moscow.

  There is also little appreciation of how lucky the world was when the Soviet Union fell apart in 1991 without some Russian extremists seizing control of the nuclear codes and taking humanity to the brink of extinction. Back then, there was a mix of luck and restrained leadership, especially on the Soviet side.

  Plus, there were at least verbal assurances from George H.W. Bush’s administration that the Soviet retreat from East Germany and Eastern Europe would not be exploited by NATO and that a new era of cooperation with the West could follow the break-up of the Soviet Union.

  Instead, the United States dispatched financial “experts” – many from Harvard Business School – who arrived in Moscow with neoliberal plans for “shock therapy” to “privatize” Russia’s resources, which turned a handful of corrupt insiders into powerful billionaires, known as “oligarchs,” and the “Harvard Boys” into well-rewarded consultants.

  But the result for the average Russian was horrific as the population experienced a drop in life expectancy unprecedented in a country not at war. While a Russian could expect to live to be almost 70 in the mid-1980s, that expectation had dropped to less than 65 by the mid-1990s.

  The “Harvard Boys” were living the high-life with beautiful women, caviar and champagne in the lavish enclaves of Moscow – as the U.S.-favored President Boris Yeltsin drank himself into stupors – but there were reports of starvation in villages in the Russian heartland and organized crime murdered people on the street with near impunity.

  Meanwhile, Presidents Bill Clinton and George W. Bush cast aside any restraint regarding Russia’s national pride and historic fears by expanding NATO across Eastern Europe, including the incorporation of former Soviet republics.

  In the 1990s, the “triumphalist” neocons formulated a doctrine for permanent U.S. global dominance with their thinking reaching its most belligerent form during George W. Bush’s presidency, which asserted the virtually unlimited right for the United States to intervene militarily anywhere in the world regardless of international law and treaties.

  How Despair Led to Putin

  Without recognizing the desperation and despair of the Russian people during the Yeltsin era — and the soaring American arrogance in the 1990s — it is hard to comprehend the political rise and enduring popularity of Vladimir Putin, who became president after Yeltsin abruptly resigned on New Year’s Eve 1999. (In declining health, Yeltsin died on April 23, 2007).

  

  Russian President Boris Yeltsin.

  Putin, a former KGB officer with a strong devotion to his native land, began to put Russia’s house back in order. Though he collaborated with some oligarchs, he reined in others by putting them in jail for corruption or forcing them into exile.

  Putin cracked down on crime and terrorism, often employing harsh means to restore order, including smashing Islamist rebels seeking to take Chechnya out of the Russian Federation.

  Gradually, Russia regained its economic footing and the condition of the average Russian improved. By 2012, Russian life expectancy had rebounded to more than 70 years. Putin also won praise from many Russians for reestablishing the country’s national pride and reasserting its position on the world stage.

  Though a resurgent Russia created friction with the neocon designs for permanent U.S. world domination, Putin represented a side of Russian politics that favored cooperation with the West. He particularly hoped that he could work closely with President Barack Obama, who likewise indicated his desire to team up with Russia to make progress on thorny international issues.

  In 2012, Obama was overheard on an open mike telling Putin’s close political ally, then-President Dmitri Medvedev, that “after my election, I have more flexibility,” suggesting greater cooperation with Russia. (Because of the Russian constitution barring someone from serving more than two consecutive terms as president, Medvedev, who had been prime minister, essentially swapped jobs with Putin for four years.)

  Obama’s promise was not entirely an empty one. His relationship with the Russian leadership warmed as the two powers confronted common concerns over security issues, such as convincing Syria to surrender its chemical-weapons arsenal in 2013 and persuading Iran to accept tight limitations on its nuclear program in 2014.

  In an extraordinary op-ed in The New York Times on Sept. 11, 2013, Putin described his relationship with Obama as one of “growing trust” while disagreeing with the notion of “American “exceptionalism.” In the key last section that he supposedly wrote himself, Putin said:

  “My working and personal relationship with President Obama is marked by growing trust. I appreciate this. I carefully studied his address to the nation on Tuesday. And I would rather disagree with a case he made on American exceptionalism, stating that the United States’ policy is ‘what makes America different. It’s what makes us exceptional.’

   

  “It is extremely dangerous to encourage people to see themselves as exceptional, whatever the motivation. There are big countries and small countries, rich and poor, those with long democratic traditions and those still finding their way to democracy. Their policies differ, too. We are all different, but when we ask for the Lord’s blessings, we must not forget that God created us equal.”

  Offending the Neocons

  Though Putin may have thought he was simply contributing to a worthy international debate in the spirit of the U.S. Declaration of Independence’s assertion that “all men are created equal,” his objection to “American exceptionalism” represented fighting words to America’s neocons.

  

  Carl Gershman, president of the National Endowment for Democracy

  Instead of engaging in mushy multilateral diplomacy, muscular neocons saw America as above the law and lusted for bombing campaigns against Syria and Iran – with the goal of notching two more “regime change” solutions on their belts.

  Thus, the neocons and their liberal-interventionist fellow-travelers came to see Putin as a major and unwelcome obstacle to their dreams of permanent U.S. dominance over the planet, which they would promote through what amounted to permanent warfare. (The main distinction between neocons and liberal interventionists is that the former cites “democracy promotion” as its rationale and the latter justifies war under the mantle of “humanitarianism.”)

  Barely two weeks after Putin’s op-ed in the Times, a prominent neocon, Carl Gershman, the longtime president of the U.S.-government-funded National Endowment for Democracy, issued what amounted to a rejoinder in The Washington Post on Sept. 26, 2013.

  Gershman’s op-ed made clear that U.S. policy should take aim at Ukraine, a historically and strategically sensitive country on Russia’s doorstep where the Russian nation made a stand against the Tatars in the 1600s and where the Nazis launched Operation Barbarossa, the devastating 1941 invasion which killed some 4 million Soviet soldiers and led to some 26 million Soviet dead total.

  In the Post, Gershman wrote that “Ukraine is the biggest prize,” but made clear that Putin was the ultimate target: “Ukraine’s choice to join Europe will accelerate the demise of the ideology of Russian imperialism that Putin represents. Russians, too, face a choice, and Putin may find himself on the losing end not just in the near abroad but within Russia itself.”

  To advance this cause, NED alone was funding scores of projects that funneled hundreds of thousands of dollars to Ukrainian political activists and media outlets, creating what amounted to a shadow political structure that could help stir up unrest when the Ukrainian government didn’t act as desired, i.e., when elected President Viktor Yanukovych balked at a European economic plan that included cuts in pensions and heat subsidies as demanded by the International Monetary Fund.

  When Yanukovych sought more time to negotiate a less onerous deal, U.S.-backed protests swept into Kiev’s Maidan square. Though representing genuine sentiment among many western Ukrainians for increased ties to Europe, neo-Nazi and ultra-nationalist street fighters gained control of the uprising and began firebombing police.

  

  A screen shot of U.S. Assistant Secretary of State for European Affairs Victoria Nuland speaking to U.S. and Ukrainian business leaders on Dec. 13, 2013, at an event sponsored by Chevron, with its logo to Nuland’s left.

  Despite the mounting violence, the protests were cheered on by neocon Sen. John McCain, U.S. Ambassador Geoffrey Pyatt and Assistant Secretary of State for Europe Victoria Nuland, the wife of neocon stalwart Robert Kagan, a co-founder of the Project for the New American Century, which was a major promoter of the U.S. invasion of Iraq.

  In a speech to Ukrainian business leaders on Dec. 13, 2013, Nuland reminded them that the United States had invested $5 billion in their “European aspirations.” By early February 2014, in an intercepted phone call, she was discussing with Pyatt who should lead a new government – “Yats is the guy,” she declared referring to Arseniy Yatsenyuk. Nuland and Pyatt continued the conversation with exchanges about how to “glue this thing” or “midwife this thing,” respectively.

  A Western-backed Putsch

  The violence worsened on Feb. 20, 2014, when mysterious snipers opened fire on police and demonstrators sparking clashes that killed scores, including police officers and protesters. Though later evidence suggested that the shootings were a provocation by the neo-Nazis, the immediate reaction in the mainstream Western media was to blame Yanukovych.

  Though Yanukovych agreed to a compromise on Feb. 21 that would reduce his powers and speed up new elections so he could be voted out of office, he was still painted as a tyrannical villain. As neo-Nazi and other rightists chased him and his government from power on Feb. 22, the West hailed the unconstitutional putsch as “legitimate” and a victory for “democracy.”

  The coup, however, prompted resistance from ethnic Russian areas of Ukraine, particularly in the east and south. With the aid of Russian troops who were stationed at the Russian naval base in Sevastopol, the Crimeans held a referendum and voted by 96 percent to leave Ukraine and rejoin the Russian Federation, a move accepted by Putin and the Kremlin.

  

  Nazi symbols on helmets worn by members of Ukraine’s Azov battalion. (As filmed by a Norwegian film crew and shown on German TV)

  However, the West’s mainstream media called the referendum a “sham” and Crimea’s secession from Ukraine became Putin’s “invasion” – although the Russian troops were already in Crimea as part of the basing agreement and the referendum, though hastily organized, clearly represented the overwhelming will of the Crimean people, a judgment corroborated by a variety of subsequent polls.

  Ethnic Russians in eastern Ukraine also rose up against the new regime in Kiev, prompting more accusations in the West about “Russian aggression.” Anyone who raised the possibility that these areas, Yanukovych’s political strongholds, might simply be rejecting what they saw as an illegal political coup in Kiev was dismissed as a “Putin apologist” or a “Moscow stooge.”

  While Official Washington and its mainstream media rallied the world in outrage against Putin and Russia, the new authorities in Kiev slipped Nuland’s choice, Yatsenyuk, into the post of prime minister where he pushed through the onerous IMF “reforms,” making the already hard lives of Ukrainians even harder. (The unpopular Yatsenyuk eventually resigned his position.)

  Despite the obvious risks of supporting a putsch on Russia’s border, the neocons achieved their political goal of driving a huge wedge between Putin and Obama, whose quiet cooperation had been so troublesome for the neocon plan for violent “regime change” in Syria and Iran.

  The successful neocon play in Ukraine also preempted possible U.S.-Russian cooperation in trying to impose an Israeli-Palestinian peace agreement that would have established a Palestinian state and would have stymied Israel’s plans for gobbling up Palestinian territory by expanding Jewish settlements and creating an apartheid-style future for the indigenous Arabs, confining them to a few cantons surrounded by de facto Israeli territory.

  Obama’s timid failure to explain and defend his productive collaboration with Putin enabled the neocons to achieve another goal of making Putin an untouchable, a demonized foreign leader routinely mocked and smeared by the mainstream Western news media. Along with Putin’s demonization, the neocons have sparked a new Cold War that will not only extend today’s “permanent warfare” indefinitely but dramatically increase its budgetary costs with massive new investments in strategic weapons.

  Upping the Nuclear Ante

  By targeting Putin and Russia, the neocons have upped the ante when it comes to their “regime change” agenda. No longer satisfied with inflicting “regime change” in countries deemed hostile to Israel – Iraq, Syria, Libya, Iran, etc. – the neocons have raised their sights on Russia.

  

  Billionaire currency speculator George Soros. (Photo credit: georgesoros.com)

  In that devil-may-care approach, the neocons are joined by prominent “liberal interventionists,” such as billionaire currency speculator George Soros, who pulls the strings of many “liberal” organizations that he bankrolls.

  In February 2015, Soros laid out his “Russia-regime-change” vision in the liberal New York Review of Books with an alarmist call for Europe “to wake up and recognize that it is under attack from Russia” – despite the fact that it has been NATO encroaching on Russia’s borders, not the other way around.

  But Soros’s hysteria amounted to a clarion call to his many dependents among supposedly independent “non-governmental organizations” to take up the goal of destabilizing Russia and driving Putin from office. As a currency speculator, Soros recognizes the value of inflicting economic pain as well as military punishment on a target country.

  “The financial crisis in Russia and the body bags [of supposedly Russian soldiers] from Ukraine have made President Putin politically vulnerable,” Soros wrote, urging Europe to keep up the economic pressure on Russia while working to transform Ukraine into an economic/political success story, saying:

  “…if Europe rose to the challenge and helped Ukraine not only to defend itself but to become a land of promise, Putin could not blame Russia’s troubles on the Western powers. He would be clearly responsible and he would either have to change course or try to stay in power by brutal repression, cowing people into submission. If he fell from power, an economic and political reformer would be likely to succeed him.”

  But Soros recognized the other possibility: that a Western-driven destabilization of Russia and a failed state in Ukraine could either bolster Putin or lead to his replacement by an extreme Russian nationalist, someone far-harder-line than Putin.

  With Ukraine’s continued failure, Soros wrote, “President Putin could convincingly argue that Russia’s problems are due to the hostility of the Western powers. Even if he fell from power, an even more hardline leader like Igor Sechin or a nationalist demagogue would succeed him.”

  Yet, Soros fails to appreciate how dangerous his schemes could be to make Russia’s economy scream so loudly that Putin would be swept aside by some political upheaval. As Soros suggests, the Russian people could turn to an extreme nationalist, not to some pliable Western-approved politician.

  Protecting Mother Russia

  Especially after suffering the depravations of the Yeltsin years, the Russian people might favor an extremist who would take a tough stance against the West and might see brandishing the nuclear arsenal as the only way to protect Mother Russia.

  

  U.S. Secretary of State John Kerry, flanked by Assistant Secretary of State for European and Eurasian Affairs Victoria “Toria” Nuland, delivers his opening remarks to Russian Foreign Minister Sergey Lavrov at the outset of a bilateral meeting on July 15, 2016, in Moscow. [State Department photo]

  Still, Official Washington can’t get enough of demonizing Putin. A year ago, Obama’s White House – presumably to show how much the President disdains Putin, too – made fun of how Putin sits with his legs apart.

  White House spokesman Josh Earnest cited a photo of the Russian president sitting next to Israeli Prime Minister Benjamin Netanyahu. “President Putin was striking a now-familiar pose of less-than-perfect posture and unbuttoned jacket and, you know, knees spread far apart to convey a particular image,” Earnest said, while ignoring the fact that Netanyahu was sitting with his legs wide apart, too.

  Amid this anything-goes Putin-bashing, The New York Times, The Washington Post and now Hillary Clinton’s campaign have escalated their anti-Putin rhetoric, especially since Republican presidential nominee Donald Trump has offered some praise of Putin as a “strong” leader.

  Despite the barrage of cheap insults emanating from U.S. political and media circles, Putin has remained remarkably cool-headed, refusing the react in kind. Oddly, as much as the American political/media establishment treats Putin as a madman, Official Washington actually counts on his even-temper to avoid a genuine existential crisis for the world.

  If Putin were what the U.S. mainstream media and politicians describe – a dangerous lunatic – the endless baiting of Putin would be even more irresponsible. Yet, even with many people privately realizing that Putin is a much more calculating leader than their negative propaganda makes him out to be, there still could be a limit to Putin’s patience.

  Or the neocons and liberal hawks might succeed in provoking a violent uprising in Moscow that ousts Putin. However, if that were to happen, the odds – as even Soros acknowledges – might favor a Russian nationalist coming out on top and thus in control of the nuclear codes.

  In many ways, it’s not Putin who should worry Americans but the guy that might follow Putin.

  *  *  *

  Investigative reporter Robert Parry broke many of the Iran-Contra stories for The Associated Press and Newsweek in the 1980s. You can buy his latest book, America’s Stolen Narrative, either in print here or as an e-book (from Amazon and barnesandnoble.com).

  

  

• New Study Finds Taxpayers Are Fleeing New York, Illinois and California

  A new demographics study, posted on newgeography.com, found that more tax filers are fleeing the state of New York than any other state in the country.  Frankly, we’re shocked people wouldn’t want to live in a state with the highest cost of living, highest home prices, highest state income tax rate and highest property tax rate…what about the cultural benefits?  We guess the bankers and hedgies have finally figured out that they can conduct their business from pretty much any location with an internet connection and then visit New York when/if necessary.  Per the same study, Illinois lost the second highest number of taxpayers and California was not far behind in third. 

  Does anyone think it’s purely a coincidence that the darkest areas of the following maps seem to overlap and represent the states that people are fleeing at the highest rates?  If so, we assume you probably also think it’s a coincidence that those very same states have been Democratic strongholds for decades.

  

  Source:  Economic Policy Institute.

   

  

   

  Actually, the Albany Times Union was able to find at least one person who thought that people were fleeing from NY for reasons other than oppressively high costs of living and burdensome tax rates.  Ironically, that person was non other than Richard Azzopardi, of Governor Cuomo’s office, who said:

  “The fact is that under this administration, New York has a record number of private sector jobs, an unemployment number below the national average, and passed reforms that led to the lowest middle class taxes in 70 years, the lowest corporate tax rates since 1968 and the lowest manufacturing tax rate since 1917 and a property tax cap.”

  While we appreciate the data from Azzopardi, we’re not sure that linking New York’s excessive tax rates to its own historically higher excessive tax rates is the right comparison.  Our guess is that your citizens (or ex-citizens) probably consider New York’s current tax rates versus the current tax rates of other states as the more relevant comparison.  But that’s just a hunch. 

  

  

• Why East Coast Gas Prices Are About To Explode

  As Native Americans protesters face arrest in North Dakota for blocking the construction of the Dakota Access Pipeline, TheAntiMedia's Carey Wedler reports a gasoline pipeline spill is currently unfolding in the South. The leak has prompted Alabama Gov. Robert Bentley, Tennessee Gov. Bill Haslam, and Georgia Gov. Nathan Deal to declare states of emergency.

  The Colonial Pipeline, which runs from Houston to New York, began leaking on September 9, spilling 250,000 gallons of gasoline, or 6,000 barrels. The pipeline was built in 1962, and the current leak in Helena, Alabama, is the largest one Colonial Pipeline has experienced in 20 years, Reuters noted.

   

  

   

  AL.com reported that according to the Colonial Pipeline company’s spokesperson, Bill Berry, the pipeline could still be leaking:

   

  “The leaking pipeline was shut down [last] Friday after the leak was discovered, but Berry said there may be additional gas still inside the pipeline. The leaking section of pipeline hasn’t been excavated yet due to safety precautions, so Berry said the condition of the pipeline and cause of the leak is still unknown.”

   

  

   

  Hundreds of employees and contract workers face health risks from inhaling vapor as they work overtime to clean up the spill, which the company says is contained to a mining retention pond. AL.com reports “the leak was discovered at the inactive mine site by employees of the Alabama Surface Mining Commission.”

  The governors of Georgia, Tennessee, and Alabama have declared states of emergency, not due to environmental concerns, but over the gas shortage that will result from the leak. After Colonial Pipeline announced Thursday there would be a delay in restarting the pipeline because “work activity was intermittent overnight due to unfavorable weather conditions that caused gasoline vapors to settle over the site,” the price of gasoline futures rose six percent… even as crude futures prices tumbled…

  

   

  As CNN reports, The major pipeline, one pipe of which has been severed, provides gasoline for an estimated 50 million people on the East Coast each day, according to company estimates. The cause of the leak has yet to be determined, according to the company's most recent statement.

  The pipeline's operator has said full service will not be restored until at least next week. The closure has set off an industry-wide scramble as suppliers seek alternative ways to transport gasoline to the East Coast.

   

  According to reports, the leak will likely start affecting drivers in the nearby states of Georgia, Tennessee, North Carolina and South Carolina within a matter of hours and may spread in coming days. Colonial Pipeline Co., which transports some 40% of the gas along the I-95 corridor says at least 250,000 gallons of gasoline have already been lost.

   

  Senior petroleum analyst Patrick DeHaan warned that some stations may run out as primary gasoline transportation shipping routes along the East coast have been temporarily closed.

   

  Not every station will be able to get the gasoline it needs, he said.

   

  “You’re going to see some places without gasoline,” he said. “It’s like a mini-hurricane.”

   

  The pipeline operator said that based on its current projections, parts of Georgia, Alabama, Tennessee, North Carolina and South Carolina will be the first markets to suffer potential supply disruptions.

  And sure enough the price of East Coast gasoline is soaring relative to the slide in West Coast… (4month highs for East Coast vs 1-month lows for West Coast)

  

  Gas prices typically fall at this time of year. Thursday was the day that stations in most of the country could start using the cheaper winter blend of gasoline rather than the summer blend, which is formulated to combat smog. But East Coast gas prices are spiking already…

  

   

  As SHTFPlan's Mac Slavo notes, the massive pipeline leak in Alabama is threatening widespread gas shortages and significant price hikes on the East Coast of the United States. Though the leak reportedly poses no danger to the public, officials say it stands to affect drivers all along the I-95 corridor from Florida to Maine.

  If you live in any of the aforementioned states then you may want to head to your local gas station and fill up the tanks. Though any shortages will be temporary, not being able to get gas for several days or a week could prove troublesome to the 50 million residents served by the Colonial pipeline. The shortage may also impact grocery store deliveries, so if you have anyessential items you absolutely must have it may be a good idea to pick those up before trucks stop delivering.

   

  The declared states of emergency highlight the fragility of just-in-time delivery systems that include critical goods like gasoline, food and medicine. As we’ve previously noted, even a small emergency could wreak havoc on a local, state or nationwide basis with immediate and catastrophic consequences for the populace.

  Mansfield Oil, a fuel distributor, has warned its customers to take fuel savings measures and to place their orders early. The company said the supply of gasoline is currently very thin along the closed pipeline, and that it was trucking in supplies from the coast to meet demand. The company said it was treating the situation "with the same importance and urgency as a natural disaster."

  

  

• Nassim Taleb Exposes The World's "Intellectual-Yet-Idiot" Class

  Authored by Nassim Nichaolss Taleb via Medium.com,

  What we have been seeing worldwide, from India to the UK to the US, is the rebellion against the inner circle of no-skin-in-the-game policymaking “clerks” and journalists-insiders, that class of paternalistic semi-intellectual experts with some Ivy league, Oxford-Cambridge, or similar label-driven education who are telling the rest of us 1) what to do, 2) what to eat, 3) how to speak, 4) how to think… and 5) who to vote for.

  But the problem is the one-eyed following the blind: these self-described members of the “intelligenzia” can’t find a coconut in Coconut Island, meaning they aren’t intelligent enough to define intelligence and fall into circularities?—?but their main skills is capacity to pass exams written by people like them. With psychology papers replicating less than 40%, dietary advice reversing after 30 years of fatphobia, macroeconomic analysis working worse than astrology, the appointment of Bernanke who was less than clueless of the risks, and pharmaceutical trials replicating at best only 1/3th of the time, people are perfectly entitled to rely on their own ancestral instinct and listen to their grandmothers (or Montaigne and such filtered classical knowledge) with a better track record than these policymaking goons.

  Indeed one can see that these academico-bureaucrats wanting to run our lives aren’t even rigorous, whether in medical statistics or policymaking. They cant tell science from scientism?—?in fact in their eyes scientism looks more scientific than real science. (For instance it is trivial to show the following: much of what the Cass-Sunstein-Richard Thaler types?—?those who want to “nudge” us into some behavior?—?much of what they call “rational” or “irrational” comes from their misunderstanding of probability theory and cosmetic use of first-order models.) They are prone to mistake the ensemble for the linear aggregation of its components as we saw in the chapter extending the minority rule.

  The Intellectual Yet Idiot is a production of modernity hence has been accelerating since the mid twentieth century, to reach its local supremum today, along with the broad category of people without skin-in-the-game who have been invading many walks of life. Why? Simply, in many countries, the government’s role is ten times what it was a century ago (expressed in percentage of GDP). The IYI seems ubiquitous in our lives but is still a small minority and rarely seen outside specialized outlets, social media, and universities?—?most people have proper jobs and there are not many opening for the IYI.

  Beware the semi-erudite who thinks he is an erudite.

  The IYI pathologizes others for doing things he doesn’t understand without ever realizing it is his understanding that may be limited. He thinks people should act according to their best interests and he knows their interests, particularly if they are “red necks” or English non-crisp-vowel class who voted for Brexit. When Plebeians do something that makes sense to them, but not to him, the IYI uses the term “uneducated”. What we generally call participation in the political process, he calls by two distinct designations: “democracy” when it fits the IYI, and “populism” when the plebeians dare voting in a way that contradicts his preferences. While rich people believe in one tax dollar one vote, more humanistic ones in one man one vote, Monsanto in one lobbyist one vote, the IYI believes in one Ivy League degree one-vote, with some equivalence for foreign elite schools, and PhDs as these are needed in the club.

  

   

  More socially, the IYI subscribes to The New Yorker. He never curses on twitter. He speaks of “equality of races” and “economic equality” but never went out drinking with a minority cab driver. Those in the U.K. have been taken for a ride by Tony Blair. The modern IYI has attended more than one TEDx talks in person or watched more than two TED talks on Youtube. Not only will he vote for Hillary Monsanto-Malmaison because she seems electable and some other such circular reasoning, but holds that anyone who doesn’t do so is mentally ill.

  The IYI has a copy of the first hardback edition of The Black Swan on his shelves, but mistakes absence of evidence for evidence of absence. He believes that GMOs are “science”, that the “technology” is not different from conventional breeding as a result of his readiness to confuse science with scientism.

  Typically, the IYI get the first order logic right, but not second-order (or higher) effects making him totally incompetent in complex domains. In the comfort of his suburban home with 2-car garage, he advocated the “removal” of Gadhafi because he was “a dictator”, not realizing that removals have consequences (recall that he has no skin in the game and doesn’t pay for results).

  The IYI is member of a club to get traveling privileges; if social scientist he uses statistics without knowing how they are derived (like Steven Pinker and psycholophasters in general); when in the UK, he goes to literary festivals; he drinks red wine with steak (never white); he used to believe that fat was harmful and has now completely reversed; he takes statins because his doctor told him so; he fails to understand ergodicity and when explained to him, he forgets about it soon later; he doesn’t use Yiddish words even when talking business; he studies grammar before speaking a language; he has a cousin who worked with someone who knows the Queen; he has never read Frederic Dard, Libanius Antiochus, Michael Oakeshot, John Gray, Amianus Marcellinus, Ibn Battuta, Saadiah Gaon, or Joseph De Maistre; he has never gotten drunk with Russians; he never drank to the point when one starts breaking glasses (or, preferably, chairs); he doesn’t know the difference between Hecate and Hecuba; he doesn’t know that there is no difference between “pseudointellectual” and “intellectual” in the absence of skin in the game; has mentioned quantum mechanics at least twice in the past 5 years in conversations that had nothing to do with physics; he knows at any point in time what his words or actions are doing to his reputation.

  But a much easier marker: he doesn’t deadlift.

  

  Not a IYI

  

  

• On This Day In Financial History

  8 years ago, Lehman’s bankruptcy exposed the reality of the global financial system and equity markets collapsed. While the events of that weekend are still in many memories, we suspect few remember the events of September 16th 1929…

  As S&P’s chief investment strategist, David M. Blitzer explains, On September 16th 1929, The Standard & Poors 500-stock index (calculated retroactively) hits 31.86, its peak for the Roaring Twenties bull market.

  

   

  It does not close above that level until September 22, 1954.

  

   

  When you hear that stocks always outperform in the long run, do you realize how long long can be?

  h/t Jason Zweig
  

  

  

• A Dire Warning: "Someone Is Learning How To Take Down The Internet"

  Submitted by Mike Krieger via Liberty Blitzkrieg blog,

  When Bruce Schneier writes a post titled, Someone Is Learning How to Take Down the Internet, you better listen.

  

  Read his post below and share widely:

  Over the past year or two, someone has been probing the defenses of the companies that run critical pieces of the Internet. These probes take the form of precisely calibrated attacks designed to determine exactly how well these companies can defend themselves, and what would be required to take them down. We don’t know who is doing this, but it feels like a large nation state. China or Russia would be my first guesses.

   

  First, a little background. If you want to take a network off the Internet, the easiest way to do it is with a distributed denial-of-service attack (DDoS). Like the name says, this is an attack designed to prevent legitimate users from getting to the site. There are subtleties, but basically it means blasting so much data at the site that it’s overwhelmed. These attacks are not new: hackers do this to sites they don’t like, and criminals have done it as a method of extortion. There is an entire industry, with an arsenal of technologies, devoted to DDoS defense. But largely it’s a matter of bandwidth. If the attacker has a bigger fire hose of data than the defender has, the attacker wins.

   

  Recently, some of the major companies that provide the basic infrastructure that makes the Internet work have seen an increase in DDoS attacks against them. Moreover, they have seen a certain profile of attacks. These attacks are significantly larger than the ones they’re used to seeing. They last longer. They’re more sophisticated. And they look like probing. One week, the attack would start at a particular level of attack and slowly ramp up before stopping. The next week, it would start at that higher point and continue. And so on, along those lines, as if the attacker were looking for the exact point of failure.

   

  The attacks are also configured in such a way as to see what the company’s total defenses are. There are many different ways to launch a DDoS attack. The more attack vectors you employ simultaneously, the more different defenses the defender has to counter with. These companies are seeing more attacks using three or four different vectors. This means that the companies have to use everything they’ve got to defend themselves. They can’t hold anything back. They’re forced to demonstrate their defense capabilities for the attacker.

   

  I am unable to give details, because these companies spoke with me under condition of anonymity. But this all is consistent with what Verisign is reporting. Verisign is the registrar for many popular top-level Internet domains, like .com and .net. If it goes down, there’s a global blackout of all websites and e-mail addresses in the most common top-level domains. Every quarter, Verisign publishes a DDoS trends report. While its publication doesn’t have the level of detail I heard from the companies I spoke with, the trends are the same: “in Q2 2016, attacks continued to become more frequent, persistent, and complex.”

   

  There’s more. One company told me about a variety of probing attacks in addition to the DDoS attacks: testing the ability to manipulate Internet addresses and routes, seeing how long it takes the defenders to respond, and so on. Someone is extensively testing the core defensive capabilities of the companies that provide critical Internet services.

   

  Who would do this? It doesn’t seem like something an activist, criminal, or researcher would do. Profiling core infrastructure is common practice in espionage and intelligence gathering. It’s not normal for companies to do that. Furthermore, the size and scale of these probes — and especially their persistence — points to state actors. It feels like a nation’s military cybercommand trying to calibrate its weaponry in the case of cyberwar. It reminds me of the US’s Cold War program of flying high-altitude planes over the Soviet Union to force their air-defense systems to turn on, to map their capabilities.

   

  What can we do about this? Nothing, really. We don’t know where the attacks come from. The data I see suggests China, an assessment shared by the people I spoke with. On the other hand, it’s possible to disguise the country of origin for these sorts of attacks. The NSA, which has more surveillance in the Internet backbone than everyone else combined, probably has a better idea, but unless the US decides to make an international incident over this, we won’t see any attribution.

   

  But this is happening. And people should know.

  As an aside, the observations noted above are consistent with some of what we have seen here at Liberty Blitzkrieg over the past year or so.

  For prior articles by Schneier highlighted here, see:

  Bruce Schneier: “The Internet is a Surveillance State”

  “This is No Longer Fiction” – The Era of Automatic Facial Recognition and Surveillance Is Here

  Top Computer Security Expert Warns – David Cameron’s Plan to Ban Encryption Would “Destroy the Internet”

  

  

• #MaybeTrumpAfterAll

  A funny thing happens when the polls go the other way…

  This is happening… 

  

   

  And so is this…

  

  #MaybeTrumpAfterAll

  Source: Townhall.com

  

  

• Jessica Alba Laughs Last After $1 Billion Offer For Her "Honest" Company

  While we would never wish ill will upon anyone, particularly someone with Jessica Alba’s particular “talent”, earlier this year we must admit that we derived some comfort from a WSJ article alleging that Alba’s “Honest Company” hadn’t really been that honest in disclosing which chemicals were used to make their “non-toxic” diapers and detergents.  It’s not that we took any delight in Alba’s potential failure, but we were at least relieved that future investors might be spared additional investing “opportunities” in America’s latest mania-driven bubble.  Back in March we wrote the following:

  Back in the summer of 2014, roughly a year and a half before the second bubble of profitless, “story”, aka “tech”, companies had burst, we wrote in dismay, that “the true indicator of just how bubbly the second coming of the dot com era has become comes courtesy of none other than Jessica Alba’s, yes the actress, own startup: a company launched in 2012 and which makes “non-toxic” diapers (as opposed to toxic diapers?), called the Honest Co., has raised $70 million at a valuation just shy of $1 billion in preparation for an IPO.”

  As we noted then, it looked as if the Alba bubble may have burst (as frightening as that may sound) when the WSJ released an article alleging that Alba’s company may have been using chemicals in their products that they had claimed to shun. 

  What isn’t as easily explained is that since we profiled Alba’s “Honest Company”, its valuation has grown by another 70%, and according to the WSJ it is now $1.7 billion with total funding raised more than $200 million “thanks to its marketing of cleaning supplies, diapers and other consumer products that it says are safer and more ecologically friendly than other brands.”

   

  But what Alba herself will have a very difficult time explaining is why, just like in the case of Theranos, her company it not only grossly misnamed, but may also be another fraud, because according to a just released WSJ expose, “one of the primary ingredients Honest tells consumers to avoid is a cleaning agent called sodium lauryl sulfate, or SLS, which can be found in everyday household items from Colgate toothpaste to Tide detergent and Honest says can irritate skin.

  

  Alas, Jessica Alba and her “Honest Company” may get the last laugh, according to the Wall Street Journal, as Unilever, maker of Dove soaps and Axe body sprays, is in talks to acquire Alba’s company for $1 billion.  That said, we weren’t totally wrong as Unilever’s contemplated purchase price is over 40% less than the $1.7BN valuation placed on Honest in it’s latest fundraising round.  Per the Wall Street Journal:

  Unilever PLC is in talks to acquire Honest Co., the consumer-products retailer co-founded by actress Jessica Alba, according to people familiar with the matter.

   

  Unilever, maker of Dove soaps and Axe body sprays, is discussing a deal valued at over $1 billion but significantly less than the $1.7 billion valuation that was placed on Honest in a fundraising round last year, the people said. The talks are at an early stage, and Honest hasn’t ruled out going for an initial public offering instead, one of the people said.

   

  Honest has raised more than $200 million from outside investors since the Santa Monica, Calif., company’s founding in 2011, according to FactSet data. Those investors include venture-capital firms General Catalyst Partners and Lightspeed Venture Partners as well as money managers Fidelity Management & Research Co. and Wellington Management Co. In the event of a sale, Honest has pledged to pay some investors double their investment.

  According to the WSJ, the Honest Company generates roughly $300 million in annual revenue which pegs Unilever’s bid at 3.3x revenue.  While a few short years ago that may have seemed like an outrageous valuation for a consumer staple business, today it’s right in line with the likes of P&G and Clorox which bubbled over as pension funds have begun trading consumer staple equities and their dividends as the equivalent of investment grade bonds.  Similar risk profile, right? 

  But, for our many readers who couldn’t give a rip about the Honest Company or it’s valuation but just clicked on this post because you liked the teaser image…we leave you with this parting gift:

  

  

  

  

• How About Presenting The Facts & Letting Voters Decide Who's "Fit To Serve"?

  Submitted by Charles Hugh-Smith via OfTwoMinds blog,

  This simple two-step process would greatly diminish the Ministry of Propaganda's influence.

  Here's a radical idea: how about presenting the facts and letting voters decide who is "fit to serve"? Consider the context of this presidential election and the judgment call as to who is "fit to serve":

  1. Americans' Trust in Mass Media Sinks to New Low (Gallup)  "Americans' trust and confidence in the mass media 'to report the news fully, accurately and fairly' has dropped to its lowest level in Gallup polling history."

   

  2. Both the Republican and Democratic candidates have highly unfavorable ratings; they may well be the most disliked nominees in American history.

   

  3. The status quo in which voters are supposed to rubber-stamp the decisions made at the top of the wealth/power pyramid is falling out of favor.

   

  4. Personal physicians are not disinterested parties; they serve the candidate, not the voting public. Their public claims of "fit to serve" suffer from irreconcilable conflicts of interest.

  To best serve the interests of the nation and the voters, I propose that all candidates for the presidency submit to a thorough medical exam at an Army or Navy hospital that immediately releases the full results to the public. The attending physicians' names will be drawn from a pool of qualified staff at the start of the exam, making it impossible for anyone to threaten or buy off the attending physicians prior to the exam.

  The exam will include chest x-rays, CT scans, neurological tests and the usual blood work.

  The examinations will be overseen by healthcare/medical journalists to insure that the exams adhere to stardard practice and the results are posted immediately without any tampering.

  The principles at work here are:

  1. The public has a right to know the facts relating to each candidates' health.

   

  2. Each candidate is given the exact same tests and treated exactly the same.

   

  3. The public will decide who is "fit to serve" after reviewing the facts of the matter.

   

  4. If you have nothing to hide, you have nothing to fear.

  If any candidate prefers to keep the results of the health exam private, they can do so by exiting the race for the presidency.

  In addition to the medical exam, each candidate will hold a two-hour press conference every week until election day. Representatives of the entire media, not just the handful of mainstream networks and newspapers, will be invited to attend. To secure the room, the public will not be admitted.

  Candidates will be invited to sit in comfortable chairs and answer any and all questions on any subject. They will not be allowed to wear sunglasses or be attended by aides. Since the room will be secured (all media reps will be screened for weapons, all entrances properly sealed, etc.), there is no need for Secret Service personnel to hover over the candidates.

  Why should any candidate object to these very transparent and uncontroversial demands? Why should any candidate object to a routine battery of medical tests and a weekly press conference?

  If you have nothing to hide, you have nothing to fear.

  

  This simple two-step process would greatly diminish the Ministry of Propaganda's influence. It isn't that hard to understand, people: the voters should be able to review the candidates' medical exam results (i.e. the facts of the matter) so they can decide who's "fit to serve" in an informed fashion. Isn't that the core of democracy?

   *  *  *

  My new book is #6 on Kindle short reads -> politics and social science: Why Our Status Quo Failed and Is Beyond Reform ($3.95 Kindle ebook, $8.95 print edition) For more, please visit the book's website.

   

  

  

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• Electile Dysfunction: From Landslide To Loser

  Authored by Alan Dershowitz via The Gatestone Institute,

  This is the strangest presidential election in my memory. Despite the polls, the outcome is utterly unpredictable. This was true even before Hillary Clinton's recent health issue. Just consider this: it was only a month ago that the Washington Post declared a landslide victory for Hillary Clinton,

  "[A] dispassionate examination of the data, combined with a coldblooded look at the candidates, the campaigns and presidential elections, produces only one possible conclusion: Hillary Clinton will defeat Donald Trump in November… Three months from now, with the 2016 presidential election in the rearview mirror, we will look back and agree that the presidential election was over on Aug. 9th."

  On August 24, Slate, a liberal online magazine owned by the Washington Post, similarly declared, "There is no horse race: it's Clinton by a mile, with Trump praying for black swans" — only to "predict" one week later "Trump-Clinton Probably Won't be A Landslide." A few days ago, in a desperate attempt to analyze the new polls showing Trump closing in on Clinton, Slate explained sheepishly, "Things realistically couldn't have gotten much worse for Trump than they were a few weeks ago, and so it's not a shock that they instead have gotten a little better of late." Some current polls even show Trump with a slight lead.

  The reality is that polling is incapable of accurately predicting the outcome of elections like this one, where so many voters are angry, resentful, emotional, negative, and frightened. In my new book, Electile Dysfunction: A Guide for the Unaroused Voter" I discuss in detail why so many voters now say they won't vote at all, or will vote for a third-party candidate. As the New York Times reported, "Only 9% of America Chose Trump and Clinton as the Nominees." Or to put the voter's frustration with the candidates more starkly, "Eighty-one percent of Americans say they would feel afraid following the election of one of the two polarizing politicians."

  (Image source: Gage Skidmore/Flickr)

  Despite their perceived lack of agency, these voters may, of course, end up voting for one of the two major candidates when Election Day comes around.

  This may depend in part on whether the Johnson-Weld ticket does well enough in the polls to be included in the presidential and vice presidential debates. The rules require that a third-party candidate reach 15 percent in five national polls. This number is difficult to achieve because many of the polls do not include third-party candidates. But it is not impossible, and if it were to occur, and if the Johnson-Weld ticket outperformed or held its own against Clinton and Trump, then people who had decided not to vote or who couldn't make up their minds might cast ballots for the Libertarian candidates.

  It is unlikely that the Stein/Baraka ticket will be included in the debates or that it will garner any significant number of voters in key states, because the candidates are so extreme in their views and so out of the mainstream of American political beliefs. However, if a significant number of voters do vote for a third or fourth party, this could impact the election, as the votes for Ralph Nader in 2000 may have determined the Florida outcome, which in turn determined the general election outcome.

  The bottom line is that in a bizarre election like this one — with so many variables and so much emotion — polls may well under- or over-predict votes for the two major candidates. Think about the vote on Brexit. Virtually all the polls — including exit polls that asked voters what they had voted for — got it wrong. The financial markets got it wrong. The bookies got it wrong. The 2016 presidential election is more like the Brexit vote in many ways than it is like prior presidential elections. Both Brexit and this presidential election involve raw emotion, populism, anger, nationalism, class division, and other factors that distort accuracy in polling. So anyone who thinks they know who will be the next president of the United States is deceiving themselves!

  To be sure, the Electoral College vote is sometimes less difficult to predict than the popular vote, because it generally turns on a handful of closely contested critical states, such as Ohio, Florida, Pennsylvania, and Virginia. But in this election, there could be surprises in states that are usually secure for one party or the other. So even the electoral vote will be more difficult to predict than in previous elections.

  One reason for this unique unpredictability is the unique unpredictability of Donald Trump himself. No one really knows what he will say or do between now and the election. His position on important issues may change. Live televised debates will not allow him to rely on a teleprompter, as he largely did in his acceptance speech or in his speech during his visit to Mexico City. He may once again become a loose cannon. No one can predict what he will say or do next. This may gain him votes, or it may lose him votes. Just remember: few, if any, pundits accurately predicted how far Trump would get when he first entered the race. When it comes to Donald Trump, the science of polling seems inadequate to the task.

  Hillary Clinton is more predictable, but her past actions may produce unpredictable results, as they did when FBI Director James Comey characterized her conduct with regard to her emails as "extremely careless." It is also possible that more damaging information about her private email server or the Clinton Foundation may come from WikiLeaks or other such sources (whether these "revelations" are actually incriminating seems to be beside the point for those 54% of voters who, without first-hand knowledge of the investigation, suspect that the FBI engaged in a preferential treatment by not seeking criminal charges against Clinton.) Finally, it is difficult to assess what impact, if any, her recent health issues may have on voters.

  Another unpredictable factor that may impact the election is whether there are terrorist attacks in the lead-up to the voting. Islamic extremists would almost certainly like to see Trump beat Clinton, because they believe a Trump presidency would result in the kind of instability on which they thrive. If ISIS attacks American targets in late October, that could turn some undecided voters in favor of the candidate who says he will do anything to stop terrorism. If voters were to change their votes based on terrorist acts, that would only encourage more terrorism in the run-up to elections.

  A final reason why this election is so unpredictable is because voter turnout is unpredictable. The "Bernie or bust" crowd is threatening to stay home or vote for the Green Party. Young voters may do here what they did in Great Britain: many failed to vote in the Brexit referendum and then regretted their inaction when it became clear that if they had voted in the same proportion as older voters, Brexit would likely have been defeated. Some Clinton supporters worry that black voters who voted in large numbers for Barack Obama may cast fewer votes for Clinton in this election. Voters who usually vote Republican but can't bring themselves to pull the lever for Trump may decide to stay home. Turnout is unpredictable, and the effect of low voter turnout is also unpredictable.

  So for all these reasons and others, no one can tell how this election will turn out. It would be a real tragedy and an insult to democracy if the election were to be decided by those who fail to vote, rather than by those who come out to vote for or against one of the two major candidates.

  

  

• Deutsche Bank Slapped With $14 Billion Fine By DOJ Over Mortgage Probe

  Blowback? Just a few weeks after the EU slapped Apple with a $14 billion bill for "back taxes," the U.S. has apparently responded with a $14 billion fine of their own to Deutsche Bank to settle an outstanding probe into the company's trading of mortgage-backed securities during the financial crisis. 

  Shareholders are not happy…

  

   

  According to the Wall Street Journal, the proposed settlement would be largest fine paid by any of the banks related to similar charges.  Unfortunately for DB, the fine is roughly equal to it's entire market cap and the stock is plunging nearly 8% in after hours trading.

  The U.S. Justice Department proposed that Deutsche Bank AG pay $14 billion to settle a set of high-profile mortgage-securities probes stemming from the financial crisis, according to people familiar with the matter, a number that would rank among the largest of what other banks have paid to resolve similar claims and is well above what investors have been expecting.

   

  The figure is described by people close to the negotiations between Deutsche Bank and the government as preliminary, and they said it came up in discussions between the bank and government lawyers in recent days. It hasn’t been previously disclosed. Deutsche Bank is expected to push back strongly against it, the people said, and it is far from clear what the final outcome will be.

   

  It is also unclear how much of that amount is proposed to be paid in cash, and how much could be in consumer relief, as past deals have been structured.

  A DB spokesman confirmed back in July that negotiations had been initiated with the DOJ though no estimates had been provided on the size of any potential settlement before today.  That said, the Wall Street Journal notes that DB's attorneys had privately suggested that a $2 – $3 billion settlement with the DOJ was probably in the ballpark.  Meanwhile, wall street analysts had estimated settlements in the $2-$5 billion range.  Any fines paid pursuant to current negotiations would be in addition to the $1.9 billion already paid in 2013 to settle other U.S. claims related to mortgage-backed securities.

  Per the table below, as of June 30, DB had reserved a total of €5.5 billion for civil litigation and regulatory penalties on it's balance sheet.

  

   

  The size of the proposed settlement is also bad news for other European banks that remain under investigation by the DOJ including Barclays, Credit Suisse, UBS and RBS.  Lawyers working with other banks have indicated that DB's settlement would likely set the precedent for what other Euro banks might be expected to pay. 

  Just when you thought DB was safe…

  

  

  

• Chaos Has Never Been Closer: "Obama May Suspend Election" If She Is Too Sick

  Submitted by Mac Slavo via SHTFPlan.com,

  The events are all lined up, and the system is geared for chaos. At any moment, a despotic leader could take control.

  But how could it ever happen in America?

  With economic collapse again on the horizon, and a basket of issues coming to a head, several factions of the population are tipping towards revolution. Much of it has played out in the election cycle; the establishment has lost all credibility, and the people are seeking anti-establishment voices. Alternate means of maintaining control are implemented.

  Homeland Security is taking control of the election process, making a  fair election completely impossible. Optics and careful PR is used to script the election, and maintain a favorable narrative – and one that is explosive enough to produce radical and unexpected results that might drive anger over the edge.

  Millions of people have been driven by the media to violently oppose Trump, and may well start riots across the country if he wins the election, that is, if Obama doesn’t stop the elections first. Likewise, if Hillary is elected and take office, it could spawn a civil war, of words… or worse.

  Any number of pretexts could theoretically come into play, but no scenario has become more likely than Hillary dropping from the race and stirring, well, a shitstorm like politics has never before seen.

  If Hillary is too sick, President Obama could opt to suspend the election, and it could make any number of groups unleash, giving way to civil unrest.

  The police state is ready to contain economic/food riots, and are also poised to use martial law to maintain order, using an iron fist.

  Chaos and order will repeat in cycle, and everything will become unstable, decline and render the population depraved and vulnerable.

  Radio host and political expert Michael Savage appeared on the Alex Jones Show and warned that the new Hillary card could be the unexpected reason for one of the most dangerous scenarios on the books.

  If these events came to pass, would the Constitution and rule of law ever be restored?

  Michael Savage: Hillary Is In Free-Fall, Obama May Suspend Election

   

  Steve Quayle has also been watching for the type of emergency events that could be used to alter reality and cancel the elections, or allow a martial law scenario to take hold. He, too, sees an uncertain election ahead.

  Steve Quayle: Election May Not Take Place

  What do you think is going to happen to this country in the next two months?

  Stay vigilant, and get ready for literally almost anything.

  

  

• Former Treasury Secretary Warns Banks Riskier Now Than In 2008 Crisis

  Submitted by Simon Black via SovereignMan.com,

  “Sir. SIR! This your bag,” the TSA agent barked at me last week, more as a statement than a question.

  “It is.”

  “Are you carrying any liquids?”

  I knew immediately; I had forgotten about the bottle of water that I had shoved in my briefcase before checking out of my hotel.

  They opened my bag and confiscated the water bottle immediately with an extra harrumph to make sure I knew that I had wasted their time.

  Yeah, I get it. I broke the rule. But it’s such a ridiculous rule to begin with.

  Are we really supposed to pretend that Miami International Airport is any safer because there’s a brand new, unopened Dasani bottle in the TSA wastebin?

  You may recall how Istanbul’s Ataturk Airport was attacked on June 28th by men armed with automatic weapons and explosives.

  Ataturk was already one of the most security-conscious airports in the world– you actually have to go through a security checkpoint just to enter the building, followed by a second security checkpoint on your way to the gate.

  And yet, despite all of this extra security, 41 people were killed and hundreds more wounded in an attack that shows just how ineffective airport security really is.

  Airport security isn’t real security. It’s merely the illusion of security– a bunch of busybodies in uniforms enforcing pointless rules to make people believe that they’re safer.

  Candidly, our financial system has borrowed the same principle. There’s no real safety in our financial system– merely the illusion of safety.

  Leading up to the 2008 financial crisis, most people thought the banks were safe.

  After all, we’ve been told our entire lives that the banks are rock solid. What could go wrong?

  This turned out to be an illusion. Banks had loaded up their balance sheets with toxic assets, rendering themselves completely insolvent. They started dropping like flies.

  Bear Stearns, Lehman Brothers, Merrill Lynch, Washington Mutual, Wachovia… some of the most established banks in the US collapsed. Poof.

  Ever since then, the banks, the US government, the Federal Reserve, and other financial regulators in the United States have been working to rebuild the illusion of financial safety.

  Most notably came a bunch of laws and regulations like the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law in 2010, designed to make the banks safer…

  … or at least give the appearance that banks are safer. As you can imagine, these regulations have merely created another illusion of bank safety.

  Today, former US Treasury Secretary Lawrence Summers published a new paper that slams these regulations for not having made the US banking system any safer:

  “To our surprise, we find that financial market information provides little support for the view that major institutions are significantly safer than they were before the crisis and some support for the notion that risks have actually increased.”

  This is important. Most people have handed over their entire life’s savings to financial institutions that are far, far riskier than we are led to believe.

  Ask yourself– does it really make sense to keep 100% of your savings in a financial system that goes through great pains to deliberately conceal the truth?

  Why take the risk? Especially when all you really gain is a whopping 0.01% interest?

  There are better options for your money.

  We’ve talked about holding physical cash and precious metals– which, in combination, is a great way to hedge risks in the banking system as well as the overall monetary system.

  If these banking system risks ever do erupt into another financial crisis, having some physical cash means that at least a portion of your savings will be immune to the consequences.

  Should that crisis turn into a full-fledged currency crisis, having some physical gold will shield you from those consequences as well.

  And even if neither of those scenarios unfolds, it’s hard to imagine you’ll be worse off holding cash and gold.

  Again, when interest rates are this low, there’s almost zero opportunity cost in holding cash.

  And gold remains one of the only major asset classes recognizable and marketable around the world, yet still FAR below its all-time high.

  

  

• Spot The (Book Review) Difference

  With health concerns mounting, email leaks hurting, and poll numbers tumbling, Hillary Clinton has had a tough couple weeks (poor thing)… but the news just got a little worse as Hillary’s newest book, “Stronger Together,” which provides a policy blueprint for where she hopes to take the country if she is elected president, sold just 2,912 copies in its first week on sale, according to Nielsen BookScan.

  As The New York Times reports, both Mrs. Clinton and her running mate, Senator Tim Kaine, have promoted the book on the campaign trail, but the sales figure, which tallies about 80 percent of booksellers nationwide and does not include e-books, firmly makes the book what the publishing industry would consider a flop.

  “Stronger Together,” whose cover shows Mrs. Clinton and Mr. Kaine waving, arrived closer to Election Day than most of these types of books.

   

  Named after the campaign’s slogan, “Stronger Together” offers readers, according to the book jacket, “specific and practical solutions, while also articulating a bold and expansive vision of change and renewal.”

   

  Its roughly 250 pages intersperse bullet-point policy ideas, like “launch a national initiative for suicide prevention” and “humanely address the Central American migrant crisis,” with photographs of Mrs. Clinton and Mr. Kaine on the campaign trail, charts in the campaign’s signature chunky font and highlights from Mrs. Clinton’s speeches.

  But, it appears, from a cursory glance at Amazon.com, that even the 2912 people that read the book were unimpressed by its contents (with 83% giving it 1 Star)… slightly different from Donald Trump’s “Great Again” book’s reviews…

  

  Some of the 1-Star reviews…

  As ‘UrbanLegend’ wrote…

  I have to start by saying I am a registered independent voter, and more importantly, a life-long independent thinker. I have voted for more D’s than R’s in my life, as well as several third-party candidates. This is the lamest, weakest, most politically-absurd book ever written, as far as I know. Save your money for food for your family just in case she is elected.

  As Daniel B noted…

  I was going to read this book…..I really was. But just as I got started, I found myself under sniper fire, passed out, and fell and hit my head. After that I got double vision and had to wear glasses that were so damn thick I couldn’t even see to read. Then I had an allergic reaction to something and started coughing so hard I spit out what looked like a couple of lizard’s eyeballs, my limbs locked up, and I passed out and fell down again, waking up only to find out I had been diagnosed with pneumonia 2 days earlier. It’s a good thing I was able to make a small fortune making this random small trade in the commodities market (cattle futures or some such thing) and then, miracle of all miracles, a few banks offered me a few million to just talk to their employees for a few minutes – and all that really helped out because I swear I was dead broke and couldn’t figure out how I was gonna come up with the 6 bucks to pay for this book, let alone pay the $1,500 for my health insurance this month. I still want to read it, but, hell, what difference at this point does it make? I hear it sucks anyway.

  Paul A. Bedish’s review was short and sweet…

  What a horrible book. I got brain damage after 4 pages and lost my shoe

  And finally “Amazon Customer” concluded…

  How are we to believe that the book was written by Mrs. Clinton and Mr. Kaine? They’ve been a bit busy lately. Obviously ghost-written campaign drivel. If she really believes we’re “stronger together” perhaps she should stop dividing us. Not calling her opponent’s supporters “deplorable” might be a good start.

  There were some 5-Star reviews…

  From Bestatchess…

  This is a great book. The chapters on “How to screw up everything you touch with hubris” “How to write the perfect doctor’s note” and “D**ing bimbos at home” were worth the price of admission.

  And finally…“I would give this book 10 stars if I could!”

  Why? Because it’s a fantastically well-written, witty, insightful and informative book that was written by a person who is easily the most important female political leader since Queen Elizabeth I. And her impact on world history is liable to be much, much greater. Please do yourself, your children, grandchildren and great-grandchildren a favor and beg, borrow, or steal this book, but whatever you do – READ IT!!! In it you will find Hillary’s plan for making this world of ours a much better place – more peaceful, more prosperous, more just, more environmentally sustainable. And as an aside, way, way more fun! This book is in fact so chock full of great ideas that if it contained any more, they would literally leak out the sides! I always felt that, compared to anyone else on the scene, Hillary Clinton was a modern day Colossus of Rhodes, but now I’m more inclined to think of her as the political equivalent of the Great Pyramid. They just don’t come any better! After her eight years in office are finished, I predict the only remaining controversy will be which one of those dead guys immortalized on Mount Rushmore should have his features rearranged in her image. (I vote for Alexander Hamilton – way overrated if you ask me.) But I digress. In sum, if you don’t read this book, you will regret it – maybe not today, but soon, and for the rest of your life. Please, don’t make that tragic mistake!

  

  

• Infrastructure Spending Does Not "Grow The Economy"

  Submitted by Patrick Trombly via The Mises Institute,

  In a new twist, the presidential nominees from both major political parties have fallen for (or hope that the voters have fallen for) a time-worn fallacy, and have proposed government spending on infrastructure “to grow the economy and create jobs.” As David Stockman has shown, infrastructure in the United States is not “crumbling,” nor is spending on infrastructure disappearing.

  What is equally important to our analysis, though, is the fallacy that government spending, on infrastructure or anything else, creates jobs or economic growth in the aggregate. This fallacy and related myths need to be dispensed with before anyone begins to take them seriously. Murray Rothbard addressed the issue in great detail in his article “The Fallacy of the ‘Public Sector.’” Below I seek to summarize, in simple terms that even Donald Trump and Paul Krugman can understand: there is no such thing as the Infrastructure Fairy that takes government spending and magically turns it into economic growth. 

  Government Spending: A Zero-Sum Game

  The money to be spent on infrastructure would have to be borrowed, taxed, or printed (a tax not called a tax) out of the non-government economy. One minus one equals zero. That’s not conservative economics or liberal economics. It’s not Democrat economics or Republican economics. It’s just economics.

  Once upon a time, politicians used to promise to “bring home the bacon.” Voters upset at the system would bemoan the fact that the system took funds from the whole country so that politicians from different districts could fight over how much of that money they could bring back to their districts to spend on things that the voters probably would not have bought with the money had they been allowed to keep it. But, given the realities of taxation, it seemed that the only choice available was to hold one’s nose, play the game, and try to vote your representative or senator back to Washington to bring back more “bacon” than was being taxed from your state to begin with. 

  But, the political class is now telling us that our money, taken from us and then spent by them, will actually grow the economy. We’ve come to expect this sort of thing from politicians, but many economists inside and outside of DC are more than happy to give the political class intellectual respectability under the new version of alchemy that is the “multiplier effect.” 

  If we dig deeper into the realities behind government spending, however, we can see that an “infrastructure stimulus program” would probably make matters worse than they are. After all, private investment is done at least with the goal of producing something that consumers want to buy, at a price that will generate a profit. These activities, if successful, would enable continued reinvestment in the same enterprise, and continued employment of the individuals therein.

  The government, via taxation, produces something that the consumers have not already chosen to buy. If they were already producing and buying such things, no government intervention would be “necessary.” Thus, whenever the government spending program — on infrastructure or anything else — ends, we end up with workers who took the “stimulus” jobs instead of the jobs that would have been created by the private economy’s spending or investing the same money. Those workers will have invested their time and energy in the development of skills not actually in demand by the consumers. This is a form of malinvestment, and it impacts employees of these firms in a manner similar to the workers who were misled by Fed-created malinvestment booms into the home construction fields in the 2000s or the oil drilling fields in the 2010s. Of course, workers need not worry about other employment if interest groups can convince politicians to keep pouring billions into these industries indefinitely, even though the taxpayers couldn’t be bothered with voluntarily investing in those industries to the same degree. 

  The Myth of Stimulus

  Nevertheless, old lies about stimulus spending never quite seem to go away. It is telling that there is only one example of “fiscal stimulus” that is popularly believed to have been successful — the myth that “World War Two brought us out of the Depression.” This sole empirical example held up to justify taking and spending more of your money on politicians’ donors’ priorities is also a fallacy. During World War Two, the government not only spent more money, it conscripted half the male population into the army and navy, sending them halfway around the world to kill people — and to be killed. Obviously, you no longer count as unemployed if you’re dead. Even among the living, a command economy cannot be maintained perpetually, whether for war or any other purpose. War simply does not add value, but rather subtracts value. Centralized war planning cannot be considered an improvement over a free economy, at least if the goal is meeting consumer demand. “GDP” includes all economic activity, though, whether consumer needs are being met or not. Thus, war-related “GDP growth" cannot be considered “economic stimulus.”

  Moreover, the post-war growth in GDP often cited by stimulus proponents wasn’t a refutation of Bastiat’s Broken Window Fallacy, as is commonly thought. To continue Bastiat’s analogy: we had simply spent the 1940s breaking everyone else’s windows, which created a temporary advantage for American glaziers. This advantage peaked in the 1960s and in all probability came at the expense of other potential avenues of growth more closely aligned with meeting consumers’ actual demand. After all, if Europeans were spending their money on new windows, they couldn’t spend that money to buy other things the Americans produced. Remember that we also eliminated, in the late 1940s, some of the war-time rations and price controls, and paid down government debt — undoing things that the government had been doing for years to stifle private sector growth.

  The “World War Two” case is often argued in conjunction with the related myth that the war-related expenditure was “needed” to combat a “liquidity trap,” which, the infrastructure fairy advocates contend, exists again today.

  But, there is no “liquidity trap” and never has been one. In the 1930s, after the leveraging up of the 1920s, the most popular phrase was “brother can you spare a dime.” Now, after the leveraging up of the 2000s, 40 percent of Americans don’t have enough put aside to cover a surprise $500 expense. An extremely high percentage of millennials live with their parents and those parents are working to a later age to make up for low retirement savings and the meager return on what savings they have. The “liquidity” problem is and was that everyone found himself to be illiquid after a credit-expansion-driven boom-bust cycle. Even the “liquidity” now held by the banks is just central bank “Quantitative-Easing” money, printed after 2008. The “stress tests” are passed only because the central banks believe that enough of their funny money remains on reserve to cover the losses that will ensue when the central banks’ latest bubbles burst. And the supposed $3 trillion of non-financial-corporation “cash on the sidelines” adds up to one sixth of the federal debt. This is a low cash position relative to the rest of the economy’s balance sheet, even without considering unfunded federal obligations, state and city debt and unfunded obligations, and corporate and household debt. The idea that we are so flush as to be too flush is just not true.

  Ultimately, spending on infrastructure no more “creates wealth” than any other kind of government spending. Like all other government spending, it’s a matter of taking money from some people to give to others. The money taken from the taxpayers must be subtracted from the money spent, and we’re left with no net gain. Of course, after the politicians and the government contractors take their cut, they’ll do pretty well. The rest of us won’t be so lucky.

  

  

• YouTube Has Quietly Begun "Censoring" Journalists Who Criticize Government

  Submitted by Alice Salles via TheAntiMedia.org,

  Earlier this month, YouTube, the behemoth video-sharing website was accused of censoring users.

  Claiming some of their videos had been barred from making money through the company’s ad services, YouTube hosts like Philip DeFranco spoke out against the policy, claiming over “a dozen of his videos had been flagged as inappropriate for advertising, including one dinged for ‘graphic content or excessive strong language.’“

  In a video entitled “YouTube Is Shutting Down My Channel and I’m Not Sure What To Do,” DeFranco called YouTube’s policy “censorship with a different name,” since users touching on what the company considers to be controversial subjects end up losing money. “If you do this on the regular, and you have no advertising,” DeFranco added, “it’s not sustainable.”

  While YouTube has already confirmed its policy regarding what it considers unfit for monetization hasn’t changed, the issue might lie elsewhere now that the company seems more efficient in enforcing its own rules. As a matter of fact, the content policy changed in 2012, when YouTube first introduced its “ad-friendly” guidelines.

  But while an algorithm is allegedly used to spot and “de-monetize” videos that break the company’s rules, many continue to accuse the company, currently owned by Google, of having “vague” descriptions of what its leadership considers ad-friendly.

  YouTube rolled out its monetization tool in 2006, when ads consisted of videos that would pop up at the bottom of the user’s screen. If the user did not click on it, it would roll for about ten seconds before going away. But as ad executives pressured YouTube to “to do a better job at promoting its creators,” the relationship with its advertisers changed. As better and even more intrusive ads were added to YouTube videos, the company allegedly became more concerned with the content.

  Those who are affected often complain about copyright claims, but some complain about another type of targeting — one that involves power players.

  YouTube Content Creators Speak Out

  Derrick J. Freeman, the host of FR33MANTV, told Anti-Media that he monetizes all of his videos, “and every day some video — even much older ones — gets slapped with some kind of warning or another because of music playing in the background somewhere. Usually a public place.”

  While Freeman’s work is often political in nature, he hasn’t seen any of his videos being flagged for breaking YouTube’s rules concerning subjects related to war or political conflicts.

  Mat Bars, another YouTube user, also complained about copyright claims.

  Asked about the alleged censorship problem, Bars told Anti-Media that “what it really most likely comes down to is advertisers not wanting their ads to be associated with certain things.” To the YouTube host, the company is “mostly blameless in this. The site isn’t even profitable, so letting advertisers push them around like this suits their best interests.” Instead of complaining about censorship, Bars added that what affects him personally is “the copyright system.”

  But to more radical political figures who gather a considerable number of followers on YouTube, things are slightly differently.

  To Luke Rudkowski, the man behind the popular channel We Are Change, YouTube’s policy of nixing monetization on some of his most popular videos has been a problem for a long time.

  “For years,” he told The Anti-Media, “I have monetized and still get f*cked from it.” Especially, he continued, “[when I launch a video about] Hillary, or war and foreign policy.” When his videos touch on drugs or guns, however, he says ads remain in place.

   

  “When the videos only have ‘Hillary Clinton’ they do fine,” he added, “however, when we add ‘FBI’, that’s when YouTube” springs into action.

  Anti-Media journalist and senior editor Carey Wedler got her start on Youtube and has had a similar experience with her channel.

  She explained the first time she realized the site had singled out her videos was “a couple of weeks” after she “posted a video about how America’s culture of militarism is an underlying contributor to domestic mass shootings.”

  She continued:

  “The video was released shortly after the Orlando shooting, which occurred in June. By July 6, I had received an email saying the video was not ‘advertiser friendly.’ Two days later, I received another email about a video I released at the beginning of June — before I released the mass shooting video. This video, which pointed out inconsistencies in Bernie Sanders’s record and questioned his ‘revolutionary’ status, was also stripped of monetization.”

  While the mass shooting video’s monetization has been restored without her appealing the company’s decision, her Sanders video remains ineligible. The Sanders video focused largely on his record of supporting war and the military-industrial complex.

  Her other videos affected by YouTube’s policy include “What Every American Needs to Know About Radical Islam,” a video “that challenged rampant Islamophobia and jingoism right after the Paris terror attacks last November,” and “Why I’m “Ready for Hillary!,” which the creator claims to be an “extremely sarcastic indictment of Hillary Clinton published before she announced her candidacy early last year.”

  Other videos by Wedler that suffered the same fate include “How America ‘wins’ the wars in Syria & Iraq” and “How I became a “self-hating Jew.” All of the de-monetized videos contain anti-war sentiments.

  According to the prolific writer and vlogger, YouTube only bothered to email her notifications regarding the changes in monetization for the Sanders and the mass shooting videos:

  “I noticed the [other] videos had all been stripped of monetization when I logged into Youtube to check out the two that had been officially flagged. However, when I checked my settings following receipt of the two emails regarding mass shootings and Bernie, my overall monetization setting had been switched off — meaning none of my videos were monetized.”

  She claims to have “never selected that option” prior to learning about the issues with the videos mentioned previously, yet when she turned the monetization option back on, “the monetization reactivated — but only for videos that hadn’t been specifically flagged.”

  “I also noticed that my videos before the self-hating Jew video hadn’t been rejected for monetization at all,”  she said.

  In cases involving YouTube’s decision to flag her videos that included notifications, Wedler added, YouTube failed to give her “a specific reason as to why the videos were stripped of monetization. I’ve seen some screenshots of those emails from other Youtubers … and some contain reasons. Mine didn’t, though it’s pretty clear to me that in my case, it’s because they are considered ‘controversial.’ Some discuss war and some contain images of war, and they are always questioning military violence.”

  While Wedler agrees that this type of policy is “not direct censorship … it does amount to an implicit attempt to discourage me and others from saying controversial things.”

  She added that while YouTube is a “privately owned company that can decide which content is appropriate for its advertisers, … if they are deciding [which of] my videos shouldn’t be allowed to generate revenue, they are effectively removing much of my incentive to continue producing content on the platform.”

  Despite the company’s policy, Wedler vows to continue making these videos simply because the message is what matters.

  Google and Its Addiction to Buying Influence

  As Wedler stated, YouTube is a private company and it has the right to set its own policies. But it’s undeniable that the site’s owner, Google, has, on a number of occasions, shown its favoritism through lobbying, prompting many to highlight the company’s appearance of favorable bias toward Democratic Presidential candidate Hillary Clinton.

  Google went from spending $80,000 on lobbying in 2003 to over $16 million in 2014. After 2014, Google, Inc. became Alphabet, and in 2015, Alphabet invested over $16 million in lobbying. To date, the company has spent over $8 million on Washington politicians.

  Alphabet’s top recipient this election cycle is, unsurprisingly, Hillary Clinton.

  But despite its knack for influence buying, Google has, over the years, created relationships with think tanks that would have criticized the tech giant’s crony capitalist ways under different circumstances.

  According to the Washington Post, Google has embarked on a quest to woo free market organizations by populating “elite think-tanks such as the Cato Institute, the Competitive Enterprise Institute and the New America Foundation” with its fellows, including “young lawyers, writers and thinkers paid by the company.”

  From the Post:

  “To critics, Google’s investments have effectively shifted the national discussion away from Internet policy questions that could affect the company’s business practices. Groups that might ordinarily challenge the policies and practices of a major corporation are holding their fire, those critics say.”

  Claiming to be defenders of privacy, Google successfully waged an aggressive lobbying campaign within Washington to defeat a congressional effort that could have put Google in the middle of a very nasty antitrust fight.

  After supporting the European Union’s antitrust prosecution of Microsoft, Google found itself the target of the same type of scrutiny, being accused of unfairly discriminating against users.

  With the excuse of going after companies like Google for antitrust law violations, Congress came up with the Stop Online Piracy Act (SOPA), a bill disguised as an anti-online piracy fix that would have allowed the federal government to target “illegal copies of films and other forms of media hosted on foreign servers.” The bill would have hurt Google the most because the search engine would have several results deleted from its database, requiring “ISPs to remove URLs from the Web, which is also known as censorship last time I checked,” Google chairman Eric Schmidt said.

  Just one month before SOPA was unveiled by Rep. Lamar Smith (R-TX), Schmidt appeared before Congress during a Federal Trade Commission (FTC) hearing where a Republican senator “accused the company of skewing search results to benefit its own products and hurt competitors.” As this hearing took place and Google was grilled by lawmakers, the U.S. Chamber of Commerce and the Motion Picture Association of America lobbies pushed Congress to pass harsh anti-privacy legislation, accusing companies like Google of giving users access to pirated music and movies.

  Afraid of the backlash caused by the hearing, Google feared the Hollywood lobby would end up hurting many of its partners, as well as smaller organizations directly tied to Google. But the search engine giant had a way out — its aggressive lobbying and partnership building skills.

  As SOPA appeared poised for passage, Google and several other tech firms stood in opposition and the bill finally failed.

  While SOPA was, indeed, a farce — and privacy advocates in Washington were happy the bill didn’t see the light of day — it’s important to note how hard Google worked to keep it from becoming a reality, putting the Silicon Valley giant closer to powerful institutions that, in theory, are against crony capitalism.

  But after SOPA, the FTC went back to the drawing board, threatening to investigate Google’s alleged antitrust violations further. At the time, the “company’s rivals, including Microsoft and Yelp, were aggressively pressing arguments that Google was exploiting its dominance in the search business.”

  Reaching out to another partner, George Mason University’s Law & Economics Center, Google and the university put together “the first of three academic conferences at the GMU law school’s Arlington County campus,” which, according to the Washington Post, helped to shape the FTC’s approach to the Google probe from then on.

  At the third academic conference held at GMU, Google remained present as a silent partner. As “[a] strong contingent of FTC economists and lawyers were on hand for the May 16, 2012, session,” the Washington Post reported, research financially backed by Google was presented by GMU lawyers and economists. And “[i]n January 2013, after an investigation that spanned more than a year and a half, the FTC settled the case with Google, which agreed to give its rivals more access to patents and make it easier for advertisers to use other ad platforms.”

  From the publication:

  “But when it came to the charges that Google biased its search results to promote its own products, the five FTC commissioners all voted to close the investigation, saying there was no evidence the company’s practices were harming consumers.”

  As Google became more involved with politics, other lobbying opportunities would arise.

  More recently, Google got involved in yet another powerful lobbying effort, which started when the company hired the former administrator of the U.S. National Highway Traffic Safety Administration to serve as the company’s Director of Safety for Self-Driving Cars, proving the revolving door that presidential candidate Barack Obama promised to nix is still alive and well. The effort paid off, and personal injury attorneys are now concerned that Google may try to push still more regulations, forcing regulators to stick the human driver with the blame for crashes and getting Google’s autonomous driving system off the hook.

  Whether YouTube’s ad policy has anything to do with its parent company’s politics is impossible to determine. But as we analyze Google’s influence in Washington, it’s important to note that, whether you agree with the tech giant on none, some, or all issues, governments create the incentives for companies like Google to continue rent-seeking.

  As the economist David R. Henderson puts it, individuals “are said to seek rents when they try to obtain benefits for themselves through the political arena. … licensed electricians and doctors [for instance] often lobby to keep regulations in place that restrict competition from unlicensed electricians or doctors.” Companies like Google are champions of this practice, which has helped to protect the brand’s popularity by keeping competitors at bay.

  So it’s not a surprise to see many claiming their content is being censored by Google’s YouTube. After all, with the amount of power the company holds in Washington, it’s as if Google – or Alphabet – is an actual wing of the government.

  

  

• Clinton Foundation CEO Admits To Pay-For-Play: "No Question" That "Courtesy Appointments" Were Made

  Yesterday, the CEO of the Clinton Foundation, Donna Shalala, went on MSNBC and openly admitted to engaging in “pay-for-play” activities saying there is “no question” that Foundation donors received “courtesy appointments” during Hillary’s tenure as Secretary of State.  Somehow, Shalala would like for us to believe that so long as appointees weren’t put in a position to impact policy decisions then there is no real issue.  I guess we should just ignore that taxpayers are funding the salaries of those appointees and paying for their government-related travel all over the world while Hillary gets to accrue “political capital” and her Foundation gets to continue raking in the donations?

  Shalala also seems to invoke the Donna Brazile (new DNC Chair) defense who previously told ABC that “someone who is a donor..saying I want access” isn’t an issue and anyone who suggests otherwise is just attempting to “criminalize behavior that is normal” (see out previous post “New DNC Chair Says Outrage Over Clinton’s Pay-To-Play Is Attempt To ‘Criminalize Normal Behavior’“).

  “First of all there is no question there were phone calls made to get appointments for people.”

   

  “There were also business people. There is no question about that.”

   

  “I don’t see evidence that there was policy decisions made as a result of that other than courtesy appointments. And people in public life are used to doing that kind of — that is, making courtesy appointments for people.  I certainly did it as secretary [of Health and Human Services] with requests from Republicans in Congress so I don’t find it unusual. We have to be careful that it’s not linked to policy decisions as opposed to simply seeing prominent people that ask for appointments.”

   

  Of course, according to LifeZette, the Trump camp took issue with the statements with Jason Miller, Trump’s communications adviser, releasing the following statement:

  “It speaks volumes that the Clinton Foundation’s CEO would casually admit on national television that its donors received access and ‘courtesy appointments’ at Hillary Clinton’s State Department.  This is emblematic of the corrupt pay-to-play culture Hillary Clinton and those in her orbit bring to the table, where it so pervasive it is actually uncontroversial to those involved.”

   

  “This is why a special prosecutor needs to be appointed to independently investigate the growing evidence of corruption between the Clinton Foundation and the State Department while Hillary Clinton was serving as secretary of state,”

  But the following morning, Shalala went on CNN and seemingly walked back her previous statements made on MSNBC saying that a “courtesy meeting” request made by Doug Band of Huma Abedin “never happened.”  

  “Guess what. That never happened. Never happened.  I don’t care who asked for what. It never happened. It just did not happen.”

  When asked whether she was comfortable with Clinton Foundation staff requesting favors, even if they were never fulfilled, Shalala stopped short of a blatant confirmation, which she offered on earlier on MSNBC, saying instead that “no one should cross any line.” 

  “Well, you know, no one should cross any line.”

   

  And, just for good measure, here is the clip of Donna Brazile from back in August where she assures us that “someone who is a donor..saying I want access” isn’t an issue and anyone who suggests otherwise is just attempting to “criminalize behavior that is normal.”

   

  Fast forward to the 3:45 mark for the relevant exchange:

   

  Well, we guess there is nothing to see here then.  Just some more smoke people…move along.

  

  

• SHe'S BaCK!

  

  

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• European Leaders Discuss Plan For European Army

  Submitted by Soeren Kern via The Gatestone Institute,

  • Critics say that the creation of a European army, a long-held goal of European federalists, would entail an unprecedented transfer of sovereignty from European nation states to unelected bureaucrats in Brussels, the de facto capital of the EU.
  • Others say that efforts to move forward on European defense integration show that European leaders have learned little from Brexit, and are determined to continue their quest to build a European superstate regardless of opposition from large segments of the European public.
  • "Those of us who have always warned about Europe's defense ambitions have always been told not to worry… We're always told not to worry about the next integration and then it happens. We've been too often conned before and we must not be conned again." — Liam Fox, former British defense secretary.
  • "[C]reation of EU defense structures, separate from NATO, will only lead to division between transatlantic partners at a time when solidarity is needed in the face of many difficult and dangerous threats to the democracies." — Geoffrey Van Orden, UK Conservative Party defense spokesman.

  European leaders are discussing "far-reaching proposals" to build a pan-European military, according to a French defense ministry document leaked to the German newspaper, the Süddeutsche Zeitung.

  The efforts are part of plans to relaunch the European Union at celebrations in Rome next March marking the 60th anniversary of the Treaty of Rome, which established the European Community.

  The document confirms rumors that European officials are rushing ahead with defense integration now that Britain — the leading military power in Europe — will be exiting the 28-member European Union.

  British leaders have repeatedly blocked efforts to create a European army because of concerns that it would undermine the NATO alliance, the primary defense structure in Europe since 1949.

  Proponents of European defense integration argue that it is needed to counter growing security threats and would save billions of euros in duplication between countries.

  Critics say that the creation of a European army, a long-held goal (see Appendix below) of European federalists, would entail an unprecedented transfer of sovereignty from European nation states to unelected bureaucrats in Brussels, the de facto capital of the EU.

  Others say that efforts to move forward on European defense integration show that European leaders have learned little from Brexit — the June 23 decision by British voters to leave the EU — and are determined to continue their quest to build a European superstate regardless of opposition from large segments of the European public.

  The Süddeutsche Zeitung reported that it had obtained a copy of a six-page position paper, jointly written by French Defense Minister Jean-Yves Le Drian and his German counterpart, Ursula von der Leyen. The document calls for the establishment of a "common and permanent" European military headquarters, as well as the creation of EU military structures, including an EU Logistics Command and an EU Medical Command.

  The document calls on EU member states to integrate logistics and procurement, coordinate military R&D and synchronize policies in matters of financing and military planning. EU intelligence gathering would be improved through the use of European satellites; a common EU military academy would "promote a common esprit de corps."

  According to the newspaper, the document will be distributed to European leaders at an informal summit in Bratislava, Slovakia, on September 16. France and Germany will ask the leaders of the other EU member states not only to approve the measures, but also to "discuss a fast implementation."

  Specifically, France and Germany will for the first time activate Article 44 of the Lisbon Treaty (also known as the European Constitution). This clause allows certain EU member states "which are willing and have the necessary capability" to proceed with the "task" of defense integration, even if other EU member states disapprove.

  According to Süddeutsche Zeitung:

  "In the wake of the British referendum to leave the European Union, Chancellor Angela Merkel and French President François Hollande have decided to demonstrate the EU's strength and to push the remaining member states to show more unity. Especially in defense policy, many projects were put on hold because Britain vetoed them. Without London, the two EU founding states, France and Germany, hope for swift decisions."

  On September 8, Defense News reported that the creation of a European army was the central focus of an August 22 meeting between the leaders of France, Germany and Italy in Naples, where the three declared "the beginning of a new Europe." That meeting was followed by a meeting of defense ministers from the three countries in Paris on September 5.

  According to Defense News, Italy is lobbying France and Germany to "back a plan for European tax breaks and financing for joint European defense procurement and development programs, as part of a bid to build a European army."

  A confidential draft document circulated by Italy calls for "fiscal and financial incentives to support new EU cooperative programs for development and joint purchases of equipment and infrastructure supporting the EU's Common Security and Defense Policy."

  In a September 8 interview with La Repubblica, the EU's foreign policy chief, Federica Mogherini, called for the establishment of a permanent EU military headquarters in Brussels that would manage all current and future EU military operations. "This could become the nucleus around which a common European defense structure could be built," she said.

  Mogherini insisted that "we are not talking about a European army but about European defense: something we can really do, concretely, starting now." She also stressed that EU defense policy would remain under the control of European governments rather than the European Commission, the powerful executive arm of the EU.

  On September 7, however, The Times reported that Mogherini will present EU leaders attending the summit in Bratislava with a "road map" and a "timetable" for creating EU military structures, which are "the foundation of a European army." According to newspaper, her plans for military structures able "to act autonomously" from NATO have led to fears that "the EU is seeking to rival the transatlantic alliance."

  The Times quoted Mogherini as saying she was taking advantage of the "political space" opened by the Brexit vote:

  "It might sound a bit dramatic but we are at this turning point. We could relaunch our European project and make it more functional and powerful for our citizens and the rest of the world. Or we could diminish its intensity and power. We have the political space today to do things that were not really doable in previous years."

  On May 27, the Sunday Times reported that steps towards creating a European army were being kept secret from British voters until the day after the June 23 referendum:

  "In an effort to avoid derailing the Prime Minister's 'Remain' campaign, the policy plans will not be sent to national governments until the day after Britons vote. Until then, only a small group of EU political and security committee ambassadors, who must leave their electronic devices outside a sealed room, can read the proposal."

  On June 28, just days after the British referendum, Mogherini presented European leaders attending an EU summit in Brussels with the "EU Global Strategy on Foreign and Security Policy." The document explicitly calls for European defense integration, and implicitly calls for the creation of a European army.

  According to the document, the EU strategy "nurtures the ambition of strategic autonomy for the European Union." It adds: "Gradual synchronization and mutual adaptation of national defense planning cycles and capability development can enhance strategic convergence between member states."

  In an interview with The Telegraph, Liam Fox, a former defense secretary who served under former Prime Minister David Cameron, said:

  "Those of us who have always warned about Europe's defense ambitions have always been told not to worry, but step-by-step that ever closer union is becoming a reality. We cannot afford to be conned in this referendum as we were conned in 1975.

   

  "The best way to protect ourselves is to stay close to the US. The US defense budget is bigger than the next 11 countries in the world put together. Europe's defense intentions are a dangerous fantasy and risk cutting us off from our closest and most powerful ally.

   

  "We're always told not to worry about the next integration and then it happens. We've been too often conned before and we must not be conned again."

  The Conservative Party's defense spokesman, Geoffrey Van Orden, said the implications of the EU's defense ambitions are worrying:

  "We can all see that the EU might play a useful role in conflict prevention and in some civil aspects of crisis management. But its ambitions go beyond that. The EU motive is not to create additional military capability but to achieve defense integration as a key step on the road to a federal EU state.

   

  "The US and indeed the UK are being misled if they imagine that such moves will enhance NATO — the key guarantor of our collective defense. On the contrary, creation of EU defense structures, separate from NATO, will only lead to division between transatlantic partners at a time when solidarity is needed in the face of many difficult and dangerous threats to the democracies."

  Mike Hookem, the defense spokesman of the UK Independence Party (UKIP), said his party had been warning about the dangers posed by the EU army concept for years:

  "I'm pleased to see people are finally waking up. An EU army is not some Eurosceptic fantasy, there are many in Brussels hell-bent on making it happen."

  Soldiers from the Eurocorps on parade in Strasbourg, France, on January 31, 2013. Eurocorps is an intergovernmental military unit of approximately 1,000 soldiers from Belgium, France, Germany, Luxembourg and Spain, stationed in Strasbourg. (Image: Claude Truong-Ngoc/Wikimedia Commons)

   

  Appendix

  Select quotes regarding a European army

  European federalists have been calling for the creation of a European army in one form or another since 1950. Although a European army is still a long way away from becoming reality, the ultimate goal of European federalists is full defense integration leading to a European military under supranational control.

  Since the Lisbon Treaty, which forms the constitutional basis of the European Union, entered into force in December 2009, the political momentum toward European defense integration has picked up steam. The drive toward European defense integration has accelerated during the Obama administration, which has often appeared indifferent to Europe and transatlantic relations. Another important obstacle to European defense integration was removed when Britons voted in June 2016 to exit the European Union.

  What follows is a collection of quotes from senior European officials regarding a European army and integrated defense.

  September 9. The EU's foreign policy chief, Federica Mogherini, said:

  "I believe a window of opportunity has been opened to give life to a European defense. I wanted to send the message that, despite the British exit, Europe can and must move forward with the process of integration. The prospect of Brexit offered an opportunity not to be slowed by the country that was always most determinedly opposed to the idea of pooling the instruments of defense."

  August 26. Hungarian Prime Minister Viktor Orbán, a staunch critic of the EU's migration policies, said a joint European army was needed to keep migrants out. At a news conference after a meeting between Central European member states and German Chancellor Angela Merkel in Warsaw, Orbán said: "We should list the issue of security as a priority, and we should start setting up a common European army."

  August 22. Czech Prime Minister Bohuslav Sobotka called for greater European military integration:

  "Our experiences with the last migration wave have shown the importance of Europe's internal borders. In the face of uncontrolled mass migration, even states in the center of Europe have realized that internal borders must be better controlled. Aside from better coordinated foreign and security policy, I also believe that in the long term, we will be unable to do without a joint European army."

  July 23. Hungarian Prime Minister Viktor Orbán said:

  "The withdrawal of the British from the EU has led to a significant reduction in the continent's military strength, and from a military policy perspective we must not remain in this defenseless position… A European army must protect the continent from two sides, from the East and from the South, in terms of protecting against terrorism and migration. Europe cannot even continue to exist without an alliance — a joint EU army."

  July 13. The German Defense Ministry released a white paper outlining the country's future defense and security policies. The document calls for steps leading to the creation of an EU army, such as the integration of military capabilities and defense industries. "We are aiming to establish a permanent European civil-military operational headquarters in the medium term," it says. The white paper also says that citizens of other EU countries could be allowed to serve in the German army. Defense Minister Ursula von der Leyen said:

  "Britain has paralyzed the European Union on the issues of foreign and security policy. This cannot mean that the rest of Europe remain inactive, but rather we need to move forward on these big issues."

  June 28. French Foreign Minister Jean-Marc Ayrault and German Foreign Minister Frank-Walter Steinmeier released a joint document titled "A Strong Europe in a World of Uncertainties." It states:

  "The security of EU member states is deeply interconnected, as these threats now affect the continent as a whole: any threat to one member state is also a threat to others. We therefore regard our security as one and indivisible. We consider the European Union and the European security order to be part of our core interests and will safeguard them in any circumstances.

  "In this context, France and Germany recommit to a shared vision of Europe as a security union, based on solidarity and mutual assistance between member states in support of common security and defense policy. Providing security for Europe as well as contributing to peace and stability globally is at the heart of the European project.

  "France and Germany will promote the EU as an independent and global actor able to leverage its unique array of expertise and tools, civilian and military, in order to defend and promote the interests of its citizens. France and Germany will promote integrated EU foreign and security policy bringing together all EU policy instruments.

  "The EU should be able to plan and conduct civil and military operations more effectively, with the support of a permanent civil-military chain of command. The EU should be able to rely on employable high-readiness forces and provide common financing for its operations. Within the framework of the EU, member states willing to establish permanent structured cooperation in the field of defense or to push ahead to launch operations should be able to do so in a flexible manner. If needed, EU member states should consider establishing standing maritime forces or acquiring EU-owned capabilities in other key areas."

  June 26. In an interview with Welt am Sonntag, the Chairman of the European Parliament's Foreign Affairs Committee, Elmar Brok, called for the immediate creation of a joint military headquarters and for the eventual establishment of an EU army:

  "We need a common military headquarters and a coalition of the willing in accordance with the permanent structural cooperation of the EU Treaty. An EU army could eventually arise from such a group. This could help to strengthen the role of Europeans in the security and defense policy, together better fulfill the responsibility of Europe in the world and also to achieve more synergies in defense spending."

  June 24. French President François Hollande said:

  "Europe needs to be a sovereign power deciding its own future and promoting its model. France will therefore be leading efforts to ensure Europe focuses on the most important issues: the security and defense of our continent, to protect our borders and preserve peace in the face of threats."

  May 29. British Armed Forces Minister Penny Mordaunt said: "A centrally controlled army would be a massive step to the EU's goal of full political integration, but it would be a very dangerous move."

  February 4. German Defense Minister Ursula von der Leyen confirmed an agreement to integrate some 800 German soldiers into the Dutch navy. While in Amsterdam, where she met with the Dutch Defense Minister, Jeanine Hennis-Plasschaert, von der Leyen called the plan a "prime example for the building of a European defense union."

  December 15, 2015. The European Commission proposed creating a European Border and Coast Guard. The proposal, which was put forward in response to the ongoing European migrant crisis, called for a rapid reaction force of 1,500 officers who would be able to deploy even if a member state did not ask for its help.

  October 15, 2015. The president of the European People's Party (EPP), Joseph Daul, said: "We are going to move towards an EU army much faster than people believe."

  September 12, 2015. An unpublished position paper drawn up by Europe and Defence policy committees of German Chancellor Angela Merkel's Christian Democratic Party (CDU) was leaked to The Telegraph. The document sets out a detailed 10-point plan for military co-operation in Europe. It calls for "a permanent structured and coordinated cooperation of national armed forces in the medium term." It adds:

  "In the long run, this process should according to the present German coalition agreement lead also to a European Army subject to Parliamentarian control.

  "In the framework of NATO, a uniform European pillar will be more valuable and efficient for the USA than with the present rag-rug characterized by a lack of joint European planning, procurement, and interoperability."

  June 15, 2015. Michel Barnier, Special Adviser on European Defence and Security Policy to European Commission President Jean-Claude Juncker, wrote:

  "Member States are slow to accept that they need to go beyond a model where defense is a matter of strict national sovereignty…. It is time for a reckoning: traditional methods of cooperation have reached their limits and proved insufficient. European defense needs a paradigm change in line with the exponential increase in global threats and the volatility of our neighborhood. The past has shown that European defense does move ahead if and when there is political will."

  March 9, 2015. In an interview with Die Welt, European Commission President Jean-Claude Juncker said the EU should establish its own army to show Russia it is serious about defending European values:

  "Europe has lost a huge amount of respect. In foreign policy too, we are not taken seriously. A common European army would show the world that there will never again be war between EU countries. Such an army would help us to build a common foreign and security policy and allow Europe to meet its responsibilities in the world. With its own army, Europe could respond credibly to a threat to peace in a member country or in a neighboring country of the European Union."

  German Chancellor Angela Merkel and Foreign Minister Frank-Walter Steinmeier said they support Juncker's proposal for a European army. In an interview with Tagesspiegel, Steinmeier added:

  "The long-term goal of a European army is a major policy objective and has been part of the Social Democratic Party's (SPD) party program for many years. Given the new risks and threats to peace in Europe we now need, as a first step, a rapid adaptation and updating of the common European security strategy."

  March 8, 2015. In an interview with Deutschlandfunk radio, German Defense Minister Ursula von der Leyen said:

  "I think that the German army is ready, under certain circumstances, to be subordinated to the control of another nation. That is the goal, that in the European Union we step by step more firmly establish our cooperation, especially in security policy. This intertwining of armies with a view to having a European army is the future."

  May 15, 2014. Jean-Claude Juncker, the European People's Party lead candidate for president of the next European Commission, wrote:

  "I believe that we need to work on a stronger Europe when it comes to security and defense matters. Yes, Europe is chiefly a 'soft power.' But even the strongest soft powers cannot make do in the long run without at least some integrated defense capacities. The Treaty of Lisbon provides for the possibility, for those Member States who want to do so, to pool their defense capabilities in the form of a permanent structured cooperation."

  December 19, 2013. The speaker of the European Parliament, Martin Schulz, called for the creation of a European army: "If we wish to defend our values and interests, if we wish to maintain the security of our citizens, then a majority of MEPs consider that we need a headquarters for civil and military missions in Brussels and deployable troops."

  November 15, 2009. In an interview with The Times, Italian Foreign Minister Franco Frattini said it is a "necessary objective to have a European army." He added:

  "Every country duplicates its forces, each of us puts armored cars, men, tanks, planes, into Afghanistan. If there were a European army, Italy could send planes, France could send tanks, Britain could send armored cars, and in this way we would optimize the use of our resources. Perhaps we won't get there immediately, but that is the idea of a European army."

  May 6, 2008. German Foreign Minister Frank-Walter Steinmeier called for the establishment of the European army "as soon as possible." He said he had been in talks with his French counterpart to discuss "future structures" of a European army.

  December 10-11, 1999. European officials meeting in Helsinki agreed to develop a European Rapid Reaction Force. Also known as the Helsinki Headline Goal, EU member states pledged that by 2003 they would be able to deploy a European military force of 60,000 troops within 60 days and for a period of potentially one year. This goal has never been met.

  December 3-4, 1988. British Prime Minister Tony Blair and French President Jacques Chirac met at the French port city of Saint-Malo to discuss future EU defense integration. The summit declaration, which laid the political foundation for a common European defense policy, stated:

  "The European Union needs to be in a position to play its full role on the international stage… The Union must have the capacity for autonomous action, backed up by credible military forces, the means to decide to use them, and a readiness to do so, in order to respond to international crises."

  October 24, 1950. The Pleven Plan, named after French Prime Minister René Pleven, was the first plan to create a unified European army. It proposed the "immediate creation of a European army tied to the political institutions of a united Europe." It stated:

  "A European army cannot be created simply by placing national military units side by side, since, in practice, this would merely mask a coalition of the old sort. Tasks that can be tackled only in common must be matched by common institutions. A united European army, made up of forces from the various European nations must, as far as possible, pool all of its human and material components under a single political and military European authority."

  The Pleven Plan was rejected by the French Parliament because it infringed on France's national sovereignty.

   

  

  

• The World Is Turning Ugly As 2016 Winds Down

  Submitted by Brandon Smith via Alt-Market.com,

  I have to say that the negative reverberations in our current economic and political environment are becoming so strong that it is impossible for people to not feel at least some uneasiness in their gut. I imagine this is the same kind of sensation many felt from 1914 to 1918 during World War I and the terrible birth of communism, or perhaps in the early 1930s at the onset of the Great Depression and the rise of fascism. Some global changes are so disturbing that they send shockwaves through the collective unconscious before they ever hit the mainstream. People know that something is about to happen, even if they cannot yet clearly define it.

  At the beginning of August in my article “2016 Will End With Economic Instability And A Trump Presidency” I stated that:

  "I believe a softer downturn will begin before the election (the U.S. presidential election) takes place, most likely starting in September. This will give a boost to the Trump campaign, or at least, that is what the polls will likely say. I would also watch for some banking officials and media pundits to blame this downturn on Trump’s rise in the polling data. The narrative will be that just the threat of a Trump presidency is “putting the markets on edge."

  Unfortunately, it would seem so far that this prediction was correct. Currently global markets have crossed into severe volatility with a vengeance after around three months of eerie calm. Why? Well, as I warned in the same article linked above as well as numerous others since the beginning of this year, the Federal Reserve is determined to continue raising interest rates into a recessionary environment as they almost always do, and equities markets addicted to cheap debt cannot tolerate even one additional rate hike from the central bank.

  So far all evidence suggests that the Fed plans to raise rates again soon; I believe at the end of this month.  The only seemingly "anti-hike" voice at the Fed so far has been board member Lael Brainard, but even her statements promote a false narrative that a America is on track to "recovery".

  Many normally “dovish” members of the Fed have openly suggested that now is the time to hike.  Voting members at the Fed have been vocal about a shift in policy.  The latest example being head of the Bank of Cleveland, Loretta Mester. She argues that rates have remained “too low for too long,” and rejected notions that lower rates are necessary to maintain stability.

  This is the same kind of language Fed members used right before the rate hike in December 2015, the first rate hike in around a decade.  And, to add to the fervor, even JP Morgan Chase head Jamie Dimon is calling for interest rates to rise.

  Get ready folks, because all the naysayers that claimed another rate hike is “impossible" are probably about to be proven wrong yet again.

  My warning on an accelerating Trump campaign being blamed for weak stock markets has also come true. Already, Bloomberg is launching the meme that the idea of Hillary Clinton losing the election to Trump “because of her health” is a “landmine for vulnerable markets.”

  This is some incredible spin by the elitist controlled media, but again, very predictable. The globalists are setting the stage to blame the economic collapse they created on conservative movements. Clinton’s “health issues” are being set up as the scapegoat for a Trump win, which conjures additional social unrest as many on the Left will argue (in the event of a Trump win) that Trump prevailed on a technicality. That is to say, the extreme Left will argue that Trump’s presidency is not legitimate.

  Another scenario is also possible but I think less likely — the potential for Clinton to bow out of the election due to her health, causing a rationale for a postponed election. I do not think a postponed election really serves the interests of the elites, but it would certainly trigger massive chaos if it occurred. Only in the strangest of any election year in American history could this even be thought of as a legitimate danger.

  Another global indicator, oil, is tumbling yet again as all the jawboning from OPEC on a “production freeze” has failed to boost crude prices for more than a week at a time. Frankly, no one is buying the hype anymore. Those who bet on the WTI index shooting past $50 to $60 a barrel this year should have been paying more attention to alternative analysts. The only other factor that has kept oil from crashing down into the $30 range has been random inventory draws. These reports, though, are little more than a stop gap. Companies have been shifting crude to different facilities in order to create the illusion of inventory draws and higher demand. But usually within a week the reports catch up to the real supply and an inventory spike sends oil crashing down again.

  Add to this the latest news that Congress has passed a bill allowing the families of 9/11 victims to sue the Saudi government for their part in the attack, and you have a recipe for a dumping of the dollar as the world’s petrocurrency. Even if Obama vetoes the bill, I believe a two-thirds majority of congress will override that veto. A catastrophe in oil markets is inevitable.

  Whether in oil markets or other sectors of finance and social stability, make no mistake, catastrophe is exactly what national governments are preparing for.

  This is most obvious today in the European Union. The German government in their first revision of their civil defense plan since the cold war has warned the public to prepare for an unspecified event by stockpiling at least 10 days worth of food and five days worth of water. Germany is also debating the idea of placing troops on the streets to “protect against ISIS.”

  And Germany is not alone. French presidential candidate Nickolas Sarkozy has made some highly disturbing statements on security in a recent interview, outlining measures he believes will best protect the public from “militants.” From Reuters:

  France needs to get tough on militants by creating special courts and detention facilities to boost security, the country’s former President Nicolas Sarkozy said in a interview published in Sunday newspaper Le Journal du Dimanche.

   

  “Every Frenchman suspected of being linked to terrorism, because he regularly consults a jihadist website, or his behavior shows signs of radicalization or because is in close contact with radicalized people, must by preventively placed in a detention center,” Sarkozy said in the interview.

   

  Sarkozy, who announced last month his candidacy for the April 2017 presidential election, has said there is no place for “legal niceties” in the fight against terrorism.

  Even in the face of Islamic extremism and terrorism, the concept of “detention facilities” where people are held without charge and without trial on the mere suspicion of being a danger to society should horrify anyone with any sense. The fact of the matter is, these violations of personal freedom and of due process are NEVER used for only one group of people. Totalitarian governments ALWAYS use one group as an excuse for the police state, then over time they expand the police state outwards to oppress everyone.

  This is the kind of rhetoric that liberty movement activists in the U.S. fought against in the National Defense Authorization Act (NDAA); but it is making a resurgence in Europe and in America as well. If you think Sarkozy is a marginal example, I recommend you re-watch this interview with Gen. Wesley Clark, who argues that “radicalized people” who are disloyal to the U.S. government should be placed in internment camps. He suggests that Britain, Germany and France need to take similar measures. It would appear that they are doing just that.

  Never forget that “radicalism” is an arbitrary designation, and the label can be applied to just about anyone for any reason. A trend in police state language is growing in the mainstream in the name of fighting terrorism, but the abrupt urgency in Europe is rather odd. Only a few months ago, EU leaders were using some outrageous mental gymnastics in order to avoid confronting the notion of Islamic terrorism. Now, they are suddenly concerned? Why?

  I believe Europe is about to witness a catalyst for financial crisis, and they are using terrorism as an excuse to preposition martial law resources before this event takes place. They don’t care about stopping ISIS, but they do care about locking down and controlling an angry citizenry in the wake of an economic downturn. If a few more terrorist attacks occur in the meantime, then hey, that only helps the elites in their efforts to pacify the public for the sake of “security.”

  Official preparedness warnings from Germany, for example, are of little use to the public. A supply of a mere ten days of food and five days of water is useless during any sizable crisis. But, the German government can now say that they “tried to warn people.” Sarkozy’s statements are the most blatant call for a police state I have yet seen from an establishment puppet politician, and this should worry people. The fact that he is being so open and honest about the end game indicates to me that a dangerous shift is imminent.

  It would appear, according to EU government behavior, that whatever is about to happen globally is going to hit hardest in Europe first and then spread to the U.S. and the rest of the world. I recommend readers watch the EU very carefully over the next few months. If you have any financial or survival preparations you have been putting off, I suggest you take care of them before the end of this year. From what I see so far, geopolitically and economically the global situation is only going to become more unstable in the near term.

  

  

• 1 In 5 CEOs Are "Successful Psychopaths"

  "We hope to implement our screening tool in businesses so that there’s an adequate assessment to hopefully identify [these successful psychopaths] – to stop people sneaking through into positions in the business that can become very costly…"

  That is the cunning plan of Australian psychologists following a study that found that about one in five corporate executives are psychopaths – roughly the same rate as among prisoners. As The Telegraph reports,

  The study of 261 senior professionals in the United States found that 21 per cent had clinically significant levels of psychopathic traits. The rate of psychopathy in the general population is about one in a hundred.

   

  Nathan Brooks, a forensic psychologist who conducted the study, said the findings suggested that businesses should improve their recruitment screening.

   

  He said recruiters tend to focus on skills rather than personality features and this has led to firms hiring “successful psychopaths” who may engage in unethical and illegal practices or have a toxic impact on colleagues.

   

  “Typically psychopaths create a lot of chaos and generally tend to play people off against each other,” he said.

   

  “For psychopaths,  it [corporate success] is a game and they don’t mind if they violate morals. It is about getting where they want in the company and having dominance over others.”

  The global financial crisis in 2008 has prompted researchers to study workplace traits that may have allowed a corporate culture in which unethical behaviour was able to flourish… ironic indeed as Wells Fargo CEO Stumpf blames 5300 of his employees for 'nasty' behavior and is unable to see any top-down ethical collapse as behind the systemic fraud.

  To help CEOs "self-identify" as psychopaths, here is a quick test…

  How to tell if your boss is psychopathic, Machiavellian, a narcissist or – even worse – all three.

  For each character trait decide whether you strongly agree, agree, feel it applies sometimes, disagree or strongly disagree and give a score from 5 for strongly agree to 1 for strongly disagree.

   

  The higher the score, the more they have combined psychopathic, Machiavellian and narcissistic tendencies.

   

  1. They tend to exploit and trick others for self-advancement.

   

  2. They have used lies and deception to get their way.

   

  3. They have used ingratiation to get their way.

   

  4. They tend to manipulate others for selfish reasons.

   

  5. They tend not to feel regretful and apologetic after having done wrong.

   

  6. They tend not to worry about whether their behaviour is ethical.

   

  7. They tend to be lacking in empathy and crassly unaware of the distress they can cause others.

   

  8. They tend to take a pretty dim view of humanity, attributing nasty motives and selfishness.

   

  9. They tend to be hungry for admiration.

   

  10. They tend to want to be the centre of attention.

   

  11. They tend to aim for higher status and signs of their importance.

   

  12. They tend to take it for granted that other people will make extra efforts to help them.

  * Courtesy of Office Politics by Oliver James (Vermillion)

  

  

• Venezuela's "Death Spiral" – A Dozen Eggs Cost $150 As Hyperinflation Horrors Hit Socialist Utopia

  Submitted by Susan Warner via The Gatestone Institute,

  • The question of whether Socialism can be an effective economic system was famously raised when Margaret Thatcher said of the British Labor Party, "I think they've made the biggest financial mess that any government's ever made in this country for a very long time, and Socialist governments traditionally do make a financial mess. They always run out of other people's money. It's quite a characteristic of them. They then start to nationalise everything."
  • There are dire reports of people waiting in supermarket lines all day, only to discover that expected food deliveries never arrived and the shelves are empty.
  • There are horrific tales of desperate people slaughtering zoo animals to provide their only meal of the day. Even household pets are targeted as a much-needed source for food.
  • President Maduro is doubling down on the proven failed policies and philosophies of "Bolivarian Socialism," while diverting attention away from the crisis — pointing fingers at so-called "enemies" of Venezuela such as the United States, Saudi Arabia and others.
  • A dozen eggs was last reported to cost $150, and the International Monetary Fund "predicts that inflation in Venezuela will hit 720% this year.

  For many Venezuelans, by every economic, social and political measure, their nation is unravelling at breakneck speed.

  Severe shortages of food, clean water, electricity, medicines and hospital supplies punctuate a dire scenario of crime-ridden streets in the impoverished neighborhoods of this nearly failed OPEC state, which at one time claimed to be the most prosperous nation in Latin America.

  Today, a once comfortable middle-class Venezuelan father is scrambling desperately to find his family's next meal — sometimes hunting through garbage for salvageable food. The unfortunate 75% majority of Venezuelans already suffering extreme poverty are reportedly verging on starvation.

  Darkness is falling on Hugo Chavez's once-famous "Bolivarian revolution" that some policy experts, only a short time ago, thought would never end.

  In a 2007 study on the Chavez years for the Washington, DC-based Center for Economic and Policy Research, Mark Weisbrot and Luis Sandoval wrote:

  "[a]t present it does not appear that the current economic expansion is about to end any time in the near future. The gains in poverty reduction, employment, education and health care that have occurred in the last few years are likely to continue along with the expansion."

  While it was not so long ago that many people heralded Venezuela as Latin America's successful utopian Socialist experiment, something has gone dreadfully wrong as the revolution's Marxist founder, Hugo Chavez, turned his Chavismo dream into an economic nightmare of unimaginable proportions.

  The question of whether Socialism can be an effective economic system was famously raised when Margaret Thatcher said of the British Labor Party:

  "I think they've made the biggest financial mess that any government's ever made in this country for a very long time, and Socialist governments traditionally do make a financial mess. They always run out of other people's money. It's quite a characteristic of them. They then start to nationalise everything, and people just do not like more and more nationalisation, and they're now trying to control everything by other means."

  In short: "The trouble with Socialism is that eventually you run out of other people's money."

  When President Nicolas Maduro inherited the Venezuelan Socialist "dream", in April of 2013, just one month after Chavez died, he was facing a mere 53% inflation rate. Today the Venezuelan bolivar is virtually worthless, and inflation is creeping to 500% with expectations of much more. A recent Washington Post report stated:

  " …markets expect Venezuela to default on its debt in the very near future. The country is basically bankrupt. It is not easy for a nation to go bankrupt with the largest oil reserves in the world, but Venezuela has managed it. How? Well, a combination of bad luck and worse policies. The first step was when Hugo Chávez's socialist government started spending more money on the poor, with everything from two-cent gasoline to free housing. That may all seem like it's a good idea in general — but only as long as there's money to spend. And by 2005 or so, Venezuela didn't have any."

  Chavez had the good fortune to die just before the grim reaper showed up on Venezuela's doorstep. According to policy specialist Jose Cardenas:

  "What began as a war against the 'squalid' oligarchy in order to build what he called '21st-century socialism' — cheered on as he was by many leftists from abroad — has collapsed into an unprecedented heap of misery and conflict."

  Maduro is doubling down on the failed Chavismo economic and social policies that have contributed to an inflationary crisis not seen since the days of the 1920's Weimar Republic in Germany, when the cost of a loaf of bread was a wheelbarrow full of cash.

  Demonstrations and public cries for food are the unpleasant evidence of a once-prosperous society being torn apart by the very largess that marked its utopian ideals less than a decade ago.

  There are dire reports of people waiting in supermarket lines all day, only to discover that expected food deliveries never arrived and the shelves are empty.

  In desperation, some middle class families have organized online barter clubs as helpless citizens seek to trade anything for diapers and baby food, powdered milk, medicines, toilet paper and other essentials missing from store shelves or available only on the black market for double and triple already impossibly inflated prices..

  There are horrific tales of desperate people slaughtering zoo animals to provide their only meal of the day. Even household pets are targeted as a much-needed source for food. This is a desperate time for a desperate people.

  As things continue to worsen, President Maduro, unfortunately, is doubling down on the proven failed policies and philosophies of "Bolivarian Socialism," while diverting attention away from the crisis — pointing fingers at so-called "enemies" of Venezuela such as the United States, Saudi Arabia and others.

  Efforts to convince Maduro to enlist help from outside have failed, according to a report in the Catholic magazine, Crux:

  Maduro has refused to accept help from international charitable organizations, including the Vatican-sponsored Caritas Internationalis, which through different affiliates has tried to send medicine and food.

   

  "Denying that there's a crisis and refusing to let the world send medicine and food is not possible," said Cardinal Jorge Urosa Savino, archbishop of Caracas.

   

  The prelate believes that Maduro is refusing to accept help in an attempt to hide the "very grave situation of total shortage," which far from improving, he said, continues to deteriorate.

  According to Breitbart:

  "The Venezuelan Episcopal Conference, the organization of the nation's Catholic bishops, issued a scathing statement condemning president Maduro for giving the military full control of the nation's food supply, accusing him of being at the helm of a devastating "moral crisis" and crippling every aspect of life in Venezuela."

  In what some economists have been calling a "death spiral", the government's failed economic policies are at the same time causing and trying to stem a runaway inflation with price-fixing policies which, in turn, are triggering shortages. Maduro is strongly urging businesses and farmers to sell their goods at severe losses, forcing shut-downs when the cost of doing business becomes prohibitive.

  According to a recent Bloomberg report, the black market is thriving because goods are unavailable at prices fixed by the government. There are reports of ordinary people quitting inadequate-paying jobs to set up black market operations, hoping to be able to make enough to sustain life.

  A dozen eggs was last reported to cost $150, and the International Monetary Fund "predicts that inflation in Venezuela will hit 720% this year. That might be an optimistic assessment, according to some local economic analysts, who expect the rate to reach as high as 1,200%."

  According to a Bloomberg report from April:

  "In a tale that highlights the chaos of unbridled inflation, Venezuela is scrambling to print new bills fast enough to keep up with the torrid pace of price increases. Most of the cash, like nearly everything else in the oil-exporting country, is imported. And with hard currency reserves sinking to critically low levels, the central bank is doling out payments so slowly to foreign providers that they are foregoing further business.

   

  "Venezuela, in other words, is now so broke that it may not have enough money to pay for its money."

  In the midst of this galloping cataclysm, there is no shortage of pundits who simplistically assert that the catastrophe is caused solely by the international collapse of oil prices. However, according to Justin Fox at Bloomberg:

  "The divergence between Venezuela's revenue and spending started long before (the 2014) oil-price collapse. When oil prices hit their all-time high in July 2008, government revenue — 40 percent of which comes directly from oil — was already falling. The main problem was Venezuelan oil production, which dropped from 3.3 million barrels a day in 2006 to 2.7 million in 2011. It was still at 2.7 million in 2014, according to the latest BP Statistical Review of World Energy."

   

  "Venezuela isn't running out of oil. Its proven reserves have skyrocketed since 2000 as geologists have learned more about the heavy crude of the Orinoco Belt. But getting at that oil will take a lot of resources and expertise, both things that Venezuela's state-owned oil company, Petroleos de Venezuela (PDVSA, best known in the U.S. for its Citgo subsidiary), has been lacking in since Chavez initiated a sort of hostile takeover starting in the early 2000s. First he kicked out 18,000 workers and executives, 40 percent of the company's workforce, after a strike. Then he started demanding control of PDVSA's joint ventures with foreign oil companies. One could interpret this in the most Chavez-friendly way possible — he was aiming for a more just allocation of his nation's resources — and still conclude that he made it harder for PDVSA to deliver the necessary tax revenue."

  Cronyism and corruption prevailed under Chavez when oil was selling at almost $200 a barrel — at a time when Venezuela could have put some money away for the inevitable rainy day. But President Hugo Chavez and successor president Maduro, were busy buying votes and consolidating power with free giveaways, according to Michael Klare in The Nation.

  Behind the doom and gloom Venezuela's collapse is the continuing specter of street crime and murder, according to Time.com in a May 2016 report:

  "The country's runaway murder rate is just one of the factors driving opposition to President Nicolas Maduro in a country where shortages of food and basic goods are chronic, inflation is running rampant and the government is jailing political prisoners. But it serves as a bloody illustration of just how close to outright societal collapse Venezuela has come since the end of the 20th century, as gangs, guerrillas and militia defend their turfs and traditional authority structures fall by the wayside."

  Venezuela's crime rate is one of the highest in the world. Called the world's most homicidal nation, Venezuela has more than street crime, thuggery and murder. Drug cartels, black marketeers, narcoterrorists, white collar criminals and money launderers are unfortunate hallmarks of the Chavez/Maduro legacy.

  The ruin of this once prosperous, oil-rich nation might be a harbinger for other nations, such as the United States, which may be tempted into believing that Socialist giveaway policies actually can provide the promise of a free lunch for longer than the next election cycle. Or might that be all many politicians need or want?

  

  Venezuela's food shortages, hyperinflation, black marketeers, narcoterrorists and money launderers are unfortunate hallmarks of the legacy of Presidents Chavez (left) and Maduro (right).

  

  

• More Akin To Goebbels

  Authored by T.L. Davis, via Christian Mercenary blog,

  The best thing that could happen during this presidential election is happening.  Once and for all, the press is being outed as the traitorous bunch of clowns we have always known they were.  Their absolute devotion to anyone not named Trump is driving them into increasingly ridiculous and contemptible positions concerning Hillary Clinton, her crimes and her rapidly declining health.  Their only hope is to push the corpse across the finish line of the election and rally around Tim Kaine.

  But, millenials are, for all of the bad press about their addiction to video games and their devotion to smoking dope, are growing concerned that the emperoress has no clothes, despite the fawning description of the beautiful attire. Never before has reality so closely reflected a fairy tale as the blind, deaf and dumb press corps accommodatingly ignoring the obvious flaws of a pre-ordained head of state.  There is always an excuse for a Clinton, always a nuanced explanation that is offered and eagerly consumed by the press.

  It depends on what the definition of "heat" is.

  The crux of the issue is that the "press" has been given special privileges through our Constitution to allow it to say anything, to print anything they believe is true.  Unfortunately, it does not bind them to reporting what they believe is a lie. This goes to the heart of our Republic and their willing cooperation with a given political party is nothing other than traitorous. Information that they are Constitutionally protected to reveal is being withheld, shielded from the public, information that is necessary for the Republic to function.

  They either do not realize, or care (either is just as damning as the other) that their political affiliation is being exposed and that they are willing to submit the nation to any degree of poor judgment, criminal activity, or outright corruption in order to secure the election of "one of their own."

  This is not being lost on the Millennials, who do not remember the clout with which Cronkite made his nightly propaganda pitches.  They do not remember the reverence with which Edward R. Murrow broadcast his missives. They are the product of internet information and hold most of our most honored traditions in contempt.  This is the first time they have been able to view the clannish behavior of an outdated "press corps" that does not seem to have a valid function in their eyes.  A tweet is more important than a network broadcast. The media has just dropped trou in front of them and they are taking notice.

  Unfortunately, they do not understand or appreciate that there is a Constitutional question here.  Given the extraordinary access a "free press" has been given to the president, members of congress and the judiciary, it is all designed to allow the people, the voters, the ones who actually decide who the office holders will be, information that could not be gained individually.  It is their duty to provide the voters with information that might make a candidate unsuitable to hold office; to expose lies and report the truth, regardless of who the other contender for the office might be.  The press is, right now, acting as voters, as imposing themselves into the election and making a determination for the rest of society.  That is not their Constitutional role and despite the great contempt the Constitution seems to evoke among these "elites," it is still a duty, a responsibility, to reveal the flaws and inadequacies of any given candidate for any given office from dog catcher to president and while they fully understand their responsibility when it comes to Trump, they seem at a complete loss when it comes to Hillary Clinton.

  I personally am not all that interested in this election; it is a disgrace, a disappointment to consider either candidate as the best we have to offer; as serious representatives of the American people, but that is not my call and I recognize it. I believe the American people are as disserved by these candidates as they are disserved by the people reporting on the election.

  If there is anything to be said about any of it, it is that we always get what we deserve and our lack of principle, our lack of interest in the political process has led to this debacle.  We are the laughing stock of the world and deservedly so.

  The only part of it that I do care about is that our Constitution was written with the intellectual understanding of this possibility: that clowns and criminals might be foisted upon us in the dark of political maneuvers and that the founders, the drafters of the document that brought forth this nation, saw only the "free press" as an antidote to this particular governmental ill and that those entrusted with that responsibility have obliterated their own credibility, voluntarily suspended critical thinking in order to produce a political outcome more suited to their political beliefs.

  What is worse, is that they, with all of their supposed political understanding and knowledge of world history either do not realize, or care, that their actions are identical to those of cheap propagandists more akin to Joseph Goebbels than Edward R. Murrow.

  

  

• Ford Announces Plan To Shift All Small-Car Production To Mexico

  Earlier today Ford announced that it expects operating income to decline in 2017 as the automaker increases investment in electric and autonomous vehicles, before rising again in 2018.  This news came after Ford had just lowered it’s expectations for FY 2016 EBIT to $10.2BN from $10.8BN due to increasing costs associated with an expanded recall related to faulty door latches. 

  So how do you offset rising costs and a top-line that executives recently admitted have “reached a plateau?”  Well you shift more production to low-cost countries, like Mexico of course.  According to Reuters, Ford CEO, Mark Fields, confirmed at the company’s investor day today that all of Ford’s small-car production would be shifted to Mexico over the next 2-3 years.

  “We will have migrated all of our small-car production to Mexico and out of the United States,” over the next two to three years, Fields told Wall Street analysts at an investor conference hosted by the automaker.

  As we wrote about a month ago, Ford is scheduled to open a brand new $1.6 billion plant in Mexico in 2018.  The plant will employee roughly 2,800 workers who will be paid $1.15 – $2.30 per hour which is a mere 97% less that the $70 per hour all-in cost of an United Auto Worker employee performing the same labor in Detroit.  The move is expected to yield savings of $1,300 per vehicle relative to production costs in Detroit.  Per the Wall Street Journal:

  Ford is scheduled to open a new $1.6 billion small-car assembly factory in San Luis Potosí in 2018 and hire 2,800 workers. People familiar with the matter say Ford will produce its Focus there, which is currently built in Michigan.

   

  A contract reviewed by The Wall Street Journal puts factory wages at the facility at about $1.15 to $2.30 per hour, on par with what other auto-assembly plants currently pay in the region. The move to Mexico will yield cost savings of about $1,300 per vehicle, or about $300 million a year, according to manufacturing experts familiar with the Detroit car maker’s finances.

  

   

  As we’ve said before, supporters of minimum wage hikes could learn from the efforts of the United Auto Workers Union which did a masterful job negotiating off-market wage and benefits packages which have ultimately only served to provide their members with permanent job losses.

  

  

• Not Everyone Went Down With The Titanic

  Submitted by Nick Giambruno via InternationalMan.com,

  It’s one of the most dangerous myths most people believe…

  Boobus Americanus thinks cash he deposits into a bank is a personal asset he owns.

  But that’s not true.

  Once a deposit is made at the bank, it’s no longer your property. It’s the bank’s.

  What you own instead is a promise from the bank to repay. It’s an unsecured liability. That’s a very different thing from owning physical cash stuffed under your mattress. Yet, 99.9% of people conflate the two.

  Cash deposited into the bank technically makes you a creditor of the bank. You’re liable to get burned should the bank make a bad bet and get into trouble. The risk is not insignificant. Most banks gamble with their customer deposits on risky investment fads like mortgage-backed securities.

  Government deposit insurance schemes are a false sense of security. With their current reserves, they could only cover less than half a penny for every dollar they supposedly insure.

  People in Cyprus had to find all this out the hard way a few years ago. People awoke on an otherwise normal Saturday morning to the horror that the cash in their bank accounts had vanished.

  It was perhaps the most potent, recent example of the risk of being totally dependent on a single country that suddenly found itself in financial trouble. It also shows why I am such a fan of owning hard assets outside the immediate reach of your government.

  You probably already know it’s a bad idea to put all of your asset eggs in one investment basket. The same goes for holding all of your assets in one country. But how much thought have you put into political diversification?

  International diversification frees you from absolute dependence on any one country. Achieve that freedom, and it becomes very difficult for any group of bureaucrats to control you. The results can be life changing.

  While everyone in the world should aim for political diversification, it’s exponentially more critical for those who live under a government sinking hopelessly deeper into financial trouble. That means most Western governments and the U.S., in particular.

  This brings up an uncomfortable truth for North Americans and Europeans. The way the political and economic winds are blowing, things are about to get much worse.

  Central banks around the globe have created the biggest financial bubble the world has ever seen. Interest rates are the lowest they’ve ever been in 5,000 years of recorded history. In some parts of the world, they’re even negative. We’re living in a financial Alice in Wonderland.

  I think the social and political implications of this bubble bursting are even more dangerous than the financial consequences.

  An economic depression and currency inflation (perhaps hyperinflation) are very much in the cards. These things rarely lead to anything but bigger government, less freedom, and shrinking prosperity. Sometimes, they lead to much worse.

  We’re already getting a small preview of what is to come…

  It seems like each week, there’s a new attack or mass shooting. Racial tensions are on the rise. Europe is experiencing a migrant crisis that’s tearing the continent apart.

  There’s no doubt the world has become a crazier place in the past couple of years. Unfortunately, I think it is only going to get worse… 

  There’s really only one way to remove yourself from all of this unpleasantness.

  

  

  

• As Vancouver Luxury Home Sales Plunge 65%, Chinese Buyers Move To Toronto

  If there was any doubt about the Vancouver housing bubble bursting, and there really should not have been after our latest update, when we showed 2 weeks ago that the average price of detached Vancouver properties crashed, dropping 17% on the month, and 0.6% on the year, to C$1.47 million ($1.13 million) in August, the lowest price since September 2015…

  

  … it can be fully laid to rest, with the latest data from Sotheby’s International Realty according to which transactions in Vancouver of at least C$1 million ($759,000) plunged 65% from a year earlier to a paltry 95 units in August, the month that a 15% real estate tax on deals by non-Canadian homebuyers took effect.

  In Vancouver, the tax “injected uncertainty into the market, and is anticipated to moderate sales activity and velocity in the fall,” the brokerage said. The long-term impact of the surcharge remains to be seen and the city remains in an affordability crisis, according to Bloomberg.

  The tax hit Vancouver’s condominium market hardest. Sales of at least C$1 million dropped 49% in August from a year earlier, after rising 29% in 12 months through July. There were no deals for condos priced at C$4 million or more last month, compared with four in August 2015. Sales of Vancouver’s most expensive homes, those priced at C$4 million or higher, fell 46% in August to 14 units, Sotheby’s said.

  However, while the Vancouver housing bubble has now popped, the ravenous Chinese buyers, far from hightailing it out of Canada, have merely decided to shift to Toronto, because at the same time as Vancouver’s real estate sales ground to a halt, luxury-home sales in Toronto and its suburbs doubled to 1,459 units, Sotheby’s said.

  

  According to the Star, sales of $1-million-plus Toronto-area single-family homes rose 83% year over year in July and August. That’s 3,026 homes, with 55 per cent of them inside Toronto’s borders. 

  That’s not entirely surprising given that the average cost of a detached home in Toronto was about $1.2 million, said Sotheby’s CEO Brad Henderson.

  “While $1 million is still a considerable amount of money, it’s difficult to find a single-family home in the city of Toronto for less than $1 million and it is not uncommon to find homes in the $2-million, $3-million or even $4-million-plus range,” he said.

  Sotheby’s says sales of homes in the $4-million-and-up category rose 74 per cent in the region and 58 per cent in the city in July and August. Sotheby’s said it expects Toronto’s luxury market to take the lead among Canada’s cities, outpacing Montreal, which probably will become a target for investors from Europe, China and the Middle East.

  “What the (Vancouver) tax introduced is . . . some uncertainty as to what other policy issues the city or the province may introduce, which would adversely affect investors,” Henderson said, adding that  investors are looking elsewhere, including cities outside Canada.

  “But, if they are looking in Canada, we believe Toronto will be the most logical place for people to consider. Montreal and Calgary will probably also get a look-see,” Henderson said.

  The good news for Vancouver is that there is finally hope the housing market will soon regain some rationality:  Sotheby’s report forecasts a “more normalized fall market” in Vancouver, based on summer sales there. Others had more harsh words: on Tuesday, the chief economist and strategist at National Bank of Canada predicted Vancouver’s housing market may enter a correction with price declines of at least 10%.

  The bad news is that the Vancouver housing nightmare of the past two years has metastasized to Toronto (to start) and anyone seeking to buy a house there will soon be priced out by Chinese money-launderers. 10% of homes sold in the Toronto region in the first six months of 2016 were $1 million or more, according to Sotheby’s. Sales over $4 million comprised less than .05 per cent of the total transactions, according to Sotheby’s. That number will soon go up fast.

  We give Toronto between 9 and 12 months before the locals wake up in horror and realize that they are now the new favorite parking spot for illegally obtained Chinese cash, and demand a similar 15% tax on foreign purchases, which will simply shift the roving Chinese horde of homebuyers to yet another city, because with $30 trillion in Chinese deposits, the supply of cash is virtually endless, especially when the Chinese population knows that the next devaluation is just around the corner, no matter how hard the PBOC wants to fight it.

  

  

• Desperately Poor Teens In America's Impoverished Inner Cities Are Trading Sex For Food

  Submitted by Michael Snyder via The Economic Collapse blog,

  When people get hungry enough, they will do just about anything for some food.  According to brand new research that was just released this week from Feeding America and the Urban Institute, there are millions of teenagers in America that live in “food insecure” households, and researchers were stunned to learn what some of these teens are willing to do to feed themselves.  Some resort to shoplifting, others deal drugs, and there were a surprising number of participants in the study that actually admitted to trading sex for food.  It wouldn’t be a shock to hear that these kinds of things are going on in an economically-depressed nation such as Venezuela, but this is the United States of America.  We are supposed to be the wealthiest nation on the entire planet.  Sadly, even while the stock market has been soaring in recent years, poverty in America has been on the rise.  For those on the low end of the economic scale, things have gone from bad to worse since the end of the last recession, and millions of children are deeply suffering as a result.

  Let’s start with some of the hard numbers.  The following comes directly from the Urban Institute website…

  An estimated 6.8 million people ages 10 to 17 are food insecure, meaning they don’t have reliable access to enough affordable, nutritious food. Another 2.9 million are very food insecure, and roughly 4 million live in marginally food secure households, where the threat of running out of food is real.

   

  Food insecurity takes a tremendous toll on teenagers. Poor nutrition—and the stress of hunger and poverty—can jeopardize their physical and mental health and development and their academic success. But despite the gravity and prevalence of teen food insecurity, we know very little about how these young people experience and cope with hunger.

  The researchers already knew that lots of young people were hungry in America.  But what surprised them were the lengths that many of these youngsters said that they would go to in order to get food…

  Some of the youths said they or someone they know — mostly young men — have turned to shoplifting food, selling drugs or stealing items to sell.

   

  The teens also reported knowing young women who have sold their bodies for food or had sex for money so they could buy food for their families.

   

  Going to jail or failing a class in order to have to attend summer school were also some of the lengths teens went to.

  Could you imagine your daughter or your granddaughter exchanging her body for food?

  For most of us that is absolutely unthinkable, but the truth is that this is taking place on the streets of America every single day.

  And this wasn’t just some blind random phone survey.  The researchers conducted personal interviews with focus groups, and what these kids were willing to admit doing was absolutely astounding.  Here is another excerpt directly out of the report…

  • When faced with acute food insecurity, teens in all but two of the communities said that youth engage in criminal behavior, ranging from shoplifting food directly to selling drugs and stealing items to resell for cash. These behaviors were most common among young men in communities with the most limited job options.
  • Teens in all 10 communities and in 13 of the 20 focus groups talked about some youth selling sex for money to pay for food. These themes arose most strongly in high-poverty communities where teens also described sexually coercive environments. Sexual exploitation most commonly took the form of transactional dating relationships with older adults.
  • In a few communities, teens talked about going to jail or failing school (so they could attend summer classes and get school lunch) as viable strategies for ensuring regular meals.

  Many of these young people understand that what they are doing is wrong.  Just consider what some of them told the researchers…

  A girl in Portland, Oregon told researchers: “It’s really like selling yourself. Like you’ll do whatever you need to do to get money or eat.”

   

  Another comment from Portland: “You’re not even dating … they’ll be like … ‘I don’t really love him, but I’m going to do what I have to do.’”

   

  Many prefer to rationalise what they are doing as dating of sorts. A boy in rural North Carolina said: “When you’re selling your body, it’s more in disguise. Like if I had sex with you, you have to buy me dinner tonight … that’s how girls deal with the struggle … That’s better than taking money because if they take money, they will be labeled a prostitute.”

  When I read the information in this report, I was stunned.  Yes, I write about our economic decline and the rise in poverty all the time, but I didn’t know that things were this bad.

  And the researchers were surprised by what they were hearing as well.  One of them said that the fact that girls are trading their bodies for food “was really shocking to me”, and she believes that things are “just getting worse over time”…

  “I’ve been doing research in low-income communities for a long time, and I’ve written extensively about the experiences of women in high poverty communities and the risk of sexual exploitation, but this was new,” said Susan Popkin, a senior fellow at the Urban Institute and lead author of the report, Impossible Choices.

   

  “Even for me, who has been paying attention to this and has heard women tell their stories for a long time, the extent to which we were hearing about food being related to this vulnerability was new and shocking to me, and the level of desperation that it implies was really shocking to me. It’s a situation I think is just getting worse over time.”

  But aren’t we being told that things are getting better?

  Aren’t we being told that our leaders “fixed” the economy?

  Of course the truth is that America is mired in a long-term economic decline that stretches back for decades.  With each passing year the middle class gets smaller as a percentage of the population, and poverty continues to grow.  Last year the middle class became a minority of the population for the first time ever, and a lot of formerly middle class Americans are now among those that aren’t sure that they are going to have enough food to eat this month.

  Hunger in America is a major crisis and it is growing.  Just because you may live in a comfortable home in a wealthy neighborhood does not mean that this problem is not real.

  Tonight there are millions of Americans that do not know where their next meal is going to come from, and they deserve our love and compassion.

  

  

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