• Dow 100,000? Marc Faber Warns: Central Banks "Will Monetize Everything… Introduce Socialism"

  Submitted by Valentin Schmid via TheEpochTimes.com,

  They call him Dr. Doom and for good reason. Dr. Marc Faber, author, investment adviser, and publisher of the Gloom, Boom & Doom report, usually emphasizes the risks in the financial system and never minces his words.

   

  However, his views are more nuanced than most people think, and his advice for investors is more pragmatic than idealistic.

   

  Epoch Times spoke to Faber about central bank manipulation of financial markets, the reasons for income inequality, and how to invest in this environment.

  Epoch Times: How long can the central banks manipulate markets?

  Mr. Marc Faber: This is an issue that will be decided by central bankers and I don’t have control over the manipulation of central banks. Haruhiko Kuroda of the Bank of Japan (BoJ) expressed the view that there is no limit to monetary inflation. That they can keep on buying assets and they can keep on buying equities and real estate.

  So the madness in the present time may go on. In a manipulated market, it won’t end well, but you don’t know when it will not end well, and how far the manipulation can last.

  Epoch Times: And then at one point, the central banks own everything.

  Mr. Faber: They could essentially monetize everything, and then you have state ownership. And through the central banking system, you introduce socialism and communism, which is state ownership of production and consumption. You would have that, yes, that they can do.

  The BoJ owns more than 50 percent of Japanese ETFs (exchange traded funds), which own large parts of the underlying companies. So indirectly they may own 20 percent of the Japanese companies, and they can go up to a higher level.

  I don’t think the central bankers are intelligent and smart enough to understand the consequences of their monetary policies at present. They focus on inflation but in my view they shouldn’t do anything. They don’t focus enough on what it does to the average standard of living of the people, to the average household income.

  

  Private ownership and central bank ownership of ETFs in Japan. (Bloomberg)

  Asset Price Inflation

  Epoch Times: If the policies are similar, why haven’t we seen hyperinflation like in Zimbabwe or Venezuela?

  Mr. Faber: The developed market central banks can go on for quite some time. If Zimbabwe prints money, the pain is more obvious right away because if you are Zimbabwe, and you print money and the others don’t, and the currency collapses, and you feel the pain much sooner.

  If the major central banks, the Fed, the European Central Bank (ECB), the BoJ, the Bank of England, and the Chinese monetize and print money in concert and agreement with each other, they all talk to each other; then the currencies don’t collapse against each other. There may be fluctuations, but we don’t have a general collapse of a currency.

  Paper money, in general, can then collapse, and it has to a large extent against asset prices like real estate around the world over the last 30 years, against equity prices, against bond prices—which have been rallying since 1981—and against precious metals since 1999.

  Asset price inflation is less obvious to the average person in the street. The average American has no money, so he doesn’t care if prices for paintings and real estate go up—until it touches him.

  

  (World Economic Forum)

  It’s nonsense to claim that inflation is only going up 1 percent per year in the United States. The cost of living of a typical family is going up much more than that—insurance, transportation, schooling are all going up.

  For example, health care premiums for insurance policies [are rising], so the typical household is being squeezed. The central banks don’t care about that; they don’t look at it.

  I suppose the system will collapse before we become like Venezuela. In the West, if they start to print money, the end game will be brief. Within five years, I expect the system to implode.

  Epoch Times: How can we avoid a collapse?

  Mr. Faber: You better ask the bureaucrats what their plans are. They had zero rates since December 2008; soon eight years [passed], and that hasn’t boosted economic activity for the average household, not in Japan nor the United States nor the EU. Now they talk about fiscal spending.

  We already have large deficits but no deficit is large enough for the interventionist, so they will boost fiscal spending. They will finance deficits by issuing government debt, which the central banks will monetize. The Treasury will issue debt, and then the Fed will buy all these debts. Of course, that will not end well, but it will postpone the problem for a while.

  Then they will find some academics who will blame wealth inequality on the evil capitalists who made so much money out of asset bubbles.

  They will blame the economic woes on these people. To some extent this is true. But the rich people did not create the inflated asset values; it was the central banks, by slashing interest rates to zero and negative interest rates in many countries.

  First, you create mispricings through artificially low rates and negative interest rates and you boost the income and wealth of the super-rich. It’s at best the 0.1 percent that really benefit from asset inflation, at the cost of all the people that have no assets and so you have this rising wealth inequality. So we have to tax the rich people and tax them more.

  Taking money from the rich is appealing if you go to voters, and you say to them, “Look, the reason the economy is doing so badly, it’s because of the rich people, the billionaires. We have to take 20 percent away from them and give it to you.” You can be sure that everybody will vote for that because the wealthy are a minority. This is what happens after monetary policies completely fail.

  Some well-connected people will hide their wealth but a lot of people won’t. Even if they take 50 percent from the richest, it’s not going to help. The next step will be to take money from less wealthy people; the interventionists will go all the way.

  Investment Strategy

  Epoch Times: How do you invest in this environment?

  Mr. Faber: Most assets by traditional valuations are overpriced. Now are they overpriced compared to zero interest rates or negative interest rates? If you take the 10-year German bonds or the 10-year Swiss bonds or the 10-year Japanese bonds, you have no or negative yield. But you can buy equities that give you a dividend yield of 2 percent or more. Then you say stocks compared to negative interest rates are a bargain.

  But they are not cheap by traditional valuation methods.

  However, I think it’s dangerous for someone to say: “We all agree that it will end badly, so we keep 100 percent of our money in cash.” First, you have to decide which cash.

  Number two, we don’t know what the time frame until it ends badly is. And in an extreme money-printing environment, the Dow Jones Industrial Average can go to 100,000.

  

  An ounce of gold is worth $1,327 on Sept. 11, 2016. (Goldprice.org)

  It may likely not go up against precious metals, but it can go up in nominal terms endlessly. It’s not going to help the typical household. I have seen many hyperinflating economies, and in each case, the standard of living of average people declined.

  That will be the case. If I were interventionist—which I’m not, and I do not support the interventionist—if I were a central banker and I said to myself the right policy now is to increase the negativity of interest rates, we go from 0.5 percent negative to 5 percent negative.

  In this particular instance, the people and companies take the money out of the financial system and store it in cash in a vault.

  

  Condo buildings line the beach in Sunny Isle, Florida, on April 5, 2016. (Joe Raedle/Getty Images)

  The measure to implement negative 5 percent is not going to work very well, so one way to make it work is to abolish cash. You can still hoard real estate, food, cigarettes, and precious metals, but you can’t hold cash anymore. So that is likely to happen, in my view, if they go all the way.

  Epoch Times: What about gold?

  Mr. Faber: I have made a very compelling case for gold in the late 1990s and silver and platinum. I wrote a book, “Tomorrow’s Gold,” which was not about gold but the rise of Asia. The gold price rose very sharply between 1999 and 2011, and it corrected after September 2011. It probably overshot, and the mining shares overshot on the upside, so they corrected.

  Now, between last October and December, we had major lows in gold stocks and precious metals prices from where the prices will continue to rise.

  They are going to go up tomorrow or in three to five years, I don’t know. If you keep printing paper money, the supply of money increases and assets that are in short supply or limited supply—whether it’s a Ferrari or a Gaugin painting—they are in tight supply, so they will appreciate.

  They will not all appreciate at the same time and to the same extent. There will be bubbles in real estate and collectibles; there will be bubbles in equities, as we have had three times since 1999.

  Epoch Times: But you would not only buy cash and gold mining stocks, right?

  Mr. Faber: I think holding all your assets in cash is very dangerous. I want to be diversified; I hold some cash, bonds, equities, some real estate, and some precious metals.

  The moment you diversify, your returns are suboptimal, but it’s likely to preserve your capital.

  

  

• The Fed`s Theoretical Inflation and Actual Core Inflation Gap is Widening (Video)

  By EconMatters

  
  

  

  When will the mainstream financial media do their job and start calling Fed Officials out for switching from the Core Inflation metric to justify a continuance of ZIRP? The actual Inflation Rate is already above the Fed`s stated target of 2 percent.

   

  

  

  

  

  

  

  

  

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

  

• Your Money Or Your Life: What's Behind The Latest Government Scam To Rob You Blind?

  Submitted by John Whitehead vis The Rutherford Institute,

  “The fact is that the government, like a highwayman, says to a man: Your money, or your life. And many, if not most, taxes are paid under the compulsion of that threat.”—Lysander Spooner, American abolitionist and legal theorist

  It used to be that the Constitution served as a bulwark against government abuses, excesses and wrongdoing.

  That is no longer the case.

  Having been reduced to little more than a historic document, the Constitution now provides scant protection against government abuses, misconduct and corruption.

  Not only are “we the people” painfully vulnerable to the whims of any militarized cop on the beat, but we are also sitting targets for every government huckster out to fleece the taxpayer of their hard-earned dollars.

  We get taxed on how much we earn, taxed on what we eat, taxed on what we buy, taxed on where we go, taxed on what we drive, and taxed on how much is left of our assets when we die.

  Because the government’s voracious appetite for money, power and control has grown out of control, its agents have devised other means of funding its excesses and adding to its largesse through taxes disguised as fines, taxes disguised as fees, and taxes disguised as tolls, tickets and penalties.

  The government’s schemes to swindle, cheat, scam, and generally defraud Americans have run the gamut from wasteful pork barrel legislation, cronyism and graft to asset forfeiture schemes, the modern-day equivalent of highway robbery, astronomical health care “reform,” and costly stimulus packages.

  Now the government and its corporate partners in crime have come up with a new scheme to not only scam taxpayers out of what’s left of their paychecks but also make us foot the bill, and it’s coming at us in the form of a war on cash.

  What is this war on cash?

  It’s a concerted campaign to do away with large bills such as $20s, $50s, $100s and shift consumers towards a digital mode of commerce that can easily be monitored, tracked, tabulated, mined for data, hacked, hijacked and confiscated when convenient.

  Much like the war on drugs and the war on terror, this so-called “war on cash” is being sold to the public as a means of fighting terrorists, drug dealers and tax evaders. Just the mere possession of cash is enough to implicate you in suspicious activity and have you investigated. In other words, cash has become another way for the government to profile Americans and render them criminals.

  The rationale is that cash is the currency for illegal transactions given that it’s harder to track, can be used to pay illegal immigrants, and denies the government its share of the “take,” so doing away with paper money will help law enforcement fight crime and help the government realize more revenue.

  Despite what we know about the government and its history of corruption, bumbling, fumbling and data breaches, not to mention how easily technology can be used against us, the campaign to do away with cash is really not a hard sell.

  It’s not a hard sell, that is, if you know the right buttons to push, and the government has become a grand master in the art of getting the citizenry to do exactly what it wants. And if you belong to the growing class of Americans—46% of consumers, approximately 114 million adults and rising—who use your cell phone to pay bills, purchase goods, and transfer funds, then the government is just preaching to the choir when it comes to persuading you of the convenience of digital cash.

  In much the same way that Americans have opted into government surveillance through the convenience of GPS devices and cell phones, digital cash—the means of paying with one’s debit card, credit card or cell phone—is becoming the de facto commerce of the American police state.

  It’s not just cash that is going digital, either.

  A growing number of states—including Delaware and California—are looking to adopt digital driver’s licenses that would reside on your mobile phone. These licenses would include all of the information contained on your printed license, along with a few “extras” such as real-time data downloaded directly from your state's Department of Motor Vehicles.

  Of course, reading between the lines, having a digital driver’s license will open you up to much the same jeopardy as digital cash: it will make it possible for the government to better track your movements, monitor your activities and communications and ultimately shut you down.

  So what’s the deal here?

  First, it’s hard to imagine how a cashless world navigated by way of a digital wallet doesn’t signal the beginning of the end for what little privacy we have left and leave us vulnerable to the likes of government thieves and data hackers.

   

  Second, digital wallets will make it that much easier for government agents to take advantage of civil asset forfeiture schemes. ERAD (Electronic Recovery and Access to Data) devices supplied by the Department of Homeland Security allow police to not only determine the balance of any magnetic-stripe card (i.e., debit, credit and gift cards) but also freeze and seize any funds on pre-paid money cards.

   

  Third, the war on cash is about giving the government the ultimate control of the economy and complete access to the citizenry’s pocketbook.

   

  Fourth, every technological convenience that has made our lives easier has also become our Achilles’ heel, opening us up to greater vulnerabilities from hackers and government agents alike. Digital cash will be no different. In recent years, the U.S. government and a host of financial institutions, retailers and entertainment giants have been repeatedly hacked. And these are the people in charge of protecting our sensitive information?

   

  Fifth, if there’s one entity that will not stop using cash for its own nefarious purposes, it’s the U.S. government. Who could forget the $12 billion in shrink-wrapped $100 bills that the U.S. flew to Iraq only to claim it had no record of what happened to the money.

   

  Sixth, this drive to do away with cash is part of a larger global trend driven by international financial institutions and the United Nations that is transforming nations of all sizes, from the smallest nation to the biggest, most advanced economies.

   

  Finally, short of returning to a pre-technological, Luddite age, there’s really no way to pull this horse back now that it’s left the gate.

  To our detriment, we really have little control over who accesses our private information, how it is stored, or how it is used. Whether we ever had much control remains up for debate. However, in terms of our bargaining power over digital privacy rights, we have been reduced to a pitiful, unenviable position in which we can only hope and trust that those in power will treat our information with respect.

  America’s founders, however, did not believe in trusting government officials or giving them too much power. In fact, they believed those entrusted with power will eventually pervert it into tyranny. As Thomas Jefferson observed, “Let no more be heard of confidence in man, but bind him down from mischief by the chains of the Constitution.”

  Unfortunately, that Constitution has since been shredded.

  Our republic has been transformed into an oligarchy.

  We have come full circle, back to a pre-revolutionary era of taxation without any real representation.

  We the people, once free citizens of a free nation, are now at the mercy of cutthroats and villains masquerading as government agents and elected officials. We continue to be robbed at gunpoint, treated like cattle, tracked incessantly and forced to serve and obey. We continue to be branded rebels and traitors and enemy combatants, shot without hesitation for daring to resist an official order or challenge injustice, and duped into believing all this was done for our “good.”

  In the end, as I make clear in my book Battlefield America: The War on the American People, we are no better than when we first started out more than 200 years ago as indentured slaves to a government elite intent on using us for their own profit and gain.

  

  

• Trump Campaign's Response To Hillary's Collapse (& DNC Leaks)

  ‘Less’ is definitely ‘more’ right now…

   

  

  Source: Townhall.com

  It’s working… 

  

  

  

• "I Protected Hillary Clinton In The Secret Service – Here's Why Her 'Fainting' Video Really Scares Me"

  Submitted by Gary Byrne via Independent Journal Review

  

   

  I protected First Lady Hillary Clinton, President Bill Clinton, and their family while I served in the Secret Service Uniform Division as an officer from 1991-2003.

  By now, you have most likely seen the startling video of Hillary Clinton ‘fainting.’ Through the lens of my 29-year-career in The Service, I can see what a naked-eyed media pundit cannot: There is something seriously wrong with Mrs. Clinton.

  Pneumonia or overheating are highly suspect excuses and I’ll explain why.

  My analysis is not partisan. I cared for and protected the Clintons for many years. It was my duty to guard Mrs. Clinton in the Secret Service and I was so close to the First Family that the Supreme Court subpoenaed me to testify on the details of Bill Clinton’s late-term scandals.

  These are the facts.

  Watch Clinton’s Secret Service’s detail in the video. Their behavior is extremely professional and very telling. Each agent is to be commended.

  At the beginning of the video, Hillary is with a protective detail of Secret Service agents, as well as two female staffers. One staffer stands very close at her back and another is shoulder-to-shoulder and arm-in-arm with Mrs. Clinton to give her balance and prop her up.

  

   

  Mrs. Clinton leans against a “ballard,” the metal columns we use to stop incoming 5-ton vehicles, and “bicycle racks” (our nickname for the portable metal fences) to restrict pedestrian access to an area.

  As the van pulls up, she has a rigid wavering posture. She awkwardly leans on the ballard and stares straight ahead with her neck craned and extended up as her body is supported at the side and rear by her staffers.

  One agent gets the door, but no one moves to enter. The Secret Service doesn’t like to wait—standing still in the eyes of the Service is waiting for an attack to happen. But the staffer can’t move Mrs. Clinton. Anything that holds up a motorcade is extremely dangerous and anything that ties up a Secret Service agent’s hands from drawing their pistol or intervening a threat is a hazard.

  The female agent at the front of the van is scanning. She sees Mrs. Clinton odd behavior as well. The female agent begins backing up to the entrance of the van to shield both sight and anyone approaching—as is procedure. She keys her mic signaling that the van is about to move. The agent is to be commended for maintaining her blank expression.

  

   

  The agent who opened the door moves to take the place of the staffer and take Mrs. Clinton’s arm, but as they switch control, she nearly falls completely. The bald agent, who I believe is the shift leader, knows what is going on with Mrs. Clinton and – this oddity is very telling – crosses between her and her exit (the van door).

  

   

  As Mrs. Clinton jerks back and forth and her legs fold, the bald agent takes her right arm. The staffer also tries to also grab underneath Mrs. Clinton’s armpits to lift Mrs. Clinton.

  Close examination of Mrs. Clinton’s legs reveal her feet and legs have extended and are not holding her weight at all. The toes of her right foot drag and skid on the pavement.

  * * *

  Continued reading at the Independent Journal Review

  

  

• This Is How Much It 'Costs' To Get An Ambassadorship: Guccifer 2.0 Leaks DNC 'Pay-To-Play' Donor List

  After addressing a cybersecuirty conference in London, notorious hacker 'Guccifer' shared over 500Mb of documents detailing 100,000 DNC donors contact info and donations. A large number of the largest donors received senior diplomatic or political positions following thge donations, ranging from UK Ambassador to Assistant Attorney General. The DNC released a statement pre-emptively claiming that this was the work of Russia (and reigniting Trump's links to Putin).

  Probably just coincidence…

  

  Source: Magafeed.com

  The dcoments contained detailed lists of 100,000 alledged donors, addresses, and phone numbers, and well as amounts donated…

  

  

  Source: imgur

  Here is the first cut of the alleged major donors on the leaked documents and the positions they received (via Magafeed.com)

  • #1 Matthew Berzun … Ambassador to UK
  • #2 Julius Genachowski … Former chairman to FCC
  • #3 Frank Sanchez…. Under secretary of commerce
  • #8 Kirk Wagner… Ambassador to Singapore
  • #9 Alan Solomont … Ambassador to Spain
  • #11 John Roos… Ambassador to Japan
  • #12 Nicole Avant… Ambassador to Bahamas
  • #13 Eileen Chamberlain Donahoe … Ambassador to the UN
  • #16 Steve Westly – CFO of California
  • #17 Don Beyer – Ambassador to Switzerland
  • #21 Don Gips – Ambassador to South Africa
  • #22 Howard Gutman – Ambassador to Belgium
  • #24 Cynthia Stroum – Ambassador to Luxembourg
  • #27 Mark Gilbert – Ambassador to New Zealand
  • #31 Norm Eisen – Ambassador to Czech Republic
  • #37 Bruce Oreck – Ambassador to Finland
  • #43 Tony West – deputy Attorney General
  • #45 Bill Kennard – Ambassador to EU

   

  The DNC responded to the latest hack claim Tuesday through its Interim Chair Donna Brazile, who stated that the “DNC is the victim of a crime,” which she blamed on “Russian state-sponsored agents,” while also cautioning that the hacked documents were still being authenticated by the DNC legal team, as “it is common for Russian hackers to forge documents.” DNC pre-emptively published a statement in an attempt to change the narrative…

  The DNC is bracing itself for the release of more documents pic.twitter.com/y1uVz8jUW9

  — WikiLeaks (@wikileaks) September 13, 2016

    Once again blaming Russia   (and Trump)… As RT reports, it's not the first time that the name of Vladimir Putin has been brought up in the US presidential campaign, but this time the US president used this “argument” while openly campaigning for Clinton against Trump. The situation has become “really ludicrous and it borders on the ridiculous,” believes Gregory R. Copley, editor of Defense & Foreign Affairs.

  “In my 50 odd years covering the US government, I have never seen this level of partisanship within the administration where a sitting president actually regards the opposition party as the enemy of the state,” Copley told RT.

   

  The analyst said that the democrats are “blaming the messenger to revert the attention from the message.”

   

  “The message which Donald Trump delivered on RT was unambiguous in his campaign. Just like the fact that WikiLeaks revelation of the hacked emails was very explicit in showing up what the Democratic party itself was doing,” Copley added.

   

  The US establishment is “sacrificing key bilateral relationships in order to win [a] domestic election,” believes Copley. He added that neither Obama nor Clinton are interested in unifying the country, but they are rather “interested in winning and engaging in what modern democracy seems to have become – the tyranny of the marginal majority over the marginal minority.”

   

  “When you think about the number of times that the Clinton campaign has brought up President Putin and the alleged Russian hacking of Hillary Clinton’s service, it makes you wonder just how desperate they are,” Copley noted. “President Obama has lost literally all prestige in an international community…with the loss of prestige he has become desperate.”

  Some of the alleged major donors (via Magafeed.com)

  Richard M. Lobo

  

  It appears Richard M. Lobo’s wife, Caren Lobo, donated $716,000 to DNC. Obama then nominated Richard Lobo for Director of the International Broadcasting Bureau.

  From BBG.gov:

  Richard Lobo was nominated by President Obama to be Director of the International Broadcasting Bureau in February, 2010, and was confirmed to the post by the Senate in September of that year.

  You can find Caren Lobo’s donation in this photo.

  

   

  Pamela Hamamoto

  

  Pamela Hamamoto paid DNC $605,000 then became the Permanent Representative of the United States of America to the United Nations and Other International Organizations in Geneva.

  More on Pamela Hamamoto

  Jane Hartley

  

  Jane Hartley paid DNC $605,000 and then was nominated by Obama to serve concurrently as the U.S. Ambassador to the French Republic and the Principality of Monaco.

  More on Jane Hartley

  Crystal Nix-Hines

  

  Crystal Nix-Hines paid DNC $600,000 and then was nominated by President Obama to the position of United States Permanent Representative to the United Nations Educational, Scientific and Cultural Organization with the rank of Ambassador.

  More on Crystal Nix-Hines

  Bruce J. Oreck

  

  Bruce J. Oreck donated $1,136,613 to the DNC and served as US ambassador to Finland 2009 to 2015.

  More on Bruce Oreck

  Robert A. Mandell

  

  Robert A. Mandell donated $1,121,250 to the DNC then President Obama named Mandell the Ambassador to Luxembourg in June 2011.

  More on Robert Mandell

  You can find Robert Mandell’s donation in this photo (as Bob Mandell).

  Julius Genachowski

  

  Julius Genachowski donated $3,494,919 toDNC and served as Chairman of the FCC from 2009 to 2013.

  More on Julius Genachowski

  You can find Robert Mandell’s donation in this photo.

  

   

  Karol Mason

  

  Karol Mason donated $856,000 to the DNC and Obama appoints her as Assistant Attorney General, Office of Justice Programs.

  *  *  *

  It's probably nothing…

  

  

• The US Military Has "Never Been Fatter"

  The men and women serving in the U.S. military are getting fatter at an alarming rate.  Could this trend be a simple reflection of the fact that pilots sitting in a command center far away from the battlefield flying drones in today’s modern military just don’t require the same level of physical fitness?  Or, perhaps our military leaders, like our college professors, have shied away from committing “micro-aggressions” against our soft-skinned millennial soldiers by asking them to do things like exercise.

  While it may not be exactly clear why it’s happening, according to data published by the Military Times, the fact is that America’s military is packing on the pounds.

  

   

  

   

  As the Military Times points out, compared to the U.S. civilian population, the rate of overweight troops is far smaller.  While that may be true, there’s a reason we don’t ensure our national security to overweight, pampered, unemployed millennials living at home with mom…they probably wouldn’t be very good at it.  But just to confirm the stats, the map below from The State of Obesity, highlights that over 30% of the civilian population in many states is technically obese.

  

   

  As Army Command Sgt. Maj. John Troxell points out, while rising obesity rates in the U.S. military don’t yet raise a “readiness concern” the “obesity trends are troubling.”

  “If I have to climb up to the top of a mountain in Nuristan, in Afghanistan, and if I have someone who is classified as clinically obese, they are potentially going to be a liability for me on that patrol,” said Army Command Sgt. Maj. John Troxell, the military’s top noncommissioned officer and the senior enlisted adviser to Joint Chiefs Chairman Gen. Joseph Dunford.

   

  Troxell said today’s force is combat ready, but he believes the obesity trends are troubling, and demand careful consideration from senior leaders. “I don’t think it’s a clear readiness concern right now.  But I think it’s something that needs our attention. And we really have to look across our services at what we’re doing every morning or every day to prepare the men and women for what could be the worst day of their life,” Troxell said in a recent interview.

  As for the reasons for the growing obesity rates, the Military Times points out a number of potential contributing factors including a lack of healthy food on base and a younger generation of soldiers that grew up playing video games on the couch rather than engaging in physical activities outdoors.

  “This is about the national security of the United States,” said retired Army Lt.  Gen.  John  Bednarek, who was the highest ranking American general in Iraq in 2014. “It’s a long term trend and we cannot turn a blind eye. The bottom line is that our commanders and senior enlisted leaders have to take a look at what we are serving, whether it’s in the [dining facility] or aboard a ship in the mess. Are we providing healthy choices? Are we providing fruits and vegetable options up front? As opposed to the first thing they see in the morning is the grill with a 22-grams-of-fat sausage patty?”

   

  Troxell said that he believes the urgent demands created by combat may have led some unit-level leaders to prioritize missions over traditional physical training. “In some cases,” he added, “the first thing that gets cut is the fitness session that was on the training calendar, when actually that is probably the most important thing we do every day.”

   

  Add to that wartime eating habits. “At the dining facilities that we had in Iraq and Afghanistan, it was really four or five times a day. It was unlimited chow of all kinds that service members could indulge in. And all of the sudden it led to some overeating and pretty soon we had people whose body mass was going up to what doctors would say is clinically obese,” Troxell said.

   

  Troxell also said that some of the military’s current fitness challenges reflect the new generation of young people joining the services.

   

  “The men and women that are coming in today weren’t doing the things as they were growing up that I was doing when I was growing up, such as playing outside until dark, racing with my friends from one crack in the cement to another crack in the cement. More and more, young men and women are attracted to things that happen indoors and allow them be on a couch, like playing video games,” Troxell said. “Men and women are growing up differently. There is less physical activities and more mental activities.”

  But, like with the Reuters presidential poll, the easiest way to fix an undesirable result is simply to “tweak” the way the data is collected, measured and analyzed, which the U.S. military intends to do promptly.

  Top military health plan to publish a new policy later this year that could have a sweeping effect on how the military defines and measures health and fitness.

  

  

• Archie Bunker Still Lives Within Some, Many, Or Most Of Us

  Authored by Ben Tanosborn,

  Politicians are human and occasionally they cannot contain themselves, allowing their true sentiments to come out; sometimes in droplets hardly noticed, but sometimes in damaging blurbs.  We, certainly the media, usually point to these blurbs as gaffes.  But in reality they simply represent what these politicians think but are not supposed to acknowledge in a world where we must try, at times force ourselves, to be painfully politically correct in order to achieve some modicum of conviviality.

  Hillary Clinton had her sentiments blurb out, as carefully hidden as they always seem to be, and gave us another slip of the tongue; her very untimely depiction of “Trump’s deplorables,” similar in nature, and of equal magnitude, to Mitt Romney’s “47 percent” gaffe of four years before; September gaffes both, as if precursors to some mythical October surprise.  And, needless-to-say, both were made before their respective elite party audiences and, expectedly, during fundraisers.

  Clinton, a consummate politician, didn’t take long to express her “regret.”

  Since Trump’s entire campaign is a serial-gaffe without apparent consequences, this non-Republican Republican candidate is not expected to regret a single thing he has ever said or might say in the future.  He has been granted a press bull, to say whatever comes to his mind… and remain “bull-holder” immune.

  So Clinton, in the open camaraderie of a fundraiser, came out of her political shell and tainted half of Trump’s followers as bigopats (bigoted patriots)… which she referred to as “deplorables.”  Although quantification, even when generalized, is not recommended in politics, the truth of the matter is that the bright gal from Wellesley College was not only on target but might have been appraisal-short.  [RE: my June 16, 2016 article, “Bigopats: Undocumented Largest Group in American Politics.”]

  However, although Americans readily will admit that the nation is fragmentally divided economically, socially and politically… most prefer to keep this humpty-dumpty (post-fall) status on the QT.  And a quarter of the electorate (24-28 percent by my account in the referred article), although confirmed by voice and action as bigopats, prefer to be tagged as patriots… divested of any intolerance or prejudice that circumvent their lives.  But voicing this out loud, no matter how true, is frowned upon as divisive for us, the citizenry, and truly anathema for American career politicians.

  We, in these United States of America, may feel that “we’ve come a long way, baby,” as the 1968 marketing of Virginia Slims cigarettes proclaimed, but in matters of bigotry the TV character of the 1970’s, Archie Bunker, is alive and well after the past four decades; its soul living in some, many or most of us… white folks.  To QT it or deny it does not and will not serve us well.  Americans are no better or worse than any other people on this planet when it comes to intolerance and prejudice.  But our challenge has been always greater than that of most other nations because of our diversity, erroneously self-depicted as a melting pot… something which had really only applied to Euro-Americans of the 19^th and 20^th centuries.

  Archie Bunker’s depiction as the archetype of the bigopat had a positive impact in many of us… sort of an American mild version of Mao Zedong’s Cultural Revolution a decade earlier in China, without extreme shocking societal changes; yet, sufficiently strong to shame us to change.  But change comes very slowly as resistance to change endures, particularly when such change implies giving up privilege and power, which in an unjust society must take place.

  So, Hillary Clinton was probably right on the mark in her quantitative assessment of her nicknamed “deplorables,” but way off the mark in expressing such unwelcome truth.

  Only prophets, philosophers and martyrs can express the unadulterated truth; but that is not the case with politicians who always do it at their peril… and expressing regret often proves not to be enough.

  

  

• Doctor Explains Why Hillary's 9/11 "Medical Episode" Is More Consistent With Parkinson's Than Pneumonia

  A few weeks back, Dr. Ted Noel, an anesthesiologist with 36 years of experience, gained notoriety by sharing his opinion on his website, Vidzette, that Hillary likely had Parkinson’s disease.

  Now, Dr. Noel has posted a new video in which he explains how Hillary’s behavior on 9/11 and the subsequent decisions made by her campaign staff and secret service detail are more consistent with Parkinson’s disease than pneumonia.

  Among other things, Noel points out that if Hillary actually was suffering from such a severe case of pneumonia that it forced her to literally collapse on a sidewalk, it’s extremely unlikely that she could make a seemingly full recovery after only 90 minutes at Chelsea’s apartment and feel well enough to great onlookers and snap a selfie with a child.  Per Noel, Hillary’s recovery timing is more consistent with how long it would take her to ingest a dosage of Levodopa and wait for her Parkinson’s symptoms to subside.  Noel also points out that sunglasses with dark blue lenses, like the ones Hillary wore this weekend despite the cloud cover, have been noted by doctors to help treat patients with major motion disorders such as Parkinson’s disease.

  With that preview, here is the full analysis:

   

  And here is Noel’s original video from August 29th:

  

  

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• Bob Farrell's (Illustrated) 10-Investment Rules

  Submitted by Lance Roberts via RealInvestmentAdvice.com,

  Over the weekend, it was interesting to see the number of advisors/analysts quickly rushing to defend their “buy and hold” investing philosophies following the sharp decline on Friday. As I wrote this past weekend:

  “The downfall of all investors is ultimately ‘greed’ and ‘fear.’

   

  They don’t sell when markets are near peaks, nor do they buy market bottoms. However, this does not just apply to individuals but many advisors as well.

   

  When I read articles from advisors/managers promoting ‘buy and forget’ strategies it is for one of three reasons. They either can’t, don’t want to, or don’t know how to manage portfolio risk. Therefore, the easy message is simply:

   

  ‘You just have to ride the market out. Long-term it will go up. But hey, let me charge you a fee for holding your stuff in an account.’

   

  The reality is that markets do not return 6%, 8% or 10% annually, and spending years making up previous losses is not a way to successfully obtain retirement goals. (Read this)

   

  It is also worth pointing out that those promoting these ‘couch potato’ methodologies are generally out in full force near peaks of bull market cycles, and are rarely heard of near bear market bottoms. This is why, as I discussed in ‘Why You Still Suck At Investing,’ investors consistently underperform over long periods of time.” 

  

  When markets are at, or near, “record levels” those levels are records for a reason. Throughout history awe-inspiring bull markets have been followed by devastating bear markets. Like “yen and yang,” a bull cannot exist without its forever intertwined counterpart.

  Despite the media, advisor and analysts rhetoric to the contrary, investors DO have the ability to manage the inherent risk in their portfolios.

  Investors can capture returns and grow their “savings” versus just blindly hoping that history will not once again repeat itself. While I can’t tell you exactly when the second half of the full-market cycle will manifest itself, I can assure you it will and the negative impact to retirement goals, and the time lost, will be just as damaging.

  One other question to ponder. While Wall Street tells you to “just hold on and ride the market out,” why are they managing risk, spending billions on trading platforms and algorithms, and in many instances betting against you? 

  With this in mind, I present Bob Farrell’s 10-Investment Rules. While these rules should be a staple for any investor who has put their hard earned “savings” at risk in the market, they are rarely heeded in the heat of bull market. Just as they are being ignored now.

   

  Who is Bob Farrell?

  Bob is a Wall Street veteran with over 50 years of experience in crafting his investing rules. Farrell obtained his master’s degree from Columbia Business School and started as a technical analyst at Merrill Lynch in 1957. Even though Farrell studied fundamental analysis under Gramm and Dodd, he turned to technical analysis after realizing there was more to stock prices than balance sheets and income statements. Farrell became a pioneer in sentiment studies and market psychology. His 10 rules on investing stem from personal experience with dull markets, bull markets, bear markets, crashes, and bubbles. In short, Farrell has seen it all and lived to tell about it.

   

  The Illustrated 10-Rules Of Investing

  1. Markets tend to return to the mean (average price) over time.

  Like a rubber band that has been stretched too far – it must be relaxed in order to be stretched again. This is exactly the same for stock prices which are anchored to their moving averages.  Trends that get overextended in one direction, or another, always return to their long-term average. Even during a strong uptrend or strong downtrend, prices often move back (revert) to a long-term moving average. The chart below shows the S&P 500 with a 52-week simple moving average.

  

  The bottom chart shows the percentage deviation of the current price of the market from the 52-week moving average. During bullish trending markets, there are regular reversions to the mean which create buying opportunities. However, what is often not stated is that in order to take advantage of such buying opportunities profits should have been taken out of portfolios as deviations from the mean reached historical extremes. Conversely, in bearish trending markets, such reversions from extreme deviations should be used to sell stocks, raise cash and reduce portfolio risk rather than “panic sell” at market bottoms.

  The dashed RED lines denote when the markets changed trends from positive to negative. This is the very essence of portfolio “risk” management.

   

  2. Excesses in one direction will lead to an opposite excess in the other direction.

  Markets that overshoot on the upside will also overshoot on the downside, kind of like a pendulum. The further it swings to one side, the further it rebounds to the other side. This is the extension of Rule #1 as it applies to longer term market cycles (cyclical markets).

  While the chart above showed prices behave on a short term basis – on a longer term basis markets also respond to Newton’s 3rd law of motion: “For every action, there is an equal and opposite reaction.” The first chart shows that cyclical markets reach extremes when they are more than 2-standard deviations above or below the 50-week moving average. Notice that these excesses ARE NEVER worked off by just going sideways.

  

  The second chart shows the price reversions of the S&P 500 on a long term basis and adjusted for inflation. Notice that when prices have historically reached extremes – the reversion in price is just as extreme. It is clear that the current reversion in the stock market is still underway from the 2000 peak.

  

   

  3. There are no new eras – excesses are never permanent.

  There will always be some “new thing” that elicits speculative interest.  These “new things” throughout history, like the “Siren’s Song,” has led many investors to their demise. In fact, over the last 500 years, we have seen speculative bubbles involving everything from Tulip Bulbs to Railways, Real Estate to Technology, Emerging Markets (5 times) to Automobiles and Commodities. It always starts the same and ends with the utterings of “This time it is different”

  [The chart below is from my March 2008 seminar discussing that the next recessionary bear market was about to occur.]

  

  As legendary investor Jesse Livermore once stated:

  “A lesson I learned early is that there is nothing new on Wall Street. There can’t be because speculation is as old as the hills. Whatever happens in the stock market today has happened before and will happen again.”

   

  4. Exponential rapidly rising or falling markets usually go further than you think, but they do not correct by going sideways

  The reality is that excesses, such as we are seeing in the market now, can indeed go much further than logic would dictate. However, these excesses, as stated above, are never worked off simply by trading sideways. Corrections are always just as brutal as the advances were exhilarating. As the chart below shows when the markets broke out of their directional trends – the corrections came soon thereafter.

  

   

  5. The public buys the most at the top and the least at the bottom.

  The average individual investor is most bullish at market tops and most bearish at market bottoms. This is due to investor’s emotional biases of “greed” when markets are rising and “fear” when markets are falling. Logic would dictate that the best time to invest is after a massive sell-off; unfortunately, this is exactly the opposite of what investors do.

  

  

   

  6. Fear and greed are stronger than long-term resolve.

  As stated in Rule $5 it is emotions that cloud your decisions and affect your long-term plan.

  “Gains make us exuberant; they enhance well-being and promote optimism,” says Santa Clara University finance professor Meir Statman.  His studies of investor behavior show that “Losses bring sadness, disgust, fear, regret. Fear increases the sense of risk and some react by shunning stocks.”

  The index of bullish sentiment shows that “greed” is once again beginning to reach levels where markets have generally reached intermediate-term peaks.

  

  In the words of Warren Buffett:

  “Buy when people are fearful and sell when they are greedy.”

  Currently, those “people” are getting extremely greedy.

   

  7. Markets are strongest when they are broad and weakest when they narrow to a handful of blue-chip names.

  Breadth is important. A rally on narrow breadth indicates limited participation and the chances of failure are above average. The market cannot continue to rally with just a few large-caps (generals) leading the way. Small and mid-caps (troops) must also be on board to give the rally credibility. A rally that “lifts all boats” indicates far-reaching strength and increases the chances of further gains.

  

  The chart above shows the ARMS Index which is a volume-based indicator that determines market strength and breadth by analyzing the relationship between advancing and declining issues and their respective volume.  It is normally used as a short term trading measure of market strength. However, for longer term periods the chart shows a weekly index smoothed with a 34-week average. Spikes in the index has generally coincided with near-term market peaks.

   

  8. Bear markets have three stages – sharp down, reflexive rebound and a drawn-out fundamental downtrend

  Bear markets often start with a sharp and swift decline. After this decline, there is an oversold bounce that retraces a portion of that decline. The longer term decline then continues, at a slower and more grinding pace, as the fundamentals deteriorate. Dow Theory suggests that bear markets consist of three down legs with reflexive rebounds in between.

  

  The chart above shows the stages of the last two primary cyclical bear markets. The point to be made is there were plenty of opportunities to sell into counter-trend rallies during the decline and reduce risk exposure. Unfortunately, the media/Wall Street was telling investors to just “hold on” until hey finally sold out at the bottom.

   

  9. When all the experts and forecasts agree – something else is going to happen.

  This rule fits within Bob Farrell’s contrarian nature. As Sam Stovall, the investment strategist for Standard & Poor’s once stated:

  “If everybody’s optimistic, who is left to buy? If everybody’s pessimistic, who’s left to sell?”

  As a contrarian investor, and along with several of the points already made within Farrell’s rule set, excesses are built by everyone being on the same side of the trade. Ultimately, when the shift in sentiment occurs – the reversion is exacerbated by the stampede going in the opposite direction

  

  Being a contrarian can be quite difficult at times as bullishness abounds. However, it is also the secret to limiting losses and achieving long-term investment success. As Howard Marks once stated:

  “Resisting – and thereby achieving success as a contrarian – isn’t easy. Things combine to make it difficult; including natural herd tendencies and the pain imposed by being out of step, since momentum invariably makes pro-cyclical actions look correct for a while. (That’s why it’s essential to remember that ‘being too far ahead of your time is indistinguishable from being wrong.’)

   

  Given the uncertain nature of the future, and thus the difficulty of being confident your position is the right one – especially as price moves against you – it’s challenging to be a lonely contrarian.”

   

  10.Bull markets are more fun than bear markets

  As stated above in Rule #5 – investors are primarily driven by emotions. As the overall markets rise; up to 90% of any individual stock’s price movement is dictated by the overall direction of the market hence the saying “a rising tide lifts all boats.”

  Psychologically, as the markets rise, investors begin to believe that they are “smart” because their portfolio is going up. In reality, it is primarily more a function of “luck” rather than “intelligence” that is driving their portfolio.

  Investors behave much the same way as individuals who addicted to gambling. When they are winning they believe that their success is based on their skill. However, when they began to lose, they keep gambling thinking the next “hand” will be the one that gets them back on track. Eventually – they leave the table broke.

  

  It is true that bull markets are more fun than bear markets. Bull markets elicit euphoria and feelings of psychological superiority. Bear markets bring fear, panic, and depression.

  What is interesting is that no matter how many times we continually repeat these “cycles” – as emotional human beings we always “hope” that somehow this “time will be different.” Unfortunately, it never is and this time won’t be either. The only questions are: when will the next bear market begin and will you be prepared for it?

   

  Conclusions

  Like all rules on Wall Street, Bob Farrell’s rules are not meant has hard and fast rules. There are always exceptions to every rule and while history never repeats exactly it does often “rhyme” very closely.

  Nevertheless, these rules will benefit investors by helping them to look beyond the emotions and the headlines. Being aware of sentiment can prevent selling near the bottom and buying near the top, which often goes against our instincts.

  Regardless of how many times I discuss these issues, quote successful investors, or warn of the dangers – the response from both individuals and investment professionals is always the same.

   “I am a long term, fundamental value, investor.  So these rules don’t really apply to me.”

  No, you’re not. Yes, they do.

  Individuals are long term investors only as long as the markets are rising. Despite endless warnings, repeated suggestions and outright recommendations; getting investors to sell, take profits and manage your portfolio risks is nearly a lost cause as long as the markets are rising. Unfortunately, by the time the fear, desperation or panic stages are reached it is far too late to act and I will only be able to say that I warned you.

  

  

• Hillary Breaks Silence; Says Whole Pneumonia, 'Stumble' Thing "Wasn't That Big A Deal", Admits Happened Before

  Hillary Clinton broke her post-9/11 silence tonight with an interview with CNN’s Anderson Cooper. Claiming that she felt dizzy but did not lose consciousness (all video evidence aside), the presidential candidate proclaimed that she didn’t think the pneumonia was “going to be that big a deal,” and is now “feeling so much better.” Cooper did press Clinton on the number of times this has happened – more than once – but Clinton took the opportunity to ironically call out her opponent for his lack of transparency.

  So judge for yourself. This is what happened…

   

  And this is what she told Anderson Cooper…

  As CNN reports, Hillary Clinton said Monday night she’s “met a high standard of transparency” about her health and didn’t think the pneumonia was “going to be that big a deal.”

  Clinton said she felt dizzy and lost her balance Sunday, but did not lose consciousness, and is now “feeling so much better.”

   

  “I was supposed to rest five days — that’s what they told me on Friday — and I didn’t follow that very wise advice,” Clinton told CNN’s Anderson Cooper in a phone interview.

   

  “So I just want to get this over and done with and get back on the trail as soon as possible,” she said.

  But during her interview Monday, Clinton sought to turn criticism of her secrecy over her illness into an attack on Republican rival Donald Trump.

  “Compare everything you know about me with my opponent. I think it’s time he met the same level of disclosure that I have for years,” Clinton told Cooper.

  She said her campaign didn’t publicly reveal her diagnosis because “I just didn’t think it was going to be that big of deal.”

  Finally,  Cooper asked about Bill Clinton’s remark in an interview with Charlie Rose that she has occasionally become dehydrated and gone through episodes like Sunday’s, and how many times that has happened before…

  “I think really only twice that I can recall,” Clinton said.

   

  “You know, it is something that has occurred a few times over the course of my life, and I’m aware of it, and usually can avoid it,” she said.

  So a ‘stumble’ that appeared more like a full drag, leaving a shoe behind… has happened before… but “wasn’t a big deal.” Ok.

  

  

  

• US Think Tank Warns That Australia Is About 6 Weeks Away From Housing Collapse

  Over the past couple of months, we have written frequently about the impact of Chinese money laundering operations on home prices in a couple of large cities around the globe.  So far, the Vancouver market has seemingly been the hardest hit with homes prices collapsing over 20% in one month after the city passed a 15% property tax on foreign buyers on July 25, 2016 (see "As The Vancouver Housing Market Implodes, The "Smart Money" Is Rushing To Get Out Now"). 

  Now, a U.S. based think tank, International Strategic Studies Association (ISSA), is warning that similar efforts to restrict Chinese investment in Australian real estate could send prices tumbling there as well.  In speaking with news.com.au, Greg Copley, President of ISSA, predicted that Australia has about 6 weeks before real estate prices start to collapse.

  "We estimate that Australia has about six weeks or so to turn this situation around, otherwise there would be a massive hit on property valuations and the building trades."

   

  "The urgency is, I believe, based on the fact that this is about how long it will take for the banks' policies to start switching off a lot of existing and planned contracts for Australian properties."

   

  "The banks clearly believe Australian real estate values will decline, so they are attempting to avoid that risk. They’ve learned from the US collapse that seizing real estate collateral is a no-win scenario when the volume is great and the market slow."

   

  “In so doing, they precipitate the market collapse but are less exposed to it.”

  Real estate prices in Australia's largest housing markets have soared over the past couple of years fueled, in no small part, by demand from Chinese buyers looking for offshore locations to park cash.  The Sydney and Melbourne markets have been the largest beneficiaries of foreign capital with real estate prices up 53% and 51%, respectively, since 2012.  That said, based on data from the Australian Bureau of Statistics it looks like home prices in Australia have already started their descent.

  

   

  Back in the spring, Australian banks began cracking down on foreign purchasers of residential properties due to concerns of increasing fraud and money laundering activites.  New rules enacted required borrowers to be Australian citizens and/or legal residents with a valid visa.  Per ISSA, these new restrictions on lending will likely result in many foreign buyers being forced to default on new residential properties.  He argues that many foreign buyers placed down payments on properties under the old banking regulations but now won't be able to secure financing to close once the properties are actually completed.

  Efforts to restrict lending, came in addition to taxes imposed by many Australian cities after foreign demand was found to be pricing local buyers out of many residential markets and killing the “Great Australian Dream” of owning property.  In fact, Sydney prices have risen to record levels and currently rank second only to Hong Kong in terms of major cities with the world’s least-affordable housing. 

  With Vancouver and Australia now cracking down on Chinese money laundering operations the only question that remains is where the next bubble will spring up to take it's place?

  

  

• Supervisor Of "Massive Fraud" At Wells Fargo Leaves Bank With $125 Million Bonus

  There was a burst of righteous populist anger anger last week, when it emerged that Wells Fargo had engaged in pervasive, “massive” fraud since at least 2011, including opening credit cards secretly without a customer’s consent, creating fake email accounts to sign up customers for online banking services, and forcing customers to accumulate late fees on accounts they never even knew they had. For this criminal conduct, Wells was fined $185 million (including a $100 million penalty from the CFPB, the largest penalty the agency has ever issued). In all, Wells opened 1.5 million bank accounts and “applied” for 565,000 credit cards that were not authorized by their customers.

  As “punishment” Wells Fargo told CNN that it had fired 5,300 employees related to the shady behavior over the last few years. The firings represent about 1% of its workforce and took place over several years.  The fired workers went to far as to create phony PIN numbers and fake email addresses to enroll customers in online banking services, the CFPB said. What was hushed away is that not a single employee will go to prison, and that ultimately it will be Wells Fargo’s shareholders – such as Warren Buffett – who will end up footing the bill.

  What Wells did not disclose publicly to anyone is that the head of the group responsible for Wells’ biggest consumer fraud scandal in years, is quietly leaving the bank with a $125 million bonus, a bonus which as Fortune’s Stephen Gandel writes today will not see even one cent clawed back as part of the dramatic revelations.

  According to Gandel, Carrie Tolstedt, the Wells Fargo executive who was in charge of the unit where employees opened more than 2 million largely unauthorized customer accounts—a seemingly routine practice that employees internally referred to as “sandbagging”— is leaving the giant bank with an enormous pay day, some $124.6 million.

  
  Carrie Tolstedt

  Tolstedt is walking away from Wells Fargo with a very full bank account, and praise: in the July announcement of her exit, which made no mention of the soon-to-be-settled case, Wells Fargo’s CEO John Stumpf said Tolstedt had been one of the bank’s most important leaders and “a standard-bearer of our culture” and “a champion for our customers.” In light of the record fine levied by the CFPB for the unit which Tolstedt headed, we wonder if Stumpf would like to retract his statement.

  What is just as troubling is that despite beefed-up “clawback” provisions instituted by the bank shortly after the financial crisis, “it does not appear that Wells Fargo is requiring Tolstedt, the Wells Fargo executive who was in charge of the unit where employees opened more than 2 million largely unauthorized customer accounts—a seemingly routine practice that employees internally referred to as “sandbagging”—to give back any of her nine-figure pay.”

  As a reminder, on Thursday, Richard Cordray, the head of the CFPB, said, “It is quite clear that [the actions of Tolstedt’s unit] are unfair and abusive practices under federal law. They are a violation of trust and an abuse of trust.”

  However, cited by Gandel, a spokesperson for Wells Fargo said that the timing of Tolstedt’s exit was the result of a “personal decision to retire after 27 years” with the bank. The spokesperson declined to comment on whether the bank was considering clawing back Tolstedt’s back pay.

  In a statement following the settlement, Wells Fargo said, “Wells Fargo reached these agreements consistent with our commitment to customers and in the interest of putting this matter behind us. Wells Fargo is committed to putting our customers’ interests first 100% of the time, and we regret and take responsibility for any instances where customers may have received a product that they did not request.”

  In other words, this has become yet another instance where bank subordinates were engaged in activity that seemingly none of their supervisors was – mysteriously – aware of, a pattern observed in virtually every major crackdown against a prominent sellside bank, from Goldman’s Fab Tourre to the Libor conspiracy. While Fortune writes that it is not clear how closely Tolstedt was responsible for or even aware of the widespread abusive tactics at the bank, it is a fact that Tolstedt ran the community banking division of the bank, which included its retail banking and credit card divisions, during the entire period in which the customer abuse was alleged, which goes back to 2011. The CFPB said about three quarters of the unauthorized accounts opened by employees of Wells Fargo were bank deposit accounts. Another 565,000 were unauthorized credit card applications. Tolstedt took over the division in 2008, after Wells Fargo merged with Wachovia during the financial crisis.

  Ironically, Tolstedt was a regular on Fortune‘s Most Powerful Women list. She was replaced on this year’s list by Mary Mack, who is taking over her job at the bank.

  Tolstedt was regularly praised for her unit’s ability to get customers to open numerous accounts. For a number of years, Wells Fargo’s proxy statement, which details executive pay, cited high “cross-selling ratios” as a reason that Tolstedt had earned her roughly $9 million in annual pay. For instance, in Wells Fargo’s 2015 proxy statement, the company said that its compensation committee had authorized Tolstedt’s $7.3 million stock and cash bonus that year, because “under her leadership, Community Banking achieved a number of strategic objectives, including continued strong cross-sell ratios, record deposit levels, and continued success of mobile banking initiatives.”

  However later in 2015, the L.A. City Attorney’s office sued the bank because of its sales tactics, saying that many of the abusive practices came from intense pressure on Wells Fargo’s employees to get customers to open up numerous accounts. A separate class action of former employees alleges they were fired for not meeting cross-selling goals, or going along with the aggressive sales tactics.

  Meanwhile, the awards for Toldstedt continued piling in, and earlier in 2016, when Wells Fargo released its annual proxy statement, it once again said that in order to justify her multimillion dollar bonus, Tolstedt’s division had “achieved a number of strategic objectives.” But this time, for the first time in years, cross-selling wasn’t listed as one of them.

  While one can speculate if Tolstedt decided to leave in advance of the CFPB crackdown on her division, one thing that is certain is how much money she is taking with her: according to Gendell, when Tolstedt leaves Wells Fargo later this year, on top of the $1.7 million in salary she has received over the past few years, she will be walking away with $124.6 million in stock, options, and restricted Wells Fargo shares. Some of that hasn’t vested yet. But Tolstedt gets to keep all of it because she technically retired. Had she been fired, Tolstedt would have had to forfeit at least $45 million of that exit payday, and possibly more. It is safe to assume that had she waited until after the CFPB settlement, that her parting present may have been one third smaller, and that she could have been the bank’s scapegoat, fired to placate regulators.

  Alas, now we will never know what “could”have happened, which means that the only recourse Wells and its shareholders have – if they feel like bothering – is to try to recoup some of her ill-gotten bonus. As Fortune concludes, “the bank’s proxy statement says that the bank has “strong recoupment and clawback policies,” and that the bank will revoke bonus pay if it is found that the conduct of an executive resulted in representational harm to the bank, or that the executive was not able to “identify or manage” risks in his or her division. But there is no sign that Wells Fargo is going to ask Tolstedt to return even a sliver of her stock jackpot.“

  As we pointed out last week, when we observed that yet again nobody is going to prison, Gandel’s parting assessment is similar: “on Wall Street, the carrots are still widely handed out. The sticks, however, remain out of sight.”

  This also means that the biggest crime on Wall Street remains a more prosaic one: getting caught.

  

  

• Hillary Versus Donald: War Or Peace?

  Via AntoniusAquinas.com,

  Although history does not exactly repeat itself, it does provide parallels and sometimes quite ominous ones.  Such is the case with the current U.S. Presidential election and the one which occurred one hundred years earlier.

  The dominating question which hung over the 1916 campaign was whether the country would remain neutral in regard to the horrific slaughter which was taking place on the European battlefields in probably the greatest act of mass insanity ever recorded, World War I.

  President Wilson had maintained that the U.S. would continue a policy of strict neutrality.  By all indications, the nation wanted no part of the war, with the President’s own party at his nomination delivering an emphatic “No” to any foreign intervention.

  Although Wilson maintained a neutral policy through the election and briefly afterwards, his advisors and Cabinet had been lobbying for war and continued to do so even more vehemently after the President’s re-election was secured.  Nearly all of them, including Wilson himself, had deep financial, family, and political ties to J.P. Morgan.  Wilson received considerable Morgan financial backing for his two presidential runs.

  The Morgan operatives within the Administration were pushing for war because the House of Morgan had “invested” heavily in the “Allied” cause and a defeat or a negotiated settlement with any favorable concessions to Germany would be a catastrophe for Morgan financial interests.

  Germany understood the cozy Morgan relationship with the Wilson Administration and the Allied powers as Morgan representatives, especially the sinister Colonel House, had repeatedly rebuffed peace proposals from the Central Powers.  The Allies and their opponents understood that Wilson’s re-election would mean U.S. entry into the conflict.

  Tragically, for the U.S. and for the course of war-ridden 20^th century history, Wilson capitulated and brought the U.S. into the battle despite the campaign promise of neutrality and no real German threat.  The House of Morgan’s financial bacon was saved at the cost of a devastated Western world.

  One hundred years later, the U.S. and the world stand at another critical juncture and face a similar choice: the election of a known war criminal who has not only shown no remorse for her murderous policies, but promises, if elected, to continue them; or the election of a candidate who has spoken of negotiating with America’s supposed principle enemy, a possible pull back in the nation’s unsustainable global empire, and the enactment of a legitimate use of federal authority – protection of the country’s borders.

  It is difficult to believe that Donald Trump is not sincere in seeking accommodation and friendly relations with Russia.  It would be far easier for the billionaire businessman and would most likely secure his election if he followed the bellicose policy of the Democrat and Republican Presidents of the recent past who have continued to antagonize and threaten Russia.  The most hopeful sign for peace coming from the U.S. in quite a while has been Trump’s talk of de-escalation of tensions and a pledge to place American interests first in foreign policy, instead of mouthing the global domination designs of the crazed neocons.

  Some of the things he has said about Vladimir Putin and Russia have been, to say the least, quite encouraging:

  I think I would get along with Vladimir Putin. I just think so.

   

  …

   

  It is always a great honor to be so nicely complimented by a man [Putin] so highly respected within his own country and beyond.

   

  …

   

  I have always felt that Russia and the United States should be able to work well with each other towards defeating terrorism and restoring world peace, not to mention trade and all of the other benefits derived from mutual respect.

  Although not a non-interventionist, a President Trump is unlikely to provoke Russia or China into a civilization-ending conflagration and has displayed the instincts of a true peace maker.

  There is, however, little hope for a reduction of global tensions if his sociopathic opponent becomes Commander-in-Chief.  Killary has repeatedly demonstrated that she is a willing tool of the neocons and the global financial forces that will profit mightily from continued U.S.- instigated conflicts.  If she makes it past the finish line, either legitimately or more likely through fraud, she will surely do their bidding.

  For once, politicians and pundits who routinely call every election “the most crucial of a generation” are right.  This year’s Presidential election is the most significant one since at least the fall of the Soviet Union and Eastern Bloc.  If the U.S. electorate wants to avoid the disaster not only to its own land and the world that followed in the wake of the 1916 election, there can be only one choice in November of 2016.

  

  

  

• It's Time To Bring Back Bernie

  Submitted by Charles Hugh-Smith via OfTwoMinds blog,

  This tells you everything you need to know about how Hillary will operate as President: there will be no honesty, transparency or truth, ever.

  Hillary's bid for the presidency is no longer defensible; it's time to bring back Bernie Sanders as the Democratic nominee.

  The issue isn't Hillary Clinton's health per se; what is indefensible is her response to legitimate questions of the American public regarding her health.

  Hillary Clinton has disqualified herself to be President of the United States because she is incapable of telling the truth about anything. There is no such thing as truth or transparency in the Clinton persona and campaign; everything is an ongoing experiment in perception management.

  First one narrative is floated; if the narrative shifts the public perception positively, it is defended to the death, and anyone questioning it is instantly accused of being a conspiracy theorist from the "vast right-wing conspiracy" that has been Hillary's favorite defense for 30 years.

  If this tried-and-true attack fails, then the questioners are accused of being sexist, partisan, etc.

  If the first trial balloon narrative doesn't gain public perception traction, it's quickly dropped and another explanation is unleashed on a willing-to-accept-anything-as-"fact"-from-Hillary mainstream media.

  So when the "overheated" explanation in 79-degree weather doesn't get traction, then it is dropped in favor of pneumonia, which mysteriously puts most sufferers in bed but Hillary declares that she feels great.

  This process of replacing explanations and narratives, interspersed with attacks on anyone who questioned the previous narrative, is repeated until the perception management result is satisfactory. Hillary is clearly incapable of honesty–the word has no meaning, because all communication is aimed at concealing or obscuring the facts of the matter and defending what is visibly indefensible as if perception management is the same as the truth. It is not the same, but Hillary is incapable of discerning the difference.

  This reliance on attacking the questioner to delegitimatize what is a legitmate inquiry also disqualifies Hillary. The American public has a legitimate interest in how Hillary Clinton benefited from the Clinton Foundation's hundreds of millions of dollars in contributions from overseas donors during her stint as secretary of state.

  The American public also has a legitimate interest in the health of presidential candidates. John F. Kennedy's poor health was masked by a compliant media in the early 1960s, but that sort of duplicity is no longer condoned. The American public wants an accurate accounting of the candidate's health.

  

  As you view the clip of Hillary collapsing, study the body language of her multiple handlers. I'm not referring to the Secret Sevice agents; I'm referring to her private handlers and aides. Note their extreme defensiveness about anyone seeing what was happening to Hillary. Their way of propping her up doesn't look like it was the first time they had to prop her up; their actions were practiced, automatic.

  They are accustomed to propping her up and masking her true condition from the public. Study the clip; it's all there, in plain view.

  Their hyper-wary posture was not just an attempt to shield the candidate from anyone seeing a moment of weakness; their over-protective watchfulness for "eyes on the candidate" is 24/7. Their only job is to mask the truth of Hillary's condition, whatever it may be.

  This tells you everything you need to know about how Hillary will operate as President: there will be no honesty, transparency or truth, ever. Life for Hillary boils down to managing perceptions and hiding facts–inconvenient or otherwise. This is not a campaign strategy–it is her default mode of existence, the only way she knows how to operate.

  Hillary's health may or may not be decisive, but what is decisive is how she has banished honesty, truthfulness, candor and transparency. The issue for Hillary and her handlers is not the facts of her health; it's how to manage public perceptions of her health in a satisfactory manner.

  We don't just need to know whether Hillary suffers from conditions beyond allergies and pneumonia. What counts most is whether she is capable of being honest, forthright and truthful about legitimate, important issues. She has clearly proven that she is incapable of being honest and truthful about anything, very likely because she cannot distinguish between plain, simple truth and perception management.

  Let's be honest for a moment, and confess that this is a character flaw that disqualifies the candidate from holding office. The last two presidents who saw their job as hiding the truth and managing perceptions were Richard Nixon during the Watergate era, and Lyndon Johnson during the War on Vietnam.

  

  Attacking every legitimate inquiry as a "vast right-wing conspiracy" is not governance; it's a paranoia and distrust of the American public that leads inexorably to catastrophes like Watergate and wars of choice that drag on as the bodies and lies pile up.

  It's time to bring back Bernie Sanders, a candidate who can tell the difference between the truth and perception management, someone who isn't an embarrassment to the nation. I understand that Hillary's coronation as Head of the Deep State has already been scheduled by the Powers That Be, but that doesn't mean we too must lose the ability to differentiate between the truth and perception management.

  *  *  *

  My new book is #7 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.

  

  

• Track All Of Bankrupt Hanjin's "Ghost Ships" In Real Time

  After two weeks of impenetrable legal limbo, there was some good news for owners of cargo stuck in the bowels of container ships belonging to the recently bankrupt South Korean shipping giant, Hanjin Shipping. As Bloomberg reported according to the insolvent shipper, at least some vessels are in line to unload cargo at Long Beach port in California after a U.S. court Friday granted bankruptcy protection, easing a gridlock that disrupted delivery of goods.

  Three more Hanjin ships are waiting at the port to clear their freight once Hanjin Greece, which is currently offloading, clears early Sept. 12 local time, Hanjin said in response to a query. Truck drivers probably will begin moving containers from the Greece on Monday while the vessel prepares to leave late in the day for the Port of Oakland, said Teamsters spokeswoman Barbara Maynard and shipping traffic controllers, cited by Reuters. Port workers began taking Hanjin Greece’s cargo ashore at 8 a.m. local time Sunday, and the Hanjin Gdynia will follow, Noel Hacegaba, chief commercial officer of the Port of Long Beach, said in a telephone interview Sunday.

  However, the Greece, and its two peer ships, carry only a fraction of the $14 billion in goods on dozens of ships owned or leased by the world’s seventh-largest container carrier. Worse, while some of Hanjin’s ships would be free to offload their cargo once they obtain the needed funding, the fate of many other ships is unknown.  Charter owner Seaspan has three ships under charter with Hanjin – the Hanjin Buddha, Hanjin Namu and Hanjin Tabul – which are all due to hit the U.S. West Coast within the next few days. Chief executive Gerry Wang said he was confident the South Korean government would provide sufficient funds to pay port operators and Seaspan by the time those ships arrived to ensure they were unloaded.

  “We’re keeping our fingers crossed, but South Korea is an export economy and the government needs to ensure the flow of goods to consumers,” Wang said. “I don’t think they want that supply chain to be interrupted on a permanent basis.”

  Alas, it may be, if only for the time being: as Reuters notes, creditors have sought an arrest warrant against the Seaspan Efficiency, a ship hauling cargo for Hanjin that was due to arrive in Savannah.

  In the meantime, two weeks after the bankruptcy was filed, most of the company’s “ghost ships” remain in limbo: it is not clear when port operators will bring others to berths in Southern California and elsewhere.  One Hanjin ship off Long Beach, the Hanjin Montevideo, is under the supervision of a court-ordered custodian after two fuel companies obtained an arrest warrant for it over unpaid bills. Hanjin and the fuel providers are trying to work out an arrangement to release the vessel.

  It’s no less chaotic around the globe: in Hong Kong, the Hanjin Belawan arrived from Shanghai on Monday loaded with containers and was anchored a short distance from the city’s Kwai Chung Container Terminal. Terminal operator Hongkong International Terminals, a unit of Hutchison Port Holdings Trust controlled by tycoon Li Ka-shing, has outraged local cargo owners by charging fees of between HK$10,000–HK$15,000 per Hanjin container to release them at the port.

  The delays have concerned importers like Alex Rasheed, president of Pacific Textile and Sourcing Inc in Los Angeles, which has a shipment of clothing in 16 containers on Hanjin ships off Long Beach. “We’re already starting to run out of some colors and some sizes,” Rasheed said, noting Hanjin’s collapse comes as U.S. retailers prepare for the all-important holiday shopping season.

  In Singapore, cargo owner AP Oil International said it had been sending replacement cargos on urgent orders. 

  “On the procurement side, we do also face some issues to receiving raw materials shipped on Hanjin vessels, which of course we are adjusting our supply chain and production to meet and replace the cargo due to the uncertainty of the situation now” Group Chief Executive Ho Chee Hon said.

  * * *

  In total, Hanjin said that as of this morning, it had 93 vessels, including 79 container ships, stranded at 51 ports in 26 countries. Readers who wish to track the fate of Hanjin’s “ghost ships” in real time – as it looks likely that many of them will remain stuck in legal and financial limbo for a long time – can do so courtesy of the following Platt’s interactive map.

  

  

  

• A Homerun For The Donald – Attack The Fed's War On Savers, Workers And The Unborn (Taxpayers)

  Submitted by David Stockman via Contra Corner blog,

  The central banks have gone so far off the deep-end with financial price manipulation that it is only a matter of time before some astute politician comes after them with all barrels blasting. As a matter of fact, that appears to be exactly what Donald Trump unloaded on bubble vision this morning:

  By keeping interest rates low, the Fed has created a “false stock market,” Donald Trump argued in a wide-ranging CNBC interview, exclaiming that Fed Chair Janet Yellen and central bank policymakers are very political, and should be “ashamed” of what they’re doing to the country…

  He’s completely correct. After all, they are crushing real wages with their 2% inflation targeting; destroying savers with NIRP and sub-zero rates; and burying unborn taxpayers in monumental debts that today’s politicians are pleased to issue with reckless abandon because the short-run carry cost is nil.

  Interest on the Uncle Sam’s $19.4 trillion of debt, for example, is easily $500 billion lower than its true economic cost based on a normal yield after inflation and taxes and elimination of the phony $100 billion per year in so-called Fed “profits” that are booked by the treasury as negative interest expense.

  Alas, when interest rates eventually normalize, the Treasury’s debt service costs will soar by hundreds of billions. At the same time, the entirety of the Fed’s “profits”, which are conjured from thin air because it buys interest-yielding government and GSE debt with printing press liabilities which cost virtually nothing, will disappear. That’s because it will be forced to take reserve charges for giant principal losses on the falling prices of its $4.5 billion portfolio of government and GSE bonds.

  At that moment, the long-abused citizens of Flyover America, who have already been clobbered as savers and wage earners, will get hit with the triple whammy of soaring Federal tax bills. And this is not a matter of if or even when; it’s really just a question of how soon.

  When it comes to the establishment’s monetary lunacy, of course, Mario Draghi’s is always leading the charge. So just consider what has been happening after his inartful punt during last week’s ECB meeting.

  First, the casino cheerleaders have insisted that there is nothing to sweat about with respect to the incredible anomaly that now plagues the euro-bond markets. To wit, socialist Europe has apparently not issued enough qualifying debt (with a yield not below the negative 0.4% threshold) to fill the ECB’s $90 billion per month purchase target.

  The solution is real simple according to Draghi’s acolytes in the casino. In addition to lowering the bond yield threshold as deep into the subzero freezer as necessary, they have proffered an even better solution. Just buy up the stock market, too!

  “The obvious reason for the ECB to buy equities is they have almost run out of German bonds to buy,” said Stefan Gerlach, chief economist at BSI Bank and a former deputy governor of Ireland’s central bank. “The basic idea is that the central bank can put essentially anything on its balance sheet and there is no reason to be straight-laced about this.”

   

  Equities offer a deep pool of assets. The market capitalization of listed eurozone companies was $6.1 trillion at the end of 2015, according to World Bank data.

  And this isn’t just some whacko sell side analyst talking his book. Here’s what one of the world’s alleged leading monetary policy exports added to the mix:

  When policy rates approached zero, central banks in the U.S., the U.K., Japan and the eurozone turned to bond purchases to reduce long-term interest rates. Buying equities would likely yield some of the same effects in terms of encouraging consumption and investment through higher household wealth and lower cost of capital.

   

  “I don’t see a reason not to do this,” said Joseph Gagnon, senior fellow at the Peterson Institute for International Economics. “It isn’t obvious to me why a central bank wouldn’t always want a diversified portfolio, including equities.”

  Actually, it gets even better. According to another casino player, bonds have now gotten so over-valued—-from massive central banking QE purchases, of course—-that European equities are now “under-valued” in relative terms!

  Therefore, the ECB can do no less than plunge into a stock buying bacchanalia in order to set things right.

  ECB stock purchases “would be justified: European equities are undervalued, while there is a bubble—that the ECB continues to inflate—in bonds,” said Patrick Artus, chief economist at French investment bank Nataxis in a research note.

  Besides that, the Swiss National Bank (SNB) and the BOJ have already pioneered the way. Fully 20% of the former’s bulging portfolio consists of equities, including massive holdings of US stocks. And when we say “massive” that’s exactly what we mean.

  The balance sheet of the SNB is up by nearly 7X since the eve of the financial crisis, and now totals $715 billion. That happens to be 108% of Switzerland’s GDP.

  It also happens to mean that in order to fight off the exchange rate impact of Mario’s relentless campaign to trash the Euro, the Swiss monetary central planners have purchased upwards of $150 billion of global equities, making them one of the largest hedge funds in the world.

  Now that the Donald has extended his talk about the “rigged” system run by our unelected financial elites to include the stock market, he surely has a point.

  

  Nor is the SNB an outlier. The BOJ also has roughly $150 billion of equities on its balance sheet. Indeed, it already owns 55% of all Japanese ETFs; is now among the top 10 shareholders in 90% of Japan’s 225 largest companies; and is slated to become the top holder in 40 of the Nikkei 225 companies by year-end 2017 at its planned stepped-up ETF purchase rate.

  

  But the insanity of buying up and thereby falsifying large sections of the stock and bond markets in order to pursue the will-o-wisp of 2% inflation isn’t the half of it. Having done this, the central banks have made themselves hostage to the most reckless fast money speculators in the entire casino.

  That’s because the latter will sell at a moments notice anything they have been front-running via leveraged carry trades if they think the central banks’ buying binge will stop.

  In the case of Japan’s 30-year bond, for example, the yield in the last few weeks has soared from 6 bps to 61 bps on fears that the BOJ may “pause” its madcap bond buying program. Since it has already purchased more than 40% of Japan’s monumental public debt, the mere hint that it might stop caused the price of the 30-year bond to plunge by upwards of 20%.

  But the recent dislocations in the euro-bond market leave nothing to the imagination. Draghi’s failure last Thursday to unequivocally state that the ECB’s $90 billion per month QE program would be extended after its scheduled expirtation next March shows exactly why the central banks have turned themselves into monetary doomsday machines:

  Meanwhile, yields on 10-year German Bunds turned positive for the first time since June 22. Yields were around 0.013 percent at the time of the market close, up from -0.06 percent on Thursday.

   

  “The jolt across bond markets began when ECB president Mario Draghi said the governing council did not discuss extending its asset purchase program. Understandably, bondholders got a little nervous about holding onto a negative-yielding asset which could fall in price if there’s no central banking buying alongside them,” Jasper Lawler, market analyst at CMC Markets, said in a note on Friday.

  There is all the evidence you need that the world’s financial markets are totally and completely rigged. And that’s why Donald Trump was exactly on target this morning when he uncorked another politically incorrect observation about the rigged nature of the Wall Street casino.

  To wit, Yellen is still sitting on interest rates at the zero bound after 93 months for one simple reason. Even in the context of an economic recovery that is now allegedly so complete that we are actually on the cusp of full employment, according to Vice-Chairman Stanley Fischer, she is deathly fearful of a hissy fit on Wall Street, as was foreshadowed by last Friday’s sharp sell off.

  Opined the Donald:

  “She’s obviously political and she is doing what [President Barack] Obama wants her to do,” Trump said in an interview on CNBC. Trump predicted that the market is going to “go way down” as soon as interest rates go up.

   

  “I believe it is a false market because money is essentially free,” Trump said.

  He got that right, but needs to take it a step further. At the same time that the Fed continues placating Wall Street gamblers with an unending stint of free carry trade funding that has self-evidently not generated real breadwinners jobs or higher real incomes in Flyover America, savers and retires continue to be pounded.

  In fact, our unelected monetary politburo is causing upwards of $300 billion per year to be transferred from savers to the banks and the financial system owing to its senseless pursuit of 2.00% inflation via pegging the money market interest rate on the zero-bound.

  Even then, however, the true impact goes far beyond retirees and the modest share of the population that actually attempts to save. To wit, 2% inflation targeting is absolutely the stupidest thing any central bank could pursue in the context of a global economy is which goods and services are freely traded, and in which the US, Europe and Japan have the highest nominal wage rates on the planet.

  What inflation targeting does is cause the domestic price level to rise, rather than fall, in DM economies. It thereby also causes the nominal wage gap with China and its EM supply chain to widen. So the Donald is right on that one, too.

  Indeed, the most potent agency of off-shoring American jobs is not the USTR or bad trade deals, but the central banks. And in the middle and lower ranks of the wage market—-where the China price on goods and the India price on services bears down most heavily—-the Fed’s inflation folly is especially perverse.

  As we have demonstrated with our more accurate “Flyover CPI”, the cost of living faced by main street America—especially for the four horseman of food, energy, medical and housing prices—has risen by 3.1% annually since the late 1980s.  And that is well more than hourly wage gains for production workers.

  So the Fed has delivered to working class Americans the worst of both worlds. Namely, rising nominal wages which have priced them out of the world market, but even higher domestic inflation that has caused their real wages and living standards to shrink.

  Here is the smoking gun. Notwithstanding a near tripling of the nominal wage rate from $9 per hour in 1987 to about $22 per hour today, real wages are lower than they were three decades ago.

  

  At the same time, the tripling of nominal wages has caused a relentless export of breadwinner jobs in goods and services to the China price and India price regions of the world. That’s why, in fact, there were still 1.4 million fewer full-time, full-pay breadwinner jobs at $50k per year in August than there were way back when Bill Clinton was packing his bags to shuffle out of the White House in January 2001.

  

  In short, the “something for nothing” money printing policies inflicted on Flyover America by our unelected rulers at the central banks, and with the full support of their facilitators and supporters among the Wall Street/ Washington ruling elites, are not only bad economics; they are perverse and unjust beyond measure.

  Indeed, the Fed is waging an insensible and outrageous war on savers, workers and future taxpayers – even as it pleasures the 1% with fantastic financial windfalls from the Wall Street casino.

  Now that is a rigged system. And that is a beltway evil that merits the Donald’s unrelenting attack on behalf of the citizens of Flyover America who have been left behind in their tens of millions.

  

  

• What Happens If Hillary Clinton Has To Drop Out?

  Submitted by Emily Zanotti via HeatSt.com,

  Hillary Clinton’s doctor now says the Democratic presidential candidate, 68, was officially diagnosed with pneumonia sometime on Friday, and has been campaigning with the serious respiratory illness for a week, leading to her “medical episode” at Sunday morning’s September 11th memorial event.

  But what happens if the candidate’s health issues get more serious? Certainly, the Democrats always have the option of propping her up, Weekend at Bernie’s style, until after November 8th, but what if matters get progressively worse? Here’s a quick primer on where the Dems could end up:

  

  When it comes to candidates (rather than office holders) the rules actually come from the political parties, not the Constitution. For Republicans, if a Presidential candidate dies or drops out, the RNC has to either convene a new convention or take an official poll of the RNC’s state representatives to select a replacement candidate. Most likely, the RNC would move the running mate up to the top of the bill, in order to preserve what fundraising has already been done for the ticket.

  But for the Democrats, it’s not so clear. The Democratic National Committee reserves the right to replace a candidate who dies or drops out, and it doesn’t provide additional details in its by-laws. So presumably the Democrats would have to make up the process up as they go along. The DNC could entrust replacing Clinton to a central DNC brain trust or, more likely, replicate the RNC’s system, handing the vote over to the committee’s state delegates.

  Tim Kaine

  The DNC would likely want to retain the support of major donors who’ve already given to the Clinton-Kaine ticket, and would probably just bump Tim Kaine up from the Veep slot. Kaine would simply slide up the ticket, choose a new running mate, hope the ballots could be reprinted in time, and carry on just as Clinton had.

  But, of course, this is 2016 and anything can happen.

  The Open Slot

  Donald Trump has proven to be a wild card candidate: he’s spent no money, compared to Clinton’s million-dollar ad buys, and raised virtually nothing compared to his Democratic opponents, and he’s still running neck and neck with Clinton nationwide. So the DNC would likely have to consider whether Kaine could retain Clinton’s razor-thin lead, or whether they’d need a more capable candidate.

  The DNC might naturally lean towards Joe Biden who said he didn’t want to campaign, but has never said, openly, that he’d prefer not to be President. Biden is neither Clinton nor Trump, making him an easy favorite in the Presidential contest (though, it’s likely any number of cartoon characters, inanimate objects and D-list celebrities would also easily pull into the lead), and he’d have the backing of President Obama, who could unite the party with a call to action to unite behind his Vice President.

  Also likely contenders: Bernie Sanders and Elizabeth Warren (both progressive candidates with a large swath of support within the Democratic party), New York governor Andrew Cuomo, Virginia’s Jim Webb, even second runner up Martin O’Malley.

  Chelsea Clinton

  There’s a longtstanding tradition in American politics of spouses stepping in after an unexpected death. Take Missouri’s Jean Carnahan, for instance, who stood in for her husband Mel after he died in a plane crash three weeks before the Missouri Senate election. After Mel won posthumously, she served in the Senate for two years. Future Senator Olympia Snowe first entered politics after the death of her husband, a Maine state representative, in a car wreck. Likewise, Mary Bono’s long political career began when her husband Sonny died in a skiing incident.

  Bill Clinton is prohibited by the 22nd Amendment of the Constitution from running. If a Clinton were to step in for Hillary, it would likely be Chelsea, who at 36 is just old enough, in terms of the Constitution, to be president.

  The Filing Deadlines

  Most states’ campaign filing deadlines have already passed – and as some independent candidates, including conservative Evan McMullin are finding, states aren’t normally open to extending the period of time candidates have to file the paperwork necessary to put their names on the Presidential ballot.

  For the Democratic replacement, though, as long as they have the party’s blessing, it’s likely officials could simply replace Clinton name any time up to a month before election day (ballots are usually printed and mailed about three weeks before). It’s also possible that Congress could postpone or move election day, but that would be an extreme step.

  

  

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• Germany: Beginning Of The End Of The Merkel Era?

  Submitted by Soeren Kern via The Gatestone Institute,

  • The anti-immigration party Alternative for Germany (AfD) surged ahead of Angela Merkel's Christian Democratic Union (CDU) in elections in her home state of Mecklenburg-West Pomerania.

  • The election was widely seen as a referendum on Merkel's open-door migration policy and her decision to allow more than one million migrants from Africa, Asia and the Middle East to enter Germany in 2015.

  • Merkel rejected any course correction on migration policy: "I am very unsatisfied with the outcome of the election. Obviously it has something to do with the refugee question. I think the decisions that were made were correct." She went on to blame German voters for failing to appreciate her government's "problem-solving abilities".

  • Many of the AfD's positions were once held, but later abandoned, by the Merkel's CDU.

  • A September 1 poll showed Merkel's popularity rating has plunged to 45%, a five-year low. More than half (51%) of those surveyed said it would "not be good" if Merkel ran for another term in 2017.

  German Chancellor Angela Merkel suffered a major blow on September 4 when the anti-immigration party Alternative for Germany (AfD) surged ahead of her Christian Democratic Union (CDU) in elections in her home state of Mecklenburg-West Pomerania.

  With 20.8% of the vote, the AfD came in second place behind the center-left Social Democrats (SPD) (30.6%). Merkel's CDU came in third place, with 19% of the vote, the worst result it has ever had in Meck-Pomm, as the state is called for short.

  The election in Meck-Pomm was widely seen as a referendum on Merkel's open-door migration policy and her decision to allow more than one million migrants from Africa, Asia and the Middle East to enter Germany in 2015. The migrant influx has resulted in a notable increase in crime in the country. The growing sense of insecurity has been exacerbated by a series of attacks this summer by Muslim migrants in which ten people were killed and dozens more were injured.

  The CDU debacle in Meck-Pomm yields two main conclusions: 1) Merkel's hopes of winning — or even running — for a fourth term in general elections in 2017 are now in doubt; and 2) the AfD is a force to be reckoned with in German politics. It can longer be simply dismissed as a "fringe party."

  Observers from across the political spectrum seem to agree that the election in Meck-Pomm marks a turning point for Merkel, who has been head of the CDU since 2000 and chancellor since November 2005. Some say her political career may effectively be over if the CDU suffers heavy losses to the AfD in state elections in Berlin on September 18.

  "This was a dark day for Merkel," said Thomas Jaeger, a political scientist at the University of Cologne. "Everyone knows she lost this election. Her district in parliament is there, she campaigned there, and refugees are her issue."

  The CDU's secretary general, Peter Tauber, agreed: "The strong performance of AfD is bitter for many, for everyone in our party. A sizeable number of people wanted to voice their displeasure and to protest. And we saw that particularly in discussions about refugees."

  The leader of the AfD, Frauke Petry, said: "This is a blow for Merkel, not only in Berlin but also in her home state. The voters made a clear statement against Merkel's disastrous immigration policies. This put her in her place."

  German Chancellor Angela Merkel (left) suffered a major blow on September 4 when the anti-immigration party Alternative for Germany, led by Frauke Petry (right), surged ahead of her Christian Democratic Union in elections in her home state of Mecklenburg-West Pomerania.

  Local AfD leader Leif-Erik Holm told supporters: "We are writing history. Perhaps this is the beginning of the end of Angela Merkel's chancellorship. This must be our goal."

  Gero Neugebauer, a professor of political scientist at Berlin's Free University, said:

  "People will see this defeat as the start of the 'Kanzlerdämmerung' (twilight of the chancellor). If a lot of CDU members start seeing this defeat as Merkel's fault, and members of parliament start seeing her as a danger for the party and their own jobs next year, the whole situation could escalate out of control. If the AfD defeats the CDU again in Berlin in two weeks, things could get ugly fast."

  In an interview with Der Spiegel, Ralf Stegner, the vice president of the SPD, said the CDU was in a "state of panic" over the rise of the AfD and that Merkel has become a liability to her party:

  "Merkel has clearly passed her zenith. It is a disaster for her that the CDU has fallen to third place with under 20% in her own state. This is a serious crisis for the CDU and it bears the names of Merkel and Seehofer. Some people now believe that Merkel no longer leads the debate with Seehofer about her 2017 candidacy. Throughout its history, the CDU has been merciless to its chancellors if there was the impression that the party was facing a massive loss of votes."

  Stegner was referring to an August 27 report by Der Spiegel which said that Merkel has postponed an announcement about her candidacy due to opposition from the CDU's Bavarian sister party, the Christian Social Union (CSU), which has been increasingly vocal in its criticism of her migration policy:

  "Angela Merkel will delay until the spring of 2017 her decision whether to run for another term as chancellor of the CDU in the general election next year. The delay was necessary because only then will CSU chief Horst Seehofer decide whether his party will support Merkel again, according to CDU insiders. This is the second time that Merkel has had to postpone the announcement of her plans.

   

  "Actually, her decision should have been announced a long time ago. The original plan was that Merkel would declare her intentions as early as last spring. But then the refugee crisis and the fierce dispute with the CSU got in the way. The Chancellor decided to wait until this fall.

   

  "This time the delay is more problematic for Merkel. In December, the CDU party congress takes place in Essen, where Merkel wants to be elected as party chairman for another two years.

   

  "But she can only be party chairman if she is a candidate in the general election. The party congress should send a signal that the CDU fully supports the Chancellor. This will not work if the party does not know if Merkel wants to continue.

   

  "From Merkel's perspective, the alternative would be more risky: If she announces her candidacy for chancellor without Seehofer's support, it could hurt her politically."

  In a September 6 interview with Süddeutsche Zeitung, CSU leader Horst Seehofer, said the "disastrous" election outcome in Meck-Pomm was a direct consequence Merkel's migration policy. He added that Merkel had ignored "multiple prompts for a course correction" and that her refusal to budge threatens the future of the CDU. "Confidence in the government is dwindling rapidly," he warned. "People do not understand how policy is made in Germany."

  CSU Secretary General Andreas Scheuer reiterated the call for Merkel to change course: "We need a cap on refugees, faster deportations and better integration."

  Bavarian Finance Minister Markus Söder agreed: "The result must be a wake-up call for the CDU. The mood of the people can no longer be ignored. A change of course is needed in Berlin."

  Merkel remains defiant. A day after the debacle in Meck-Pomm, Merkel rejected any course correction on migration policy:

  "I am very unsatisfied with the outcome of the election. Obviously it has something to do with the refugee question. I think the decisions that were made were correct."

  She went on to blame German voters for failing to appreciate her government's "problem-solving abilities" (Lösungskompetenz).

  On September 7, in a fiery address to the German parliament, Merkel said the AfD's anti-immigration stance posed a threat to Germany. "All of us should realize the AfD is a challenge not only for the Christian Democrats… they are a challenge for everyone in this house." She may also have indicated that she intends to seek another term as chancellor when she said: "There is still a lot of work to be done."

  Alternative for Germany (AfD)

  In more ways than one, Angela Merkel is directly responsible for the rise of the AfD. In her more than ten years as chancellor, she has moved the CDU to the left on so many key issues that the party is no longer conservative in any meaningful sense of the word.

  Under Merkel, the CDU's policies on nuclear energy have become essentially identical to those of the Green Party. Merkel has also adopted many of the social policies of the SPD. In terms the open-door migration policy, the CDU's position is virtually indistinguishable from both the SPD and the Greens. This has created an opening for the AfD.

  Launched in 2013, the AfD is now present in nine of Germany's 16 state parliaments. It is poised to enter the federal parliament for the first time in 2017. According to an Insa poll cited by Bild on September 5, if the national election were held today, the AfD would win 15% of the vote, making it the third-largest party in Germany.

  The Insa poll also found that in the Meck-Pomm election, the AfD siphoned off more than 55,000 votes from other parties. More than 22,000 CDU voters cast their ballots for the AfD; 15,000 SPD voters voted for the AfD; and more than 22,000 voters affiliated with other parties gave their votes to the AfD.

  The party was originally founded to protest the German government's handling of the eurozone crisis. Its founding manifesto stated:

  "The Federal Republic of Germany is facing the most serious crisis in its history. The euro currency area has proved to be unworkable. Southern European countries are sliding into poverty under the competitive pressure of the euro. Entire states are on the verge of default.

   

  "Hundreds of billions of euros have already been pledged by the federal government. An end to this policy is not in sight. This is excessive and irresponsible. We, our children and our grandchildren will have to pay for this with taxes, stagnation and inflation. At the same time, this is eroding our democracy. In this situation, the CDU, CSU, SPD, FDP and the Greens know only one answer: Keep it up!"

  In April 2013, the Frankfurter Allgemeine Zeitung revealed that CDU insiders viewed the rise of the AfD as "the end of Merkel's chancellorship." A strategy was set in place to conduct opposition research and paint the AfD as a "national conservative" party driven by proponents of "market radicalism."

  The AfD — similar in many ways to the upstart Tea Party movement in the United States — has suffered self-inflicted wounds as a result of political infighting and internal power struggles. Establishment politicians and the mainstream media have repeatedly seized on outrageous comments made by some within the party to portray it as a "far right" party that poses a threat to German values.

  In an interview with the Guardian, Frauke Petry, the AfD leader, said the party has sometimes felt forced to use outspoken language to get its message across. She said:

  "Well, sometimes, I don't deny, we think we have to use provocative arguments in order to be heard. Because we tried very hard at the beginning of 2013 to be heard with lots of very sensible thinking and arguments, and we simply couldn't get through to anyone. So what do you do? You put forward a provocative argument, and sometimes you are given the chance to explain what you meant. I know it's a difficult choice to make but sometimes, for us, it feels like the only way."

  Petry also said the AfD is not opposed to "real refugees," but it is against the hundreds of thousands of economic migrants who are posing as refugees. "There is enough space for refugees in Germany, but the problem is that we don't distinguish anymore between migrants and asylum seekers," she said.

  A comprehensive party manifesto published in May 2016 called for: limited government; term limits; campaign finance reform; reducing the power of political parties; direct elections for chancellor; devolving power to federal states; a referendum on the euro; reforming the United Nations; a strong military based on the NATO alliance; reintroducing conscription; stronger police enforcement; justice reform; gun rights; protecting German borders; labor market reform; eliminating burdensome bureaucracy; promoting the traditional family; encouraging Germans to have more children rather than resorting to mass migration to fix its demographic problems; protecting the rights of the unborn; promoting German culture rather than multiculturalism; promoting the German language as the basis for German identity and for integration; banning the foreign financing of mosques; eliminating government subsidies for radio and television; and so on. Many of the AfD's positions were once held, but later abandoned, by the CDU.

  Meanwhile, a September 1 poll for ARD television showed Merkel's popularity rating has plunged to 45%, a five-year low, and down from a high of 67% one year ago. More than half (51%) of those surveyed said it would "not be good" if Merkel ran for another term in 2017. If national elections were held today, the CDU would win just 33%, down from 42% one year ago.

  The poll showed one factor in Merkel's favor: the lack of a political rival strong enough to challenge her.

  

  

• AsiaPac Stocks Plunge Most In 8 Months As China Money Market Turmoil Accelerates

  Hong Kong Interbank borrowing rates spiked to 6-month highs as a combination of central-planning-inspired liquidity restriction and global 'risk-off' strikes. 3M HIBOR spiked 95bps to 4.21% – its highest in 6 months; and Chinese stocks are feeling the pain, tumbling most in 3 months. Having reached historical lows in volatility, it appears 'pent-up' anxiety is coming back with fury. The broad-based MSCI Asia APEX 50 index is down 3.5% – the most in 8 months…

  This could be a problem…

  

   

  And Chinese stocks are displeased…

  

   

  India is down most in a month…

  

   

  And Indonesia is down most in 7 months…

  

   

  "It's probably nothing"

   

  Charts: Bloomberg

  

  

• Samsung Sheds $20BN Of Market Cap In 2 Days After Recalling Exploding Phones

  Turns out spontaneous pocket explosions are not a desirable feature for smartphone consumers…just ask Samsung.  The company was forced to recall 2.5mm phones last week after reports surfaced of the device exploding during or after charging.  That doesn’t look healthy.

  Get your exciting Samsung Galaxy Note7 “Pocket Bomb” here #samsung #explode #notegate https://t.co/j91ErOsxU6

  — Robert Follis (@robfol) September 2, 2016

   

  Meanwhile Samsung shareholders have suffered the biggest 2-day price drop since Lehman, with the stock shedding nearly $20 billion in market cap.  The recall is expected to cost $1BN but the brand value destruction is obviously much higher with Apple simply having to make phones that don’t spontaneously combust to win over consumers.

  

   

  

   

  Meanwhile the FAA has warned airline passengers not to turn on or charge Galaxy Note 7 devices on board aircraft and not to stow them in any checked baggage.

  FAA Statement on Samsung Galaxy Note 7 Devices https://t.co/NADpT5Jma4 pic.twitter.com/e9uJvNmUUq

  — The FAA (@FAANews) September 8, 2016

   

  But the video made it look really cool…

  

  

• 911 and the Lost American Culture

  911 is an event that changed America forever.  Probably that can be said for many such events like Pearl Harbor, the sinking of the Lusitania, or the day the Allies ‘won’ World War 2.  But 911 is a lot more complicated, probably just because it’s an event that was in line with the times, culture, and changing world.  And as we explain in Splitting Pennies – a lot of money was made on Forex trades.  

  Everything that was before 911 was no more.  From the date of 911 until now, America has been preoccupied with war, security, and various emergencies.  It’s no coincidence that this event is known as ‘911’ which is the emergency code Americans dial.  America is in a state of emergency.

  911 was the paradigm game changer of our century.  As we understand this event better, we can better understand markets and the world as it really is, and better ourselves for a brighter more prosperous future.

  Some personal experiences not found in the ether

  911 has been so well analyzed and documented by so many researchers.  Thanks to all of them.  Here’s some subjective experiences no one ever knew.

  In the year 2000 a group of investors had been assembled via Private Placement Memorandum in Palm Beach County to invest 20 Million USD in the development of an intelligent stock trading algorithm, we code named the project ADTS “Automatic Day Trading System” (which was heresy in that time “Program Trading”).  The investors were all committed based on the involvement of an Italian Illuminati Investment Banker with the initials BT (now deceased).  We were fully subscribed in July of 2001 and in August I was personally looking for office space for our startup.  Among the locations I was investigating were the twin towers (one of our backers was an NYSE insider, Wall St. seemed an appropriate place to operate) although practically, we probably would have chosen south Florida, as the majority of the founders were based in Palm Beach County at that time, as well as BT.  

  The morning of 911 I remember waking up with the sun, unusual for me (i’m an alarm clock guy, i can’t wake up with the roosters).  It was a beautiful sunny day in Palm Beach I remember opening all doors on my house and enjoying the nice morning with no clouds.  Later I would learn how all the clouds were sucked out to sea by a hurricane Erin that reversed course strangely, exactly on the morning of 911.  It was headed for NYC almost exactly to where the twin towers were, ironically, before it changed course.  But, it sucked all the bad clouds, gasses, and other atmospheric elements (pressure) into it ensuring a clear game day for a historic, epic black op.

  Those who can remember this day, remember the fear, shock, confusion, anger, and overwhelming emotions even for the most fervent anti-government rebel.  We felt as America was under attack – but from whom?  From what?  How?  We watched TV.  We watched mutliple TVs.  There wasn’t any Zero Hedge in that time, most news websites were copies of their TV programs, and what alternative news there was, lacked the depth of information that they have today.  Today, everyone has an HD camera in their pocket, back then, smartphones hadn’t been popularized yet.  

  So later in the day, I got a call from BT “It was Bin Laden” .. silence.  I thought, what a strange comment.  I didn’t even know who this character was.  After receiving a small lesson about the Mujahadeen, later I was explained that we’ll be soon going to war in Afghanistan, and that we should consider moving our operations for our business to another country  (for a number of reasons but mostly, the non-US investors were afraid of Americas’ stability, and also that the climate of war is not productive for developing intelligent trading systems).  All this info was told to me the same day of the attack.  Now I was by no means an insider, I have no knowledge of who provided this information to BT, but at the time it wasn’t really of any interest to me to ask.  

  The strange email chain

  I’m not sure how I got on this email chain, but it was 2001, a time of chain letters, there was no social media.  I was emailed to a group, all the group was CC not BCC, with video attachments – my limited DSL was slow to download them, don’t remember many details about the videos, but the text of the email I remember clearly.  In all caps, the emailer explained that they have RECORDED SHOOTING DOWN OF AN AIRPLANE WITH HOME VIDEO, MANY MILITARY VEHICLES AND CRAFT.  PLANE POSSIBLY SHOT DOWN BY ANOTHER PLANE, OR IN COMBINATION WITH SURFACE TO AIR MISSILES.  MILITARY BANGING ON DOOR – PLEASE FORWARD THESE VIDEOS TO EVERYONE YOU KNOW.  OUR ADDRESS IS ….. PA OUR EMAIL IS… OUR NAME IS.. OUR PHONE IS.. OUR CHILDREN ARE LOCATED AT…   silence.

  I never saw this email chain or this home video surface years later.  At the time, I had been preoccupied with my own moving to New Zealand and unfortunately don’t have the records of this, it was in hindsight a huge mistake not keeping better records of such things.  But with all the strange mistakes made by the MSM at the time, this seemed like just one of a hundred little ‘quirks.’ 

  But there were a lot of strange things about Flight 93, such as the FBI reports of White Angels, claims that it was shot down (much like the email said), and no physical crash evidence:

  

  WHERE’S THE PLANE?  LET’S CREATE A MAN-HUNT!

  Pratically speaking, we’ll never know 100% of what happened, because whoever executed this black op destroyed all the evidence, and key people died of mysterious causes.  But due to the honorable and diligent research by millions- there certainly is a MASSIVE GIANT POINTING FINGER

  Open your mind, change your life – with splitting pennies.  Change you reality – buy the book.  Splitting Pennies can do it.  Just read it.

  

  

• Elon Musk: "We Have Not Ruled Out" That UFO Caused Space X Explosion

  Via SputnikNews.com,

  @ashwin7002 @NASA @faa @AFPAA We have not ruled that out.

  — Elon Musk (@elonmusk) September 9, 2016

  The statement by the vaunted entrepreneur that he couldn’t rule out that UFO hunters were correct that an unidentified object or weapon initiated the explosion has alien enthusiasts out in full force.

  

  The frenzied excitement for alien hunters hit new heights on Friday when the innovative wunderkind Elon Musk wrote to a commenter on Twitter that "We have not ruled that [a UFO hitting the Space X Falcon 9 rocket] out" with theories ranging from an attack by foreign defense forces to a laser attack by an alien ship quickly cascading through social media.

  The statement comes one week after self-proclaimed UFO hunters pointed to video footage from the SpaceX explosion noting that there was a black object barreling near the rocket only seconds before explosion with YouTube viewers quickly dispatching theories that the flying object was a bird or a bug based on the relative speed of the object – over 1,000 MPH – and its appearance behind riggings that ruled out the possibility that it was a bug in the camera lens.

  The explosion quickly consumed the rocket destroying Facebook’s AMOS-6 internet-beaming satellite and causing unprecedented damage to the launchpad – a fairly unusual incident for a rocket explosion. Musk said the explosion was "really a fast fire" and was unable to point to specific mechanical causes for the failure of the rocket.

  

  One Twitter user said that the sound at 54 seconds in a video posted "sounds like a metal joint popping under stress" which Elon Musk said was "most likely true" but also said that "we can’t yet find it on any vehicle sensors" pointing to the possibility of some outside sabotage.

  "Important to note that this happened during a routine filling operation. Engines were not on and there was no apparent heat source," said Musk questioning how the rocket could spontaneously erupt in flames. "Particularly trying to understand the quieter bang sound a few seconds before the fireball goes off. May come from rocket or something else."

  One person suggested that it could be a drone, but opined that if it was a drone it was a particularly fast and circular drone that does not match the description of any known existing defense products. Others opined that whatever the flying vehicle that may have given rise to the explosion, it appears it was a "well planned attack from a competitor."

  Although speculation continues to circle around the explosion of the Space X Falcon 9 rockets with the most fascinating theory by far being the potential that space aliens beamed the rocket, many more plausible alternatives exist including a leak of propellant fuel, metal on metal contact sparking just enough initial flame, or a buildup of oxygen. Some commenters are even blaming Vladimir Putin and/or China – which makes maybe less sense than even space aliens.

  The truth is out there…

  

  

• Is A VaR Shock Just Starting: Here Is The Checklist

  Last Thursday, when the S&P was once again surging to within a fraction of taking out its all time high, we warned readers to "Brace For "VaR Shock" – How The Bank Of Japan May Be About To Unleash A Global Selloff." Of particular interest was whether 10Y JGB yields would soar, now that the market was questioning the BOJ's resolve to keep longer rates under control, leading to a risk-contagion scenario like the one seen in 2003, when Japanese bond yields exploded. We then said that "what that selloff – in a time of soaring cross-asset correlations, record quant leverage and virtually non-existent market liquidity – would mean for equities, we don't know, – but thanks to Haruhiko "Peter Pan" Kuroda, we will soon find out."

   

  

  Well, the timing of the post could not have been better, because we got our answer the very next day when – just as predicted here on Thursday – as a result of crashing bond MTMs – the very definition of a VaR shock – global stocks suffered their first aggressive global selloff in months, the biggest one in fact since Brexit, as trader attention, which has been ignoring pretty much every development and key news update over the past two months assuming instead that central banks "have it covered", finally focused on the sharp selloff in long-dated global bonds leading to cross-asset liquidation and sharp quant deleveraging, as we predicted just hours earlier.

  Friday's selloff, incidentally, also took place just two days after JPM's head quant, Marko "Gandalf" Kolanovic issued a new stark warning: "Volatility Is About To Surge", due to catalysts which – as we explained in the post – included this month's central bank (ECB, BOJ, Fed) meetings, seasonals pushing market volatility higher, and leverage in systematic strategies and option positioning provide fuel for volatility. We bring this up just to silence all those peanut gallery complainers that Kolanovic "has no idea what he is talking about."

  

  But while Kolanovic's arguments confirm that our prediction of an imminent VaR shock is correct, another influential JPM analyst, Nick Panigirtzoglou, author of JPM's Flows and Liquidity weekly snapshot, is just fractionally more optimistic and says that while a VaR shock is a distinct possibility, he notes that "not all conditions underpinning VaR shocks are currently in place in either equity or bond markets." We disagree, but that's what makes a market. As such, we present his thoughts on the matter, and let readers decide just where in the imminent VaR shock continuum we find ourselves.

  Here is Panigirtzoglou's attempt to mitigate some of the long, long overdue fears of a risk off response to another round of central bank mistakes, and his take on whether September 2016 is set to be this year's major "tantrum" event which first sweep Japanese and European bonds, and then quickly spreads across the global impacting all asset classes.

  * * *

  Market volatility declined further over the past month raising more concerns about complacency. Are investors too complacent currently? Are current market conditions inducive to a VaR shock? And VaR shocks do not necessarily need a fundamental trigger such as policy changes or political events. Examples of fundamental or policy triggered VaR shocks were the taper tantrum of May 2013, the Chinese devaluation of August 2015 and more recently the Brexit vote. VaR shocks can simply occur if, for example, investor positions normalize from previous extreme levels. Examples of such non-fundamental VaR episodes were those that took place in April 2013 in the JGB market or in April 2015 in the Bund market.

  So, according to the Greek JPM analyst (not to be confused with his nemesis on this issue, the Croatian one), how likely are such shocks in the current conjuncture? According to JPM, there are certain conditions underpinning the emergence of VaR shocks:

  1) Low volatility. Low market volatility induces investors, most of whom employ some type of volatility-based risk management framework, to increase the notional size of their positions as volatility collapses. The same investors are forced to cut their positions when hit by a shock, triggering self- reinforcing volatility-induced position shedding. Examples of VaR sensitive investors are hedge funds such as risk parity funds, asset managers, banks that set limits against potential losses in their trading operations by calculating Value-at-Risk metrics. Historical return distributions and historical market volatility measures are typically used in VaR calculations given the difficulty in forecasting volatility. This in turn induces these investors to raise the size of their trading positions in a low realized volatility environment, making them vulnerable to a subsequent volatility shock.

  2) The market to be “trading long”. VaR shocks tend to materialize following an overhang of extreme long equity or duration exposures. How elevated are investor positions currently?  The equity betas we regularly update in Charts A20 and A21 show a rather mixed picture. While systematic hedge funds such as risk parity funds and CTAs have high equity exposures currently, discretionary managers such as Discretionary Macro and Equity Long/Short hedge funds appear to have reduced their equity exposures recently. So not all hedge fund sectors are high in terms of their equity exposures. 

  The picture is also mixed in the bond space. For example in our European client survey, while Euro area single currency investors have still pretty high duration exposure at 0.36 years, multi-currency investors are close to neutral. Both of these position indicators were very elevated at the beginning of 2015, just before the April 2015 Bund VaR shock. By taking into account both the blue and the black line in Figure 2 the picture we are getting is of less extreme positioning in Euro area bonds than in April 2015

  

  We mentioned banks as typical VaR investors. Are US banks too long duration? The Fed's H.8 release provides some guidance on this for US banks. Each week, the Fed reports the net unrealized gain on banks’ available for sale securities. This is by no means a complete measure  of banks’ duration exposure. It does not include held to maturity portfolios (albeit these are much smaller than AFS portfolios), and importantly does not include the impact of any swap hedges. That said, we can infer banks’ duration exposure by relating  week-to-week changes in unrealized gains to week-to week changes in the yield of our UST 10y yield. Figure 4 shows this beta, estimated over a rolling 3-month window to smooth through the noise in the estimate. It suggests that banks would make MTM losses on their available for sale portfolios of around $15bn for each 1% increase in the 10y yield. Abstracting from the volatility post last August’s episode, the current reading is rather negative i.e. US banks are rather long duration, albeit not far from the middle of its historical range.

  

  An alternative way of gauging positions is to look at the response of equity and bond markets to economic news. This is shown in Figure 5 and Figure 6 which look at the behavior of equity prices and bond yields to economic surprises. An environment where long equity positions are heavy should see equities responding by more to negative economic news than to positive news. That is, the beta of equity prices to negative news should be higher than their beta to positive news. An environment where long bond duration positions are heavy should see bond yields responding by more to positive economic news than to negative news. That is, the beta of bond yields to positive news should be higher than their beta to negative news. The bond market is currently trading close to “neutral” according to  this indicator, in contrast to the overhang of long positions seen in April/May 2015 during the “Bund VaR shock”. Similarly, the equity market is trading close to “neutral”, in contrast to the overhang of long positions seen in May this year and December last year.

  Taking together, the above indicators do not currently point to overstretched equity or duration positions.

  

  3) Stretched valuations. Admittedly this is a harder to assess metric especially on an absolute basis. On a relative basis valuations for JGBs or Bunds looked very expensive during the April 2013 and April 2015 VaR episodes, respectively. One simple way of illustrating this is via a bivariate regression of the 5y5y forward swap rate in Japan or the Euro area on its US counterpart and on the 2y spot rate differential vs. the US. This is shown in Figure 7. The residuals were very negative i.e. valuations were very expensive, for Japanese rates in April 2013 and for Euro area rates in April 2015. According to Figure 7 these residuals look a lot more “normal” i.e. close to zero, currently. In the equity space, a simple visual inspection of 12m forward PE multiples shown in Figure 8 suggests that the previous relative expensiveness of European and Japanese equity markets, the equity markets that corrected the most since August 2015, has more than unwound. In all, not all conditions appear currently in place for a VaR shock as low market volatilities are combined with rather mixed investors positions and valuation signals

  

  Regarding market volatilities it is also important to remember that while vol is low, it is not cheap. In fact the opposite is true. Volatility is rather expensive as we highlighted in this month's Cross Asset Volatility Strategy publication (Sep 8th). Implied volatilities have indeed declined to levels last seen n August 2015, before the equity market correction. However, realized  volatilities have declined even more sharply. This is also shown in Figure 9 which constructs a cross asset 1- month Realized vol metric based on the same indices and weights as the ones used for our Implied volatility metric. This Realized vol metric currently stands at the lowest level since October 2014! The greater fall in realized vs. implied volatilities means that vol risk premia increased sharply over the past month making vol even more expensive as an asset class. The ratio between our cross-asset Implied and Realized vol metrics stands at well above one, at 1.3x currently. In other words there are hefty risk premia embedded in option markets that are more indicative of skepticism rather than complacency. And this particularly true with retail investors who continue to pour money into VIX ETFs (Figure 10), despite the very negative carry. As a result of the extreme steepness in the VIX futures curve, popular VIX ETFs are currently losing around 10% per month due to negative roll. If no shocks materialize over the coming months, it is likely that negative-carry long- VIX positions are taken off, exerting downward pressure on the steepness of the VIX curve, from currently “bubble” like levels.

  

  * * *

  And there you have it: on one hand JPMorgan – via Kolanovic – expects a major selloff, potentially as much as 20% should central banks not come to stocks' bailout this time; on the other hand you have JPM – via Panigirtzoglou – explaining that the "other" JPM guy is wrong, and that the conditions for a VaR shock are only modest embedded right now. Which, of course, is good news if only for the bears out there: after all if everyone was expecting an aggressive continuation of Friday's plunge, it would be assured that that would not happen. However, now that JPM's Greek fund flow expert has inject a trace of doubt that the VaR shock may happen, the contrarian selloff may well continue.

  Luckily, there will be a quick and easy way to find out of Panigirtzoglou is wrong: keep an eye on JGB trading overnight. If we the banchmark bond's yield surges, and if the Nikkei is getting whacked, the answer will be obvious: major quant and CTA funds are now deleveraging and until they are finished, there will be no rebound for the market for the time being. In fact, if central banks really think they can extricate themselves from micro managing the market and the economy (with only failure to show for it), then the next leg lower in the S&P500 could make on dizzy.

  In the end, it will all be about what Kuroda – central bank governor of the country that has almost all negative yielding paper in the world – with does and says in the next few hours because if the BOJ reveals yet one more disappointing surprise, all bets may just be off. As to where the 10Y JGB ends up trading, we don't know, however we do know that a lot of investors will be crushed if the "frontrun the BOJ" trade no longer works; in that case the TINA option, or there is no alterative to holding stocks, will promptly be replaced with a "lack of alternative" to holding cash. At least, until, such time as the Ken Rogoff proposal to ban cash is fully implemented and the next and final leg of the monetary policy cycle arrives, the one which ends in hyperinflation and the collapose of the global reserve-based system.

  

  

• Chair of University Engineering Department: Fire Did NOT Cause Collapse of Third Building on 9/11

  Today, the Chair of the Department of Civil and Environmental Engineering at the University of Alaska, Fairbanks, a PhD in structural engineering and one of the nation’s top experts in the cause of building collapses (Leroy Hulsey) publicly announced that – contrary to the government’s explanation – fire did NOT bring down World Trade Center building 7 on 9/11:
    

  
    

  He joins scores of other structural engineers, civil engineers, high-rise architects, and fire experts who say that the government’s story is false … Building 7 was NOT brought down by fire.

  And see this.

  

• Maker Of Drug Fueling Heroin Overdose Epidemic Is Lobbying To Keep Weed Illegal

  Submitted by Carey Wedler via TheAntiMedia.org,

  In 2016, cannabis is still illegal in many parts of the country, and pharmaceutical giant Insys Therapeutics Inc., a manufacturer of fentanyl, just demonstrated much of the reason why.

  Arizona is currently gearing up to vote on legalizing recreational cannabis. Ahead of that vote, Insys just contributed $500,000 in the fight against Proposition 205, U.S. News and other outlets report.

  The Arizona-based pharmaceutical company recently gave the funds to Arizonans for Responsible Drug Policy, an anti-legalization campaign group actively fighting to defeat the ballot measure.

  Insys’s contributions are particularly unsettling considering the company currently markets only one product — a spray version of fentanyl, a powerful opiate.

  Fentanyl has become one of the country’s most dangerous prescription drugs. It is more potent than traditional addictive opiates, which already claim thousands of lives every year and drive addicts to graduate to heroin use. Fentanyl is 50 times stronger than heroin and has been linked to a growing number of deaths in the United States. It is particularly dangerous when sold on the street and cut with other drugs. Fentanyl has been blamed for worsening the sharp rise in heroin overdoses as dealers across the country have begun adding it to heroin to make it stronger.

  Yet Insys and opponents of legalization are more concerned about a plant.

  According to Arizonans for Responsible Drug Policy, “four states and the District of Columbia have already legalized [cannabis] and are seeing disastrous repercussions for their youth, workplaces and communities.”

  Of course, this assessment is incorrect.

  Colorado has lower rates of teen cannabis consumption than the national average, and studies have shown driving while under the influence of the plant is far less dangerous than alcohol, a legal drug. Colorado has seen a spike in tourism, business, and tax revenues as a result of legalization.

  Interestingly, a study by Johns Hopkins university last year found states with medical marijuana had lower rates of overdose from opiates.

  In spite of Arizonans for Responsible Drug Policy’s claims they care about communities, it is completely comfortable taking half a million dollars from a company that produces one of the most toxic and addictive drugs on the market. Unsurprisingly, Insys previously sold a synthetic cannabis product and has already gained approval from the FDA to launch a similar one in the near future. These business ventures provide an even deeper understanding of why they oppose legalization.

  “[W]e are truly shocked by our opponents’ decision to keep a donation from what appears to be one of the more unscrupulous members of Big Pharma,” J.P. Holyoak, chairman of the Campaign to Regulate Marijuana like Alcohol said.

  His statement continued:

  “Our opponents have made a conscious decision to associate with this company. They are now funding their campaign with profits from the sale of opioids – and maybe even the improper sale of opioids. We hope that every Arizonan understands that Arizonans for Responsible Drug Policy is now a complete misnomer. Their entire campaign is tainted by this money. Any time an ad airs against Prop. 205, the voters should know that it was paid for by highly suspect Big Pharma actors.“

  Considering the myriad healing properties of cannabis, it is obvious why a pharmaceutical company in the business of selling powerful painkillers is eager to invest in maintaining prohibition. Legalizing and normalizing cannabis pose a direct threat to pharmaceutical profits considering cannabis is effective at treating pain, anxiety, degenerative diseases, and potentially even cancer. Though much more research is needed to determine the true efficacy of cannabis as medicine, the federal government’s insistence on keeping it illegal stifles further scientific examination.

  There are legitimate concerns about treating cannabis like alcohol — namely, that convoluted regulations make legalization a bureaucratic headache compounded by the substance’s illegal status with the federal government. Nevertheless, powerful interests are aggressively trying to keep cannabis illegal — Insys’s donation is the largest any group associated with Proposition 205 has received.

  Around the country, the pharmaceutical fight against legalization is joined by the tobacco lobby, the alcohol lobby, the private prison lobby, and law enforcement.

  Still, U.S. News reports the ballot measure is gaining popularity among Arizonans. While corporate cash has been known to influence election outcomes, only time will tell if Insys’s desperate attempts to keep a plant illegal will sway voters.

  

  

• DOJ Study Finds "Real And Nearly Unprecedented" Spike In Homicides Around U.S.

  We have frequently written about rising violent crime around the U.S. with an emphasis on the soaring homicides in Chicago which are up nearly 50% YoY (see recent posts here and here).  Now it seems as though others in the mainstream media are starting to take notice.

  The New York Times recently compiled data from around the country and found there were nearly 6,700 homicides reported in the 100 largest cities in 2015, a YoY increase of 950 or roughly 17%, with nearly half of the rise — 480 of the 950 — coming from seven cities.  Their study is tied to a June 2016 report published by the National Institute of Justice in which Richard Rosenfeld, a criminology professor at the University of Missouri-St. Louis, declared that “the [2015] homicide increase in the nation’s large cities was real and nearly unprecedented.”

  Murder rates rose significantly in 25 of the nation’s 100 largest cities last year, according to an analysis by The New York Times of new data compiled from individual police departments.

   

  The findings confirm a trend that was tracked recently in a study published by the National Institute of Justice. “The homicide increase in the nation’s large cities was real and nearly unprecedented,” wrote the study’s author, Richard Rosenfeld, a criminology professor at the University of Missouri-St. Louis who explored homicide data in 56 large American cities.

   

  In the Times analysis, half of the increase came from just seven cities — Baltimore, Chicago, Cleveland, Houston, Milwaukee, Nashville and Washington.

  The map below highlights the cities with the biggest spikes in YoY murder rates from 2014 to 2015.  That said, the data doesn’t speak to the continued rise in violence so far in 2016 with Chicago homicides up nearly 50% YoY.

  

   

  And here is a look at the YoY increase in homicides in the top 56 cities of the U.S. courtesy of the National Institute of Justice report from June 2016.

  

   

  The chart below helps illustrate just how pervasive the homicide spike across the country is with the most cities reporting a substantial spike in YoY murders since the early 90s.

  

   

  Meanwhile the New York Times attributes the spike in violent crime to a variety of issues including poverty, lack of aggressive policing in the wake of protests related to “high-profile police killings of African-Americans”, and increased drug usage.

  In his study, Dr. Rosenfeld said that rising crime might be linked to less aggressive policing that resulted from protests of high-profile police killings of African-Americans. But he said this hypothesis, a version of the so-called Ferguson effect, which has spurred heated debate among lawmakers and criminologists, must be further evaluated.

   

  Some experts attribute the sudden spike in violence largely to a flood of black-market opiates looted from pharmacies during riots in April 2015. The death of Freddie Gray, a young black man who sustained a fatal spinal cord injury in police custody, had set off the city’s worst riots since the death of the Rev. Dr. Martin Luther King Jr.

   

  During the riots, nearly 315,000 doses of drugs were stolen from 27 pharmacies and two methadone clinics, according to the Drug Enforcement Administration, a number much higher than the 175,000 doses the agency initially estimated.

  The “why now” question is something we recently addressed in another post entitled “Milwaukee Homicides Soar – What Is Going On In the Murderous Midwest?“.  While the typical explanations for violent crime (e.g. poverty, unemployment, etc.) may explain why crime is higher in certain cities it certainly doesn’t explain why the sudden spike is occurring now. Thomas Abt of the Harvard Kennedy School of Government thinks the sudden spike is more likely due to the “Ferguson Effect” or a concept he refers to as “legal cynicism.” 

  The key question is why the spike in violence now?  Ask any “expert” to explain the cause of violent crime and you’ll get a range of responses from systemic problems of poverty, unemployment, lack of education of inner city youth, breakdown of the family unit, etc.  The problem is that none of those things explain the sudden changes in violence we’re currently witnessing in the Midwest.

   

  Thomas Abt, senior research fellow with the Harvard Kennedy School of Government, believes the issue is more likely what other political commentators have dubbed “the Ferguson Effect.”  Writing for The Marshall Project, Abt discussed what he thought might be causing the sudden spike in violent crimes in the Midwest:

   

  It is unclear what is driving the problem, but my own hunch – and it is still just a hunch at this point – involves a criminological phenomenon called legal cynicism. Multiple studies have demonstrated that, controlling for other factors, when communities view the police and criminal justice system as illegitimate, they become more violent. When people believe the system is unwilling or unable to help them, they are more likely to take the law into their own hands, creating the cycles of violent retribution that were chronicled so vividly last year in Jill Leovy’s Ghettoside.

  The “Ferguson Effect” explanation does seem to be supported by a substantial and sustained spike in Baltimore homicides after the Freddie Gray death.

  

  

   

  The question is how comments like the ones below from our commander-in-chief  impact whether people “view the criminal justice system as illegitimate”?

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

   

  November 2014 Comments Regarding Ferguson grand jury decision – “The law too often feels like it’s being applied in a discriminatory fashion….Communities of color aren’t just making these problems up….These are real issues. And we have to lift them up and not deny them or try to tamp them down.”

   

  May 2015 Comments at Lehman College – The catalyst of those protests were the tragic deaths of young men and a feeling that law is not always applied evenly in this country. In too many places in this country, black boys and black men, Latino boys, Latino men, they experience being treated differently by law enforcement — in stops and in arrests, and in charges and incarcerations. The statistics are clear, up and down the criminal justice system; there’s no dispute.

  We’ll let you be the judge of that.

  

  

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• Global Economic Overview (Brexit, China, Screwflation, Humility, Patience… )

   

  Global Economic Overview (Brexit, China, Screwflation, Humility, Patience… )

   

  By Vitaliy Katsenelson, CFA The following is an excerpt from Investment Management Associates’ second-quarter letter to investors (also published on Institutional Investor)

  In this letter we are taking up the ambitious goal of painting a picture of the global economic landscape as we see it, in order to walk you through the investment process that we been fine tuning for this less-than-exciting picture.  

  The Answer Is Not in Your Econ Book

  The Great Recession may be over, but seven years later we can still see the deep scars and unhealed wounds it left on the global economy.  In an attempt to prevent an unpleasant revisit to the Stone Age, global governments have bailed out banks and the private sector.  These bailouts and subsequent stimuli resulted in swollen global government debt, which jumped 75% from $33 trillion in 2007 to $58 trillion in 2014.  (These numbers come from a recent McKinsey study on global debt.  They are the latest numbers we have, but we promise you they have not shrunk since.)

  A lot of things about today’s environment don’t fit into economic theory.  Ballooning government debt should have brought higher – much higher – interest rates.  But central banks bought the bonds of their respective governments and corporations, driving interest rates down to… well, today a quarter of global government debt “pays” negative interest.  

  The concept of positive interest rates is straightforward.  You take your savings, which you amass by foregoing current consumption – not buying a newer car or making fewer trips to fancy restaurants, and lend them to someone.  In exchange for your sacrifice you receive interest payments.  

  With negative interest rates something very different happens: You lend $100 to your neighbor.  A year later, the neighbor knocks on your door and with a smile on his face repays that $100 loan in full by writing you a check for $95.  You had to pay him $5 for foregoing your consumption of $100 for a year.  This is what negative interest rates are!  Try to explain this logic to your kids.  We tried to explain it to ours and failed, miserably.  

  The key takeaway is this: negative and near-zero interest rates show central banks’ desperation to avoid deflation, and more importantly they highlight the bleak state of the global economy.

  In theory, low and negative interest rates were supposed reduce savings, get consumers off their butts, and stimulate spending.  In practice the opposite has happened – the savings rate has gone up.  As interest rate on their deposits declined, consumers felt that now they had to save more to earn the same income.  Go figure.
  Some countries resort to negative interest rates because they want to devalue their currencies.  This strategy suffers from what economists call the fallacy of composition – the mistaken assumption that what is true of one member of a group is true for the group as a whole.  As a country goes to negative interest rates, its currency will decline against others – arguably stimulating its export sector (at the expense of other countries).  But there is absolutely nothing proprietary about this strategy: other governments will do the same, and in the end all will experience lowered consumption and a higher savings rate.  

  The following point is so important we want to repeat it, bold it, italicize it, and underline it: If our global economy was doing great, interest rates would not be where they are today!  

  As We Zoom in Things Get Worse

  Let’s start with Europe, the world’s second largest economy.  European political (EU) and monetary (EMU) unions were great experiments that made a lot of sense on paper.  Europe, which had roughly the same size population and economy as the US, was at a competitive disadvantage, as dozens of currencies embedded extra transaction costs in cross-border trade, and each currency separately had little chance to compete with the US dollar for reserve currency status.  

  There were also important noneconomic considerations. Germans were haunted by their past; they had started two world wars in the 20th century, and a united Europe was their way of lowering the chances of future European wars.

  EMU sounded like a very logical marriage of all the significant powers of post–World War II Europe. But the arrangement was never really a marriage; it was more like a civil union. EMU members combined their currencies into one, the euro. They agreed to use the same central bank and thus implicitly guaranteed one another’s debts.

  Though treaties put limits on budget deficits (limits that, ironically, Germany was the first to exceed), each country went on spending its money as it wished. Some were relatively frugal (like Germany); others (Portugal, Ireland, Italy, Greece, and Spain) went on spending binges like newly hitched college students who had just gotten their first credit card, with an irresistibly low introductory rate and a free T-shirt.  

  The European Union is a collection of states that are vastly different from each other.  They are separated by culture, language (which impedes labor mobility resulting in semi-permanent labor productivity disparity between countries – think Greece and Germany), economic growth rate, total indebtness, and history. (Germany, for instance, suffered through hyperinflation in the early twentieth century and is thus paranoid about inflation.)

  Now let’s turn to Brexit – the UK referendum on exiting the EU.  Ironically, the UK doesn’t have half the problems that most EU nations are going through.  Since it is not part of the European Monetary Union, it has retained its currency and its central bank.  

  The UK’s main dissatisfaction with EU membership is due to the immigration issue.  Since treaties have turned the EU into a borderless union, when Germany accepted refuges from Northern Africa it basically made a unilateral decision on behalf of all EU members to accept those refuges to all EU countries.  High unemployment, wage stagnation, and Muslim terrorism are now endemic in the EU, and you can see how the UK citizenry might have a problem with this.  

  After the Brexit vote, the financial media lit up with opinions on its consequences for the EU and global market economy.  They’ve varied from “Brexit is a non-event” to “This is a Lehman moment for the global economy” (referring to Lehman Brothers going bankrupt and almost bringing the financial system to a halt in 2008).  The arguments on both sides are quite convincing:  

  The argument for Brexit being a non-event is simple and straightforward.  The UK maintained its currency; thus dis-joining the EU will bring lower complexity.  The UK and EU will forge new trade treaties.  There is a fear that the EU may impose trade sanctions on UK, not so much to punish the UK as to threaten other EU members that exit will come at a stiff economic cost (effectively turning this voluntary club into a prison).  However, the UK is a net importer of goods from the EU; thus any sanctions will hurt remaining EU members more than the UK.  

  Of course, the UK may never exit the EU.  The referendum was not binding; it was there to measure the temperature.  The new prime minister may decide to ignore the will of the people and remain in the EU.  

  The Lehman moment argument is less simple, but it is not unimaginable either.  Brexit may provide a spark that will ignite already gasoline-soaked ground.  Though the EU and EMU were supposed to unite Europeans, they may have had the opposite effect – they may have caused a groundswell of nationalism.   

  In all honesty, we are concerned more about Italy than the UK.  Italy is the third largest economy in the EU and the second most indebted one.  Its debt to GDP stands at 132% (Greece is at 171%).  Seventeen percent of Italian bank loans are non-current.  In the depths of the financial crisis, that number was 5% in the US.  Italian lenders account for nearly half of bad debt in the EU (source WSJ).  

  If Italy was not part of the European Monetary Union (EMU), it would just print lira and bail out its banks.  But it gave up that luxury when it joined the EMU.  To make things worse, in 2014 the EU passed a law that prohibits governments from bailing out their banking systems; thus the shareholders, debtholders, and depositors may bear the brunt of the eventual bailout.  Unless the EU passes a new law that bends the 2014 law – or the Italian government takes matters into its own hands, violating the EU charter – we may see Italian debtholders and depositors hit with the cost of bank bailouts take to the streets and demand “Italexit.”  

  Nationalism is a highly emotional, zero-sum, us-against-them sort of business. Add immigration concerns on top of economic ones and it’s not hard to see how Europe has turned into a highly combustible mixture looking for a match.  And since emotions are often anti-logical, future decisions by EU countries may not necessarily be beneficial to the European continent.  

  Since the situation in Europe is so complex and combustible, we don’t know whether Brexit will be just another match that simply burns out or the one that starts the fire.  Will it trigger other exits?  Will it slow down EU growth, thus straining an already leveraged system?  We don’t know, and nobody does.  

  China is the third largest economy in the world and is living through the largest debt bubble we probably we’ll ever see in our lifetime.  From 2007 to 2014 its debt quadrupled from $7 to $28 trillion (according to McKinsey).  Over the same time period its economy tripled, growing from $3.5 to $10.5 trillion.  These numbers are staggering, and they point to one indisputable fact: all Chinese growth since 2007 came from borrowing.  There was no miracle in it.  

  But it gets worse, much worse. The numbers also show that every $1 of new debt brought only cents of GDP growth.

  In the absence of skyrocketing debt, the Chinese overcapacity bubble, which was already fully inflated pre-2007, would have burst years ago.  

  As the government continues to engineer growth using debt, every yuan of debt will bring less growth. The laws of economics have not been suspended in China.   American economist Herbert Stein’s law states that things that cannot go on forever, won’t.  When its debt bubble bursts, China will turn from being a tailwind for global growth into a headwind.  

  This brings us to the world’s fifth largest economy, Japan.  It is the most indebted developed nation in the world – its debt to GDP is over 230%.  Japan is the proof of Herbert Stein’s law – its economy is still suffering a hangover from what at the time seemed an endless real estate party (bubble) that lasted from the mid ’80s into the early ’90s. Japan has been on the QE and endless stimulus bandwagon longer than anyone else and has nothing (well, except a lot of debt) to show for it.  

  Japan also has the oldest population in the world – 26% of its population is older than 65 (in contrast to the US, where the figure is only 15%).  Rising debt and an aging population are a double negative for the economy, as debt per capita is rising at an even faster rate than total debt. And since the working population is declining at an even faster rate than the population, debt per working person is growing at an even faster rate.  

  From what we just told you, you might think Japan is paying the highest interest rates in the world, somewhere in the high teens.  Wrong! The Japanese ten-year bond yields negative interest.  

  We just spilled a lot of digital ink to give you a brief overview of what we see around the world.  We did not do it to increase your consumption of alcohol or anti-anxiety medicine.  

  We did it for a few reasons.  First, we wanted to show you that stock market performance has not been driven by the improving health of the global economy.  Just as negative interest rates are not a positive for the continued health of the economy, nor does current stock market performance augur rosy future returns for stocks.  In fact, the opposite is true.  The bulk of the stock market gains are due to one variable: the expansion of the price-to-earnings ratio.  S&P 500 earnings have stagnated since 2014.  

  Stock prices have gone up because the Federal Reserve and other central banks have squeezed all investors to the right side of the risk curve.  Stocks, and especially high-quality ones that pay dividends, are looked upon as bond substitutes.  Investors now look at the dividends of those stocks and compare those yields to what they can earn in Treasuries.  This strategy will end in tears, as these bond-substitute stocks are significantly overvalued (see Coke example further on). 

  Secondly, we wanted to show you the headwinds we are facing and what we are doing to avoid having them deflate the sails of your portfolio.  Summarizing, these headwinds are:
  The risk of lower or negative global economic growth.  If we get higher economic growth, we’ll treat that as a bonus.
  Something-flation.  Inflation (high interest rates), deflation (low interest rates) or screwflation (higher interest rates and deflation).  We don’t know which of these extremes we’ll see and in which order.  Nobody does.  Despite their eloquence and portrayed confidence, financial commentators arguing one or another extreme point of view on CNBC don’t know, either.  In fact, the more confident they are more dangerous they are.  The difference between us and them is that we know we don’t know and are therefore trying to construct an “I don’t know” portfolio that can handle any extremes.
  And finally, stock valuations will decline.  

  This is a time for humility and patience.  Humility, because saying the words “I don’t know” is difficult for us testosterone-laden alpha male money manager types.  

  Patience, because most assets today are priced for perfection.  They are priced for a confluence of two outcomes: low (or negative) interest rates continue to stay where they are (or decline further) and above-average global economic growth.  Both happening at once in the future is extremely unlikely.  Take one of them away (only one!) and stock market indices are overvalued somewhere between a lot and humongously (we don’t even try to quantify superlatives).  

  Take both away and… 

  Vitaliy N. Katsenelson, CFA, is Chief Investment Officer at Investment Management Associates in Denver, Colo. He is the author of Active Value Investing (Wiley) and The Little Book of Sideways Markets (Wiley).  

  His books were translated into eight languages.  Forbes Magazine called him "The new Benjamin Graham".   To receive Vitaliy’s future articles by email or read his articles click here.

  

• The Great 9/11 Coverup

  Authored by Eric Zuesse, originally posted at Off-Guardian.org,

  Did you happen to notice that after more than a decade of the ‘news’ media’s demanding publication of “the missing 28 pages” (which turned out actually to have been 29 pages) from the U.S. Congress’s investigation into 9/11, the document’s press-coverage, finally, on 15 July 2016, turned out to have been little-to-none? And did you notice that the little there was, said it contained nothing important? Perhaps you didn’t get to know even this much about the press-coverage of it, because the U.S. Congress, which had been hiding the document ever since 2003, dumped it on a Friday night, in order for it to receive as little press-coverage as possible.

  Well, what that document actually showed, and proved (and cited FBI investigators who could then have testified in public, if requested), was the opposite of unimportant: that the Saudi Ambassador to the United States, Prince Bandar bin Sultan al-Saud (who was known in Washington as “Bandar Bush,” because of his closeness to the Bush family), had secretly been paying the Saudi handlers of at least two of the 15 Saudis among the 19 9/11 hijackers, and that Bandar’s wife and other relatives were also paying those hijackers-to-be, and their families — thus enabling the future hijackers to obtain the necessary pilot-training etc., for the 9/11 attacks.

  How much news-coverage of this was there in the U.S.’democracy’ that is supposed to be informing the public about such things, instead of continuing the cover-ups of them?

  Why do U.S. ‘news’ media hide it — after having demanded for more than ten years that the ‘missing 28 pages’ become published?

  But that’s not all there is to the cover-up: As I mentioned and documented in my July 20th news-report on “9/11: Bush’s Guilt and the ’28 Pages’,” U.S. President George W. Bush was also involved in the 9/11 operation: He had instructed his National Security Advisor Condoleezza Rice to block his obtaining from U.S. government sources any specific information about what the attacks would entail, or about the date on which they would occur. (Presumably, he already knew, via his private communications with Prince Bandar or someone else who was in on the event’s planning, all that he had wanted to know about the coming event.)

  When CIA Director George Tenet, on 10 July 2001, was practically screaming to Rice to allow him into the Oval Office, to meet privately with the President to inform him of how urgent the situation had become to take action on it, she said: “We’re not quite ready to consider this. We don’t want the clock to start ticking.” Tenet was shocked, and dismayed. That encounter with Rice was intended to urge the President to establish a hit-team to take out bin Laden, so as to avert the operation — whatever it was, or would turn out to be. The way that Chris Whipple put this, in his terrific report in Politico magazine, on 12 November 2015, titled “The Attacks Will Be Spectacular”, was that, “they did not want a paper trail to show that they’d been warned.”

  Apparently, “Bandar Bush” knew the details, but his friend George W. Bush did not — Bush needed “deniability” — it’s not for nothing that he was able to say, after the event, as Condoleezza Rice was to put it when speaking to reporters on 16 May 2002, “This government did everything that it could in a period in which the information was very generalized, in which there was nothing specific to react to … Had this president known of something more specific, or known that a plane was going to be used as a missile, he would have acted on it.”

  How does she now square that statement with her having told Tenet, on 10 July 2001, “We’re not quite ready to consider this. We don’t want the clock to start ticking.”? What ‘clock’? Why not? No one asks her — especially not under oath.

  Is that the way things happen in a democracy, even 15 years after the event?

  On 10 September 2012, Kurt Eichenwald, who had reported for The New York Times, was then issuing his new book on the aftermath of the 9/11 attacks, 500 Days: Secrets and Lies in the Terror Wars, and he headlined an op-ed then in his former newspaper (which thus could hardly have declined to accept it), “The Deafness Before the Storm”, describing the most puzzling aspect of the lead-up to 9/11:

  It was perhaps the most famous presidential briefing in history.

  On Aug. 6, 2001, President George W. Bush received a classified review of the threats posed by Osama bin Laden and his terrorist network, Al Qaeda. That morning’s “presidential daily brief” — the top-secret document prepared by America’s intelligence agencies — featured the now-infamous heading: “Bin Laden Determined to Strike in U.S.” A few weeks later, on 9/11, Al Qaeda accomplished that goal.

  On April 10, 2004, the Bush White House declassified that daily brief — and only that daily brief — in response to pressure from the 9/11 Commission, which was investigating the events leading to the attack. Administration officials dismissed the document’s significance, saying that, despite the jaw-dropping headline, it was only an assessment of Al Qaeda’s history, not a warning of the impending attack. While some critics considered that claim absurd, a close reading of the brief showed that the argument had some validity.

  That is, unless it was read in conjunction with the daily briefs preceding Aug. 6, the ones the Bush administration would not release. While those documents are still not public, I have read excerpts from many of them, along with other recently declassified records, and come to an inescapable conclusion: the administration’s reaction to what Mr. Bush was told in the weeks before that infamous briefing reflected significantly more negligence than has been disclosed. In other words, the Aug. 6 document, for all of the controversy it provoked, is not nearly as shocking as the briefs that came before it.

  Those “briefs” still are not published. And now, after the revelation, by Chris Whipple, that Condoleezza Rice was under instruction from her boss not to allow him to be informed too early for “the clock to start ticking,” we can understand why there is still so much that hasn’t yet been released to the public, in our ‘democracy’, about who was really behind 9/11.

  On 17 April 2016, Paul Sperry in the New York Post headlined “How US covered up Saudi role in 9/11”, and he reported that his own investigation showed: “Actually, the kingdom’s involvement was deliberately covered up at the highest levels of our government. And the coverup goes beyond locking up 28 pages of the Saudi report in a vault in the US Capitol basement. Investigations were throttled. Co-conspirators were let off the hook.” But isn’t it time, now, to demand that Bush’s role also be explored — not only that the Saud family’s (especially Bandar’s) role in it be prosecuted? After all, Bush was the one who took a Presidential oath.

  Or: Is the U.S. not enough of a democracy, for that to happen — for the Constitution to be enforced, by the U.S. President after Bush (the President who will not prosecute his intended successor)? How total must the non-accountability at the top be, before we call the country a “dictatorship” — only a fake ‘democracy’?

  Regarding the actions that brought down the three World Trade Center Buildings, WTC1, WTC2, and WTC7, there also is good reason to distrust the official ‘history’. Witness accounts both by firefighters and by the general public were videoed at the time saying that they heard multiple explosions, which indicated controlled demolitions after the two plane-crashes into WTC1 and WTC2. Other witnesses of the WTC7 collapse also heard explosions. Regarding WTC7, there was testimony from the owner of the WTC, Larry Silverstein, saying that he instructed the Fire Department not to go into WTC7 but simply to “pull it.” (And his subsequent statement saying he didn’t really mean that and he meant only to “pull” the firefighters from that building, which actually had none, was debunked.)

  Even the government’s “Final Report on the Collapse of World Trade Center Building 7” acknowledged (p. 48) that there had been “(2) a freefall descent over approximately eight stories of gravitational acceleration for approximately 2.25 s[econds]” meaning that that 8-story segment had been blasted so that, throughout those 8 stories, there was zero resistance to the collapsed portion falling through it from above.

  This alone constitutes solid and conclusive physical proof of the official lie, though itself published in the official source. And yet on the very next page in that official document is stated, “Blast events did not play a role in the collapse of WTC 7. … There were no witness reports of such a loud noise.”

  But there were such witness reports; and, anyway, the very admission (on the prior page) that there was free-fall over an 8-story segment of the building, constitutes acknowledgement of physical proof that there had been controlled demolition on WTC7. Further, there has even been expert testimony that nano-thermite was used to bring down each of these buildings. But clearly, whatever the truth of the matter is, the U.S. Government has been lying, and continues to lie, about 9/11. For at least the past 16 years, we’ve been living in a dictatorship. And the evidence suggests that this has been the case ever since at least 1981.

  *  *  *

  Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

  

  

• Why One Hedge Fund Is Once Again Preparing For The End Of The Euro

  Our friends at Fasanara Capital have released a new report, which in keeping with the Mayfair fund’s recent trend of gloomy predictions, has looked beyond the current set of adverse socioeconomic development jarring Europe, and looks forward to the “last act of the Euro”, explaining why “whatever it takes” is now over, and why the time to panic about the future of the common currency is once again nigh.

  Here is their latest analysis:

  The last act begins for the EUR peg

  Why the EUR-peg is likely to break
  Why new QE is deflationary and counterproductive, so it may soon be up for review

  We have long been negative on the prospects for the EUR peg to survive the test of global structural deflation and local ineffective policymaking. Back in 2013, we wrote of the instability and unsustainability of a currency construct set for failure. At the time, we highlighted three big problems with it:

  • Structural Deflation / Secular Stagnation: debt overhangs and chronic over-supply (misallocation of capital), bad demographics (aging population, falling working population), technological disruption (‘Amazon effect’, 4th Industrial Revolution), falling productivity of credit (diminishing marginal impact of new lending, while also credit growth decelerates) all conspire to the deficient aggregate demand, the structural deflation and the liquidity trap, across the globe: a process which began well before the Global Financial Crisis and the Lehman-moment.

    Why does deflation matter that much? Because durable deflation in a period of economic stagnation is like a death penalty for debt-laden countries burdened with high unemployment: no matter how much virtuous they get fiscally their debt-GDP ratio is set to rise over time, i.e. their debt go up in real terms and make a recovery progressively less likely. So they remain trapped in a long period of debt deflation / balance sheet recession. Take the case of Italy, for example, at 132.5% gross public debt-GDP, where at zero inflation even a primary surplus of ~8% would just about manage to prevent debt ratios from rising further. And such surplus would be heavily contractionary, thus a self-defeating strategy. Such is the evil of deflation. No wonders the ECB embarked on unprecedented expansion of the monetary base. But it failed at stopping deflation. Here are our thoughts in 2014 on that.

  • EU mistaken diagnosis: instead of seeing Secular Stagnation for what it is, EU policymakers saw a problem of low productivity caused by a lack of structural reforms and fiscal discipline. The ensuing quest for austerity drove by ‘internal devaluation’ and aggravated the crisis, helping the inner workings of secular stagnation.
  • Dysfunctional politics: the inability to reach an agreement and put to work sound crisis resolution policies at the EU level has become proverbial. It is still fresh in memory the epic struggle to tackle the restructuring of Greece, which accounts for a ~1% of the bloc’s GDP, while it took over 90 meetings – between EU summits, EU ministers etc – to reach a temporary solution. Gridlock reigns and stands in the way of efficient policymaking. Not so long ago, lack of coordination and a flawed currency construct led to the ‘Black Wednesday’ ERM’s fiasco, with Sterling breaking away disorderly.

  

  The implosion of the EUR may not be such an outlier in financial history: after all, each and every fixed exchange-rate regime in history was let go, sooner or later. However, there was reason for hope this last June. The Brexit referendum sent an unequivocal message in rejection of the current state of affairs of EU policymaking. In addition to issues with migrations flows and income inequality, the anti-elite stance taken against Brussels was hard to miss. The more so as it added to several other indicators of anti-elite discontent all over the world, from the rise of Trump in the US to support for extremists in Austria and Hungary, etc. Brexit was part of a trend, not an isolated data point.

  Sure thing, secular stagnation, technological disruption and globalization all conspire to feed on income inequality and stagnant real wages to a point where they can easily serve as scapegoats. But the EU crisis policymaking fell short (unable to avert deflation), if not backfired (new QE is disinflationary), while the EU red tape super-state exacerbated the crisis (further impediment to growth), leading to the political defeat of Brexit. First and foremost, it was a defeat for the EU.

  On grounds of logical thinking, it should have worked as the proverbial canary in the coal mine, the last minute wake-up call averting disaster. It did not.

  In the aftermath of the Brexit referendum, we thought Europe had the unmissable chance to seize the opportunity for building consensus for deep structural reforms of the EU, acknowledging defeat and learning from past mistakes. Yet, despite the second biggest GDP in the EU opting to drop out, the EU is very much business as usual, much as Brexit never happened. To this day, no grand action plan is in sight, no sense of urgency, except the idea of bullying the UK upon negotiations in an attempt to deter further uprising across Europe.

  The list of past mistakes is long and getting longer:

  • Pushing for fiscal austerity at a time of secular stagnation, mistaking a problem of deficient global aggregate demand for one of lack of structural reforms.
  • Wasting a most precious monetary expansion through QE without accompanying it with redistributive fiscal expansion. QE was then able to purely buy time and kick the can down the road some more
  • Failing to complete the Banking Union, providing the safety net of deposit insurance and other structural reforms of the banking system. To the contrary, bail-in rules were introduced, which only led to financial instability and a crisis of confidence in the banking system, further undermining their profitability, thus curtailing bank lending to the real economy and wasting the efforts at the monetary level
  • Preserving the supremacy of EU bureaucracy over pragmatic crisis policymaking, thus dampening already-scarce animal spirit, and ultimately leading to disaffection for the EU project

  On the other hand, we believe only a dramatic shift in narrative at the EU level could derail the train before it hits the wall, with measures including:

  • Temporary Suspension of the Fiscal Compact
  • Banking Union completion via a deposit guarantee, in exchange for fiscal controls post-normalisation of growth rates/inflation
  • Allowing for State aid of troubled banking sector (e.g. Italy), before State intervention has to occur anyway but at zero-periodic equity valuations
  • Programming substantial Fiscal Expansion, possibly Helicopter Money down the road (discussed below), as ways of forcing income redistribution policies (Brexit vote had inequality, not just immigration, as key tipping factor). Deflation is the elephant in the room, that needs to be taken care of, or else all bets are off.
  • Democratic elections for Brussels’ bureaucracy-enabling functions
  • Diversion of Brussel policymaking away from red tape overdrive, clear endorsement of member states for most matters

  The biggest threat to EU survival is then not so much Brexit but the lack of response that followed. The dramatic warning signal shot by Brexit fell on the deaf ears of inadequate EU policymaking.

  We doubt the UK will ever prove weak enough to help the case of the EU current policymaking. If anything, so far it seems like the UK is performing remarkably well, if one is to look at the business and consumer confidence surveys of late. The GBP is weaker than any QE by Mervyn King/Mark Carney could ever achieve/dream of. But is surely too early a time to draw conclusions, Article 50 has not even been triggered yet. Chances are, though, that the UK will do ok even after that, relative to the rest of Europe. We expect a mild recession, if any, and a rebound afterwards. And that is just more problem for Europe (see also Fasanara Interview at CNBC: Brexit: don’t think UK is ‘standing on the cliff of a disaster’). The UK doing well will send another unequivocal message to struggling EU countries: there is life after the EU.

  Professor Joseph Stiglitz has recently reaffirmed his view that the EUR will break, as ‘the cost of keeping the Eurozone together probably exceeds the cost of breaking it up’. Earlier this year, former BoE’s Governor Mervyn King predicted the collapse of the Eurozone. Russia’s President Vladimir Putin recently said that Russia holds 40% of its FX reserves in EUR, while he thinks the Union may comprise fewer stronger countries in the future (see BBG interview), thus leading to an appreciating EUR. The time for treating the EUR-peg as a taboo may soon be past us, and an open discussion become the dominant narrative, in pursuit of a long-term durable solution to economic stagnation, in an attempt to save the European Union, so to orderly drive the process as opposed to end up being overwhelmed by the trending course of events.

  Timeline for a EUR de-peg

  In terms of timing the de-peg, other than saying that whatever is unstable and unsustainable will necessarily have to come to an end, that no fixed currency regime ever survived the test of time, the next obviousness is to say that it is impossible to know what precise trigger will precipitate events. However, one can look at the steady growth of EUR-sceptics across Europe, and interpolate from there to get some rough idea.

  At present, when looking through populist parties and EUR-sceptics, an estimated 30%-40% of the European electorate would stand to vote against staying in the Monetary Union (which does not necessarily mean leaving the EU). That number shrunk somehow after the Brexit vote, in fear of disaster hitting the shores of the UK. One year from now, it may be evident that the UK is doing just fine, while some parts of Europe further crumbled. At that point, the 30%-40% will have become 50%-60%, offering the political capital for a regime change. That may trigger the change in course for crisis policymaking that might have happened today if only the strong message of Brexit was not wasted. At that point then, the EUR-peg may be going, in one of two ways: orderly sacrificed in an attempt to preserve the EU, or disorderly as momentum/chaos takes the upper hand.

  

  So far QE provided the glues and tapes to stick the broken pieces together in Europe. Now though, it seems that QE may be running out of steam.

  * * *

  Tomorrow we will present the second part of Fasanara’s analysis looking at why QE no longer works.

  

  

• The Disturbing Signs Of Global Conflict Continue To Gather Pace

  Submitted by Graham Vanbergen via Stratgic-Culture.org,

  The signs are ominous, the rhetoric constant. Whichever way you look at it, the world is slowly descending into an ever greater spiral of conflict. We all know that the current wars raging in the Middle East have the potential to go catastrophically wrong and pull the super-powers into something much bigger.

  You also know things are not good when the so-called ‘conspiracy theories’ from alternative media outlets eventually goes mainstream, and there’s no shortage:

  • Britain’s Daily Telegraph: Here’s how World War Three could start tomorrow
  • America’s NewYork Times simply entitled: “World War Three”
  • Canada’s Global Research: World War III in The Pipeline? US and European Allies Threaten Russia
  • Australia News Network: World War 3 Update: US Warns China at G20 Summit
  • Russia’s RT: China & Russia’s G20 message: Confrontation with West not our desire
  • Iran – Press TV: World War III a coin flip if Hillary elected
  • Germany Der Spiegel: War against Russia

  To confirm the state of the world today, the Global Peace Index states, and I quote – “There are now only ten countries in the world that are free from conflict”. 

  The Independent has a 40 second video (HERE) of these ten countries, it’s worth watching, you’ll be surprised…

  Some believe World War III has already started, most dispute that. It takes no more than a spark to light the fire and currently there are a lot of sparks flying around. Even political instability in the European Union as a result of a refugee crisis is a cause for concern. Pew Research, published just last month, confirmed that European’s fear a wave of refugees will mean more terrorism and fewer jobs. Violent protests have broken out, politician’s are worried. The VP of the International Relations Committee at Hungary’s parliament, Jobbik Member Marton Gyongyosi was supported by other EU leaders when he has suggested that “physical protection of our borders” is required. He went further –

  "The US caused this (refugee) problem in the neighborhood of Europe and then leans back criticizing European countries for not dealing with the problem efficiently.”

  In that context, a few EU leaders are calling for an EU wide army and its own intelligence service. It seems America and therefore NATO are not as trusted as they once were. The US/EU trade deal TTIP, the largest deal in the history of humanity, is reported as being over. Is this evidence of the widening gap of disagreement, maybe.

  The outcome is a changing political landscape. Before the European Union was created by the Maastricht Treaty on November 1st 1993 there were just 25 nationalist political parties. Since the birth of the formalised EU there has been a 150 per cent rise in political parties on the extremes of the political spectrum, now totalling 64. One of them was Ukip that focused on immigration and subsequently produced the ‘Brexit’ protest vote that now threatens to tear the EU project apart.

  North Korea is a wild card scenario – anything could happen, but if South Korea was attacked, America would have no option but to step in. And what would China do – it’s anyone’s guess.

  

  John Pilger’s interview on Going Underground spells out the increasing risk of a global conflict

  Tension has substantially risen around the world over USA and Russia/China relations, the South China Sea, Ukraine and Crimea, multiple Mid-East conflicts, north Africa and South America. One should not forget currency wars, economic and political sanctions adding to the global strain. John Pilger’s interview on the Threat of World War Three leaves the viewer in no doubt as to where he lays blame, and if anyone knows about war, he should, he’s covered most of them since Vietnam.

  Even basic resources are a cause for concern. Natural water for one, food scarcity, food security and environmental disasters all add to a backdrop where global terrorism is massively on the rise, global debt is now a third bigger than prior to 2007, mass protests due to political instability, such as South America (Brazil being a new hotspot) all adding to increasing tension.

  The geo-political situation is now characterised by ever-increasing militarism across the world, bringing the prospect of another world war closer than at any time since 1939.

  Scrutinising the underlying issues and causes for the devastating outbreak of World War I in 1914 which ended up killing 17 million, Leon Trotsky laid bare the startling similarities between the crisis of the world economy at the time and the turn to militarism. Historical records display a relevance for today that should serve as an advance warning of the horrors that extreme neoliberalism and globalisation offers up if we do not make efforts to pull back from the brink.

  From WSWS  in an article entitled “Capitalist breakdown and the drive to war,” comparisons are made between the extreme economic conditions just prior to the first world war and today.

  “The years leading up to the outbreak of World War I, like the period prior to 2008, were marked by stormy economic growth. But by 1913–14, the limits to that growth had been reached and the world economy experienced a fundamental shift. From the middle of the 1890s, Trotsky explained, the basic curve of capitalist development climbed steeply upwards. But this very upswing created the conditions for a breakdown. “In 1914,” Trotsky wrote, “a crisis broke out which marked not merely a periodic oscillation, but the beginning of an epoch of prolonged economic stagnation. The imperialist war was an attempt to break out of the impasse.” Further economic development at the pace of the previous period was “extremely difficult,” as the bourgeoisie “flinched against the limits of the market.” “This created class tensions, made worse by politics, and this led it to war in August 1914.”

  

  Corrupt bankers represent a threat not only to those they directly rip off but also potentially the entire global financial system, the Governor of the Bank of England has warned.

  The parallels are striking, particularly as the financial crisis forced upon us in 2007/8 by an out of control banking system, that benefited a tiny elite, caused wave after wave of economic turbulence, austerity and the dismantling of the social democratic movement that itself was born from the wreckage of World War Two. Peoples across the world are getting angry as inequality worsens.

  Mark Carney has written a very strongly worded letter, in his capacity as chair of the Financial Stability Board (FSB) to a global forum of national regulators, financial ministries and central banks – to the G20, which is currently meeting in China.

  “The incidence of financial sector misconduct has risen to a level that has the potential to create systemic risks” he says. The message is quite clear. Carney believes there is another systemic crisis centred around financial markets. Even he believes and openly stated that corrupt bankers now represent a threat not only to those they directly rip off but also to the entire global financial system. Last year, just four of Britain’s banks were fined well over £50billion ($67bn) for their egregious acts of criminality. Prison beckoned for no-one, whilst poverty soared. Don’t forget the London riots. Spreading like wildfire, the resulting chaos generated looting, arson, and mass deployment of police and resulted in the death of five people. In just three days, a dozens towns and cities were no-go areas of violence, 3,443 crimes reported, over a thousand arrests – from an unrelated spark.

  According to Jim Rickards, the CIA’s Asymmetric Warfare Advisor, the probability of a new global conflict is rising every day. In a startling interview from last year he reveals that all 16 U.S. Intelligence Agencies have begun to prepare for World War III. Richards is predicting the fall of the dollar with the result of “an extended period of global anarchy”.

  In the meantime, Russia is preparing to be attacked by NATO and America. Global Research reports that “Colonel General Leonid Ivashov, President of the International Centre of Geopolitical Analysis explained in an interview to KP, that ‘if data on Russia-NATO power balance at the Western direction is analyzed, as well as military activity build-up rate at our borders, scale of combat equipment deployment, if the grade of Russia’s demonization is estimated, one can say that preparation to a real war is taking place, as such acts are usually undertaken at the forefront of a war.’

  Russia, so threatened by the West, it is now building huge nuclear bunkers around Moscow to protect itself at a time when financial resources are at best ‘stretched’.

  As TIME reports “The South China Sea has instantly become uncharted waters for the globe’s two most-powerful nations. The ruling from the Netherlands, while legally binding, has no mechanism for enforcement. That means negotiations will be required to ease the growing territorial tensions in and around the South China Sea. If talks don’t happen, or go nowhere—and China continues to refuse to back down—a military clash could occur.”

  Dr.Paul Craig Roberts quite firmly believes a Third World War is currently being fought. How long before it moves into its hot stage he asks.

  “Washington is currently conducting economic and propaganda warfare against four members of the five bloc group of countries known as BRICS—Brazil, Russia, India, China, and South Africa. Brazil and South Africa are being destabilized with fabricated political scandals. Both countries are rife with Washington-financed politicians and Non-Governmental Organizations (NGOs). Washington concocts a scandal, sends its political agents into action demanding action against the government and its NGOs into the streets in protests.”

  

  “We have already seen what the New World Order has done with Islam” As Pope Francis says, “they have used it to foment a crisis, a clash of civilisations”

  Even The Pope believes the start of World War Three is underway – ““To be clear, when I speak about war, I speak about real war. Not a war of religion. There is a war of interests. There is a war for money. There is a war for natural resources. There is a war for domination of peoples” Pope Francis said, alluding to globalisation and the goals of the so-called New World Order of complete and total control over every human being on the planet.

  Already, the world has more displaced people than at any time during the course of either World War One or Two. The fight for resources as a direct result of globalism now threatens peace on every continent in the world.

  The Doomsday Clock is an internationally recognised design that conveys how close we are to destroying our civilisation with dangerous technologies of our own making, nuclear weaponry by far our most dangerous experiment, makes the clock tick each year. It puts the current time of war at 23.57 – just 120 seconds left.

  The current position of the Doomsday Clock is the closest it has been since 1984 and is actually a few clicks closer to reaching a global extinction event for humans than in 1962 when the Cuban missile crisis had twitchy American and Russian fingers on red buttons. What a cataclysmic ending for humanity, bombed back into the stone age. For what?

  

  

• Hillary Calls Trump Supporters A "Racist, Sexist, Homophobic, Basket Of Deplorables"

  Several days ago, the WSJ reported that in a change of strategy, Hillary would tone down her personal attacks on Trump to distance herself from an increasingly uglier mudslinging campaign on both sides. It didn’t last long: perhaps after she saw the latest polls which continue to slip away from her favor, and confirm the two candidates are again neck and neck, on Friday night during an LGBT fundraiser for her campaign in New York hosted by Barbara Streisand, Hillary unleashed an unprecedented ad hominem attack on what amounts a quarter of America, calling half of Trump’s supporters a “basket of deplorables.”

  Cited by BuzzFeed, Hillary made a statement which 4 years ago effectively lost Mitt Romney the election: “you know, just to be grossly generalist, you could put half of Trump’s supporters into what I call the basket of deplorables.”

  “Right?” she said as the crowd laughed and applauded. “The racist, sexist, homophobic, xenophobic, Islamaphobic — you name it,” Clinton continued. “And unfortunately there are people like that. And he has lifted them up. He has given voice to their websites that used to only have 11,000 people — now have 11 million. He tweets and retweets their offensive, hateful, mean-spirited rhetoric.”

  Clinton said the other half are people struggling who have found hope in Trump’s message.

  “That other basket of people are people who feel that the government has let them down, the economy has let them down, nobody cares about them, nobody worries about what happens to their lives and their futures, and they’re just desperate for a change,” she said. “They don’t buy everything he says, but he seems to hold out some hope that their lives will be different. They won’t wake up and see their jobs disappear, lose a kid to heroin, feel like they’re in a dead end. Those are people we have to understand and empathize with as well.”

  In other words, Hillary believes that half of America either see its future in a dead end, or is a gruesome caricature of a “racist, sexist, homophobic, xenophobic, Islamaphobic” redneck, something she has recently equated to the “alt right.” In a recent speech Clinton tried to tie her GOP rival in with the so-called alt-right movement, a loose fringe group that exists largely online and often appeals to anti-immigrant, anti-Semitic and white nationalist individuals.  

  While we enjoy Hillary’s attempts at broad-stroke stereotyping, what is rather ironic about Hillary’s instant alienation of about a quarter of Americans, is that five months ago the liberal FiveThirtyEight.com website found that Trump voters’ median household income was higher than the median in every state, sometimes by a wide margin; and that 44% of Trump voters have college undergraduate degrees, compared to 29% of US adults. In fact, the median household of a Trump voters is far higher than that of a Hillary supporter.

   

  

  Meanwhile, Hillary only dominates among the very lowest of income earners in America – which is no surprise since “work is punished” at that level of income, and that is specifically the target demographic desired by most liberals who promise more government handouts and, in general, just more government.

   

  

  On Friday Clinton reportedly told the crowd: “If you know anybody who’s even thinking of voting for Trump, stage an intervention.” In other words, wealthier, more educated people, at least if one goes by the facts.

  Finally, recall that it was almost exactly four years ago when Mitt Romney’s infamous “47%” recording leaked in which he said that “there are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it — that that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what. … These are people who pay no income tax. … [M]y job is not to worry about those people.”

  After the media pounced and decimated Romney for that statement, his campaign was over. We wonder just how expansive the silence will be from the mainstream media this time around, when its preferred candidate has effectively just done the same.

  Meanwhile, Politico reported that promptly after news of Hillary’s speech leaked, Trump’s campaign demanded an apology for her comments, jabbing Clinton on Twitter for “placing people in ‘baskets'” and insulting “millions of Americans.”

  “Treating people as subhuman – irredeemable/deplorable – is no way to run for POTUS,” tweeted Tim Miller, a former Jeb Bush spokesman and fervent Trump opponent. “Dems shld skip the excuses & move straight to mea culpa.”

  But Merrill, Clinton’s traveling press secretary, defended the remarks as the political furor began to rage online. “She gave an entire speech about how the alt right movement is using his campaign to advance its hate movement,” he tweeted. “Obviously not everyone supporting Trump is part of the alt right, but alt right leaders are with Trump. And their supporters appear to make up half his crowd when you observe the tone of his events.”

  In other words, no excuse is coming. In a statement later released by the Trump campaign, senior communications adviser Jason Miller said Clinton’s comments “revealed her true contempt for everyday Americans.”

  “What’s truly deplorable isn’t just that Hillary Clinton made an inexcusable mistake in front of wealthy donors and reporters happened to be around to catch it,” he wrote. “It’s that Clinton revealed just how little she thinks of the hard-working men and women of America.”

  We thought that had been made clear when she spent the month of August delivering speeches to various billionaires’ mansions in the Hamptons, while ignoring both the general public and the press.

  But perhaps the biggest irony is that none other than then Sen. Barack Obama made a strikingly similar 2008 comment – again, captured at a donor event – that small-town voters “cling to guns or religion,” which Republicans said showed contempt for ordinary Americans. “The parallel is disdain for the unwashed,” tweeted Washington Examiner columnist Tim Carney, embracing the comparison.

  “You go into these small towns in Pennsylvania and, like a lot of small towns in the Midwest, the jobs have been gone now for 25 years and nothing’s replaced them,” Obama said then. “And they fell through the Clinton administration, and the Bush administration, and each successive administration has said that somehow these communities are gonna regenerate and they have not. And it’s not surprising then they get bitter, they cling to guns or religion or antipathy toward people who aren’t like them or anti-immigrant sentiment or anti-trade sentiment as a way to explain their frustrations.”

  Obama was pilloried for those comments, including by none other than his Democratic primary opponent at the time, Hillary Clinton. She ripped him as “elitist” and cast him as someone who couldn’t possibly fathom the concerns of “working, hard-working Americans, white Americans.”

  Fast forward 8 years later, and well, irony strikes again.

  

  

• Visualizing The (Massive) Size Of The US National Debt

  When numbers get into the billions or trillions, they start to lose context. As Visual Capitalist's Jeff Desjardins notes, the U.S. national debt is one of those numbers. It currently sits at $19.5 trillion, which is actually such a large number that it is truly difficult for the average person to comprehend.

  How big is the U.S. National Debt?

  The best way to understand these large numbers? We believe it is to represent them visually, by plotting the data with comparable numbers that are easier to grasp.

  

  Courtesy of: The Money Project

   

  Today’s data visualization plots the U.S. National Debt against everything from the assets managed by the world’s largest money managers, to the annual value of gold production.

  1. The U.S. national debt is larger than the 500 largest public companies in America.
  The S&P 500 is a stock market index that tracks the value of the 500 largest U.S. companies by market capitalization. It includes giant companies like Apple, Exxon Mobil, Microsoft, Alphabet, Facebook, Johnson & Johnson, and many others. In summer of 2016, the value of all of these 500 companies together added to $19.1 trillion – just short of the debt total.

   

  2. The U.S. national debt is larger than all assets managed by the world’s top seven money managers.
  The world’s largest money managers – companies like Blackrock, Vanguard, or Fidelity – manage trillions of investor assets in stocks, bonds, mutual funds, ETFs, and more. However, if we take the top seven of these companies and add all of their assets under management (AUM) together, it adds up to only $18.9 trillion.

   

  3. The U.S. national debt is 25x larger than all global oil exports in 2015.
  Yes, countries such as Saudi Arabia, Kuwait, and Russia make a killing off of selling their oil around the world. However, the numbers behind these exports are paltry in comparison to the debt. For example, you’d need the Saudis to donate the next 146 years of revenue from their oil exports to fully pay down the debt.

   

  4. The U.S. national debt is 155x larger than all gold mined globally in a year.
  Gold has symbolized money and wealth for a long time – but even the world’s annual production of roughly 3,000 tonnes (96 million oz) of the yellow metal barely puts a dent in the debt total. At market prices today, you’d need to somehow mine 155 years worth of gold at today’s rate to equal the debt.

   

  5. In fact, the national debt is larger than all of the world’s physical currency, gold, silver, and bitcoin combined.
  That’s right, if you rounded up every single dollar, euro, yen, pound, yuan, and any other global physical currency note or coin in existence, it only amounts to a measly $5 trillion. Adding the world’s physical gold ($7.7 trillion), silver ($20 billion), and cryptocurrencies ($11 billion) on top of that, you get to a total of $12.73 trillion. That’s equal to about 65% of the U.S. national debt.

  *  *  *

  Source: The Money Project – an ongoing collaboration between Visual Capitalist and Texas Precious Metals that seeks to use intuitive visualizations to explore the origins, nature, and use of money.

  

  

• The American Golden Calf

  Submitted by Bob Livingston via PersonalLiberty.com,

  As a young boy I enjoyed my family’s bantam chickens that laid very small eggs and hatched very small chicks. Theirs was a small and miniature world.

   

  One day one of my bantams started sitting on eggs to hatch its chicks. Something happened to her eggs but she continued to sit, so I decided to put a duck egg under her. Duck eggs are at least three times bigger than bantam eggs and take a few days longer to hatch, but she dutifully sat on the egg several days longer. She hatched the duckling and, as you can imagine, it thought that his world was normal and that the bantam hen was his mother.

   

  The duckling eventually grew into a full sized mallard duck, probably five or six times the size of its bantam mother. The full-grown duck would follow its hen mother around as would normal chicks. It was a funny sight to watch.

   

  But I remember thinking, even as a small boy, that the duck’s entire reality was that the bantam hen was his mother and that was the way the world worked. He had no need to consider anything else.

  This is the world of the American people today. Their perceptions of reality control them and they who control their perceptions control the American people.

  

  Our perception of America has always been that she is the mother country and ordained by God, good and just and a beacon of freedom. This is hammered into our psyches from our early days.

  From pre-school up, we are taught to worship the state. I don’t know if it is still done, but in the public (non)education system, for many years, schoolchildren across the South – and elsewhere, I suppose — recited the Pledge of Allegiance each morning. Political rallies and government meetings are still often begun with a recitation of the pledge.

  People say it with patriotic fervor, with their hands placed dutifully on their hearts.

  Sporting events, political rallies and other public venues are often kicked off with the playing and/or singing of the Star Spangled Banner. Before the song begins, people are instructed to rise, men to remove their hats; and people place their hands over their hearts. They don’t realize its value as a propaganda tool.

  We have come to equate the flag, the pledge and the national anthem with patriotism, and patriotism with government, country and support for government, support for foreign wars and veterans. Anything less is “un-American.”

  Beyond its patriot fervor is the almost religious fervor and religious symbolism of the American people’s actions when the pledge and the national anthem begin: the ritual standing, removal of hats, placing of hands and rote recitation. In the book of Daniel, Israelites Hananiah, Mishael and Azariah (Shadrach, Meshach and Abednego) refused to worship the golden image of Nebuchadnezzar contrary to the king’s decree. The king ordered them to be thrown into the furnace after it was turned up to seven times its normal temperature.

  NFL player Colin Kaepernick created a stir last week when he refused to stand for the national anthem. He was not subsequently ordered into the furnace by the king, but he was burned symbolically by many football fans who torched their jerseys. Americans fumed that he should “leave” America if he can’t support the flag; and that he had disrespected the flag, the nation and veterans.

  What are we saying when we say that someone “disrespected the flag,”  “disrespected the country,” “disrespected the veterans” if he chooses to not stand for the national anthem? What is the flag but a piece of cloth? By the reaction to Kaepernick, it seems it has become more of a golden calf to represent mother country or the god of government.

  Our mother has become a witch. Yes, same symbols, same flag, same pledge of allegiance, but a decadent spirit controlling the perceptions of the American people, keeping them on the animal farm (controlling their perceptions) long enough to impoverish and enslave them.

  Time and gradualism can change a system all the way from human liberty to slavery (the animal farm) over a few generations without anyone being aware except a very few, those who ask questions.

  “America, love it or leave it,” is a tired canard. One cannot leave it except at great cost. Recall that in 1860-1861 11 states attempted to “leave it” in order to preserve their liberty and rights as sovereign states. They were branded as “insurrectionists” and attacked by the War Party and the result was their economic and social destruction, subjugation and the deaths of some 850,000 people (the equivalent of about 8.5 million people today). When one talks of secession today he’s branded as a racist, crazy or a radical and told secession is “illegal.”

  One can love his country but hate his government and its actions. I love America but not the people who control America and its government. I love America, but its rulers are alien to individual freedom, its government now anathema to liberty.

  If the flag is symbolic of government and that government lies at every turn, enslaves its people, steals from their labor, passes laws that are an execration to their Christian faith, takes from them their liberty, mandates the murder of 1 million babies a year, imports tens of thousands of immigrants to replace American workers and drive down wages, and that makes war on other countries that have not threatened us, why should any acknowledge its presence with more than a sneer?

  Wars are not for patriotism and “democracy,” as we are propagandized. And our freedom has not been threatened by outside forces in 200 years. Wars are to kill; i.e., mass ritual murder. Additionally, big business and globalist banksters in league with Satan reap massive profits for the killing and sacrifice of young men (lambs) on all sides of combat.

  If the flag is symbolic of the Constitution, that Constitution died long ago — destroyed by a crony railroad lawyer and mercantilist who made war on a sovereign people to benefit monied interests.

  If the flag is symbolic of freedom, that freedom no longer exists — stolen long ago by crony corporations and globalist banksters and unaccountable oligarchical black-robed satanists and idol worshippers who usurped their authority created laws out of thin air under the guise of “interpreting the Constitution” a dictate not granted them under the original document.

  The phony form of patriotism instilled within the population is strong leverage against independent thinking, keeping people ignorant of the treason by our own government.

  America today is a more advanced state of fascism than World War II Germany and Italy. Fascism never identifies itself as totalitarianism. It always calls itself democracy.

  Democracy is the politically correct word and cover term for modern American fascism.

  American fascism has all the attributes and trappings of benevolent totalitarianism. No, benevolent totalitarianism is not an oxymoron.

  The word benevolent in this instance means that the general perception of the population of the American system is that it is benevolent. This is only to say that modern America is full-blown fascism with a pretty face. It is every bit as deadly to human liberty as any tyranny in history and I would add far more sinister because of its propaganda sophistication.

  Any regime that can spin tons of fiat paper money with printing presses or electronically is a slave system regardless of what it calls itself or regardless of the general population’s perception of it.

  Our mother has been transformed into a witch no matter how much we love her.

  h/t Alt-Market's Brandon Smith

  

  

• Vanderbilt University Name Placards For Faculty Offices Will Now Include "Preferred Pronouns"

  A few weeks back we warned that Princeton University was fed up with people using “gender binary” hate speech like “freshman” (see “Princeton University Kindly Requests You Stop Using “Gender-Binary” Hate Speech Like “Freshman”“) and had released an official guide on how to develop “gender-inclusive” speech. 

  Now it seems as though the lunacy of the educated elitists in New England is spreading like an infectious disease to schools south of the Mason-Dixon line.  As pointed out by the Daily Caller, Vanderbilt University’s “Faculty Senate Gender Inclusivity Task Force” recently started posting the following flyers around campus urging students and faculty to announce their “preferred pronouns” when introducing themselves. 

  Offer your name and pronoun in faculty meetings, committees, and other spaces where students may not be present

  • “I’m Steve and I use he/him/his pronouns. What should I call you?”
  • “My pronouns are they/them/theirs. May I ask yours?”

  People who “identify” as “gender-fluid” are encouraged to use newly created pronouns “Ze/Zir/Zirs” or “Ze/Hir/Hirs.”  We have absolutely no clue what that means and have exactly 0 interest in trying to figure it out so if you desire more info then you’re on your own.

  Finally, students and staff are encouraged to admit when they make a gender assessment mistake and learn from it for the next encounter.

  Graciously accept correction. Apologize and learn for next time.

   

  Take initiative. Do not expect others to remind you of their name and pronouns.

   

  “Thank you for reminding me. I apologize and will use the correct name and pronoun for you in the future.”

  Couldn’t correcting someone be considered a “micro-aggression” under certain circumstances? 

  

   

  And while we were trying to holdout hope that this lunacy was somehow reserved to some small fringe elements of campus and didn’t reflect the view of the unspoken majority of sane individuals at Vandy…the following tweet came along, showing that name placards around campus will now include “preferred pronouns”, and crushed our nice, cozy “safe place.”

  Vanderbilt made nametags recently & many included a preferred pronoun section. This is real life: pic.twitter.com/LeT7BCkdmA

  — Clay Travis (@ClayTravis) September 6, 2016

   

  What more is there to say?

  

  

• Media Slams Gary Johnson's Aleppo Gaffe, Ignores Even Worse One From Hillary

  Submitted by Darius Shahtahmasebi via TheAntiMedia.org,

  The corporate media’s focus on how presidential candidate Gary Johnson asked, “What is Aleppo?” during an interview on MSNBC’s “Morning Joe” provides a unique opportunity for the mainstream media to ignore all the ridiculous things the other presidential candidates have said — including frontrunner Hillary Clinton.

  Thankfully, we have independent media.

  As Democracy Now! reported on Thursday, Clinton made the bold and equally ludicrous statement that she would never put boots on the ground in Syria (and Iraq):

  “We are not putting ground troops into Iraq ever again, and we’re not putting ground troops into Syria. We’re going to defeat ISIS without committing American ground troops.”

  There’s just one problem: the number of American troops deployed to Iraq has been rising steadily in the past few years and will most likely continue to for a long time. In Syria, the U.S. has made no secret of the fact there are special operations forces on the ground now, some of whom recently came under fire from Syrian warplanes.

  It could be the case that Clinton is referring to a specific kind of troop because, as we have learned in recent times, “There are no boots on the ground” actually means “There are some boots on the ground but we aren’t going to discuss it.” This was the case in Libya in 2011, when commandos on the ground helped rebel groups capture and execute Libyan leader Muammar Gaddafi.

  Either Clinton is rewriting the rules of what it means to have troops on the ground in the Middle East, or she genuinely thinks Iraq and Syria have no troops on the ground.

  Regardless, why is it that the media can let Clinton off scot-free with such a blunder yet insists on focusing on Johnson’s minor gaffe? If you watch Johnson’s interview on MSNBC, it is quite clear that contextually, he wasn’t sure what his interviewers were asking when they referred to Aleppo. Once they clarified it for him, he was able to provide an answer better than what Clinton and Trump have offered regarding the Syrian crisis. Further, it didn’t appear the pundits were able to answer his inquiry about Aleppo without first hesitating, then merely saying Aleppo is in Syria – the epicenter of the refugee crisis.

  Is this a blunder worth top headlines around the world? Or is it a clear attempt to denigrate Johnson while ignoring every ludicrously incorrect statement Clinton and Trump make on a regular basis?

  Some people say that there is no such thing as bad publicity. Indeed, the media outlets attempting to mock Johnson are putting him on the map. If the public takes the time to listen to the interview, they might realize he has a better understanding of American foreign policy than the rest of the presidential candidates — not to mention the New York Times.

  As Johnson said right after he asked his fateful question:

  “Well, with regard to Syria, I do think that it’s a mess. I think that the only way that we deal with Syria is to join hands with Russia to diplomatically bring that at an end. But when we’ve aligned ourselves with — when we’ve supported the opposition of the Free Syrian Army — the Free Syrian Army is also coupled with the Islamists.

   

  “And then the fact that we’re also supporting the Kurds and this is — it’s just — it’s just a mess. And that this is the result of regime change that we end up supporting. And, inevitably, these regime changes have led a less-safe world.”

  Further pressed about his gaffe, he added:

  “Well, no, I do understand Aleppo, and I understand the crisis that is going on. But when we involve ourselves militarily — when we involve ourselves in these humanitarian issues we end up — we end up with a situation that in most cases is not better, and in many cases ends up being worse.”

  

  

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• The "Oh Shit" Guy That Wiped Hillary's Server With BleachBit Was Just Granted Immunity

  Last week, after the FBI dropped their Friday before Labor Day weekend bomb on Hillary, we wrote about the various events leading up to the deletion of Hillary’s emails (full details here: “The “Oh Shit” Moment: Hillary Wiped Her Server With BleachBit Despite Subpoena“).  At the end of that post we concluded that the “Undisclosed PRN Staff Member” managing Hillary’s servers on behalf of Platte River Networks had seemingly thrown himself under the bus by admitting to the FBI 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” but then went ahead and deleted the emails anyway.

  According to new info from the New York Times, that “Undisclosed PRN Staff Member” is Paul Combetta and apparently his brazen honesty during FBI interviews came only after receiving an immunity deal from the Justice Department.

  For those who “do not recall” the specific timeline leading up to Combetta wiping Hillary’s server, here is a breif recap: 

  December 2014 / January 2015 – “Undisclosed Clinton staff member” instructs Combetta to remove archives of Clinton emails from PRN server but he forgets.
  

   

  March 4, 2015 – Hillary receives subpoena from House Select Committee on Benghazi instructing her to preserve and deliver all emails from her personal servers.

   

  March 25, 2015 – Combetta has a conference call with “President Clinton’s Staff.”

   

  March 25 – 31, 2015 – Combetta has “oh shit” moment and realizes he forgot to wipe Hillary’s email archive from the PRN server back in December…which he promptly does using BleachBit.
  

   

  February 18, 2016 – Combetta meets with FBI and denies knowing about the existense of the subpoena from the House Select Committee on Benghazi at the time he wiped Hillary’s server. 

   

  May 3, 2016 – Combetta has follow-up meeting with the FBI and admits 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.”

  And here are the details from the FBI Notes:

  

  

   

  Given this fact pattern, we would be very curious to know exactly when Paul Combetta was granted immunity by the Justice Department.  Perhaps that immunity was granted sometime after February 18, 2016, when Combetta had troubles recalling the issuance of a subpoena, but before May 3, 2016, when he seemed to recover from his unfortunate bout of amnesia.  Just a guess.

  Earlier this week, the chair of the House Committee on Oversight and Government Reform sent the following letter to Platte River Networks asking officials to appear before Congress to testify on how Hillary’s email account was set up and how the messages were deleted.  That said, it’s now unclear whether this request for testimony will go anywhere given the new information that Combetta has been granted immunity.

   

  But just in case, Hillary spokesman, Brian Fallon, wants you to know that Paul Combetta went totally rogue and made a unilateral decision to wipe Hillary’s emails without any input from anyone connected to the Hillary campaign.  His decisions to committ several federal crimes were all his own.

  Brian Fallon, a spokesman for Mrs. Clinton’s presidential campaign, said that the deletions by the specialist, who worked for a Colorado company called Platte River Networks, had already been “thoroughly examined by the F.B.I. prior to its decision to close out this case.”

   

  “As the F.B.I.’s report notes,” Mr. Fallon said, “neither Hillary Clinton nor her attorneys had knowledge of the Platte River Network employee’s actions. It appears he acted on his own and against guidance given by both Clinton’s and Platte River’s attorneys to retain all data in compliance with a congressional preservation request.”

  What more is there to say?

  

  

• "Anything & Everything Goes" – The Corrupt & Deranged Governance Of America

  Authored by Robert Gore via Straight Line Logic,

  The Burning Platform’s quote of the day sums it all up perfectly: “The further a society drifts from the truth, the more it will hate those who speak it.” George Orwell

  Contemporary governance embodies corruption within deranged systems resting on foundations of theft and fraud. Corruption makes reform impossible; derangement assures eventual collapse.

  “Defense” spending is a misnomer. The US could defend itself at a small fraction of what it spends on its military and intelligence. The US government’s foreign intervention and maintenance of a confederated empire are actually a welfare and transfer payment program. Spending has become the point: maximizing the payoff to military and intelligence contractors, their think tanks and lobbying arms, captured politicians, and the vast bureaucracies. Winning wars doesn’t serve the interests of those beneficiaries, lengthy and inconclusive engagements do.

  The war on terrorism is a mother lode. The enemy is whomever the government deems it to be, wherever the government chooses to fight it. The war itself creates more terrorism. Victory cannot be defined; the war will go on as long as the current ideology remains in place. It enriches the military-intelligence-industrial complex, but a war-without-end welfare program is clearly deranged, a fitting target of satire. It will continue indefinitely because its beneficiaries have far more incentive and resources to promote their interests than the rest of us have in promoting peace.

  Politicians use other people’s money to line their own pockets and buy votes; recipients accept the largess and become dependent on it. There is no limit to demands that the government fund “needs,” and no limit on the political willingness to meet those demands. It is testament to this lack of limits that the world’s richest countries cannot fund the demand for redistributive largess from their countries’ own resources. Aggregated, they have accumulated the largest debt load in history, far beyond their ability to repay it.

  Mounting debt generates its own limit: insolvency. Demographics shaped by the transfer state compound the problem. Stealing the fruits of labor penalizes honest productivity and constricts opportunity. Faced with bleak prospects, many of the young opt out of the financial obligations of starting families, rearing children, or even supporting themselves. Birthrates have dropped far below replacement in most developed countries: fewer people to fund taxes and debt just as the number of putative beneficiaries skyrocket. Pension shortfalls around the world are the canary in this coal mine. The mathematics are inescapable. Present arrangements are unsustainable, but will continue until debt markets and taxpayers rebel.

  They will face a counter-rebellion by dependency-warped recipients deprived of that which was never really theirs. Those who can but don’t honestly produce are both dishonest and unproductive. Faced with a cut-off, expect chaos and violence.

  Debt and taxes fund governments and enslaves their constituents. They’re the foundation for the second most insidious racket: the banking complex. The Federal Reserve Act of 1913 began the shift from real money (gold) to debt, enshrined the banking cartel, and was, through the establishment of the lender of last resort function, the first major step towards making taxpayers the guarantors of bank liabilities. Later, deposit insurance and Too Big To Fail (TBTF) sealed that guaranty.

  Bankers have found heaven on earth, but their paradise has destroyed the economy. TBTF has removed capitalism’s most potent corrective: failure. Government debt issuance, central bank monetization, interest rate suppression, and random, whimsical, and absurd policies provide banks with middleman’s profits, inside information, access to cheap funding for speculation, and, as a particularly vicious policy—the war on cash—gathers steam, captive deposits. They destroy honest saving and investment and burden the economy with an increasingly onerous load of debt and taxes. Even governments and central banks, entities that can conjure their own debt and mandate its acceptance, will for all intents and purposes go broke if spending outruns revenues long enough.

  The most insidious racket? While the banking camarilla is nothing to sneeze at, lawyers writing laws and regulations must be reckoned the Mt. Everest of rackets. They write, implement, interpret, and enforce the laws, augmenting their wealth and power every step of the way. Even the bankers ostensibly kowtow to the government (what happens behind the scenes is another matter). The repository of lawful coercive force, government inevitable becomes organized crime and the law nothing more than the means to corrupt ends. Write the law and write your own ticket.

  Standards of honesty and integrity crumble in societies based on theft and fraud, replaced by a new standard. Coercive, redistributive “altruism” excuses all manner of corruption among the powerful and the servitude of those who either choose or are forced to produce. Bread, circuses, and moral degeneracy entertain and placate the masses. The bizarre becomes commonplace, but the populace grows sated with each new manifestation, always more “transgressive” (of standards that no longer exist) than the previous one, in progressively shorter spans of time.

  Anything and everything goes. Only one standard remains that rouses virtually everyone—rich and poor, powerful and powerless—to righteous indignation: the more pervasive the corrupt derangement, the less acceptable it is to talk about it. In our own time, the obvious conclusion that the warfare and welfare states are morally and fiscally bankrupt, doomed to collapse, remains confined to the fringe.

  Here’s a rewrite of the “Emperor’s New Clothes” in light of modern realities.

  The child points out the Emperor’s nudity.

   

  The Emperor’s beholden courtiers and the impoverished but thoroughly cowed townspeople immediately threaten and intimidate the child.

   

  Naively stubborn, he repeats himself until someone claps a hand over his mouth.

   

  The headline next day: “Child who Questioned Emperor’s Attire Found Dead in Field Outside of Town.”

  Hillary Clinton wins support not despite her corruption and derangement, but because of it, especially among the establishment. Their rackets need a participant and patron. Donald Trump is hardly a naively honest child, but he has had the temerity to question a few rackets, notably immigration, trade, and the warfare state’s global empire. Questioning that last one—because it’s the largest and most lucrative—has provoked copious quantities of vehement vitriol.

  Truth can awaken minds and rouse people to action, posing an obvious threat to the corrupt and deranged. Should Trump win the election, he will assuredly be presented with the same choice as the child in the story: get with the program or die. Odds are he folds, in which case those of us rooting for meaningful change will be left with the hope that the inevitable collapse occurs before we die.

  

  

• Descendants Of Slaves Owned By Georgetown University Want $1 Billion

  Last week we noted that Georgetown University President, John DeGioia, announced plans to grant preferential admission consideration to descendants of slaves formerly owned and sold by the university in 1838 (see “Georgetown To Grant Admission Preference To Slave Descendants“).  According to a report of a special “Working Group” of the university, two priests who served as president back in 1838 orchestrated the sale of 272 slaves netting the university $115,000 ($3mm in current dollars) which was used to pay off school debts.  The “preference in admissions,” along with an official apology from President DeGioia, was part of the
  school’s effort to “atone” for profiting from the sale of enslaved
  people.

  As part of our note, we suggested that Georgetown should post their “bid” of “preference in admissions” to the official Reparations website so that an official market could be established (see “There Is Now A Marketplace For White People To Make Reparations Payments“).  Now, less than a week later, we have an official “offer” from the descendants of the slaves formerly owned by Georgetown who want “preference in admission” plus a mere $1 billion.  Up until now, the 15 point spread on the Ford term loan back in October 2008 was about the most egregious bid/ask gap we’d ever seen but this puts that market to shame. 

  Per the Washington Post, the descendants of the 272 slaves sold by Georgetown University have already raised $115,000 so they really only need help with the incremental $999,885,000. 

  The descendants proposed a $1 billion foundation and announced that they had raised $115,000 in seed money, an amount equivalent to the 1838 sales price for the 272 people Georgetown sold to pay off a debt. That amount is equivalent to about $3 million in today’s dollars.

   

  “The foundation can only be a reality if we can establish a partnership with Georgetown University,” he said. “The foundation is our vision of an opportunity for us to have a partnership with Georgetown University that can take the history that we all now know about and turn it into a greater common good for Georgetown, the Jesuits, the Catholic Church, and humans overall.

   

  He praised university leaders. “What Georgetown did was step out and away on an issue that has just dragged our whole country and society backward. They have stepped out in front and said, ‘We need to openly deal with this.’ I want to commend them for that. But we want to work with them on a greater vision that’s not dependent on the day-to-day educational mission of Georgetown, a separate foundation that we all have a role in. … We can take that, use it in a positive way to do much better for all of God’s wonderful humanity.”

  That said, according to the website of the Georgetown University Investment Office the school’s total endowment is only about $1.5 billion.  As such, we suspect that additional negotiations may be required to close the gap between Georgetown’s bid (apology + admission preference) and the current offer (apology + admission preference + $1,000,000,000) before an official settlement can be reached. 

  

  

• One "Lifelong Socialist" Norwegian's Perspective On Trump

  Authored by 'Ola Nordmann',

  Despite Norwegian mainstream media and political establishment support for Hillary Clinton (They also supported Mark Rubio and Bernie Sanders when they were running), I would like to apologize for our politicians and voice my support for Trump. I believe that Americans need to think about what is at stake from lifelong socialists’ perspective.  Despite what people read about Norway being the best place to live, it comes with a price. Everyone needs to mostly agree, not raising concern, even when feeling wronged. Going outside the line leads to ostracization. (It’s like being Amish in some ways.)

  We are not that creative. We would like to think so, but compared to Minnesota, our American cousin (similar population, culture, and climate), we are far behind – left in the dust. Minnesota has many diverse and world class companies like 3M (Minnesota Mining and Manufacturing), Polaris (snowmobiles and motorcycles), and Medtronic (Innovative medical equipment).  Our largest companies are mostly resource related: Statoil (state oil company), Telenor (our innovative phone company) and Yara (fertilizer). The government substantially owns many of them, not making them real companies that compete for their daily existence, like their Minnesota counterparts.

  If you ever come to Norway, you will find around half the TV shows are American! We have Dr. Phil, NCIS, Cake Boss, Fast and Loud and so on.  Our version of Cops and Storage Wars will put you to sleep. Recently, a major Norwegian media outlet launched a reality show, called Oslo S, about our central train station. The theme is bouncers and bums exchanging pleasantries – Yawn. Other shows come from Australia, Sweden and the UK. I wish we could be more American, in this regard, making our own entertainment to cover all the time slots, instead of importing it.

  Our education system teaches conformity and compliance. It does not teach critical reasoning, questioning the system or exploring the media’s agenda.  When you graduate, you will be unable to take charge and make a decision. (Good decisions always disappoint someone. Otherwise, the choice would not need arbitration in the first place) Instead, you will learn that everyone must be included, finding a compromise. This indoctrination process often leaves your team uncompetitive or product useless, falling short of market demands. It’s more important that everyone is happy than to remain profitable, which ensures long-term enterprise survival.  The lack of confidence taught in our education system is crippling.  This insecurity makes us somewhat socially retarded with foreigners. When we go abroad, we travel in groups, sticking to ourselves, not interacting with the locals. It may explain our unfriendly ranking.   

  Many well to do Norwegians acknowledge the systems shortcomings, opting for private education. Some even send their kids boarding schools in England and Ivy League universities in America. We have a hard time getting those kids to return home, leading us forward. Instead, they add to America’s vastness and achievements. Recently, private schools in Norway started to pick up.   

  Our Economy is equally as boring. After oil (65%), we sell fish and aluminum. Our Central Bank did such a wonderful job devaluing the currency, allowing the Chinese to buy our expensive water company. Many more of our unique companies are now vulnerable to foreign takeover.

  Our technology sector will not save the economy after oil’s demise (at least not now).  Although there are some interesting firms, doing cool stuff, they are no comparison to those in California, Boston or New York. We get good people, but America gets the best of the best, driven by a deeply human desire to succeed. 

  If we were truly innovative: we would have lured Elon Musk to Norway to make Tesla’s here (we are on a per-capita basis one of the world’s largest consumers of electric cars).  It would have complimented our emission-free hydroelectric industry, which generates 99% of Norway’s power. We should have invested our oil fund money into becoming leaders in 3D metal and alloy printing. This technology would be an ideal complement to our small but highly skilled workforce, losing jobs in the oil industry.  We could have been exporting commercial aircraft and car parts, made to order and on demand, diversifying the economy.  Nevertheless, our leaders in the Central Bank and Politics learned to play it safe, avoiding risk and confrontation, all their life. They never learned that not taking risk is also a risk. We are experiencing that right now – the repercussions of doing nothing.

  Our cultural basis comes from the Janteloven. Essentially if we see our neighbor with a new Cadillac, we get jealous, hastily concluding that he stole it instead of sacrificing to earn it. We will never openly express our distaste. We just hold it in and do something passive aggressive like reporting him to the tax office. When the American neighbor sees the luxury car, he gets motivated and works extra hard.  Afterward, he buys a Bentley, one-upping the neighbor. Economies and innovation benefit from competition, not envy and passive-aggressive behavior mixed with feelings of inadequacy.  

  If you want to live in Norway, you have to be comfortable with complacency.  Things are “great” because they don’t change, making life predictable. Norway is for those needing direction, protection, and an identity. It is for those who want to take it easy, seeking a steady routine, usually after they made it. For the outliers, ambitious and the hungry– those few who make the greatest contributions for posterity –America is your place.

  In the American workplace, in general, respect is earned based on actions and not given. In Norway, we tell such anxious people to relax and not worry so much, subtly suppressing them.  Americans, even if they don’t like you, will at least respect you if you’re productive.

  I do not want to see America become Norway. First, it’s impossible. Our history and evolutionary paths are different. Second, the human species, as a whole, would cease to advance.  We will never get the next iPhone, Tesla or action movie.

  Below are my observations about Trump and why Americans, and the world for that matter, should consider him.

  Trump is more Interesting than the Kardashians

  The obnoxious family is popular here, polluting our airwaves daily.  Trump is the first Presidential Candidate (based on observation) to get more press than them. People are talking about Trump, America and what’s wrong. Moreover, they are talking about “why.”  Everyday people, who normally watch sports and reality shows, are having vigorous debates about real topics that affect their lives.

  Trump made politics interesting to the entertainment drugged masses! His presidency would mean more democracy, not less. More people will start to pay attention to the government than Kim Kardashian’s backside.  Everything usual will get disrupted.  A new culture of calling things as you see it will rise (or return, depending on how long you have been around.

  The media and public will scrutinize Trump’s every move. It will be interesting to know what he is up to. Everyone will be watching his speeches and commenting the day after. It will be far from routine. Democracy needs public participation. Good or bad: as the antics ensue, more outsiders will get energized and inspired, bringing new faces to politics. 

  Loathed by Billionaires, Goldman Sachs and Mainstream Media

  I find it interesting that the very wealthy are suddenly vocal, vigorously opposing Donald J Trump’s presidency. Mark Cuban, Warren Buffet, Bill Gates and George Soros have all made statements against “The Donald.” Buffet, Gates, and Soros are avid supporters of Hillary Clinton. Goldman Sachs top management are not allowed to donate to Trump’s campaign.

  As an average seventy-something Norwegian farmer, looking at American from the outside, I find the vigorous billionaire opposition “interesting.”  Moreover, this is amplified by CNN (which we get here in Norway as part of our standard cable package).  CNN used to be fact based news only. Now they morphed into the Clinton News Network, attempting to shape public opinion, garnering support for globalism.  

  Perhaps the billionaire’s enterprises benefit from bloated government spending (this is speculation and worthy of investigation)?  These Billionaires are so rich that the interest earned on their idle cash and investments amounts to tens of thousands of dollars per day. What do they have to lose either way? Why is this so important to them? Maybe it’s to their advantage that the ladder (better known as the American Dream), where people can ascend through the rungs, achieving different levels of success through hard work, is broken?

  Don’t Americans find it strange, despite technological advancements and increased productivity, that medical care, education, and housing costs are rising. I thought technology was supposed to make things cheaper, easier and more abundant. Remember when people went from horse and buggy to the Ford Model T – what happened? (A middle mobile middle class was born). Based on what I read about American life, it seems like now, when there is a new technology or innovation to make life easier, things get worse. Jobs become less stable than decades earlier.  People are working longer hours for less.  The housing standard is now a cramped condo instead of a house with a yard. It appears a  lot of people are on edge. 

  American’s need to ask themselves, reflecting back one generation (20 years), how billionaires have made their lives better? Billionaires have substantially increased their wealth in the past 20 years, have you? 

  American’s have a history of being rebellious, unpredictable, self-reliant and wild, rooting for the underdog. In this case, the underdog is Trump. The world needs this from you: not to become “European,” stuck in discussion while opportunity passes. 

  Government & Opportunity

  Unlike Libertarians, I do believe the government has a role in the private sector, ensuring competition exists and industries, serving national interests, are secured. (It would be crazy if the American army bought guns and tanks made in China to save money.) It is important that America secures its’ ability to produce heavy machinery, rockets, automobiles, high-tech, food, and medicine. However, this doesn’t mean the government support monopolies.

  In the past, the American government would break up monopolies to ensure competition which also pushed innovation. In the past, they broke up the railroad, oil, and telephone monopolies, leading to innovation in energy, transportation, and communications. Since the failed attempt to break up Microsoft, the US and many world governments seemed to have looked the other way while corporate conglomerates keep on growing. The unchecked growth leads to corruption and stagnation. These mega companies can exert influence over local, state and even national governments who inadvertently put all their eggs in one basket. Even worse, when the mega corporation gets in trouble, they extort governments to bail them out, at taxpayer expense, otherwise threatening a crisis or mass layoffs. 

  Hence, governments must act like icebreaker boats, breaking down the massive ice flows so all can pass through the channel, not only the big boats. This observation was especially true with the bank bailouts. When they got in trouble, the big bank CEO’s claimed the fallout would be on the order of a natural disaster. Although Americans have a history of resiliency, bouncing back stronger from disasters, the US Government bailed the failed banks out while the people, owning homes and banking products, lost out. (Many Norwegian towns lost a lot, believing in US Mortgage securities during the 2008 crisis).  The government, supposedly elected by the people, should have let the banks fail and help the victims of the systematic and institutionalized fraud, keeping them in their homes.

  The Glass–Steagall Act was enacted in 1933 after the 1929 stock market crash to separate investment and commercial banks. Hence, the act limited the size of the banks and therefore limited the risks to the market. In 1998, Bill Clinton stated that this act was no longer relevant, and Congress repealed it in 1999. Many argue that Glass-Steagall would have averted the 2008 financial crisis.  When Trump proposed to reinstate the act, Wall Street jumped on him. 

  American’s should think long and hard about whose side Wall Street is on. 

  Right vs. Correct

  The big problem in the World today is the lack of honesty: objective and fact based. Without proper facts, it’s difficult to make good decisions.  Europe, Norway included, has embarked down the Political Correctness (PC) path. So much so that people waste a lot of time deciding how to say something in a polite and “correct” way, often sacrificing the truth. This behavior leads to bad decisions or none at all.  Instead of listening to the raw content, meant to help reach a good decision, PC people focus on the tone and word choice, missing the main point altogether.

  Often the liberals will call you a sexist, racist or narcissist, responding to a direct and logical challenge that questions a popular assumption or long held belief.  In Norway, we mandate that corporate boards have a set percentage of women. In technical companies, it is difficult to find qualified women, so ones from outside the profession are assigned. Sacrificing needed knowledge and experience for “correctness,” often leads to sub-optimal performance. If there is a woman on the board of an innovative American company, it’s because she is qualified and not to fill a quota. She worked hard, putting in the hours, getting her to the top. (I recently saw a post where someone posted a list of company ranking them from highest to lowest regarding women on the board. When I asked them to post the margins compared to their global competitors, Someone rebuffed me as a sexist.)

  Instead of doing quotas, the government should focus on recruiting more women into the profession and ensure all the barriers are removed. Anyone, regardless of gender or background, should be able to excel in the given profession based on merit. No one should be blocked because of race. In essence. all obstacles should be cleared from the roads so that everyone can get on the highway, reaching their full potential. The focus should be on getting access to those who don’t have it in the beginning and not forcing quotas at the end.

  Recently, we had a situation in Norway where a Norwegian Bank employed the services of an Indian IT provider, bringing people onshore to build a payment app. During the development process, the Indians worked outside the regulations, putting in a lot of extra time under duress. The Norwegian managers apparently did not have knowledge that their Indian management counterparts were breaking the law. In my opinion, I believe that the Norwegian managers may have been too afraid to ask difficult questions to the Indians, fearing a PC backlash and being branded a racist.

  PC can snuff out the truth, blocking people from doing the right thing. Being correct over being right can suppress expression and push negative sentiment underground. People cannot express legitimate concerns because they are more afraid to offend someone, even if they need it. In a sense, this is discrimination. Is it only white males that get to hear the honest and raw truth while everyone else gets the sugar coated and often distorted version of it? Perhaps this explains the rise of nationalist parties.

  Some nationalist parties are extreme and irrational (Golden Dawn in Greece) and others address legitimate concerns (UKIP).  The mainstream media does not differentiate.  Being in a democracy requires a lot of work, on the individuals part, collecting and analyzing the facts for yourself.  Remember that ad revenue powers mass media. Perhaps people should think twice before thinking mainstream media outlets are benevolent.

  Focus on success has been America’s edge: greed and the desire to make money trumps personal feelings, race, and gender. American’s simply want the best people on their team, seeing only green. In this sense, greed is fair and democratic, rewarding merit while blind to other factors.  Last time I was in America, I noticed that people go pretty far when they are good at something they enjoy.

  The world is counting on the American ideal that “right is might, saying it like it is.” Being right over correct gives us the data in the purest form, free of distraction, allowing for the best possible decision.

  Globalism vs. Nationalism

  Being proud of your country and voting for politicians who put national interests ahead of global ones is not racist like liberal mainstream media would like you to believe. Racism is when you institute policies to block certain people from opportunity or services, based solely on their genetics, personal beliefs, ethnic background or religion. Sexism is when you do this based on gender.

  It is not racism to be opposed to helping those outside your borders when so many inside, who paid into the system, need help (education, medical care, access to basic services, etc.).  BREXIT highlights this prioritization very clearly. Countries can grow, add diversity and obtain skills with a proper immigration and integration policy.

  The American’s have done so much to help the world, twice saving Europe from self-destruction. Instead of rebuilding themselves in full force, the rebuilt the conflict perpetrators. 

  The American system, based on the premise of strong individuals (families) and weak government, yield self-determination and personal responsibility. Based on my reading of the American system and Constitution, states should take more responsibility for themselves, minimizing the role of the Federal government.  This way the people have more say about the spending of their tax contributions. The further away the money goes (to DC vs. the state capital), the less the taxpayer sees regarding benefits.  It appears that a lot of money “gets stuck” in Washington DC. Many in the EU feel that a lot of money gets stuck in Brussels (Although Norway is not a member of the EU, we still pay the membership fee and follow the rules. We agreed to this to save our fishing and oil industry). 

  It’s easier to help others and save the world when your situation is stable. Moreover, stability and prosperity lead to more openness and acceptance of outsiders.

  Trump is right to put Americans first, especially if they are paying taxes to the American government.

  Failures vs. Success

  Everyone is criticizing Trump about past failures. These are probably the same people that say failure is part of success, which is true. Here is an example of someone who failed a lot and then succeeded as president. He was also considered a bit wacky back in the day:

  

  Russian Reality

  I am far from being a Russia fan. I am just stating the facts, hoping the Americans can see this issue from another angle. 

  Although Norway’s experience with Russia during WWII was positive, helping us drive out the Germans and then leaving afterward, many do not have a positive view of them because of the media. They did not occupy us, and we later became trade partners, mainly exchanging fish for metal.

  However, Trump is right to reach out to Vladimir Putin. We have a terrorist problem in the Middle East caused by faulty American and Western European policy.  The USA, UK, and Russia were allies in WWII, defeating the Nazi’s. The Russians lost the most people in the conflict, created by Europe. Are they really so bad?

  The US and Europe created the current situation in Ukraine, making empty promises to the opposition, hanging them out to dry when Russia responded via proxy. Putin hacked NATO by supporting rebels not wearing national uniforms, taking advantage of the EU’s bureaucracy. They are still debating: invasion or insurgency? Europe remains naïve to many things. All the while Ukrainian corruption rages on no matter who is in power. In fact, they cannot get their top leaders to comply with reporting, which is a pre-requisite to a visa-free regime.  

  

  Soviet Soldiers are buried in Norway – Memorialized for their sacrifice.

  I am upset that our government blindly follows Obama, regarding this issue. Russia is our neighbor, and we have a long-standing relationship. Ironically the trade sanctions we imposed, on America’s behalf, hurt us more than them. Our exports to Russia fell while theirs to us rose markedly in 2015. Now is bad timing, considering that the American frackers are destroying our offshore oil industry, albeit fair and square by “building a better mousetrap.” 

  Norway has to stop being pathetic, acting like an American lap dog. We need to be more “American” in the sense that we make our own decisions and determine our destiny. Norwegians know all about America, but most Americans don’t know we exist. Therefore we must take care of ourselves, not depending so heavily on others for our protection. If the Finns managed to hold back Russia in 1939-1940, we should be able to do the same if an unlikely event were to happen. 

  The greater issue is that Europe (EU) needs to grow up.  How does a country (Russia) of 143 million with a GDP of $1.2 trillion nominal (smaller than California) stare down a federation with over 500 million people and a $19 trillion economy?  WTF right? We have not taken responsibility for our own lives, crutching on America.

  Trump is right. NATO is outdated and requires re-evaluation. America, being the World’s babysitter, has done so at the cost of their own people and prosperity. By breaking up NATO, perhaps we can organize with Sweden, Finland and Denmark a robust defense alliance. But then for what? Russia has never intended any harm to us.  (The antics with airplanes flying close to the border don’t count. Everyone does that on both sides.) 

  The Border Wall

  Trump is right. A nation is defined by borders and rules. There are people in the country who pay taxes and follow a law, expecting security in return. In light of the recent migrant crisis, we also built a wall.

  The wall with Mexico is more of a metaphor for an advanced border control system than an actual concrete structure.  The actual wall could be built with drones, robotic and sensor technologies offered by FLIR Systems in America and Kongsberg Gruppen in Norway.  Our defense company is an expert in sensor technologies and remote weapon systems. Our leaders should be getting in good with Trump to line up some business. Participation in the border wall project would stimulate innovation in Norway, which we dearly need.

  I personally feel that when the EU parliament and Angela Merkel, unilaterally decided to let in massive amounts of refugees, they inadvertently endorsed dictatorships and terror groups. They allowed ISIS and other dictators to seize abandoned properties, assets, and agricultural lands, strengthening their hold. Maybe like Castro in the Mariel boatlift in 1980, the regimes sending us refugees emptied out their prisons on Europe.  We will never know until it’s too late, manifested as horrific crimes and gang activity.

  I want to make it clear that there is nothing wrong with bringing in refugees and immigrants. It just has to be done in a proper and controlled manner, not to overwhelm the system or society. Otherwise, legal immigrants get short changed. The legal immigrants often wait in cues, sometimes for years, having earned outstanding credentials, only to start over when they arrive in a western country.

  Western countries have to acknowledge and deal with the ideological conflicts, assimilating the people to western standards. Otherwise, you get Sharia courts and back alley law, enforced by intimidation and risk of family ostracization. If the West really wants to fix the problems, the feminists should fight for the rights of Muslim women in their home countries, many of which are western allies.

  

  The American way, teaching people to fish, is better than the European way, giving the fish outright, on refugee integration. Work defines your character, and it is what defines an American regardless of background, belief or gender.

  Don’t try to be like us, blindly helping people and giving them a lot of “free stuff.”  Prolonged destitution leads to self-loathing, mutating into resentment against the host. Mixed with idle time and the fact misery loves company, results in the current European situation. Listen to Ronald Reagan instead. 

  Trump Care vs. Obama Care

  America’s biggest problem is obesity. It’s destroying America from the inside out, more so than any terrorist organization or other external threats. When people don’t feel good physically, they lose it mentally and spiritually.  America’s greatest power, more than flags, history, land, guns, and innovation is its’ spirit. The American soul, defiant, driven, determined, brave and wild is unique. It’s what makes American unmeasurable and surprising.

  Fat acceptance is about as sensible as condoning drunk driving. It tells those in question that it’s ok to give up on themselves, endangering their own health. This view may not be “correct” but it’s factually right, regarding public health.

  Healthcare is something we get right in Norway. So here is some advice.Public health starts with the lifestyle and eating habits. If Trump wants to solve the American health care crisis, he needs to take on the food industry the same way he took on John McCain and the Republican party, laying them to waste. If government must provide free medical care, then it must, through policy, steer people towards healthy eating and fitness. Recently, retired US military leaders stated that the obesity epidemic poses a risk to national security, making it difficult to recruit qualified people.

  Perhaps, Trump Care should invest part of the defense budget into a network of sports facilities, making all the Olympic sports accessible to everyone. Inner city kids could take up rowing or learn cross country skiing. Rural Americans can get more access to swimming pools and Soccer. Not only will America rack up more medals but the Army would have a greater pool which to draw. This initiative would be a far better investment than supporting other nation’s defense programs. I am confident Trump Care could bring the cost of medications for the public through bulk buying like the Canadians do.  The savings from preventative medicine (proper eating and exercise) along with reduced obesity rates would lead to substantially lower private health insurance costs, making emergency room visits possible for everyone without experiencing bankruptcy afterward. 

  Norwegians want Americans to live long, healthy and happy lives so they can come and visit us, enjoying our natural wonders.

  Conclusion

  Trump could surprise everyone, becoming a great president. He is already turning the American political system upside down. Or, he could be a much-needed stick of dynamite applied to an unmovable obstacle – the political system.  (When explosives are used to remove obstacles, they are consumed in the process. After detonation, the obstacle is cleared and the explosive is gone.)

  The worst case is that Trump will be a one term president. However, he will destroy a lot of bad institutions in the process by shaming them on national TV, causing people to take action at the polls, by protesting or through non-compliance – real democracy.  Imagine if Trump started calling out specific government officials, regarding project cost overruns and wasteful spending.

  Perhaps Trump will Pardon Edward Snowden and offer Julian Assange free passage to California to spite his rivals? I would like to see them pardoned so they can come to Norway and accept long overdue Nobel Peace Prizes (when the committee comes to its’ senses).

  If Trump’s presidency is a catastrophic failure, the collateral damage would also take out the two party system in the process. The US Election of 2020 may well consist of four to five political parties vying for power vs. two, giving Americans more choice.  There is really nothing to lose. This Trump statement applies to everyone not just black people.

  Many Europeans, Norwegians included, compare Trump to Hitler. This comparison is nonsense. Trump grew up in a family and went to an Ivy League school, married and fathered five kids. Hitler was an utter failure at life, pushed up on a wave of fascism. Europe is the continent that produced 20^th-century dictators, not America.  It is Europeans who blindly follow like lemmings, not Americans. They are, in general, too unruly, varied and wild for a dictatorship to take hold.

  Moreover, there are plenty of checks and balances, including his own family and the US Military.  The American military people I have met are very human and have a high standard when it comes to moral law.  They would never enforce Third Reich edicts.

  Nevertheless, Trump could learn some diplomacy, perhaps from Nigel Farage (who sounds nice even when insulting people). It will also be impossible to ban people based on religion. Religion is a personal declaration that can be changed. (I once met some Iranians who converted to Christianity, getting baptism papers, successfully obtaining refugee status in America).  Instead, the immigration process should be a uniform and rigorous process, consisting of background checks, psychological exams, and extensive interviews, verifying the applicant's legitimacy and intent. 

  America needs to take care its’s own and the world needs to grow up, taking control of their own destiny. Americans need to remember, they as individuals are very powerful, unique and yet compassionate people.  They must not depend on large corporations and mass media but their instincts and values.  It will never be boring with Trump in the White House. Hence, why Kim Kardashian endorsed Hillary Clinton. Is it so bad that people will leave reality TV behind? Is it a bad thing that people find politics interesting, something that affects their life?  

  Please ask yourself: do you really want to be like us (socialist)? Then make your decision.  Good Luck in November.

  Yours Truly,

  Ola Nordmann from Norway.

  h/t AG

  

  

• 10 Reasons Why The Government Does Not Deserve Your Tax Dollars

  Government has plenty of money, and as The Rebel's Lauren Southern explains, the idea that feeding more money into a broken system will somehow fix the system is quite literally insane. Yet to this day we still here politicians lying through their teeth saying they need to raise taxes – and liberals defending their decision.

  Government wastes so much of that money that we give them that not a single person can convince me raising taxes is a good idea.

  Most people see this glaring incompetence, but if you don't here's a list of 10 ridiculous things the US government spent your money on…

  

  

• The War Economy: CNN's Wolf Blitzer Warns About Job Loss If US Stops Arming Saudi Arabia

  Submitted by Mike Krieger via Liberty Blitzkrieg,

  Ladies and gentlemen, it appears the long anticipated moment of peak mainstream media stupidity may have finally arrived.

  This is what passes for journalism in America today.

  The Intercept reports:

  Sen. Rand Paul’s expression of opposition to a $1.1 billion U.S. arms sale to Saudi Arabia — which has been brutally bombing civilian targets in Yemen using U.S.-made weapons for more than a year now — alarmed CNN’s Wolf Blitzer on Thursday afternoon.

   

  Blitzer’s concern: That stopping the sale could result in fewer jobs for arms manufacturers.

   

  “So for you this is a moral issue,” he told Paul during the Kentucky Republican’s appearance on CNN. “Because you know, there’s a lot of jobs at stake. Certainly if a lot of these defense contractors stop selling war planes, other sophisticated equipment to Saudi Arabia, there’s gonna be a significant loss of jobs, of revenue here in the United States. That’s secondary from your standpoint?”

   

  Paul stayed on message.  “Well not only is it a moral question, its a Constitutional question,” Paul said. “Our founding fathers very directly and specifically did not give the president the power to go to war. They gave it to Congress. So Congress needs to step up and this is what I’m doing.”

   

  Saudi Arabia began bombing Yemen in March 2015, and has since been responsible for the majority of the 10,000 deaths in the war so far. The U.S.-backed bombing coalition has been accused of intentionally targeting civilians, hospitals, factories, markets, schools, and homes. The situation is so bad that the Red Cross has started donating morgue units to Yemeni hospitals.

   

  The Obama administration has sold more weapons to the Saudis than any other administration, pledging more than $115 billion worth of small arms, tanks, helicopters, missiles, and aircraft.

  But hey, the Saudis aren’t really that bad, right. No, they’re just one of the most barbaric, inhumane terrorist supporting states on planet earth.

  

  Need some proof?

  Here you go:

  U.S. Government Reaffirms Total Support for Saudi War Crimes in Yemen

  Saudi Arabia Forces the United Nations to Remove it from a List of Child Killers

  Record Beheadings and the Mass Arrest of Christians – Is it ISIS? No it’s Saudi Arabia

  Additional Evidence Emerges That U.S. Government Officials Intentionally Whitewashed the Saudi Role in 9/11

  “Getting Things Done” – The Brother of Hillary Clinton’s Campaign Chair is a Major Lobbyist for Saudi Arabia

  Saudi Arabia Sentences Journalist to Five Years in Prison for Insulting the Kingdom’s Rulers

  German Intelligence Warns – Saudi Arabia to Play “Destabilizing Role” in the Middle East

  And yes, I could go on — and on and on and on.

  Finally, let’s end with the clip referenced in the article at the top.

  Great job by Rand Paul. Meanwhile, Wolf Blitzer, you are an embarrassment to your profession and to your country.

  

  

• PoSTCaRD FRoM HeLL…

  

  

• Germany Prepares For Domestic Troop Deployments As "Catastrophic" Terrorist Attack Deemed "Conceivable, Even Probable"

  Merkel continues to publicly defend her "open border" immigration policies despite continued erosion of her popularity amid rising nationalist sentiments in Germany and across the EU.  Meanwhile, Germany is preparing to deploy troops within its borders for the first time since World War II amid growing fears that the potential for a large-scale terrorist attack is "conceivable, even probable," at least according to Lt. Gen. Martin Schelleis.

  Concerns of a potential threat come as nearly 30,000 asylum seekers continue to flood the country each month from Syria alone (see chart below).  Overall, Germany took in about 2.1 million immigrants last year and over half of them were refugees. 

  

   

  Which has resulted in a spike in terrorist attacks….

  

   

  Plans to utilize soldiers for counter-terrorism efforts within domestic borders is a very controversial concept for a country only seven decades removed from totalitarian rule.  Such efforts weren't even allowed until a court decision in 2012 which expanded Article 35 of the German constitution to allow armed forces to be deployed within domestic borders but only in response to a terrorist attack of "catastrophic proportions."

  Per Schelleis, German military assets are critical for providing a quick, effective response to a large-scale terrorist attack.  Per NBC:

  "What matters in a large-scale terrorist situation is that quick and effective action is taken," he told NBC News. "This calls for the procedures to be coordinated and practiced."

   

  Schelleis added the military assistance on offer could include low-altitude air space surveillance, checkpoints, explosive ordnance disposal and even advice on nuclear, biological and chemical threat situations.

   

  "We could also provide mobile laboratory capabilities," Schelleis said. "Our troops are excellently trained. The same applies to medical personnel, who are well versed in treating gunshot and burn injuries."

  That said, with an active duty force of only 60,000 (compared to 1.4mm for the United States) others within the German military ranks believe that assisting with domestic operations would spread personnel to thin. 

  The country's armed forces are spread thin while fulfilling peacekeeping missions in Afghanistan, Kosovo, Mali and in the the Mediterranean Sea.

   

  According to the German Armed Forces Association, many servicemen don't want to be used as "stopgaps at home."

   

  "We favor the planned training under the leadership of police forces in order to assess a potential role of the armed forces in a large-scale terror scenario," said Lt. Col. André Wuestner, the group's head. "But it should not be our goal to protect train stations."

   

  Wuestner said his counterparts in France and Belgium have warned that their domestic security duties — such as patrolling city centers — have kept them from training for their main responsibilities, such as missions abroad.

  We were under the impression that Merkel's plan was simply "we can do this"…did she mean "we can do this with the Bundeswehr?"

  

  

• Why Does Propaganda Work? Some People Want It

  Submitted by Daniel Lattier viaThe Foundation for Economic Education,

  There’s a principle in hypnotism that goes like this: A person cannot be hypnotized against his will. He must be a willing subject. He must be fully cooperative.

  So it goes with propaganda. For propaganda to be effective, it requires submissive subjects. As Professor Nicholas O’Shaughnessy wrote, propaganda is a “co-production in which we are willing participants.”

  Propaganda is typically defined as the dissemination of particularly biased information in support of a political or ideological cause. In his 1965 book Propaganda: The Formation of Men’s Attitudes, philosopher Jacques Ellul provided us with some of the basic characteristics of propaganda: it thwarts dialogue, it is geared toward the masses, it utilizes various media, it is continuous, it is not intended to make one think.

  Disable the Brain

  If these are the characteristics of propaganda, then it is no exaggeration to say that we are surrounded by it today. Most news organizations have become partisan shills and propagandists. They provide viewers with a steady stream of videos, audio clips, images, and articles—most lacking nuance and of dubious intellectual merit—that serve the intended purpose of promoting an ideology while fueling disdain for the “opposition”. And they have become very successful doing it.

  The reason they are successful, I fear, is that most people today want to be propagandized—though they would never admit it. Most people want to be given ideological marching orders and talking points from an authority. Most people have zero interest, and see little value, in engaging with arguments put forward by those who hold differing positions, unless it’s to ridicule them. Most people want to simply choose the news media organizations that best fit with their selected ideological camps and immerse themselves in their informational streams.

  This realization is unfortunate, but not really surprising. Over the past few hundred years we’ve had a massive democratization of public discourse and higher education in the West. A continually larger percentage of the population has gone to school for longer and longer periods of time, and has been given the impression that, as a result of this education, they are enlightened “critical thinkers” whose opinions have as much value as the next person’s.  

  Yet, at the same time, we must confront the question raised by Dorothy Sayers in her famous 1947 essay “The Lost Tools of Learning”:

  “Has it ever struck you as odd, or unfortunate, that today, when the proportion of literacy throughout Western Europe is higher than it has ever been, people should have become susceptible to the influence of advertisement and mass propaganda to an extent hitherto unheard of and unimagined?”

  The fact is, though everyone goes through the education system today, most are not provided with the building blocks of thought. Most are no longer taught logic. Most are not shown how to engage in rational debate.

  Avoiding Complexity

  And even if these skills were better taught in today’s schools, I highly doubt that our situation would be that much better. If history and experience are any indicators, the difficult reality is that most people either don’t possess the intellectual chops for doing battle with complex and controversial ideas, or they choose not to undertake the discipline necessary to acquire this skill.  

  In the past, when confronted with new or different ideas, people who did not achieve the heights of formal education had the values and traditions embedded in their communities to fall back on. These provided them with a foundation—a “common sense”—by which to assess the merit those opinions that may differ from their own.

  But today, hyper-individualism, increased urbanization, the breakdown of the family, and ideological divisions have caused a decline in the formative influence of community, and reduced our access to the “common sense” that it can provide.  

  Intellectually insecure and socially uprooted, many people are now desperate for some authority to cling to, someone who will give simple expression to the inklings of thoughts and instincts to which they can neither give adequate voice nor adequately live out.   

  Is it any wonder, then, that so many people would seek out propaganda today, and that its providers would be so happy to oblige?

  

  

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• The "Bomber Harris" Of Central Banks

  By Chris at www.CapitalistExploits.at

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

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

  

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

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

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

  In this week’s edition of the WOW we’re covering the Japanese central bank policies and the recent rise in Japanese interest rates

  It was back in mid 2011 that I first began shorting the yen. Specifically, I was long both XAU/JPY (in blue) and USD/JPY (in green and red).

  

  On the USD/JPY we moved all the way from 72 to 125 in early 2015 which was obviously a profitable run.

  Gold, on the other hand, went ballistic through late 2012, then proceeded to collapse into 2013 before bouncing back and settling into a trading pattern (albeit a volatile one) which is pretty much where we stand today.

  I’ve been trading around these core positions ever since I first poked fun at the BOJ in March of 2011.

  Then the following year (January of 2012) I wrote a satirical piece, suggesting methods the BOJ could use to entice retail investors into the JGB market. Ironically my satire today looks far more plausible than the methods subsequently taken by the BOJ over the last 4 years. Truth truly is stranger than fiction.

  Beginning 2016 the USD/JPY positions have experienced significant drawdowns with volatility spiking. Drawdowns only hurt if you’re levered, while volatility is important for that portion of any position held in options contracts. You want to be buying volatility when it’s cheap and selling it when it’s expensive.

  I mention these things since I’ve been looking to re-establish and pyramid back in. And so as I sit here today I’m left pondering the BOJ’s next move and how much manoeuvrability they have left.

  Japanese government bond rates have been rising sharply towards the zero mark over the past 6 months. A reversal of the downtrend. We can see this in the 10-year JGB chart below.

  

  This is causing concern amongst the elites at the BOJ. Like market participants such as myself and many of the fund managers (some of the world’s most notable and successful) I regularly speak with, the BOJ may be asking the same question we are: is this the invisible hand of the market beginning to repudiate negative interest rates?

  We’ll only know in hind sight and must work with the probabilities in any given scenario. I know of no successful trader or investor who manages risk any other way.

  What Will the BOJ Do Next?

  In a recent statement Kuroda-san dismissed ideas of calling a halt to their aggressive monetary policy, and while what a central bank says and what a Central bank does are not always the same thing, we do know that the BOJ is in a bit of a pickle.

  “It is often argued that there is a limit to monetary easing, but I do not share such a view. 

  
  

  Needless to say, there is still ample room for further cuts in the negative interest rate and for an increase in the quantity dimension.”

  

  The BOJ Conundrum

  Do you remember the Monty Python skit with Colin “Bomber” Harris self-wrestling where he succeeds by defeating himself?

  The BOJ is the “Bomber Harris” of the central bank world. It’s gotten to the point where it is wrestling with itself and bound to win, and in doing so bound to lose.

  They’ve stated their intent purpose is to create inflation. It’s not specifically to destroy the yen or further layer the country with ever greater debts. It’s to create inflation. They are simply accepting that those are the consequences they must bare.

  The process which they’ve used to do so is with a record-setting bond purchase program which has now crept into buying equities and commercial property ETFs.

  Consider that the former (bond purchasing) was designed to push interest rates down, forcing capital out of the bond market into the equity markets. Forcing people to essentially spend and invest instead of hoard and save, thus stoking the flames of inflation.

  The latter (buying equities and commercial real estate ETFs) has been a panicked attempt to do what the market has largely refused to do in the size deemed necessary as the 2% inflation target still looks a long way off.

  This is self-wrestling at its best. As bond yields have plunged below the neckline, destroying the ability of savers to get any sort of return those savers have instead saved more and hoarded money. Deflation is persistent as a result.

  Many of you will remember my conversation with colleague Grant Williams early this year where we discussed the market reaction to the BOJ going negative. The Nikkei dropped at the open and the yen rallied. Not at all what the BOJ expected or wanted. Wrestling against themselves.

  As I mentioned in a recent issue of World Out of Whack focused on demographics, consumption changes radically when you’re retiring. Needs change and that is a qualitative issue that few seem to grasp, certainly not central bankers.

  While these policies continue to fail, the debt pile grows and tensions increase. A consequence of enormous debt is the ability to service these debts. Nobody is talking about this anymore. At negative interest rates who cares, right?

  The Three Musketeers

  In a world where central bank policy globally is co-ordinated, negative interest rates don’t seem to pose much risk. Provided they’re all in it together. One for all and all for one.

  The ECB, FED, and BOJ are of course the three most important central banks in the world and the only real players when it comes to deep liquid capital markets.

  It’s ironic that the BOJ is using negative interest rates in an attempt to devalue the yen but can only really be successful if they can devalue against the euro and dollar.

  This means of course that a yen devaluation needs to be met with either no or less devaluation by the ECB and the FED, otherwise it simply doesn’t work as they all go down together.

  And herein lies the conundrum. Co-ordination between these three musketeers is necessary in order for the bond markets to hold together. Breaking ranks could provide a global shock that markets are wholly unprepared for and as the entire ball of wax grows bigger, any divergences become more and more dangerous. Pretty soon the smallest arbitrage will threaten to tear through the increasingly fragile markets.

  Interestingly this is where the qualitative, not quantitative side to economics becomes really, really important. It’s a reason why I’ve been hammering on about the change in the zeitgeist affecting US politics as well as the changes taking place in European politics. These are qualitative behavioural economics issues which, together with the quantitative, need to be understood (a topic I’ll be covering later this week).

  Rates or Currencies? Take Your Pick

  So on the one hand we have currency risk and on the other we have interest rate risk.

  Right now interest rates are negative with the outlier being the US. If the chubby lady hikes, even by 25 basis points (because that’s the most they’d dare to do), then the BOJ will get what they want in a depreciating yen. But the consequences to their already falling bond market (rising rates) could get out of hand and quickly.

  Ironically the easiest way to counter that would be for the Fed to slash rates, bringing rate differentials closer together but that would not have the same depreciating affect on the yen.

  What is clearer with every passing day is that these guys are less and less data dependent. Monetary policy at the BOJ is now completely reactionary and chaotic. After all, what’s the point at looking at data sets anymore when any reference point that may have had any meaning was left miles offshore a long time ago?

  Understanding where institutional capital will flow is always a pretty useful question and so..

  Imagine you’re an institution (as some readers are) and have to buy government debt in size…

  

  Cast your vote here and also see what others think

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

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

  – Chris

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

  “Oh what a tangled web we weave, when first we practice to deceive” – Sir Walter Scott

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• Latin America's 'Pink Tide' Crashes On The Rocks

  Submitted by Ryan McMaken via The Mises Institute,

  Ten years ago, South America was witnessing the rise of what came to be known as the "pink tide." Characterized by an allegedly kinder and softer version of socialism than the "red" communism of Castro's Cuba, the pink tide had begun with the election of Hugo Chavez in Venezuela in 1998, followed by the election of Lula da Silva in Brazil in 2002, and followed by the rise of the Kirchners in Argentina in 2003. The tide continued to roll in with the election of Evo Morales in Bolivia in 2006, and Rafael Correa's election in Ecuador in 2007.

  As these new leftist candidates gained traction, their success was said to herald a new era of leftist politics in South America that would bring to an end the "neoliberal" consensus and impose a new, more humane economics on Latin American society.

  Eighteen years after Hugo Chavez's inauguration, things haven't gone quite as planned.

  The economy of Venezuela is in seemingly terminal decline with riots, shortages, and enforced slave labor imposed in an attempt to force more production out of the population. Meanwhile, the economies of Brazil and Argentina — while not comparable to Venezuela — are among the worst in Latin America, with Brazil heading for its its worst depression since 1901.

  As economies worsened, corruption and authoritarian tactics worsened as well. Venezuelans have gotten the worst of it with citizens groaning under the weight of a police state that shuts down small business and persecutes even the smallest entrepreneurs for alleged economic "crimes" such as being a "class traitor." In her final years, Kristina Kirchner became increasingly autocratic and paranoid, going so far as to prosecute and impose fines on economists who made economic forecasts the Argentinian state found to be be unflattering. Meanwhile in Brazil, corruption reached new heights as President Rousseff — the pink-tide successor to da Silva — attempted to save the economy and her political career by showering her political allies with "stimulus" cash.

  The Hard-liners Give the Worst of It

  Much of the most serious damage has been limited to Venezuela, Brazil, and Argentina, however, as it seems the pink tide was never quite as deep or strong as many suspected it to be.

  Correa and Morales, for instance, while spouting Marxist rhetoric, proved to be more pragmatic rather than ideological, opting for more restrained reforms that still left room for the more standard fare of so-called neoliberalism, such as expanded international trade and relatively restrained government budgets.

  In contrast, Venezuela's regime committed itself to revolutionary changes in its economic and political systems while the Kirchners clamped down on free trade, manipulated exchange rates, imposed capital controls and persecuted political enemies. Brazil expanded government spending to new highs.

  Over the past decade, we saw the rise of two different blocs in Latin America. There were the more market-oriented economies, found in Chile, Colombia, Peru, and Uruguay. In some cases, these countries elected avowed leftists as well. But, even these center-left governments tended to lean toward expanded trade or benign neglect toward informal economies and the business sector.

  Some countries — Chile, Colombia, Peru, and Mexico — after years of consistent growth and stable politics, were even christened the "Pacific Pumas" in a play on the "Asian Tigers" moniker of the 1990s.

  The general trend continued into 2015, as the two blocs of South America show two very different trajectories:

  

  Of course, this is just a snapshot of a trend that has continued for several years. The committed pink tide countries have foundered while the more pragmatic, restrained, and trade-oriented regimes have seen far better growth trends:

  

  Source: IMF calculations and estimates.

  The next graph shows trends in GDP per capita since 1990. In this case, I have taken the same per capita GDP values and indexed them, with a base year of 1990 to give us a view of growth over the past 25 years.

  In this case, we find that countries that were less committed to the pink tide experienced the most growth. The top three countries for growth by this measure are Chile, Peru, and Uruguay. Argentina had been keeping pace with Peru, but has gone into decline since 2011, and now is about equal to Colombia in terms of growth. 

  Indeed, there has been generally unabated growth for all countries shown here except for Argentina, Brazil, and Venezuela. All three of the leading "pink tide" countries show distinct downtrends in recent years, with no growth at all over the past five years. Venezuela is in the worst position with no net growth at all in 25 years.

  

  For help in reading the graph, here are all countries by index value in 2016, and by percentage growth since 1990 (GDP per capita):

  • Chile 2.5 (151% growth) 
  • Peru 2.3 (125% growth)
  • Uruguay 2.1 (110% growth)
  • Argentina 1.9 (86% growth)
  • Colombia 1.8 (77% growth)
  • Bolivia 1.6 (59% growth)
  • Ecuador 1.6 (55% growth)
  • Brazil 1.4 (42% growth)
  • Mexico 1.4 (41% growth)
  • Paraguay 1.3 (34% growth)
  • Venezuela 1 (-1.2% growth)

  Naturally, not everything can be explained simply by the politics of the past decade. There are always other major institutional issues, and even military issues, as in the case of Colombia's recently-ended conflict with FARC rebels. Mexico's War on Drugs continues to be a significant drag on growth. 

  Moreover, it is also too simplistic to slap easy left-right labels on regimes, since the brand of socialism practiced in Venezuela is significantly different from that practiced by the Peronists in Argentina. Clearly, political institutions in Brazil are relatively less authoritarian than those in Venezuela. Even worse would be to go off mere political party labels as in the case of the Socialist Party in Chile, which currently controls the presidency in that country. The "Socialist Party" in Chile is best described as mildly center-left by modern standards, and party members should obviously not be lumped together with the Chavismo socialists of Venezuela. 

  Nevertheless, whether called Peronista or Chavismo, regimes more committed to populist, third-way, and socialist political action in practice are, not surprisingly, coming up against some of the disastrous economic side effects of their policies. 

  Of course, we can't prove anything by demonstrating correlations, which is why we must rely on sound economic theory as well.

  

  

• Wells Fargo Fires 5,300 For Engaging In Massive Fraud, Creating Over 2 Million Fake Accounts

  For years we have wondered why Wells Fargo, America’s largest mortgage lender, is also Warren Buffett’s favorite bank. Now we know why.

  On Thursday, Wells Fargo was fined $185 million, (including a $100 million penalty from the Consumer Financial Protection Bureau, the largest penalty the agency has ever issued) for engaging in pervasive fraud over the years which included opening credit cards secretly without a customer’s consent, creating fake email accounts to sign up customers for online banking services, and forcing customers to accumulate late fees on accounts they never even knew they had. Regulators said such illegal sales practices had been going on since at least 2011.

  In all, Wells opened 1.5 million bank accounts and “applied” for 565,000 credit cards that were not authorized by their customers.

  Wells Fargo told to CNN that it had fired 5,300 employees related to the shady behavior over the last few years. The firings represent about 1% of its workforce and took place over several years.  The fired workers went to far as to create phony PIN numbers and fake email addresses to enroll customers in online banking services, the CFPB said.

  How Wells perpetrated fraud is that its employees moved funds from customers’ existing accounts into newly-created accounts without their knowledge or consent, regulators say. The CFPB described this practice as “widespread” and led to customers being charged for insufficient funds or overdraft fees, because the money was not in their original accounts. Additionally, Wells Fargo employees also submitted applications for 565,443 credit card accounts without their knowledge or consent, the CFPB said the analysis found. Many customers who had unauthorized credit cards opened in their names were hit by annual fees, interest charges and other fees.

  According to the NYT, regulators said the bank’s employees had been motivated to open the unauthorized accounts by compensation policies that rewarded them for drumming up new business. Many current and former Wells employees told regulators they had felt extreme pressure to expand the number of new accounts at the bank.

  And, since it is US government policy never to send a banker to prison, they thought that engaging in criminal behavior was not such a bad idea.

  Federal banking regulators said the practices reflected serious flaws in the internal culture and oversight at Wells Fargo, one of the nation’s largest banks.

  “Today’s action should serve notice to the entire industry that financial incentive programs, if not monitored carefully, carry serious risks that can have serious legal consequences,” said CFPB Director Richard Cordray. He added that “unchecked incentives can lead to serious consumer harm, and that is what happened here.”

  “Consumers must be able to trust their banks. They should never be taken advantage of,” said Mike Feuer, the Los Angeles City Attorney who joined the settlement.

  On its behalf Wells fargo issued a statement saying it “is committed to putting our customers’ interests first 100 percent of the time, and we regret and take responsibility for any instances where customers may have received a product that they did not request,” the bank said in a statement adding that “at Wells Fargo, when we make mistakes, we are open about it, we take responsibility, and we take action.”

  As the NYT puts it, “this is an ugly moment for Wells Fargo, one of the few large American banks that have managed to produce consistent profit increases since the financial crisis.” Now we know one of the reasons why.

  As CNN redundantly adds, “the scope of the scandal is shocking.”

  And since nobody will go to prison, in a few months we will read another such “shocking scandal” perpetrated by another bailed-out bank.

  

  

• The Official Story Is Now The Conspiracy Theory: Paul Craig Roberts Warns "The Tide is Turning"

  Authored by Paul Craig Roberts,

  In a few days it will be the 15th anniversary of 9/11, and this November 22 will be the 53rd anniversary of the assassination of President John F. Kennedy in Dallas, Texas. These two state crimes against democracy destroyed American democracy, accountable government, and the Constitution’s protections of civil liberty.

  Years after the damage done by these events the American people no longer believe the official stories. Neither does the government, but the government will never validate the distrust that Americans now share of the oligarchs’ government by acknowledging the truth.

  The official explanation of the assassination of President Kennedy never made any sense. Videos of the assassination contradicted the official story, as did witnesses, and many credible people challenged the government’s story. The CIA was faced with the official explanation becoming unglued and launched its media program stigmatizing doubters as “conspiracy theorists.” 

  The CIA’s psych warfare against the public succeeded at the time and for a number of years during which witnesses had mysterious deaths and the trail grew cold. But by the late 1970s there was so much public skepticism of the official story that the US Congress took the risk of being labeled “conspiracy kooks.” The House Select Committee on Assassinations reopened the inquiry into JFK’s murder. The House Committee concluded that the Warren Commission’s investigation was seriously flawed, that there was more than one person firing at President Kennedy and that there was a conspiracy to assassinate JFK.

  The corrupt US Department of Justice (sic) contradicted the House Select Committee’s report. However, the American people believed the Select Committee and not the corrupt Justice (sic) Department, which never tells the truth about anything.

  By 2013 polls showed that most Americans are “conspiracy kooks” who do not believe the official government line on JFK’s assassination. So with regard to JFK’s assassination, the “conspiracy theorists” are in the majority. The minority are the Americans who cannot escape their brainwashing.

  

  In a few days it will be the 15th anniversary of the alleged al Qaeda attack on the World Trade Center and Pentagon, and we are witnessing the fading protection that the charge of “conspiracy theorist” provides for the officlal government story. Indeed, the official 9/11 story is collapsing before our eyes.

  Europhysics, the respected publicaton of the European physics community has pubished an article by scientists who conclude that “the evidence points overwhelmingly to the conclusion that all three [World Trade Center] buildings were destroyed by controlled demolition.” Few American scientists can admit this, because their careers depend on US government and military/security complex research contracts. Independent scientists in the US are a vanishing breed, an endangered species.

  The scientists say that in view of their findings, “it is morally imperative” that 9/11 “be the subject of a truly scientific and impartial investigation by responsible authorities.”

  So now we are faced with a peculiar situation. The scientifically ignorant two-bit punk American presstitutes claim to know more than the editors of the journal of the European physics community and the scientists who did the investigation. Don’t you think it farfetched that ignorant, corrupt, and cowardly American journalists who lie for money know more than physicists, chemists, 2,700 high-rise architects and structural engineers who have called on the US Congress to launch a real investigation of 9/11, firefighters and first responders who were on the WTC scene, military and civilian pilots and former high government officials, all of whom are on record challenging the unbelievable and physically impossible official story of 9/11? What kind of a dumbshit moron does a person have to be to believe that the United States government and its media whores know better than the laws of physics?

  The ability of the presstitutes to influence Americans seems to be on the decline. The media ganged up on Donald Trump during the Republican primaries, intending to deny Trump the nomination. But the voters ignored the presstitutes. In the current presidential campaign, Hillary is not the run-away winner that the presstitutes are trying to make her. And despite the propaganda ministry, the legs under the official 9/11 story are wobbly, to say the least.

  Indeed, the official 9/11 story already has lost credibility with the American public. Last April a Rasmussen Poll found that “Americans doubt they’ve been told all the facts about the September 11, 2001 terrorist attacks on the United States and strongly believe the government should come clean.”

  A YouGov poll in 2013 found that 50 percent of Americans “have doubts about the government’s account of 9/11,” which shows that the public is far more intelligent and less corrupt than the presstitutes who are paid to lie to the public. This poll also found that as a consequence of the cover-up job performed by the American presstitutes, 46 percent of Americans were not even aware that a third WTC building, Building 7, collapsed on September 11. After viewing films of WTC 7’s collapse, 46 percent saw it as a controlled demolition. By a margin of two to one, poll respondants support a new investigation of Building 7’s collapse.

  So, in America today “conspiracy kooks” outnumber those who believe the official lies. As the official lies are themselves conspiracy theories, Americans who disbelieve the official conspiracy theories outnumber Americans who believe official conspiracy theories. The question is: who are the real conspiracy kooks, the majority who disbelieve the official lies or the minority who believe the official lies?

  It is curious that the CIA’s psych-op mind-controll has broken down in the cases of the JFK assassination and 9/11, but is still effective in more recently orchestrated events, such as San Bernardino, Orlando, Paris, and Nice. Perhaps this is because not enough time has passed for the public to pay attention to the vast difference between the stories and the evidence.

  The Internet offers many refutations of the official accounts. With regard to Nice, France, the Nice police officials themselves are having problems with the official story. The French Anti-Terrorist Sub-Directorate in Paris has ordered the public authorities in Nice to delete the video recordings from security cameras of the “Nice Terror Truck Attack.” The Nice authorities refused on the grounds that this would be destruction of criminal evidence. This story has disappeared from the news. I have asked friends in France how this conflict was resolved and have not heard anything. The French like to live life well and faced with the refugees from Washington’s wars, they seem to be focused on living life well while it can be done. If I hear anything, I will pass it on.

  Apparently, the order to delete the video evidence of the “attack” was not sufficient for the French Ministry of the Interior. According to a senior Nice police officer, Sandra Bertin, the Interior Ministry pressured her to falsify her police report on the Nice “truck massacre.” Officer Bertin told the Journal du Dimanche that “he ordered me to put in [the report] the specific positions of the national police which I had not seen on the screen.”

  The Interior Minister, Bernard Cazeneuve is suing the Nice police official for “defamation,” as if it is possible to defame any politician anywhere in the corrupt West.  Moreover, why would a senior Nice official make up a story about being ordered to change a report? It doesn’t make any sense, does it? Clearly, the central government is trying to hide the evidence against the official story.

  It seems that the French media is disposing of the Nice police official by branding her a rightwing racist opposed to the current government.

  Watch this video and ignore the narrator’s four-letter vocabulary.

  What you will learn is that all those people you saw running in the presstitute TV reports had no idea why they were running. The presstitutes created the impression that they were running away from the truck. However, as the interviews show, they were running because other people were running, because the police told them “terrorists, run,” and because they heard shots (apparently police firing blanks). Those interviewed reported, “You run with them even though you have no idea what you are running from. You can’t help it, you run with them.” None of those running away ever saw a truck.

  According to the foul-mouthed narrator, the film of the people running away was taken prior to the time the truck allegedly mowed down 185 people, killing 85 of them. The narrator appears to be correct if the time stamps on videos are correct. The narrator says the streets needed to be cleared for the crisis actors to put on their show that is used to control our minds about what happened.

  I have pointed out that a truck that hit 185 people, killing 85 of them would be covered in blood and that bodies would be splattered all over the street with blood everywhere. Yet, the photos and videos that we are shown show no such evidence. The stopped truck on which police are directing gunfire is as white as snow.

  Independently of the vast analysis online of the video evidence of the alleged “Nice attack,” I suspect the Nice “terror attack” for the same reason that the Pentagon attack is suspect. Despite all the contrary evidence against the official stories, the authorities refuse to release the video evidence that, if it shows what the authorities claim, would shut up the skeptics and prove the official story.

  When a government claims it has video evidence that proves its official story but refuses to release it, indeed, demands the destruction of the video evidence, we know for an absolute fact that the video evidence totally contradicts the official story. That is the only possible conclusion.

  My readers will write to me asking how the government expects to get away with its faked, and in the case of 9/11 false flag, terror orchestrations? The answer, perhaps, is that just as it took a long time for the JFK assassination and 9/11 lies to catch up with the government, the recent orchestrations will also take some time for a slowly awakening public to catch on. In the meantime the orchestrated events will serve the agendas that they are intended to serve, and by the time that the public sees through the orchestrations, a new situation will be in place with new orchestrations.

  Keep in mind that the public thinks it is shown evidence. Newspapers need photos to give a visual dimension to their coverage, and TV needs videos of the events. News organizations are under a time pressure, and they have to use what they are handed or what is at hand. There is no time to scrutinize the visual material or to raise questions about it. Most of the public thinks that the photos and videos shown to them are evidence or would not be shown and accepts the visual evidence without question. In an earlier column I linked to the vast array of Nice photos provided in the UK Daily Mail. The photos show a calm situation. There are a few people lying in the street without any sign of bodily damage or blood and there are covered objects that the public assumes are dead people. But the streets are devoid of the splattered blood and mangled bodies that would be the consequence of a truck hitting 185 people. Similarly, we have been shown very few videos and their origin is unknown except for the one attributed to Richard Gutjahr who was apparently pre-positioned to film inconclusively both the Nice and German “terror attacks.” Online analysis of the videos shows that the videos are not evidence for the storyline. The real question is why the French Interior Minister has prevented the release and demanded destruction of the security camera videos that filmed the entire event, an order that brought the central government in Paris in conflict with the public authorities in Nice. There has been no US media interest whatsoever in this very strange event. It is not a “conspiracy theory” to ask why the public cannot see the video evidence that shows what actually happened.

  What agenda is served by the Paris and Nice attacks? This is the question everyone should be asking and the media, if we had one, should be investigating. With the information currently available to me, my answer is this. Of all the peoples of Western Europe, the French are the most independently minded. French independence has taken a number of recent hits from Washington:

  The largest French bank was forced to hand over $9 billion to Washington for doing business with a country on Washington’s disapproval list.

   

  Washington forced France to cancel a lucrative ship-building program for Russia, to the detriment of French companies and shipyard workers.

   

  Washington has forced France into a diplomatic conflict with Russia that the French do not want and into a looming military conflict which the French want even less, as the conflict would mean the vaporization of France. As one Russian SS-18 can wipe out three-fourths of the state of New York, how many do you think it would take to wipe France off of the face of the Earth? Not even a handful.

   

  Keep in mind that in 1966 President Charles de Gaulle pulled France out of NATO on the grounds that it was necessary to preserve French independence in world affairs. France did not again submit to Washington’s control until 2009 when Washington-owned Nicolas Sarkozy, put into the French presidency by Washington’s money, followed his orders and rejoined NATO.

  The Paris and Nice orchestrated events serve to scare France back into Washington’s arms. Dreams of independence become nightmares when independence leaves the French people at the mercy of both terrorists and Russians. Washington, who owns Sarkozy, who is once again Washington’s candidate for president of France, intends to keep France in NATO.

  The article in Europhysics pointing out the impossibility of the official 9/11 story could possibly lead to a rebirth of skepticism among Europeans. Only a skeptical media willing to investigate government storylines can bring a halt to the staged terror events that serve secret agendas.

  Keep in mind that the US government has plentiful video evidence of the 9/11 attack on the Pentagon but refuses to release the evidence that it says support its story. Similarly, the French federal government has prohibited Nice authorities from releasing the security camera videos of the Nice truck attack and has ordered the video evidence destroyed. How can we believe governments that refuse to show us the hard evidence?

  

  

• And The Fed Wants To Raise Rates When?

  For the sixth year running, exuberant GDP growth projections have been drastically marked down to a new normal low. But this year is different, not only have 2016 GDP growth expectations been marked down to post-crisis lows, but The Fed – in all its wisdom – is determined to raise rates (twice if you believe them) because, in their own words“the economy is in good shape and headed in the right direction…”

  Does this look like the right time raise rates?

  

   

  The oft-quoted Zero Hedge chart above prompted DoubleLine’s Jeff Gundlach to state “clearly this is a bad time to raise rates” adding that if rate-hike odds remain below 40%, then September is off the table (as The Fed does not want to shock the markets)…

  

  Good luck Janet.

  

  

• Over 70% Of US Doctors Surveyed Say Hillary's Health Concerns Are "Serious, Possibly Disqualifying"

  On a day when Hillary Clinton proclaimed the media biased (against her), labeling the GOP as "sad, misogynistic sexists," a survey of the Association of American Physicians and Surgeons (AAPS) found that nearly 71% of physicians thought concerns about Hillary Clinton's health are "serious – could be disqualifying for the position of President."

  With her lead over Trump tumbling to six-week lows following a poor performance at last night's "commander-in-chief" forum, and a press conference focused on what she was not asked (or didn't answer)…

  

  Source: RealClearPolitics

  Hillary Clinton's campaign has called "sexism" on the GOP. As The Hill reports,

  The Democratic nominee, along with top surrogates and allies, has seized on Trump’s recent comment that Clinton does not have a “presidential look,” using the comment to depict him as sexist.

   

  The former secretary of State also laid into Republican National Committee Chairman Reince Priebus for his tweet that she looked “angry” during an MSNBC presidential forum.

   

  Clinton didn’t rule out sexism when asked if she was being treated differently in the political race because she is a woman.

   

  “I'm going to let all of you ponder that last question,” the first female presidential nominee replied with a grin at a press conference.

   

  “I think there will be a lot of Ph.D. theses and popular journalism writing on that subject for years to come. I don’t take my advice and I don’t take anything seriously that comes from the RNC.”

  Chelsea Clinton also waded into the debate on Thursday, criticizing Trump’s remarks about a “presidential look.”

  “Everyone can see that as the sad, misogynistic, sexist rhetoric that I hoped we had moved beyond in the 21st century,” the former first lady's daughter said.

  This isn’t the first time accusations of sexism have bubbled up during the campaign.

  Earlier this year, Clinton fired at Trump for saying that if she were a man, “she would get 5 percent of the vote.” The billionaire criticized Clinton at the time for playing the “woman card.”

   

  “They're pretty quick to yell sexism in a crowded theater … but constantly playing the victim card is not something you do from a position of strength,” said Republican strategist Matt Mackowiak.

   

  Mackowiak said playing up gender is a “risk that can backfire” especially because “the first to make inroads with the other [demographic] will win.”

  This 'sexist' call follows a lambasting of any and everyone who even mentions her health as "conspiracy theorists" with a political axe to grind. Ultimately, the media frenzy culminated in an article written by the WaPo's Chris Cilizza who concluded that "the questions about Hillary Clinton's health are absurd"…

  

  … a statement which could pass for absurd judging by the Clinton campaign's furious response to demonize any member of the mainstream who dares to even bring them up.

  *  *  *

  Which means that, according to AAPS, over 70% of US doctors and surgeons are absurd right-wing tin-foil hat-wearers…

  Concerns about Hillary Clinton's health are "serious—could be disqualifying for the position of President of the U.S.," say nearly 71% of 250 physicians responding to an informal internet survey by the Association of American Physicians and Surgeons (AAPS). About 20% said concerns were "likely overblown, but should be addressed as by full release of medical records." Only 2.7% responded that they were "just a political attack; I have confidence in the letter from her physician and see no cause for concern."

   

  While more than 81% were aware of her history of a concussion, only 59% were aware of the cerebral sinus thrombosis, and 52% of the history of deep venous thrombosis.

   

  More than 78% said the health concerns had received "not enough emphasis" in the media, and only 2.7% that there had been "too much emphasis."

   

  Nearly two-thirds said that a physician who had a concern about a candidate's fitness to serve for health reasons should "make the concerns known to the public." Only 11% said a physician should "keep silent unless he had personally examined the patient," and 10% that the candidate's health was "off limits for public discussion."

  Eighty-eight respondents submitted comments.

  One said that "the public interest will ALWAYS override either privacy rights or rights of self-determination in the case of a presidential candidate."

   

  Another mentioned Clinton's "so called loss of memory claimed during her FBI questioning about her email server."

   

  Beyond the specific questions, one remarked that "I think that the candidate should be honest with the public about his/her health!"

   

  The history of the concussion was concerning: "The public must watch the movie Concussion to realize that such an injury does affect thought process."

  A poll of 833 randomly selected registered voters by Gravis Marketing showed that nearly half (49%) were not aware of the "well documented major health issues that Hillary Clinton has." Nearly three-fourths (74%) were unaware of Bill Clinton's statement that Hillary suffered a "terrible" concussion requiring "six months of very serious work to get over." The majority (57%) thought that candidates should release their medical records.

  "Both physicians and other voters think that health concerns are relevant when choosing a presidential candidate," states AAPS executive director Jane M. Orient, M.D.

   

  "However, more than 40% of physician respondents were unaware of the cerebral sinus thrombosis, and the vast majority of voters were not aware of all of Clinton's problems or their potential serious long-term implications for cognitive function."

  Now that's a lot of "absurd conspiracy theorists."

  

  

• AsiaPac Stocks, Won Tumble After Possible North Korea "Nuke Test"

  Reports of an "artificial earthquake" in North Korea sparked a bout of risk off in AsiaPac stocks and the Korean Won as USGS says the 5.3 magnitude quake at zero depth is near past North Kore nuclear test sites.

  • *S. KOREA DETECTS ARTIFICIAL EARTHQUAKE IN N.KOREA AROUND 9:30AM
  • *S. KOREA GOVT CALLS FOR TASK FORCE ON POSSIBLE NUKE TEST:YONHAP
  • *5.3 MAG. EARTHQUAKE CHINA-NORTH KOREA BORDER REGION :EMSC
  • *USGS CITES 'POSSIBLE EXPLOSION' FOR M5.3 EVENT IN N. KOREA
  • *USGS: LOCATION NEAR PAST NORTH KOREA NUCLEAR TESTS
  • *JAPAN SAYS NORTH KOREA LIKELY CONDUCTED NUCLEAR TEST

  

  As Bloomberg reports, the 5.1-magnitude earthquake in a similar location was recorded before North Korea’s fourth nuclear test in January at the site. The news agency said the test was at the same location.

  • *SUGA: JAPAN SEES POSSIBILITY N.KOREA QUAKE WAS NUCLEAR TEST
  • *S. KOREA FOREIGN MINISTRY HOLDS EMERGENCY MEETING: YONHAP

  And the initial reaction is selling pressure in local currencies…

  

   

  And stocks…

  

  As AP reports, a second nuclear test this year would be a defiant response to Western pressure on Pyongyang to halt its nuclear ambitions. The country has previously conducted tests every three to four years.

  Any test will lead to a strong push for new, tougher sanctions at the United Nations and further worsen already abysmal relations between Pyongyang and its neighbors. North Korean nuclear tests worry outside governments because they are seen as moving North Korea's scientists and engineers that much closer to their goal of an arsenal of nuclear-tipped missiles that can reach the United States.

   

  North Korea is thought to have a handful of rudimentary nuclear bombs and has spent decades trying to perfect a multistage, long-range missile to eventually carry smaller versions of those bombs. After several failures, it put its first satellite into space with a long-range rocket launched in December 2012, and has since launched another such successful launch.

   

  Experts say that ballistic missiles and rockets in satellite launches share similar bodies, engines and other technology. The U.N. calls the North's long-range rocket launches banned tests of ballistic missile technology.

   

  Some analysts say the North hasn't likely achieved the technology needed to manufacture a miniaturized nuclear warhead that could fit on a long-range missile capable of hitting the U.S. But there is a growing debate on just how far the North has advanced in its secretive nuclear and missile programs.

  The question is – what does it take to prompt a retaliation from South Korea (or its big brother 'Murica)?

  

  

• The Deep (Left) Pockets Of Black Lives Matter

  Authored by Mitchell Shaw, originally posted at TheNewAmerican.com,

  While claiming to be a grassroots organization formed in response to the prevalence of police violence, Black Lives Matter (BLM) is actually 100-percent pure Astroturf. With coffers bulging with millions of dollars from George Soros, the Ford Foundation, and other deep-pocketed leftist individuals and groups, BLM is little more than a front organization for these leftists and their agenda to reshape the very fabric of American society, culture, and law.

  

  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. As we reported then:

  The relevant portion of the report says:

  The killing of Freddie Gray in April helped spawn weeks of peaceful protests by Baltimore residents and allies from the #BlackLivesMatter movement that were temporarily interrupted by a period of unrest that lasted less than 48 hours and resulted in some injuries and millions of dollars in property damage to neighborhood businesses. While many lamented the damage done, the overwhelming sentiment is that the uprising has catalyzed a paradigm shift in Baltimore that offers opportunities for major justice reforms.

  In particular, recent events offer a unique opportunity to accelerate the dismantling of structural inequality generated and maintained by local law enforcement and to engage residents who have historically been disenfranchised in Baltimore City in shaping and monitoring reform. Building on our existing networks and programs, OSI-Baltimore will focus investments on: 1) creating a culture of accountability for policing in Baltimore, recognizing the pervasive racism, disrespect and lawlessness that gave rise to recent events; and 2) building the capacity of activists in Baltimore to demand and achieve immediate and long-term reforms.

   

  The sum of $650,000 is quite something for an organization claiming both that it is “grassroots” and that it represents the people being oppressed by an evil, racist society. Grassroots aren’t normally that wealthy, and evil, racist societies don’t normally fund organizations dedicated to throwing off those chains. There is clearly something else at work here and that something is an Astroturf front for racial agitation.

  And, as much money as $650,000 is, it is mere drop in the bucket. The Washington Times reports that between OSF and the Center for American Progress, BLM has been the beneficiary of $33,000,000. Through grants to a variety of subversive organizations under the BLM umbrella, OSF and the Center for American Progress are funding a false narrative about racial disparity and police violence with the end-goal of “reforming” local police by federalizing them. By using the looting and rioting as “opportunities for major justice reforms,” Soros and his ilk have fanned the flames of an invented fire for their own purposes.

  As bad as all of that would be on its own, even that $33,000,000 is — yet and still — just a drop in the bucket. The Ford Foundation and Borealis Philanthropy have recently formed the Black-Led Movement Fund with a six-year commitment to a pooled donor campaign to the tune of $100,000,000. Race-hustling, it would appear, is a booming industry. After all, you can’t make omelets without breaking a few eggs and you can’t reconstruct a society until you first tear it down. And there is no tool better at tearing down a society that the proven method of divide-and-conquer. $133,000,000 will pay for a lot of #BLM #FTP t-shirts.

  So, under the banner and hashtag of “Black Lives Matter” sits a bulging and growing money bag. What is BLM doing with its ill-gotten gains? Have these “leaders” of black America started career training centers in the most impoverished and disenfranchised neighborhoods? No, they have simply demanded higher minimum wages. Rather than help the poor, black residents of the nation’s poor, black neighborhoods learn more valuable job skills, BLM simply demands that entry-level McJobs pay more than the jobs are worth. Have these “leaders” of black America started drug rehabilitation programs to help the poor overcome addictions? No, they have instead demanded that the legalization of drugs which addle the minds of the poor, black Americans in the inner-cities of America. Have these “leaders” of black America launched programs to address the cycle of poverty which necessarily accompanies high illegitimate birth-rates and fatherless homes? No, instead they have demanded that the “sex work” industry (a not-so-veiled reference to prostitution) be legalized. If black lives mattered to these “leaders” in the BLM “movement,” they would seek ways to make black lives better. Instead they use black lives as cannon fodder in their war on police — which is part of a larger war on society.

  Take for instance just one of the many subversive organizations which will receive that $100,000,000 from The Ford Foundation and Borealis Philanthropy. The Movement for Black Lives (MBL) advocates for all of the above-mentioned ideas and more. MBL demands reparations including free college and a minimum wage with no requirements for the one receiving the “wage” to perform any work in order to receive it. (Of course, "minimum wage" is not the correct term since the very definition of "wage" is payment received for work performed.) It’s enough to make one wonder what the free college education is for if people will get money for nothing. MBL also demands the legalization (they prefer the term “decriminalization”) of drugs and prostitution. Their demand goes so far as to make such policy retroactive and to include — say it with me — reparations. And, with a wink and a nod to Marx and Engels, MBL demands “economic justice” to include “collective ownership, not merely access.”

  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.

  h/t Brandon Smith's Alt-Market.com

  

  

• 40% Of GDP Per Year: Goldman Calculates The True Growth Rate Of China's Debt

  For a long time when it came to Chinese loan creation, analysts would only look at the broadest reported aggregate: the so-called Total Social Financing. And, for a long time, it was sufficient – TSF showed that in under a decade, China had created over $20 trillion in new loans, vastly more than all the “developed market” QE, the proceeds of which were used to kickstart growth after the 2009 global depression, to fund the biggest capital misallocation bubble the world has ever seen and create trillions in nonperforming loans.

  However, a problem emerged about a year ago, when it was revealed that not even China’s TSF statistic was sufficient to fully capture the grand total of total new loan creation in China. We profiled this three months ago in a post titled “China’s Debt Is Far Greater Than Anyone Thought“, where, according to Goldman, “a substantial amount of money was created last year, evidencing a very large supply of credit, to the tune of RMB 25tn (36% of 2015 GDP).” This massive number was 9% higher than the TSF data, which implied that “only” a quarter of China’s 2015 GDP was the result of new loans. As Goldman further noted, the “divergence from TSF has been particularly notable since Q2 last year after a major dovish shift in policy stance.”

  In short, in addition to everything else, China has also been fabricating its loan creation data, and the broadest official monetary aggregate was undercutting the true new loan creation by approximately a third. The reason for this is simple: China does not want the world – or its own population – to realize just how reliant it is on creating loans out of thin air (and “collateralized” by increasingly more worthless assets), as it would lead to an even faster capital outflow by the local population sensing just how unstable the local banking system is.

  Unfortunately for the Beijing politburo, there are ways to find the real number.  This is how Goldman did it: the firm’s approach is not to directly quantify the amount of credit extended, because financial institutions (FIs) do not provide good clarity on the true nature of their assets and hence it is difficult to conclude how much of those are indeed credit to corporates and households. Rather, the firm looks at the mirror image of credit—i.e., “money”, which is a metric related to FIs’ funding side. The basic idea is that credit generation is essentially a money creation process, hence an effective gauge of “money” can give a good sense of the pace of credit. But as the officially reported broad money, M2, has been rendered less relevant by continued financial diversification, so Goldman construct our own money flow measure to fit our purpose.

  • Quantify the money flow from households and corporates to various financial investments, including i) bank deposits from households and corporates and ii) non-deposit financial investment by households and corporates, including wealth management products (WMPs), investment funds, insurance schemes and collective trust products.
  • Adjust the money flow measure above for factors that affect the quantity of money but are unrelated to credit generation; These include changes in net government financial balance, FX/RMB conversion by households and corporates, and cross-border RMB flow.
  • Add entrusted loans (which are company-to-company lending and do not create money) to the adjusted money flow measure to make it comparable to the TSF concept.

   

  

   

  The table below shows Goldman’s estimates for 2016 Q1-Q2, in addition to its estimates for 2011- 2015 discussed previously. In seasonally adjusted terms, our estimate of credit flow for the first half of 2016 is 35% of GDP.

  

  Here is the good news: compared to late 2015, the record credit creation has slowed down fractionally, and the gap with the TSF total has shrunk. The smaller gap seems to be in line with recent reports that listed banks’ “investment receivables” expanded less rapidly in 2016 H1, and it might partly reflect the regulators’ tougher stance against shadow lending in recent months.

  And now, the bad news: this “tougher stance” has not been nearly tough enough, because as the following chart shows on a 1-year moving average, nearly 40% of China’s “economic growth” is the result of new credit creation, or in other words, new loans.

  

   

  What this really means, is that China’s debt/GDP, estimated most recently by the IIF at 300%…

  

  … is now growing between 30% and 40% per year, when one accounts for the unaccounted for “shadow” credit conduits.

  Here is how Goldman concludes this stunning observation:

  The PBOC appears to have shifted to a less dovish, though still supportive, policy bias in the last few months. However, given the prospective headwinds from slower housing construction and tighter on-budget fiscal stance in the coming months, there remains a clear need to sustain a high level of infrastructure investment, which is credit intensive, to achieve the minimum 6.5% full-year growth target (see our recent comment here). This poses constraints on how much further the PBOC can keep reining in credit, in our view.

  Translating Goldman, some time around 2019, China’s total Debt/GDP will be over 400%, an absolutely ridiculous number, and one which assured a banking, if not global, financial crisis. The only saving grace is that for the time being, the PBOC and Beijing have managed to sweep away China’s unfixable problems under the rug, with a series of amazing distractions and the effectively nationalization of the stock, bond and FX markets. Alas, this is also the basis for “recovery” in all other developed nations, which means that as of this moment, it is a race between the world’s central banks not who can devalue the fastest, but who can avoid losoing credibility first, and watch as these Keynesian mountains of debt, never before seen in the history of manking,  come crashing down as JM Keynes “long run” finally catches up with everyone.

  

  

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• Where Do We Go From Here?

  By Chris at www.CapitalistExploits.at

  A great deal of human behaviour is unmistakably genetic.

  Usain Bolt is clearly genetically disposed to outrunning drowsy cheetahs, while Michael Phelps is only part human with the other part clearly fish of some kind. Both have a physiological edge compounded by what I can only imagine must be a vomit inducing amount of punishing hard work.  But I suspect in order for it all to work they have a deep love and passion for their chosen profession.

  While I’m not Buddhist, I think Buddha summed it up nicely when he said:

  “Your work is to discover your work and then with all your heart to give yourself to it.”

  Passion is infectious and felt when talking to someone who clearly loves their work, and Worth Wray, the Chief economist and global macro strategist at STA Wealth Management, is definitely one such gent with such passion. No doubt this is why I enjoyed so much speaking with him.

  Last week I published the first part of a conversation I had with Worth.

  And today I have for you the second part of the recording where we dive into:

  • The type of world that Worth is positioning for right now.
  • The effect of robotics on emerging market economies and a really interesting impact that this could have on Japan – something I had not thought about at all and which has given me a lot to think about and research.
  • We spend quite a bit of time on China and discuss why the vote on the 1st of October is so important to the future of China and the renminbi and how this may play out. The ramifications and portfolio positioning going into and post this vote are I think worth considering.
  • We discuss the political changes coming across Europe and in the US and what this can mean to entire countries in a globally interconnected world.
  • We also discuss a theme which I’ve been banging the proverbial drum on here at Capitalist Exploits: the mechanics of increasing instability in markets due to both geopolitical as well as economic events unfolding right now as well as how companies are already preparing for a protectionist world.

  Listen to it here and tell me what you think by leaving a comment on the blog.

  

  (Click on the image to listen to the podcast)

  – Chris

  “The prospect for a global FX shock may seem unsettling, but we believe it’s exactly what global markets need to bring good assets back to reasonable prices.” — Worth Wray

   

  ————————————–

  Liked this article? Don’t miss our future articles and podcasts, and

  get access to free subscriber-only content here.

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• Negative Interest Rates Are ILLEGAL

   

   

   

   

  Negative Interest Rates Are ILLEGAL

  Written by Jeff Nielson

  
  

  

   

  We used to live in societies which observed the Rule of Law. Among the many great ironies and perversities of our social/legal devolution is this. Many of our fundamental principles of law (and justice) were such an integral part of our lives that they were taken for granted, and thus rarely discussed in explicit terms. Now, in the Corrupt West, many of these same principles of law/justice have been forgotten – seemingly erased by our lawless governments.
  

  
  

  One of these elementary principles of law is the commercial doctrine of “consideration”. The premise and legal principle is a simple one. In order for any commercial transaction to be recognized as being legitimate (and thus legal), both parties to any transaction/contract have to derive some material benefit. In law; this material benefit is known by the name “consideration”. There must be consideration, on both sides of any/every commercial transaction.

  
  

  At this point; many readers will already grasp that so-called “negative interest rates” violate the legal doctrine of consideration, and thus fail the test as a basis for any legal/legitimate commercial transactions. However, this merely scratches the surface when it comes to the degree to which our criminalized interest rates violate the Rule of Law. To fully appreciate the lawlessness of what our puppet governments are inflicting upon us (for the benefit of our Banker Overlords), we need to delve further back into this litany of criminality.

  
  

  The starting point in our descent into fraud and illegality with respect to our interest rate regimen is the so-called “0% interest rate”. There is no such thing as a “0% interest rate” or 0% loan. By definition; an interest rate is a positive number. It is the price we pay in exchange for the use of capital.

  
  

  As has been explained previously; what our corrupt governments call a “0% interest rate”, our Justice System (the real one) calls a “sham transaction”. We know this, in our two-tier societies, because if Ordinary People attempt to engage in the sham transaction of a “0% loan”, their transactions will be immediately subjected to legal scrutiny (generally by the Tax Man) and deemed to be null-and-void, as sham transactions.
  

  
  

  Some readers will claim that this is not true. They will assert that “0% loans” and 0% financing are now common, legitimate aspects of our world of commerce, with automobile sales being a commonly cited example. Why can car-dealers offer “0% financing”, and not have these transactions nullified as sham transactions?
  

  
  

  It is because these transactions do observe the legal doctrine of consideration. It is simply that these transactions have been disguised to create the illusion that the purchaser is getting “something for nothing” (i.e. free financing). Nothing could be further from the truth. The supposed “free financing” is merely an incentive to purchase, provided in lieu of other sales incentives.
  

  
  

  If the same purchaser sought to purchase the same vehicle, but without the perk of “0% financing”, then instead of that incentive they would be given a choice of other freebies, to entice them to commit to such a major purchase. Alternately (and even more cynically) auto dealers simply – and secretly – raise their sticker-price on the car, so that there is no “free financing”.
  

  
  

  The purchaser pays precisely the same amount for the vehicle by the time that the payments have been completed. All that has changed are the optics of the payments. Instead of paying “interest” over the months/years of car-payments, the purchaser is simply making larger payments of “principle”: the purchase price of the car. There is “no free lunch” in legitimate commercial transactions, nor in societies which observe the Rule of Law.
  

  
  

  A so-called “0% interest rate” is a prima facie fraud. It is free money. The Federal Reserve, corrupt operator of the world’s “reserve currency” has been financing the U.S. monetary system, and the U.S. economy itself, through fraudulent currency. Of course the “0% interest rate” is just one of many Fed frauds. This is why this fraud-factory never allows any legitimate audit of its books.
  

  
  

  Free money is fraudulent money, and thus illegal money. It is nothing more than a variation of counterfeiting, especially when combined with the institutionalized (but legal) fraud of “fractional-reserve banking”. The combination of so-called 0% lending and fractional-reserve banking renders a monetary system fraudulent and illegal, all by itself. It renders the currency of that monetary system worthless.

  
  

  So-called “negative interest rates” are much, much worse. Borrowers stealing from lenders. Banks stealing from their depositors. Just as there is no such thing as a 0% interest rate, there could never be a legitimate concept known as a “negative interest rate”. This term is simply another banker-euphemism for more banker fraud/crime.
  

  
  

  The enormous economic carnage which is caused by our regimen of such criminalized interest rates was the subject of the prequel to this piece. It was/is important to demonstrate this harm, from a legal standpoint. Why has the insanity/fraud/criminality of negative interest rates been inflicted upon us? Because (supposedly) we “need” this fraud for the sake of our economies, and thus our own best interests.
  

  
  

  In legal parlance; such attempts at justification are called “public policy” arguments. Yes, the conduct in question is technically illegal, but because the conduct “serves the Greater Good”, we bend the rules and allow the conduct.
  

  
  

  With the open criminality of negative interest rates, there is no Greater Good, merely greater and greater evils which flow from this monetary fraud, as (primarily) the Big Banks steal from anyone/everyone hapless enough to have some of their capital within the clutches of these financial pirates. A “negative interest rate” fails the test of legality, in several respects. There is no public policy argument of any kind which could mitigate in favor of this fraud, to even the tiniest degree.
  

  
  

  It is particularly important to explicitly acknowledge the open criminality of negative interest rates, because as informed readers are well aware, the banking Crime Syndicate is just getting started. While “negative” rates become more and more common, and more-deeply negative (i.e. illegal), the banking Crime Syndicate is pushing an even more-heinous criminal agenda on our puppet governments.
  

  
  

  Informed readers know this latest campaign of financial crime by the name “the War on Cash”. The “war” is being fought (by the bankers) in order to create a paradigm of ultimate financial fraud/evil: the Cash-Less Society. What is a cash-less society? It is a financial/economic system where all residents are compelled by law to keep all of their (fully) liquid wealth inside a bank – generally a Big Bank.
  

  
  

  And once our wealth is inside the Big Bank? We no longer receive a microscopic (positive) rate of interest on our deposits. We no longer provide the bank with the use of our capital for free (which is already illegal, by lack of consideration). We’re now forced to keep our wealth inside the Big Bank, and then the Big Bank systematically steals that wealth, in ever-growing increments, via the crime of a negative interest rate. And what they don’t steal via negative rates of interest, they will steal via “the bail-in” – an even more-lawless confiscation of financial assets.

  
  

  Crimes piled atop crimes. Lies piled atop lies, to supposedly justify all this systemic criminality.
  

  
  

  However, readers of these commentaries already have their own Answer to the ever-thickening web of criminality and financial fascism being wrapped around us like a choke-chain: precious metals. We will escape the criminality of “negative interest rates” and escape the criminality of “cash-less societies” by funneling our wealth into gold and silver. Honest Money. Stores of value; protection from this organized crime.

  
  

  Yes. The same banking Crime Syndicate which has already imposed the systemic criminality of negative interest rates, and is about to impose the systemic criminality of cash-less societies, will allow prudent people to escape their financial clutches, completely, while everyone else has their wealth forcibly taken from them in this lawless/rapacious manner. Here are two words for any/all people comforted by such a Dangerous Delusion: “bullion confiscation”.

  
  

  We must stop the criminality of negative interest rates today, not after the dwindling remnants of our wealth have been pillaged by the banking Crime Syndicate, with the enthusiastic assistance of our puppet governments. Governments which refuse to outlaw the naked criminality of the so-called “negative interest rate” should not merely be (meekly) voted out of office. They must be impeached.

  
  

  The central banks which are callously and deliberately facilitating this systemic financial/monetary crime demand more than mere punishment. They must be abolished.

  
  

  These corrupt, spineless governments and the Institutions of Financial Crime which rule above them (and us) are doing more than merely betraying us, as they serve their real Masters. They are malevolently conspiring to destroy us financially, completely and utterly.
  

  
  

  The “War on Cash” and all of these other systemic financial crimes are a war against all decent people, waged by the psychopathic oligarchs who lurk in the shadows. We did not declare this war. We do not want this war. But if we don’t start to fight this war, it will soon be over – and we all will have lost.

  
  

  All that is necessary for the triumph of Evil is for good men [and women] to do nothing.

  –Edmund Burke, Irish philosopher, 1729 – 1797

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

   

   

   

   

  Negative Interest Rates Are ILLEGAL

  Written by Jeff Nielson

  
  

  

• America The Illiterate

  Authored by Chris Hedges in Nov 2008, via Strategic-Culture.org,

  We live in two Americas. One America, now the minority, functions in a print-based, literate world. It can cope with complexity and has the intellectual tools to separate illusion from truth. The other America, which constitutes the majority, exists in a non-reality-based belief system. This America, dependent on skillfully manipulated images for information, has severed itself from the literate, print-based culture. It cannot differentiate between lies and truth. It is informed by simplistic, childish narratives and clichés. It is thrown into confusion by ambiguity, nuance and self-reflection. This divide, more than race, class or gender, more than rural or urban, believer or nonbeliever, red state or blue state, has split the country into radically distinct, unbridgeable and antagonistic entities. 

  There are over 42 million American adults, 20 percent of whom hold high school diplomas, who cannot read, as well as the 50 million who read at a fourth- or fifth-grade level. Nearly a third of the nation’s population is illiterate or barely literate. And their numbers are growing by an estimated 2 million a year. But even those who are supposedly literate retreat in huge numbers into this image-based existence. A third of high school graduates, along with 42 percent of college graduates, never read a book after they finish school. Eighty percent of the families in the United States last year did not buy a book.

  The illiterate rarely vote, and when they do vote they do so without the ability to make decisions based on textual information. American political campaigns, which have learned to speak in the comforting epistemology of images, eschew real ideas and policy for cheap and reassuring personal narratives. Political propaganda now masquerades as ideology. Political campaigns have become an experience. They do not require cognitive or self-critical skills. They are designed to ignite pseudo-religious feelings of euphoria, empowerment and collective salvation. Campaigns that succeed are carefully constructed psychological instruments that manipulate fickle public moods, emotions and impulses, many of which are subliminal. They create a public ecstasy that annuls individuality and fosters a state of mindlessness. They thrust us into an eternal present. They cater to a nation that now lives in a state of permanent amnesia. It is style and story, not content or history or reality, which inform our politics and our lives. We prefer happy illusions. And it works because so much of the American electorate, including those who should know better, blindly cast ballots for slogans, smiles, the cheerful family tableaux, narratives and the perceived sincerity and the attractiveness of candidates. We confuse how we feel with knowledge. 

  The illiterate and semi-literate, once the campaigns are over, remain powerless.  They still cannot protect their children from dysfunctional public schools. They still cannot understand predatory loan deals, the intricacies of mortgage papers, credit card agreements and equity lines of credit that drive them into foreclosures and bankruptcies. They still struggle with the most basic chores of daily life from reading instructions on medicine bottles to filling out bank forms, car loan documents and unemployment benefit and insurance papers. They watch helplessly and without comprehension as hundreds of thousands of jobs are shed. They are hostages to brands. Brands come with images and slogans. Images and slogans are all they understand. Many eat at fast food restaurants not only because it is cheap but because they can order from pictures rather than menus. And those who serve them, also semi-literate or illiterate, punch in orders on cash registers whose keys are marked with symbols and pictures. This is our brave new world.

  Political leaders in our post-literate society no longer need to be competent, sincere or honest. They only need to appear to have these qualities. Most of all they need a story, a narrative. The reality of the narrative is irrelevant. It can be completely at odds with the facts. The consistency and emotional appeal of the story are paramount. The most essential skill in political theater and the consumer culture is artifice. Those who are best at artifice succeed. Those who have not mastered the art of artifice fail. In an age of images and entertainment, in an age of instant emotional gratification, we do not seek or want honesty. We ask to be indulged and entertained by clichés, stereotypes and mythic narratives that tell us we can be whomever we want to be, that we live in the greatest country on Earth, that we are endowed with superior moral and physical qualities and that our glorious future is preordained, either because of our attributes as Americans or because we are blessed by God or both. 

  The ability to magnify these simple and childish lies, to repeat them and have surrogates repeat them in endless loops of news cycles, gives these lies the aura of an uncontested truth. We are repeatedly fed words or phrases like yes we can, maverick, change, pro-life, hope  or war on terror. It feels good not to think. All we have to do is visualize what we want, believe in ourselves and summon those hidden inner resources, whether divine or national, that make the world conform to our desires. Reality is never an impediment to our advancement.

  The Princeton Review analyzed the transcripts of the Gore-Bush debates, the Clinton-Bush-Perot debates of 1992, the Kennedy-Nixon debates of 1960 and the Lincoln-Douglas debates of 1858. It reviewed these transcripts using a standard vocabulary test that indicates the minimum educational standard needed for a reader to grasp the text. During the 2000 debates, George W. Bush spoke at a sixth-grade level (6.7) and Al Gore at a seventh-grade level (7.6). In the 1992 debates, Bill Clinton spoke at a seventh-grade level (7.6), while George H.W. Bush spoke at a sixth-grade level (6.8), as did H. Ross Perot (6.3). In the debates between John F. Kennedy and Richard Nixon, the candidates spoke in language used by 10th-graders. In the debates of Abraham Lincoln and Stephen A. Douglas the scores were respectively 11.2 and 12.0. In short, today’s political rhetoric is designed to be comprehensible to a 10-year-old child or an adult with a sixth-grade reading level. It is fitted to this level of comprehension because most Americans speak, think and are entertained at this level. This is why serious film and theater and other serious artistic expression, as well as newspapers and books, are being pushed to the margins of American society. Voltaire was the most famous man of the 18th century. Today the most famous “person” is Mickey Mouse.

  In our post-literate world, because ideas are inaccessible, there is a need for constant stimulus. News, political debate, theater, art and books are judged not on the power of their ideas but on their ability to entertain. Cultural products that force us to examine ourselves and our society are condemned as elitist and impenetrable. Hannah Arendt warned that the marketization of culture leads to its degradation, that this marketization creates a new celebrity class of intellectuals who, although well read and informed themselves, see their role in society as persuading the masses that “Hamlet” can be as entertaining as “The Lion King” and perhaps as educational. “Culture,” she wrote, “is being destroyed in order to yield entertainment.”

  “There are many great authors of the past who have survived centuries of oblivion and neglect,” Arendt wrote, “but it is still an open question whether they will be able to survive an entertaining version of what they have to say.”

  The change from a print-based to an image-based society has transformed our nation. Huge segments of our population, especially those who live in the embrace of the Christian right and the consumer culture, are completely unmoored from reality. They lack the capacity to search for truth and cope rationally with our mounting social and economic ills. They seek clarity, entertainment and order. They are willing to use force to impose this clarity on others, especially those who do not speak as they speak and think as they think. All the traditional tools of democracies, including dispassionate scientific and historical truth, facts, news and rational debate, are useless instruments in a world that lacks the capacity to use them.

  As we descend into a devastating economic crisis, one that Barack Obama cannot halt, there will be tens of millions of Americans who will be ruthlessly thrust aside. As their houses are foreclosed, as their jobs are lost, as they are forced to declare bankruptcy and watch their communities collapse, they will retreat even further into irrational fantasy. They will be led toward glittering and self-destructive illusions by our modern Pied Pipers—our corporate advertisers, our charlatan preachers, our television news celebrities, our self-help gurus, our entertainment industry and our political demagogues—who will offer increasingly absurd forms of escapism.

  The core values of our open society, the ability to think for oneself, to draw independent conclusions, to express dissent when judgment and common sense indicate something is wrong, to be self-critical, to challenge authority, to understand historical facts, to separate truth from lies, to advocate for change and to acknowledge that there are other views, different ways of being, that are morally and socially acceptable, are dying. Obama used hundreds of millions of dollars in campaign funds to appeal to and manipulate this illiteracy and irrationalism to his advantage, but these forces will prove to be his most deadly nemesis once they collide with the awful reality that awaits us.

  

  

• Clinton Versus Trump And The Co-Option Of The Liberty Movement

  Submitted by Brandon Smith via Alt-Market.com,

  Most of my readers are well aware of my position on U.S. elections in general – they are an eternal farce meant to give false hope to the masses. They are designed to make the public feel as if we are participating in our own governance, when in reality, we are only ever allowed to choose from a list of candidates that the elites pre-select. This does not mean that all politicians are corrupted or controlled, but according to the evidence I have seen, the majority of government represents the desires of a select few, and not the majority of the citizenry.

  There is absolutely no chance of retaking our current government by working within the system. To be blunt, the system is now structured to protect itself and nothing else. To think that it can be influenced through “elections” is an absurd notion.

  For the past decade, though, I have seen a powerful shift in the public psyche towards a realization that our government is built upon a fraudulent paradigm; the false left versus the false right. I also understand that if I can see this shift, so can the numerous think tanks funded by the elites. The elites do not always try to obstruct changes in public awareness; this would be an unrealistic and fruitless effort. Instead, they often work to co-opt these changes and exploit them to the benefit of the establishment.

  Consider, for instance, the aggressive takeover of the Tea Party movement by the neoconservative guard. I joined activist efforts in 2007 when the Tea Party was small but growing and organized primarily around the goal of auditing and/or shutting down the Federal Reserve. Many people are not even aware that the Tea Party was launched by Ron Paul among other libertarian voices.

  As the movement began to grow exponentially, there were some attempts to stifle it. Accusations of “homegrown terrorism” were thrown around, not necessarily by Democrats, but by the Republican Party. When the strategy of demonization failed, the same Fox News supported neocons that called for our heads suddenly began hijacking our bandwagon. I’ll never forget the day I saw a supposed Tea Party event featuring main speakers like Rick Santorum and Mike Huckabee; it was then that I knew there was no more Tea Party.

  Of course, the elites were able to pirate the name (or the “brand”) and pirate some of the events, but they were never able to steal away the idea and the principles behind the movement. This seemed to confound the establishment. No matter what tactics they used, the movement, which I and many others have always called the “Liberty Movement,” just simply would not go away.

  What the elites did not seem to grasp at that time was that the movement was not rooted in a single organization, or a single candidate, or even a group of “leaders.” Instead, the liberty movement was and still is rooted in a set of principles. Normal co-option tactics could not possibly work. They could take over the Tea Party, but true liberty activists could simply walk away and start another group or groups. We are adaptable, and because we do not have a traditional centralized leadership, we are difficult to pin down and control.

  No matter what the elites have tried, they have not been able to lure liberty activists back to the neocon reservation. However, the establishment is not averse to trying new methods and new avenues of attack.

  The first and most common strategy of co-option is to fool the target movement into adopting a leader or leaders that they think are friendly but who are actually working against them. As mentioned earlier, this was attempted with the Tea Party, but it failed. Liberty activists left the Tea Party and continued their efforts elsewhere. When simpler methods elude the establishment, they tend to add complexities.

  For example, I have written extensively on a concerted effort by the Russian government controlled RT network and others to paint Eastern governments as “victims” of globalist aggression. As I have outlined and thoroughly evidenced, nations like Russia and China work hand-in-hand with globalist institutions like the International Monetary Fund, World Bank, the Bank of International Settlements and the United Nations. It is undeniable that the East is a part of the so-called “New World Order.” They are not opposed to it.

  Despite the considerable evidence to the contrary, there is still a percentage of the liberty movement that clings to the notion that globalism is a construct of the West alone, and that the East is “fighting against it.” One purpose of this propaganda is, I believe, to continue the effort to co-opt the liberty movement. If the movement can be convinced to develop adoration for globalist puppets like Vladimir Putin or Xi Jinping, then we can eventually be lured into negative actions under false pretenses. Fortunately, the false East/West paradigm is losing its edge and liberty activists mesmerized by it are coming to their senses once again.  The only REAL paradigm worth our concern is the globalists versus the rest of us.

  Many people will not understand why such measures on the part of the establishment would be necessary. The fact is, the liberty movement is the single-most vital activist movement in modern history. It is the core of a great awakening that is accelerating but still fragile.

  This awakening, if left to grow, will result in the erasure of all false paradigms and the elites behind them.  A problem that has plagued humanity for centuries, the problem of centralization and collectivism (community by force rather than by consent), could finally be dismantled.

  Some will claim such statements amount to “delusions of grandeur,” but if that were true, the elites would not need to spend vast amounts of energy and capital trying to co-opt or demonize us. If we were not a threat, or if our claims were nonsensical “conspiracies” with no validity, then they would let us clamor about until we inevitably self destruct. Instead, they have well-funded organizations like the Southern Poverty Law Center dedicated to endlessly misrepresenting who we are and what we believe in.

  With the false East/West paradigm not achieving the desired effect, and the hack and slash tactics of the SPLC and the mainstream media doing little to deter the expansion of the movement, the elites have become more sophisticated.

  Whenever you have a rebellion focused on the inherent ideals of freedom, totalitarian institutions struggle to intervene. The issue is, freedom is not only moral, but practical. Wherever true freedom exists, people are not only happier, but more productive and prosperous. It’s hard for a tyrant to fight a rebellion based on freedom because the idea is more powerful than any weapon or any form of treachery. No matter how advanced the tyranny is, and no matter how many rebels they imprison or kill, the idea of freedom endures.

  The only way to destroy a rebellion like this, a rebellion like the liberty movement, is to make it about something other than freedom. The powers that be have to convince that movement to support policies that are destructive to their own ideals. If this can be done, then that rebellion has lost the advantage of principle – the only advantage that really matters.

  So what does any of this have to do with the 2016 election?

  As I have pointed out for many months, the election of 2016 is an obvious dividing point for our nation. This is how I was able to predict back in March that the final election would be Donald Trump versus Hillary Clinton – the match-up made too much sense.

  Clinton was always a given. No other Democratic candidate could possibly encompass the pure evil of the establishment guard more than her. And, the only candidate conservatives could revile more than Barack Obama is Hillary Clinton. Clinton is even despised by many on the political Left. This is a perfect scenario for the elites.

  I have been trying to recall any election in the past century in which more negative and potentially damning information was released about a candidate. Clinton’s numerous lies on the Benghazi attacks are still fresh in the public consciousness. No one can deny, at the very least, that she had real-time confirmation as head of the State Department that the diplomatic station in Benghazi was under direct attack, and that under her watch no aid was ever sent though it was readily available. Despite her dismissals in congressional hearings, her own emails confirm that she was aware of the terrorist event, but told the American people a fabricated story about “protests” rather than a violent assault.

  The motives behind Clinton allowing Ambassador Chris Stevens among others to be murdered in Benghazi have yet to be revealed. I suspect that the then-secret arms flow from Libya into Syria and the covert U.S. support of ISIS may have had something to do with it.

  Through constant email hacks and leaks, Clinton has been proven over and over again to be either a liar or completely incompetent. Her misappropriation of taxpayer funds for her husband’s foundation, her mishandling of classified materials and the misuse of her position within government to dole out favors to her financial patrons is so egregious that if government actually followed the rule of law she would be imprisoned for the rest of her life.

  In fact, Clinton’s only defense so far for her misdeeds has been to argue essentially that because of her health condition she is too incompetent to be blamed for her behavior.

  Add to this her open pandering to insane cultural Marxist groups like third-wave feminists and Black Lives Matter and it would be hard to find a more cartoonish or cinematic monster. So, people will have to forgive me when I say that anyone who thinks the establishment is stupid enough to place all their eggs in the basket of the Clinton campaign is living in a fantasy world. Clearly, a Clinton presidency is not the end game for the elites.

  Trump’s public persona is the exact antithesis to Clinton’s. Readers know that for months I have been predicting a Trump presidency. Those not familiar with my position can read my article “2016 Will End With Economic Instability And A Trump Presidency.”

  To summarize, the elites need a patsy for the breakdown of the financial system they have engineered. That patsy will not be Trump per se, but conservatives in general. Whether Donald Trump is aware of this program or not, I do not know. I have no hard evidence indicating that Trump is anti-constitution; then again, I don’t have much evidence indicating he is pro-constitution. All I have at present to go by is his rhetoric, and rhetoric counts for nothing.

  What I do know is that triggering a fiscal crisis under the watch of Trump and blaming conservatives is far more useful to the elites than triggering a crisis under Clinton and risk blame falling on international banking syndicates.

  I can say with a high level of certainty that millions of conservatives in the U.S. will not tolerate a Clinton presidency. It’s just not going to happen. I give it a year or less before she begins implementing draconian measures above and beyond Obama’s efforts and Americans respond with physical rebellion. In this event, the U.S. will be torn apart by outright civil war.

  Those who think this is an exaggeration should consider the fact that we have already been on the edge of widespread conflict with the federal government during the Bundy Ranch incident, and that was over property rights and government abuse of protesters.  The average American is completely oblivious to how close we came to an open shooting war, not just in Nevada but across the country.  Imagine how oblivious they will be to the reaction over a Clinton gun grab.

  I do not think this is the plan, though.

  Rather, the plan may be in part to lure the liberty movement, which is now more influential than ever before, back under the purview of the Republican umbrella. With Trump at the helm, there is an assumption among many liberty activists that the establishment has “stumbled” and lost control. Keep in mind that without Clinton as the opposing super-villain, this narrative does not work.

  Only Clinton could frighten liberty activists enough to forgo their understanding of the false left/right paradigm and rejoin the Republican Party. Only Trump, with his brand of rhetoric, could convince them that perhaps the party has been shaken up and the neocon rats scattered. I’m just not buying it.

  I believe Clinton is meant to lose. If this is the case and Trump is inaugurated in January of next year, the liberty movement needs to ask itself if Trump is truly an obstacle for the elites, or if he is an ally to the elites.

  The Left is already salivating over the possibility that the Trump campaign will devour the liberty movement and turn it into something unrecognizable.  Just take a gander at this editorial from Bloomberg called 'The Tea Party Meets Its Maker', which announces the death of the "Tea Party" at the hands of Trump (and yes, they are lumping all patriot groups under the label of the Tea Party "racists").

  This article is an interesting window into the twisted mind of the collectivist Left.  Set aside Bloomberg's acrid vitriol and biased ignorance of what we stand for; they already have a childish image in their minds of who we are and that's never going to change.  Instead, look at how they can barely contain their poisonous glee over the idea that independent and decentralized liberty activists could be absorbed and assimilated through the rise of Trump.  Clearly, they have always hated the fact that we have been impossible to co-opt to this point.

  And hey, if they can't beat Trump in the election, then at least Trump's success will mean the destruction of those bastard constitutionalists with their practical world views and highly evidenced arguments.  Screw those white guys.

  This is not to say that a media rag like Bloomberg is privy to any plans to co-opt the liberty movement.  They are knowingly dishonest, and they are globalist tools, but I think they mostly believe they are being dishonest in the name of elevating the Democratic party.  They think Hillary is their hero, and that Trump is a villain, and the corporate oligarchs they work for are not even part of the election equation.

  That said, their argument that Trump could bring down liberty activist groups is not without merit.  People say that sometimes life imitates art.  I say, sometimes mainstream journalism accidentally imitates life.

  The greatest threat to our movement will be if we centralize and fall in line behind one man or one mainstream organization. In our fervor to defeat Hillary Clinton, who is admittedly a despicable person, will we find ourselves willingly blind to any trespasses by Trump? Imagine for a moment that the elites do indeed crash our financial system with Trump in office; will we still hold Trump accountable to the same constitutional standards as we would a president under non-crisis conditions?

  Vote for whoever you wish, but realize that our responsibilities do not end once the election is over.  If Trump as president responds to a crisis with martial law or other unconstitutional abuses, will we make excuses for him because we WANT to believe he is anti-establishment, or will we stand against him as we would Hillary Clinton?

  Maybe these are presumptuous questions. Perhaps there will be no Trump presidency. Perhaps he does take office but there is no financial crash (though simple mathematics dictate otherwise). Perhaps Trump will magically invigorate our economic structure, the elites will walk away in solemn defeat and America will return to a golden age of prosperity. Yeah, we can all dream.

  The bottom line is, far more important than the U.S. elections, far more important than a Clinton defeat or a Trump win, far more important even than economic crisis is the continued independence and vitality of the liberty movement. The temptation to sacrifice that independence for some activists will be overwhelming. It will seem far easier to hand over responsibility for the future of this nation to a more “official” entity. But in this sacrifice of responsibility lies the death of freedom. Again, the liberty movement is the most important movement in modern human history, and the only way it can be killed is if we help kill it. The only way it can be co-opted is if we allow it. The risk at this moment is greater than it has ever been.

  Even if you disagree with the potential for every scenario I present here, all I ask is that you increase your vigilance at this time and whatever happens, don’t forgo your principles for the sake of what you think is a lesser evil.

  

  

• Air China "Safety" Tip For London Tourists: Be Careful In Areas "Populated By Indians, Pakistanis And Black People"

  Air China is taking some heat today after posting some unusual “safety” tips for their travelers looking to visit London.  The controversial advice was posted in Air China’s in-flight magazine, Wings of China, and read as follows:

  “London is generally a safe place to travel, however precautions are needed when entering areas mainly populated by Indians, Pakistanis and black people.  We advise tourists not to go out alone at night, and females always to be accompanied by another person when traveling.”

  The excerpt from the magazine was first revealed by Beijing-based CNBC producer, Haze Fan, who posted the following tweet:

  My story on my own experience reading Air China tips on safety in #London @MayorofLondon @markboleat https://t.co/CeXcROfabc

  — Haze Fan (@journohaze) September 7, 2016

   

  As noted in the Evening Standard, Londoners were naturally a little upset with the safety warning and have called on Air China to retract the excerpt. 

  Dr Rosena Allin-Khan, Labour MP for Tooting, which has one of the largest Indian and Pakistani populations in London, said: “My initial thoughts were that the comments were outrageous.”

   

  “I think that it is offensive to Londoners and I would like to see it removed. I would also like to ask the airline why they thought these precautions needed to be taken.

   

  “Why they feel they needed to warn people of something that is not reflective of London at all?

   

  “I am going to be writing to the Chinese Ambassador to invite him to visit Tooting in London, where all races live side by side. Then they can see how we live and our wonderfully diverse community.”

  As Fan pointed out in an article on CNBC, this is not the first time a Chinese company has drawn criticism for racism.  Back in May, Shanghai Leishang Cosmetics, the maker of Qiaobi laundry detergent, published the following commercial that also took some heat for being “slightly” racist.  The commercial shows a black man entering a room and attempting to flirt with an Asian woman.  She feeds him a detergent drop and stuffs his body into a top-loading washer. When the cycle completes, a fair-skinned Asian man emerges to the woman’s delight.

  The company offered an official apology for the ad but one executive of the company told The Global Times that people were “too sensitive.”

   

  Can you imagine if these blatant acts of “microaggression” were shared with millennials attending our various elite universities?  Mom and dad would have to spend $1,000s on doctors to undo the psychological damage caused by this level of offensive material. 

  

  

• Democrats Release Powell's Instructions To Clinton How To Bypass State Servers, While Warning Of Dangers

  Thanks to Democratic Rep. Elijah Cummings thoughtful decision to release an email exchange between former Secretaries of State Colin Powell and Hillary Clinton, we can now confirm that Hillary was well aware of the lack of security and the "real danger" before she made the decision to use a private email server.

  

  In what we are sure was a selfless act of honesty by Rep. Elijah E. Cummings, the Ranking Member of the House Committee on Oversight and Government Reform publicly released an email exchange in which former Secretary of State Colin Powell advised then-Secretary of State Hillary Clinton on the use of personal email two days after she was sworn in as Secretary…

  From: Colin Powell
  To: Hillary Clinton hr15@att. blackberry. net
  Subject: Re: Question

   

  I didn’t have a BlackBerry. What I did do was have a personal computer that was hooked up to a private phone line (sounds ancient.) So I could communicate with a wide range of friends directly without it going through the State Department servers. I even used it to do business with some foreign leaders and some of the senior folks in the Department on their personal email accounts. I did the same thing on the road in hotels. Now, the real issue had to do with PDAs, as we called them a few years ago before BlackBerry became a noun. And the issue was DS would not allow them into the secure spaces, especially up your way.

   

  When I asked why not they gave me all kinds of nonsense about how they gave out signals and could be read by spies, etc. Same reason they tried to keep mobile phones out of the suite. I had numerous meetings with them. We even opened one up for them to try to explain to me why it was more dangerous than say, a remote control for one of the many tvs in the suite. Or something embedded in my shoe heel. They never satisfied me and NSA/CIA wouldn’t back off. So, we just went about our business and stopped asking.

   

  I had an ancient version of a PDA and used it. In general, the suite was so sealed that it is hard to get signals in or out wirelessly. However, there is a real danger. If it is public that you have a BlackBerry and it it government and you are using it, government or not, to do business, it may become an official record and subject to the law. Reading about the President’s BB rules this morning, it sounds like it won’t be as useful as it used to be. Be very careful. I got around it all by not saying much and not using systems that captured the data.

   

  You will find DS driving you crazy if you let them. They had Maddy tied up in knots. I refused to let them live in my house or build a place on my property. They found an empty garage half a block away. On weekends, I drove my beloved cars around town without them following me. I promised I would have a phone and not be gone more than an hour or two at Tysons or the hardware store. They hated it and asked me to sigh a letter relieving them of responsibility if I got whacked while doing that. I gladly did. Spontaneity was my security. They wanted to have two to three guys follow me around the building all the time. I said if they were doing their job guarding the place, they didn’t need to follow me.

   

  I relented and let one guy follow me one full corridor behind just so they knew where I was if I was needed immediately. Their job is to keep you hermetically sealed up. Love, Colin

   

  *  *  *

   

  On Fri, Jan 23, 2009 at 7:37AM, > wrote:

  Dear Colin, I hope to catch up soon w you, but I have one pressing question which only you can answer! What were the restrictions on your use of your blackberry? Did you use it in your personal office? I’ve been told that the DSS personnel knew you had one and used it but no one fesses up to knowing how you used it! President Obama has struck a blow for berry addicts like us. I just have to figure out how to bring along the State Dept. Any and all advice is welcome. All the best to you and Alma, Hillary

   

  UNCLASSIFIED U.S. Department of State Case No. 0-2016-11097 Doc No. C06125520 Date: 09/06/2016

   

  To: Colin Powell
  Subject: Re: Question

   

  Colin, I am finally out of the SCIF and want to thank you for all of the advice about berries, security and life on the 7th floor! I hope we’ll have a chance to visit in person sometime soon. All the best, H

  From the release of this exchange we know two things:

  1) The Democratic establishment has no qualms throwing Colin Powell under any bus at all if it helps Hillary get out of this corner, and

   

  2) we know Hillary was well aware of the "real danger" of her actions and specifically told to "be very careful" not to say anything about it.

  Still what difference does it make?

  

   

  As we previously noted, Colin Powell was greatly displeased by Hillary's attempts "to pin" the email scandal on him…

  Powell told People Magazine that Clinton was using her private email long before their meeting.  “The truth is she was using it for a year before I sent her a memo telling her what I did [during my term as Secretary of State],” he said.

  

  

• What Wall Street Expects From The ECB Tomorrow, And How Will The Market React

  While there have been various trial balloons in recent days, hinting that the ECB could start purchasing equities, most notably by the Peterson Insitute, it is unlikely that Mario Draghi will commence outright monetization of ETFs at the ECB’s meeting tomorrow. Still, that does not change the fact that the ECB is rapidly running out of bond to government monetize, which has pushed government yields to all time negative lows, and has so distorted the corporate market that non-backstopped corporations have issued negative yielding bonds: an unheard of event. On the other hand, if the ECB relents, and does nothing, it may be perceived as a sign of tightening, spiking bond yields and sending equities tumbling.

  Adding to the pressure, the existing version of the ECB’s €1.7 trillion QE asset-purchase program is scheduled to end in just six months, however so far Draghi has failed miserably at spurring euro-area inflation while the full impact of Brexit has yet to be realized. If the ECB extends quantitative easing – as most economists surveyed by Bloomberg predict – policy makers may have to reconsider what they can buy.

  UBS best summarizes the dilemma Draghi finds himself in: “Generally, we observe a dilemma on the side of the ECB: The stronger the credibility of the QE programme, the lower the yields and hence the smaller the availability of bonds trading above the minimum of -0.4% (depo rate). Conversely, the lower the credibility of QE, the higher the yields (at least for shorter maturities), and hence the larger the pool of bonds trading above the minimum rate of -0.4%.”

  As a result, not much is expected out of Draghi tomorrow, however as UBS further points out, the ECB may as soon as tomorrow have to adjust the technical rules of its QE programme if it wants to continue buying €80bn of assets until March 2017, or longer. UBS thinks increasing the issue limit on bonds not containing a collective action clause (CAC) and expanding the maturity range of purchases could be easily achieved. Scrapping the deposit rate floor and amending the rules on substitute purchases is also a possibility. However, the Swiss bank regards a deviation from the capital key allocation on purchases as unlikely. In the near term, there is also a low chance that the ECB would expand the range of assets to include bank bonds or cut the deposit rate unless – but this seems very unlikely, too – it is part of a more fundamental monetary policy decision.

  What about the ECB’s calendar:

  Although 8 December is now our base-case scenario, we acknowledge that moving already on 8 September would have advantages as well. It would give markets and economic agents early clarity about the path of monetary policy after March 2017, and thus stabilise expectations and help to reduce downside risks. Perhaps more importantly, it might be easier for the ECB to decide on an extension of QE in September rather than in December, when Eurozone inflation is likely to be higher (approaching 1% y/y, compared with the current/July rate of 0.2% y/y), which might increase the resistance against a QE extension from ECB hawks. In extremis, a delay until 8 December could even mean that – contrary to our base case – the ECB might not extend QE at all, for example, if a sharp rise in oil prices were to markedly alter the inflation outlook in the meantime.

  UBS summarizes the ECB’s policy menu as follows:

  

  So, at least according to UBS analysts, it is likely that the ECB will do nothing tomorrow. Others are more impatient, and as Bloomberg points out, the ECB’s self-imposed purchase restrictions are likely to be a focal point ahead of tomorrow’s announcement, even if no final decision is taken. Draghi said at the last gathering in July that officials have shown they can adjust QE when required, and that there should be no doubt they can stick to their pledge to keep spending 80 billion euros a month until March 2017 “and beyond if needed.” Here are the key options:

  Option 1: Changing the Issue and Issuer Limits

  • Rule: The maximum share of any single public-sector security that euro-area central banks can hold — known as the issue limit — has already been raised to 33 percent from 25 percent for bonds without collective-action clauses. The cutoffs are to prevent the ECB from gaining the power to block any restructuring plans and to avoid it becoming a dominant investor. The 33 percent threshold also applies to the exposure to any one bond issuer.
  • Solution: Raising the issue limit on bonds without collective-action clauses should be “fairly uncontentious,” according to a note by HSBC Holdings Plc. Increasing the limits is the “most likely” choice and could come as early as Thursday, according to Bloomberg Intelligence economists. The issuer limit might also be increased.
  • Cons: The ECB could distort markets. It could also be viewed as financing government deficits — which is illegal under European Union law.

  Option 2: Changing the Deposit-Rate Floor

  • Rule: The ECB must only buy debt with a yield higher than the deposit rate, currently minus 0.4 percent. The rule ensures that losses booked by the central bank when it buys negative-yielding debt are offset by the income gained from its deposit account.
  • Solution: Lowering or scrapping the minimum-yield requirement would be one of the easiest options to implement, according to Barclays Plc. In particular, it would increase the available pool of German bonds — two-thirds of those assets are now ineligible after concerns of a Brexit-led slowdown prompted investors to seek a haven for their cash.
  • Cons: National central banks — especially in Germany — would be knowingly making a loss on some of the bonds they buy. Still, that doesn’t necessarily imply losses at an aggregate level for either individual central banks or the Eurosystem.

  Option 3: Changing the Capital Key

  • Rule: QE purchases are shared between the national central banks in line with the capital key, which is roughly equivalent to the relative size of each economy. It means that more than a quarter of the debt bought is German, 20 percent is French, and 17 percent is Italian.
  • Solution: The ECB could deviate from the capital key and link buying to the amount of outstanding debt. That would put off scarcity concerns in countries such as Germany. Accelerating purchases in the euro-area periphery could expand fiscal space and benefit the real economy, Goldman Sachs Group Inc. said in a note in August. The central bank has already made small moves in this direction, citing the program’s flexibility.
  • Cons: The move would favor securities issued by countries with the biggest debt pile — notably Italy, the third-largest debtor among developed economies after the U.S. and Japan — and so raise concerns over monetary financing. Bundesbank President Jens Weidmann said last month that moving away from the capital key risks blurring the line between monetary and fiscal policy.

  Option 4: Expand Into New Asset Classes

  • Rule: The ECB’s asset-purchase program started with covered bonds and asset-backed securities, before expanding into fully fledged QE with the addition of sovereign debt and agency bonds. It has since expanded into regional debt and corporate bonds, and its list of eligible agency bonds has been expanded.
  • Solution: A bigger step would be to identify new asset classes — Karsten Junius at J Safra Sarasin suggests equities. Exchange Traded Funds might be one route.
  • Cons: Some asset classes could prove controversial. For example, buying bank bonds could conflict with the ECB’s role as supervisor. While equity investors might be thrilled at the idea of the institution following its Swiss or Japanese counterparts in buying stocks, a series of less substantial changes would probably prove easier to implement.

  Verbal Warning

  There are other technical changes that could enlarge the universe of eligible securities. The ECB could alter the rules on substitute purchases or buy longer and shorter-dated debt than the 2-year to 30-year maturities currently allowed. It might also come up with something completely new.

  * * *

  Operating within the parameters of UBS’ dilemma, “Draghi risks disappointing the market if he doesn’t verbally indicate that something is going to come,” according Holger Sandte, chief European analyst at Nordea Markets in Copenhagen. “If we’re going into an easing package in December then he should prepare for that.” On the other hand, tighten, and watch risk assets selloff.

  * * *

  What do others expect? More than 80 percent of economists surveyed by Bloomberg say the ECB will extend QE, and a similar share predict it will tweak its purchasing rules. Almost half of respondents foresee action on Thursday, with almost all the rest predicting an announcement at the October or December meetings.

  Here is a recap what various individual banks think Mario will do:

  WHEN WILL ECB EXTEND QE?

  • CITIGROUP (Guillaume Menuet): extension of asset purchases for at least 6 months to be announced this week
  • JPMORGAN (Greg Fuzesi): QE to be extended beyond March 2017; formal announcement more likely in December than this week; don’t expect central bank to address scarcity either
  • BOFAML (Gilles Moec): ECB can’t keep options open until December; at least a commitment to continuing QE after March 2017 would be needed; “At the very least,” ECB to provide clear deadline this week for final decision to continue QE and signal, in no ambiguous terms, that a “reflection has started”
  • CREDIT SUISSE (Peter Foley): expect an extension before the end of the year, alongside technical tweaks to address bond scarcity
  • UNICREDIT (Marco Valli): another dose of stimulus is just a matter of time; regardless of the exact time, next move likely to be a 6-month extension of QE until at least September 2017
  • HSBC (Karen Ward, Fabio Balboni): ECB needs to extend QE horizon by 6 months to September 2017 from March at the very least
  • DEUTSCHE BANK (Mark Wall): no longer expect further easing this week; ECB will wait until December to extend QE
  • UBS (Reinhard Cluse): will likely only extend QE at December meeting
  • BARCLAYS (Fabio Fois): continue to expect ECB to extend QE beyond March 2017 by 6-9 months with a change to some technical elements, but without expanding monthly limits; that’s more likely in October/December than this week
  • GOLDMAN SACHS (Dirk Schumacher): ECB to announce extension of QE program to end of 2017 at Sept. meeting
  • BNP PARIBAS (Luigi Speranza): ECB will prolong asset purchases to September 2017 this week
  • MORGAN STANLEY (Elga Bartsch): ECB to ease only in December instead of September, with risk that it may not ease at all
  • CREDIT AGRICOLE (Valentin Marinov): small chance ECB will extend QE duration beyond March 2017

  WHAT ELSE WILL THEY DO?

  • CITIGROUP: ECB to adjust modalities of PSPP this week, probably focusing first on increasing the issuer and issue limit from 33% to 50% for bonds that don’t contain collective action clauses (CACs); Bank may also lower the main refinancing rate by 10bp to -0.1% to incentivize banks to take-up ECB liquidity at the three remaining 4-year TLTRO II operations
  • CREDIT SUISSE: most likely route is for ECB to retain gradual and flexible approach, loosening restrictions progressively on various parameters
  • HSBC: ECB may run out of German assets to buy in 1st half of 2017 on current parameters; Could extend QE horizon by another 6 months just by increasing issuance limit to 50% for non-CAC bonds; another change could be to include bonds with maturities beyond 30 years; option of deeper negative rates will probably be parked for now
  • DEUTSCHE BANK: any QE extension would need to be accompanied by other measures such as an increase in the issue limit on non-CAC bonds; further deposit rate cut unlikely
  • UBS: may adjust technical rules as soon as this week or in October; increasing issue limit on non-CAC bonds and expanding maturity range of purchases could be easily achieved; Scrapping deposit-rate floor and amending rules on substitute purchases also possible; deviation from the capital key allocation, cutting rates or including new assets is unlikely
  • BNP PARIBAS: ECB also likely to modify some of program’s parameters to accommodate buying for longer; raising the issue limit for non-CAC bonds would be easiest option

  WHAT WILL THE MARKET RESPONSE BE?

  • JPMORGAN (Mika Inkinen, Antoine Gaveau): if central scenario proves right, bear steepening of euro-area curves and some widening in intra-EMU spreads likely, with magnitude of moves depending on Draghi’s tone; Any increase in the issue limit may drive mild bull flattening, while a removal of deposit rate floor would see pivot steepening; a significant move away from capital key would spur bear steepening, intra-EMU spread tightening
  • BOFAML (Athanasios Vamvakidis, Ralf Preusser): FX impact limited; risks to EUR may be to upside if ECB doesn’t announce QE extension this week as markets could take it as a sign of strong disagreements within GC on how to extend QE; If ECB commits to extending QE but doesn’t address bond scarcity, expect curves to flatten; front end may cheapen as market trims the implied probability of rate cuts and may see profit-taking in periphery
  • CITIGROUP (Harvinder Sian): baseline of 6-mo. QE extension is priced in OIS curve; if we are wrong, market will have to price higher probability of QE taper in 2017; Baseline of pushing the non-CAC bond limit higher infers an aggressive flattening rally that should be used to set up steepeners as other options on the capital key/depo floor will have to be considered
  • CREDIT SUISSE: any relaxation in capital key allocations would move markets the most, leading to a narrowing in bond spreads and some EUR depreciation
  • CREDIT AGRICOLE: EUR unlikely to come under sustained selling pressure without a strong signal the bank’s asset purchases will be expanded as well
  • BNP PARIBAS (Steven Saywell): See risks of a rise in long- end core yields in decision aftermath even if ECB delivers; no meaningful impact on EUR
  • DEUTSCHE BANK (Abhishek Singhania): market pricing for further cuts should be lower; any signs of ECB concern over impact of more negative rates may drive sell-off in belly; Recommends short EUR vs JPY in 1Y1Y OIS; impact on EUR curve may be limited even if ECB doesn’t extend QE this month, given flatness of the 5/10 and 10/30 curve doesn’t show when market is pricing an extension
  • UBS (Themos Fiotakis): Sooner or later, perhaps even in the upcoming meeting, ECB may need to start addressing certain modalities of its program, ultimately leading to a steeper curve; impact on longer-dated bonds harder to predict; easier to see a steeper curve than higher yields
  • BARCLAYS (Giuseppe Maraffino): could see further volatility should ECB opt to wait before acting, hence outright duration and peripheral spread positions don’t offer good risk/reward; Stay short 10Y bunds vs Treasuries, receive 15Y fwd point on EUR swap curve vs wings, long PGB 4/30 steepeners, and long 7Y French ASWs
  • MORGAN STANLEY (Hans Redeker): ECB can’t weaken EUR; even if it extends its QE program or cuts rates further, it won’t be able to push down long-term bond euro-area yields substantially to weaken currency given yields are already low or negative

  * * *

  Finally, here are some charts courtesy of UBS summarizing the state of the ECB’s balance sheet and monetary policy:

  

  Source: Bloomberg, UBS

  

  

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• Ferguson Protest Leader Found Dead Inside Burning Car With Gun Shot Wound

  The body of activist Darren Seals was found inside a burning car outside of St. Louis on Tuesday morning with a gunshot wound.  The burning vehicle was discovered in the village of Riverview about five miles east of Ferguson.

  Seals helped lead protests in Ferguson, MO back in August 2014 after the unarmed teenager, Michael Brown, was shot and killed by a white police officer, Darren Wilson.  The shooting resulted in weeks of protests in Ferguson which often turned violent.  A subsequent wave of protests occurred in November 2014 after St. Louis County prosecutor announced that a grand jury had decided not to indict Darren Wilson.   

  

   

  A motive has not yet been announced but the St. Louis Police Department confirmed the case was being investigated as a homicide. 

  Meanwhile twitter users are calling attention to a tweet sent by Seals a few months ago alleging that "10 detectives pulled me and my 14 year old brother over, pointed guns on us, and told me "choose your enemies wisely."

  Months ago #DarrenSeals tweeted this. Yesterday the police didn't even tape off his crime scene. #BlackLivesMatter pic.twitter.com/We2KznDTqa

  — Lizz Brown (@lizzzbrown) September 7, 2016

  

  

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• The Swiss Begin To Hoard Cash

  While subtle, the general public loss of faith in central banking has been obvious to anyone who has simply kept their eyes open: it started in Japan where in February hardware stores were reported that consumers were hoarding cash, as confirmed by the spike in demand for safes, “a place where the interest rate on cash is always zero, no matter what the central bank does.” Then, as we reported just over a week ago, Burg-Waechter KG, Germany’s biggest safe manufacturer, posted a 25% jump in sales of home safes as a result of “significantly higher demand for safes by private individuals, mainly in Germany.”

  Rivals Format Tresorbau GmbH and Hartmann Tresore AG also reported double-digit-percentage German sales increases. “Safe manufacturers are operating near their limits,” said Thies Hartmann, managing director of Hamburger Stahltresor GmbH, a family-owned safe retailer in Hamburg, which he says has grown 25% since 2014. He said deliveries take longer from safe makers, some of which are running three production shifts.

  And now, at long last, the revulsion to banking and the fractional reserve model has finally reached the country that according to many created modern banking as we know it: Switzerland.

  Only unlike Japan and Germany, the Swiss are much more subtle about their cash hoarding than telling the neighborhood they have a stash of cash in their home by publicly buying a safe; instead, as Bloomberg reports, more and more companies are taking out insurance policies to protect their cash hoards from theft or damage.

  “Because of the low interest rate level, we note increasing demand for insurance solutions for the storage of cash,” said Philipp Surholt at Zurich Insurance Group AG, among underwriters reporting a surge in such requests. “We’re seeing demand for coverage for sums ranging from 100 million to 500 million francs.“

  Where the Swiss also differ from many other nations is that numerous local banks have already passed on negative rates to their wealthiest customers. The SNB imposed NIRP in early 2015, charging banks for excess deposits. Many lenders including UBS Group AG and Credit Suisse Group AG have passed on at least some of the burden, they don’t disclose how much, to cash-rich clients like asset managers and big companies.

  Meanwhile, a fascinating arbitrage has emerged between NIRP and insurance costs: Helvetia Holding said it charges about 1,000 francs ($1,020) a year to insure 1 million francs, a fraction of the 7,500 francs a company would pay to park the same amount in a bank for a year, assuming the lender passes on the full charge. While that amount doesn’t include the cost of logistics such as transport or security features like reinforced walls, guards and alarm systems, those may not be an issue for the wealthiest clients who already own their own safes and have their own means of transportation of the physical cash.

  Regardless of the tangential costs, the use of such policies has jumped in the recent past.

  Companies need to save a lot on bank fees for cash storage to be economical because, in addition to insurance, they have to assume the costs of managing the money, said Roberto Brunazzi, a spokesman for Baloise Holding AG. He said the company has long offered such coverage “but there has been a noticeable increase and now it’s becoming more commonplace.”

  But the best news for Swiss residents is that unlike in Europe where the ECB recently banned the €500 banknote, in Switzerland it is relatively easy to store substantial amounts of cash in relatively modest spaces courtesy of the CHF1000 bill, the highest denomination banknote in circulation in Europe. As Bloomberg points out, 1 million francs worth of 1,000-franc bills can fit in a small box.

  Furthermore, unless Switzerland bans the 1000 swiss frank note, it may soon trade at a premium to its book value as demand for the “paper” rises. The reason is that more banks have warned that they may one day have to charge ordinary savers – not just big customers – for liquidity. In June, UBS and Credit Suisse exceeded their combined minimum required deposits by about 26 times, putting them about 25.8 billion francs over their exemption. Swiss cantonal banks were about 24 times over the amount they are required to hold at the SNB, or about 12.5 billion francs over their threshold, according to SNB data, which doesn’t break down the figures by bank.

  “Negative rates are the dominant topic,” said Markus Gygax, chief executive officer of the Swiss retail bank Valiant Holding AG. “As long as the interest rate on credit keeps falling, it’s a big problem for us.”

  For now, there is no need to panic: “Consumers are shielded from the negative interest rates so far,” Oliver Adler, an economist at Credit Suisse, told Bloomberg Television’s Anna Edwards and Rishaad Salamat on Tuesday. “Large institutional investors have had to pay, but in the overall context it’s not dramatic.” However, sensing what is coming, some lenders that are below the SNB’s threshold are taking on other banks’ cash for a fee. As a result, a “market for liquidity” has developed between the banks as a result of negative rates, the Swiss Banking Association said last week in its annual report on the industry.

  “Cash hoarding is a problem for monetary policy,” Koch said. “It’s a question of efficiency: the more corporates hoard cash, the smaller the impact of negative rates.”

  For now, the SNB says it hasn’t seen evidence of widespread cash hoarding in Switzerland, Bloomberg concludes, to which all we can add is that this is precisely what the very sensible locals would want it to see. Meanwhile, the stealth hoarding continues.

  

  

  

• 40,000 Students In Limbo, 8,000 Employees Fired As ITT Suddenly Shuts Down

  The long-running tragic saga of ITT Education Services, which was established nearly 50 ago and operates the ITT Technical Institutes for-profit college chain, finally came to a end this morning with both a bang and a whimper, when it announced that it is shutting down effective immediately, leaving the fate of 40,000 students currently enrolled in limbo, and some 8,000 workers without a job.

  The company said the closure is due to an investigation and sanctions by the U.S. Department of Education.

  “It is with profound regret that we must report that ITT Educational Services, Inc. will discontinue academic operations at all of its ITT Technical Institutes permanently after approximately 50 years of continuous service,” the company stated Tuesday. “Effective today, the company has eliminated the positions of the overwhelming majority of our more than 8,000 employees.”

  As previously reported,  ITT Tech stopped enrolling new students on August 29, just a few days after it was cut off from a significant amount of federal funding by the government. ITT’s collapse was catalyzed when the Department of Education effectively killed the company two weeks ago, when it told the company on August 25 that it couldn’t enroll new students who use federal financial aid. The school accused federal officials of forcing the closure and denying it due process. The company has been the subject of state and federal probes for various reasons, including its recruitment tactics, lending practices and job placement figures.

  Among the measures imposed, ITT was been ordered to pay $152 million to the department within 30 days to cover student refunds and other liabilities in case the company closes. The chain, based in Indiana, is still paying another $44 million demanded by the department in June for the same reason.

  In order to have access to federal student loans, schools need to be accredited by a government-recognized accrediting agency. ITT Educational Services was found to be out of compliance with its accreditor’s standards twice this year, according to the Department of Education. Needless to say, for-profit schools tend to rely heavily on federal student aid.

  The Accrediting Council for Independent Colleges and Schools recently asked the company for proof of why its accreditation should not be withdrawn or suspended.

  ITT’s death, while sudden, should not come as a surprise: enrollment has been slipping for a while. In July, the company reported its new student enrollment dropped almost 22% from the same period the year before.

  Meanwhile, the roughly 40,000 students currently enrolled now find themselves in limbo: when a school closes its doors, it can leave its students stuck without a degree and massive student loans. ITT”s collapse is reminiscent of Corinthian Colleges, which filed for Chapter 11 bankruptcy protection in May of 2015 in the wake of alleged predatory lending practices and accusations of inflated job placement numbers, leaving about 16,000 students stuck without a degree, and thousands more with huge debts. Some students were eventually able to receive debt relief.

  Cited by PIX11, the Department of Education has said that ITT Educational Services’ students could be eligible for a closed school loan discharge, however that process may take years to complete, meanwhile the prospect of earning a college diploma, even if from a novelty school, has evaporated. 

  Enrollment in for-profit schools increased in the years following the recession when job growth was weak and people were looking to hone their skills or switch to more in-demand careers.

  * * *

  The full statement released by ITT is below:

  ITT Educational Services, Inc. to Cease Operations at all ITT Technical Institutes Following Federal Actions

  “It is with profound regret that we must report that ITT Educational Services, Inc. will discontinue academic operations at all of its ITT Technical Institutes permanently after approximately 50 years of continuous service. With what we believe is a complete disregard by the U.S. Department of Education for due process to the company, hundreds of thousands of current students and alumni and more than 8,000 employees will be negatively affected.

  The actions of and sanctions from the U.S. Department of Education have forced us to cease operations of the ITT Technical Institutes, and we will not be offering our September quarter. We reached this decision only after having exhausted the exploration of alternatives, including transfer of the schools to a non-profit or public institution.

  Effective today, the company has eliminated the positions of the overwhelming majority of our more than 8,000 employees. Our focus and priority with our remaining staff is on helping the tens of thousands of unexpectedly displaced students with their records and future educational options.

  This action of our federal regulator to increase our surety requirement to 40 percent of our Title IV federal funding and place our schools under “Heightened Cash Monitoring Level 2,” forced us to conclude that we can no longer continue to operate our ITT Tech campuses and provide our students with the quality education they expect and deserve. 

  For more than half a century, ITT Tech has helped hundreds of thousands of non-traditional and underserved students improve their lives through career-focused technical education. Thousands of employers have relied on our institutions for skilled workers in high-demand fields. We have been a mainstay in more than 130 communities that we served nationwide, as well as an engine of economic activity and a positive innovator in the higher-education sector.

  This federal action will also disrupt the lives of thousands of hardworking ITT Tech employees and their families. More than 8,000 ITT Tech employees are now without a job – employees who exhibited the utmost dedication in serving our students. 

  We have always carefully managed expenses to align with our enrollments. We had no intention prior to the receipt of the most recent sanctions of closing down despite the challenging regulatory environment that now threatens all proprietary higher education. We have also always worked tirelessly to ensure compliance with all applicable laws and regulations, and to uphold our ethic of continuous improvement. When we have received inquiries from regulators, we have always been responsive and cooperative. Despite our ongoing service to this nation’s employers, local communities and underserved students, these federal actions will result in the closure of the ITT Technical Institutes without any opportunity to pursue our right to due process.

  These unwarranted actions, taken without proving a single allegation, are a “lawless execution,” as noted by a recent editorial in The Wall Street Journal. We were not provided with a hearing or an appeal. Alternatives that we strongly believe would have better served students, employees, and taxpayers were rejected. The damage done to our students and employees, as well as to our shareholders and the American taxpayers, is irrevocable.

  We believe the government’s action was inappropriate and unconstitutional, however, with the ITT Technical Institutes ceasing operations, it will now likely rest on other parties to understand these reprehensible actions and to take action to attempt to prevent this from happening again.”
  

  

  

• Hillary Clinton And The 'C' Word

  Authored by James Taranto, originally posted op-ed via The Wall Street Journal,

  'C' Is For Concussion – How not to suppress a political rumor

  Hillary Clinton is in excellent health, so shut up: That’s a summary of the media narrative that emerged last month after Donald Trump questioned whether Mrs. Clinton has “mental and physical stamina.” A Puffington Host headline proposed: “Let’s Call The Conspiracy Theories About Hillary’s Health What They Are.” What are they? You guessed it: “The subtext of the rumors spouted by Trump and his crew of armchair doctors is clear: [Mrs.] Clinton is biologically unfit to lead,” asserted senior reporter Melissa Jeltsen. “She’s a woman, after all.”

  As evidence, Jeltsen cites a comment from “forty-six years ago” by Edgar Berman, a retired physician and “close confidant” of Hubert H. Humphrey, to the effect “that women were temperamentally unsuited to hold high office because of their ‘raging hormonal imbalance.’ ” Forty-six years ago, Trump was 24 and Mrs. Clinton was 22. His conspiracy against her has been a long time in the making, hasn’t it?

  Two days later, the site published a post by contributor David Seaman, who was more open to theories about Mrs. Clinton’s health. It included a link to a video by Paul Joseph Watson of the conspiracy site Infowars, titled “The Truth About Hillary’s Bizarre Behavior.”

  The video strikes this columnist as not credible. It opens, for instance, with a clip of Mrs. Clinton smiling at reporters while wildly bobbing her head up and down. That’s certainly weird behavior, but there is a plausible nonmedical explanation: According to the Washington Post’s David Weigel, the reporters who witnessed the scene “interpreted her exaggerated head-bobbing as a joke at how she’d been suddenly surrounded—and as a successful attempt at ending the scrum.”

  But if the Puffington Host was trying to tamp down conspiracy theories, its next move was probably ill-advised. Real Clear Politics reports that Seaman posted a video to YouTube “saying that he was terminated from his job without warning“ and that the post in question (along with another one) was deleted. Sure enough, if you go to Seaman’s archive page, you’ll see the two headlines in question (the first and third ones in the list), but if you click on either, you get a blank page with an “editor’s note”: “This post is no longer available on the Huffington Post [sic].”

  The topic must really be taboo if it results in such action from a site that will publish just about anything. And plenty of more-mainstream sites have been denying there is anything wrong with Mrs. Clinton’s health. Weigel’s Post piece was titled “Armed With Junk Science and Old Photos, Critics Question #HillarysHealth.” Similar headlines come from the New Yorker (“The Far Right’s Obsession With Hillary’s Health”) and the Atlantic (“Questions About Hillary’s Health: The Birtherism of 2016”).

  Our favorite is a mocking column from the Boston Globe’s Scot Lehigh:

  In Hillary Clinton’s inner circle, it’s common knowledge that there are times she’s so low-energy that she blanks out for hours. When that happens, she is given to strange mental spells during which she has little or no control over what she says and does. She sometimes mutters things no one can understand.

   

  My colleagues in the mainstream media are covering all this up, but the time has come to speak out. We simply can’t elect a president subject to such mysterious health issues.

   

  What’s that you say?

   

  It’s nothing?

   

  It’s just that she . . . sleeps at night, like the rest of us.

  Trump has said as much too, as Politico notes:

  Donald Trump seemingly will not rest until the world thinks Hillary Clinton needs a nap.

   

  The Republican nominee took to Twitter yet again Friday night to question his Democratic challenger’s physical well-being, repeating his claim that she’s always asleep.

   

  “#WheresHillary? Sleeping!!!!!” Trump tweeted. The Republican nominee has repeatedly alleged recently that [Mrs.] Clinton’s health is failing (Clinton’s doctor pronounced her health “excellent” last year in a letter released by the campaign).

  It is the nature of conspiracy theories that they are unfalsifiable: Believers frame efforts at debunking as evidence that the debunkers are in on the conspiracy.

  But one needn’t be a conspiracy theorist to recognize groupthink—in this case, to expect that liberal journalists will try to comfort Mrs. Clinton, whether or not she is afflicted. Discounting Infowars need not preclude reading the Post, New Yorker, Atlantic, et al., with a skeptical eye.

  And some evidence has surfaced to belie the insistence that Mrs. Clinton is in excellent health so shut up. On Friday afternoon, the FBI released a heavily redacted report on its criminal investigation into the mishandling of classified information while Mrs. Clinton was secretary of State. CNBC reports:

  Hillary Clinton told the FBI she did not recall all the briefings she received on handling sensitive information as she made the transition from her post as U.S. secretary of state, due to a concussion suffered in 2012, according to a report released Friday. . . .

   

  Said the report, “Clinton said she received no instructions or direction regarding the preservation or production of records from (the) State (Department) during the transition out of her role as Secretary of State in 2013.

   

  “However, in December of 2012, [Mrs.] Clinton suffered a concussion and then around the New Year had a blood clot (in her head). Based on her doctor’s advice, she could only work at State for a few hours a day and could not recall every briefing she received,” the report said.

  Journalists spend weeks trying to discredit questions about Mrs. Clinton’s health, and then it turns out Mrs. Clinton raised questions about her own health as an excuse for the FBI. That doesn’t exactly enhance the debunkers’ credibility.

  Then, as the New York Post reports (with video), Mrs. Clinton opened a Labor Day speech in Cleveland with a four-minute coughing fit. She joked that the cause was a psychological disorder: “Every time I think about Trump, I get allergic.” There’s also video in which her uncontrolled expectoration halts a campaign-plane press gaggle (during a question about hacking, as Scott Adams notes).

  Of course a bad cough isn’t necessarily a grave symptom; one can have a frog in one’s throat without being in immediate danger of croaking. But it’s not a good image for someone trying to convince voters she’s in perfect health—or for media trying to convince readers and viewers.

  Besides, imagine if Bob Dole or John McCain—both just a few years older than Mrs. Clinton when they were running for president—had hacked for four minutes at the start of a speech. Wouldn’t there be a lot of talk about whether they were too old and frail to serve?

  In fact, there was plenty of such talk even absent such an episode…

  In 1995 a cover of Time, then an influential weekly magazine, asked: “Is Dole Too Old for the Job?” and answered: “The G.O.P. front runner says he’s 72 years young, but the age issue won’t fade away.”

   

  In 2008 the NBC News website ran an Associated Press dispatch under the headline “1 in 4 Chance McCain May Not Survive 2nd Term.” McCain, who turned 80 last month, is on track to beat those odds and is seeking a sixth Senate term.

  Generally it has been Republicans, including also Ronald Reagan, who’ve received the is-he-too-old treatment from the media. Until this year, one couldn’t put that down to partisan bias, for GOP nominees have tended to be older than Democratic ones. Since 1968 the Democratic nominee has been older than the Republican one only once, in 2004. Mrs. Clinton, who turns 69 next month, is the first Democratic presidential nominee over 61 since 1948—and the oldest one in the party’s 188-year history.

  Of the 17 Republicans who sought their party’s presidential nomination this year, 15 are younger than Mrs. Clinton. But Trump, 70, is one of the superannuated two (George Pataki, 71, is the other). Our sense is that compared with the treatment of earlier septuagenarian candidates, the press has made less fuss about Trump’s age—maybe because he so often fails to act it, maybe because with Mrs. Clinton as his opponent, the double standard would be too glaring.

  Though not too glaring for the Puffington Host, which last week ran a piece by Jennifer Gunter – whose bio reads “OB/GYN, writer, sexpert, defender of evidence-based medicine, Canadian Spice”—titled “Science Says Trump Is More Likely Than [Mrs.] Clinton to Have a Heart Attack in the Next 10 Years.”

  Similarly in 2008 Michael Maslansky—whose bio is in no way entertaining—wrote a piece for the site titled “Someone Had to Ask: Who Is More Likely to Die in Office?”:

  The answer appears to be that McCain’s age is going to be the bigger issue. He is already at a disadvantage as the candidate of experience in a “change” election. And he is further disadvantaged by the fact that he will have to get up on stage with a candidate young enough to be his son. Now it seems that, despite the fact that there is a reasonably long list of world leaders older than him, many Americans will see John McCain debating Obama with one foot already in the grave.

  Maslansky’s piece ran in April 2008, when the Democratic nomination was not yet final. He concluded with a nod to the third candidate, then 8½ years younger than she is today:

  Over at the Hillary campaign, a question of this nature should be a cause for celebration. While her various lapses in memory may have set her back politically this week, at least she can sleep well at night knowing half the country doesn’t think she’s going to be carried out of the White House in a body bag if she becomes president. Or do they? Perhaps it’s time someone should ask.

  Last month someone did, and he was banished from the Puffington Host.

  'C' is for Concussion, Conspiracy, Coughing, and Clinton.

  

  Source: GrrrGraphics.com

  

  

• Vancouver Housing Bubble Burst Sends Local Consumer Sentiment Crashing Most In Three Years

  As was largely expected, the first official data since the bursting of the Vancouver housing bubble following the 15% luxury real estate tax, was ugly: on one hand, the number of Vancouver home sales fell 26% from a year earlier, and tumbled by 23% comparted to July, to
  2,489 transactions. Detached properties were hit hardest as sales
  dropped 45% from a year earlier. Transactions of attached homes such as town-houses dipped 25% and apartment sales were down 10%. On the other, prices likewise slumped, with the average price of detached Vancouver properties crashing 17% in just one month, and already down 0.6% on the year, to C$1.47 million ($1.13 million) in August, the lowest price since September 2015.

  

   

  What is worse, is that what was until now a mostly regional housing bubble, is starting to spread in the form of a hit to Canadian consumer confidence. As Bloomberg reports, “a shifting real estate market in Vancouver led Canada’s consumer confidence index lower for a second week.” According to the BBG Nanos telephone poll shows, the share of respondents who see local real estate prices falling has almost doubled in the last two weeks, rising to 22.5% in the latest survey, up from previous readings of 20.5% and 12%. Conversely, the share of those who see higher prices fell to below 40 percent for the first time since April.

  Housing jitters dragged the broader Bloomberg Nanos Canadian Confidence Index down to 58.4, from 59.3 previously, the second straight drop from the 2016 high of 59.9. Readings on the economy also deteriorated, while perceptions of job security and personal finances showed slight improvements.

  The drop may not appear too dramatic on the chart below, however once the inlfection point in public mood hits, the acceleration phase kicks in shortly after, especially if the Vancouver housing woes accelerate or, worse, spread to cities such as Toronto.

  

  However, while the broader national index has only just started inflecting, the British Columbia expectations sub-index, which measures the outlook for housing and the economy, plunged by the most since July 2013 to 60.9. 

  
  

  “Negative pressure on the perceptions of real estate value continues, particularly in the province of British Columbia,” said Nanos Research Group Chairman Nik Nanos.

  Unless another wave of price-indescriminate Chinese buyers emerges over the next few months, what is for now just a trickle to national Canadian consumer sentiment, will promptly become a flood.

  

  

• The Tyranny Of 9/11: The Building Blocks Of The American Police State From A-Z

  Submitted by John Whitehead via The Rutherford Institute,

  “No one man can terrorize a whole nation unless we are all his accomplices.” ? Edward R. Murrow

  We’ve walked a strange and harrowing road since September 11, 2001, littered with the debris of our once-vaunted liberties.

  Over the past 15 years, we have gone from a nation that took great pride in being a model of a representative democracy to being a model of how to persuade the citizenry to march in lockstep with a police state.

  What began with the passage of the USA Patriot Act in October 2001 has snowballed into the eradication of every vital safeguard against government overreach, corruption and abuse.

  This is not freedom. This is a jail cell.

  Set against a backdrop of government surveillance, militarized police, SWAT team raids, asset forfeiture, eminent domain, overcriminalization, armed surveillance drones, whole body scanners, stop and frisk searches, roving VIPR raids and the like—all of which have been sanctioned by Congress, the White House and the courts—our constitutional freedoms have been steadily chipped away at, undermined, eroded, whittled down, and generally discarded.

  Our losses are mounting with every passing day.

  Free speech, the right to protest, the right to challenge government wrongdoing, due process, a presumption of innocence, the right to self-defense, accountability and transparency in government, privacy, press, sovereignty, assembly, bodily integrity, representative government: all of these and more have become casualties in the government’s war on the American people, a war that has grown more pronounced since 9/11.

  Since the towers fell on 9/11, the American people have been treated like enemy combatants, to be spied on, tracked, scanned, frisked, searched, subjected to all manner of intrusions, intimidated, invaded, raided, manhandled, censored, silenced, shot at, locked up, and denied due process.

  In allowing ourselves to be distracted by terror drills, foreign wars, color-coded warnings, underwear bombers and other carefully constructed exercises in propaganda, sleight of hand, and obfuscation, we failed to recognize that the true enemy to freedom was lurking among us all the while.

  Indeed, the U.S. government now poses a greater threat to our freedoms than any terrorist, extremist or foreign entity ever could. Here’s an A-to-Z primer to spell out exactly what government tyranny means post 9/11.

  A is for the AMERICAN POLICE STATE.

  B is for our battered BILL OF RIGHTS.

  C is for CIVIL ASSET FORFEITURE, a diabolical governmental scheme to deprive Americans of their liberties, namely, the right to property.

  D is for DRONES, weaponized, equipped with lasers, tasers and scanning devices, and aimed at “we the people.”

  E is for ELECTRONIC CONCENTRATION CAMP in which all citizens are suspects, their activities monitored and regulated, their movements tracked, their communications spied upon, and their lives, liberties and pursuit of happiness dependent on the government’s say-so.

  F is for FUSION CENTERS, which serve as a clearinghouse for information shared between state, local and federal agencies. These fusion centers constantly monitor our communications, everything from our internet activity and web searches to text messages, phone calls and emails.

  G is for GRENADE LAUNCHERS and GLOBAL POLICE. Take small-town police forces, equip them with enough firepower to render any citizen resistance futile, and then enlist them to be part of the United Nations’ Strong Cities Network program, and you not only have a standing army that operates beyond the reach of the Constitution but one that is part of a global police force.

  H is for HOLLOW-POINT BULLETS. The government’s efforts to militarize and weaponize its agencies and employees is reaching epic proportions, with federal agencies as varied as the Department of Homeland Security and the Social Security Administration stockpiling millions of lethal hollow-point bullets.

  I is for the INTERNET OF THINGS. This “connected” industry propels us closer to a future where police agencies apprehend virtually anyone if the government “thinks” they may commit a crime, driverless cars populate the highways, and a person’s biometrics are constantly scanned and used to track their movements, target them for advertising, and keep them under perpetual surveillance.

  J is for JAILING FOR PROFIT. Having outsourced their inmate population to private prisons run by private corporations, this profit-driven form of mass punishment has given rise to a $70 billion private prison industry that relies on the complicity of state governments to keep their privately run prisons full by jailing large numbers of Americans for inane crimes.

  K is for KENTUCKY V. KING, a ruling that opens the door to warrantless police raids, leaving Americans with little real protection in the face of all manner of abuses by law enforcement officials.

  L is for LICENSE PLATE READERS, which enable law enforcement to track the whereabouts of vehicles, and their occupants, all across the country.

  M is for MAIN CORE, the U.S. government’s database of  8 million or more names and information on Americans considered “threats” to the nation who should be rounded up in times of national emergency or under martial law.

  N is for NO-KNOCK RAIDS. More than 80,000 of these paramilitary raids are carried out every year—more than 200 SWAT team raids every day—and all in the pursuit of someone merely suspected of a crime, usually possession of some small amount of drugs.

  O is for OVERCRIMINALIZATION, which has resulted in an uptick in Americans being arrested and jailed for such absurd “violations” as letting their kids play at a park unsupervised, collecting rainwater and snow runoff on their own property, growing vegetables in their yard, and holding Bible studies in their living room.

  P is for PATHOCRACY and PRECRIME, tyranny at the hands of a psychopathic government. Couple that with the government’s burgeoning precrime programs, and anyone seen as opposing the government—whether they’re Left, Right or somewhere in between—becomes a potential extremist.

  Q is for QUALIFIED IMMUNITY, which allows officers to walk away without paying a dime for their wrongdoing.

  R is for ROADSIDE STRIP SEARCHES and BLOOD DRAWS. The courts have increasingly erred on the side of giving government officials—especially the police—vast discretion in carrying out strip searches, blood draws and even anal probes for a broad range of violations, no matter how minor the offense.

  S is for the SURVEILLANCE STATE. On any given day, the average American going about his daily business will be monitored, surveilled, spied on and tracked in more than 20 different ways, by both government and corporate eyes and ears.

  T is for TASERS and other nonlethal weapons, which enable police to aggress with the push of a button, making the potential for overblown confrontations over minor incidents that much more likely.

  U is for UNARMED CITIZENS SHOT BY POLICE. No longer is it unusual to hear about incidents in which police shoot unarmed individuals first and ask questions later, often attributed to a fear for their safety.

  V is for VIPR SQUADS, which are tasked with carrying out so-called “soft target” security inspections whenever and wherever the government deems appropriate, at random times and places, and without needing the justification of a particular threat.

  W is for WHOLE-BODY SCANNERS. Using either x-ray radiation or radio waves, scanning devices and government mobile units are being used not only to “see” through your clothes but to spy on you within the privacy of your home.

  X is for X-KEYSCORE. One of the many spying programs carried out by the NSA that targets every person in the United States who uses a computer or phone.

  Y is for YOU-NESS. Facial recognition software promises to create a society in which you can be tracked based on your face, mannerisms, social media and “you-ness.”

  Z is for ZERO TOLERANCE, in which young people are increasingly viewed as suspects and treated as criminals by school officials and law enforcement alike, often for engaging in little more than childish behavior. The lesson being taught to our youngest—and most impressionable—citizens is this: in the American police state, you’re either a prisoner (shackled, controlled, monitored, ordered about, limited in what you can do and say, your life not your own) or a prison bureaucrat (politician, police officer, judge, jailer, spy, profiteer, etc.).

  As I make clear in my book Battlefield America: The War on the American People, the reality we must come to terms with is that in the post-9/11 America we live in today, the government does whatever it wants, freedom be damned.

  The choices before us are straight-forward.

  We can live in the past, dwell on what freedoms we used to enjoy and shrug helplessly at the destruction of our liberties.

  We can immerse ourselves in the present, allowing ourselves to be utterly distracted by the glut of entertainment news and ever-changing headlines so that we fail to pay attention to or do anything about the government’s ongoing power-grabs.

  We can hang our hopes on the future, believing against all odds that someone or something—whether it be a politician, a movement, or a religious savior—will save us from inevitable ruin.

  Or we can start right away by instituting changes at the local level, holding our government officials accountable to the rule of law, and resurrecting the Constitution, recognizing that if we fail to do so and instead follow our current trajectory, the picture of the future will be closer to what George Orwell likened to “a boot stamping on a human face—forever.”

  

  

• "Too Many Whites" – MSNBC 'Tweaks' CNN Poll To Show Hillary Back In The Lead

  Just over a month ago, Donald Trump shocked the establishment and took the lead in national polls.

  

  Reuters jumped into action and 'tweaked' its polling methodology.

  In a presidential campaign notable for its negativity, the option of “Neither” candidate appears to be an appealing alternative, at least to participants in the Reuters/Ipsos opinion poll.

   

  Many voters on both sides have been ambivalent in their support for Democratic nominee Hillary Clinton and Republican nominee Donald Trump, complicating the task of the pollsters trying to track the race.

   

  That sentiment may help explain an apparent skew that recently emerged in the Reuters/Ipsos poll results. Given the choice, a relatively large group of voters opted for “Neither/Other” candidate compared with other major polls, leading to an underreporting of several percentage points for one or other of the two major contenders at times in the race.

   

  As a result, Reuters/Ipsos is amending the wording of the choice and eliminating the word “Neither,” bringing the option in line with other polls.

  And order was restored with Hillary surging into the lead:

  

   

  Today, however, a CNN national poll showed Trump regaining the lead (by 2 pts):

  Donald Trump has a two-point edge over Hillary Clinton in the latest CNN/ORC national survey of likely voters out Tuesday, as the Democratic nominee's post-convention lead has largely evaporated.

   

  Among those likely to vote in two months, Trump took 45 percent to Clinton's 43 percent, while Libertarian nominee Gary Johnson earned 7 percent and Green Party nominee Jill Stein had 2 percent. But among all registered voters surveyed, Clinton leads by 3 points, 44 percent to 41 percent, while Johnson took 9 percent and Stein 3 percent.

   

  The Republican nominee has a slightly higher favorability rating than Clinton among likely voters, although both are still underwater. Trump is seen favorably by 45 percent and unfavorably by 55 percent, while Clinton is at 42 percent to 56 percent. The disparity between the two candidates is lessened among registered voters.

  And so, as Politico reports, MSNBC decided another tweak was required:

  MSNBC 'unskewed' a CNN national poll on Tuesday that showed Donald Trump leading Hillary Clinton by two points, re-weighting the results to match the 2012 electorate and showing a four-point lead for the former secretary of state.

   

  The poll of likely voters, released Tuesday by CNN/ORC, showed Trump ahead of Clinton nationwide in a four-way contest, 45 percent to 43 percent. But MSNBC host Chuck Todd explained that the poll, in his network’s estimation, may have oversampled white voters without a college degree, one of Trump’s strongest groups.

   

  “Whites without a college degree appear to make up nearly half of their sample. In 2012, by the way, whites without a college degree was slightly more than a third of all voters,” Todd said.

   

  “The point is, your numbers may not be wrong but your weighting may be, your assumptions. So the CNN folks assumed an electorate that is not an impossible scenario for Trump, but it would be an historic shift if it occurred.”

  With the numbers adjusted to reflect how the electorate shook out four years ago, Clinton’s two-point deficit shifted to a four-point lead, 46 percent to 42 percent.

  Mission accomplished.

  

  To this latest, and most entertaining, "non-GAAP" poll adjustment, we have one question: just how stupid do 'they' think the American people really are?

  

  

• "What A Mess!" – Pentagon At War With CIA In Syria

  Submitted by Eric Margolis via Strategic-Culture.org,

  What a mess! In the crazy Syrian war, US-backed and armed groups are fighting other US-backed rebel groups. How can this be?

  It is so because the Obama White House had stirred up war in Syria but then lost control of the process. When the US has a strong president, he can usually keep the military and intelligence agencies on a tight leash.

  But the Obama administration has had a weak secretary of defense and a bunch of lady strategists who are the worst military commanders since Louis XV, who put his mistress, Madame de Pompadour, in charge of French military forces during the Seven Year’s War. The French were routed by the Prussians. France’s foe, Frederick the Great of Prussia, named one of his dogs, ‘la Pompadour.’

  As a result, the two arms of offensive US strategic power, the Pentagon and CIA, went separate ways in Syria. Growing competition between the US military and militarized CIA broke into the open in Syria.

  Fed up with the astounding incompetence of the White House, the US military launched and supported its own rebel groups in Syria, while CIA did the same.

  Fighting soon after erupted in Syria and Iraq between the US-backed groups. US Special Forces joined the fighting in Syria, Iraq and most lately, Libya.

  The well-publicized atrocities, like mass murders and decapitations, greatly embarrassed Washington, making it harder to portray their jihadi wildmen as liberators. The only thing exceptional about US policy in Syria was its astounding incompetence.

  Few can keep track of the 1,000 groups of jihadis that keep changing their names and shifting alliances. Throw in Turkomans, Yzidis, Armenians, Nestorians, Druze, Circassians, Alawis, Assyrians and Palestinians. Oh yes, and the Alevis.

  Meanwhile, ISIS was inflicting mayhem on Syria and Iraq. But who really is ISIS? A few thousand twenty-something hooligans with little knowledge of Islam but a burning desire to dynamite the existing order and a sharp media sense. The leadership of these turbaned anarchists appears to have formed in US prison camps in Afghanistan.

  The US, Saudi Arabia, and Turkey armed and financed ISIS as a weapon to unleash on Syria, which was an ally of Iran that refused to take orders from the Western powers. The west bears heavy responsibility for the deaths of 450,000 Syrians, at least half the nation of 23 million becoming refugees, and destruction of this once lovely country.

  At some point, ISIS shook off its western tutors and literally ran amok. But the US has not yet made a concerted attempt to crush ISIS because of its continuing usefulness in Syria and in the US, where ISIS has become the favorite whipping boy of politicians.

  Next come the Kurds, an ancient Indo-European stateless people spread across Turkey, Iraq, Iran and Syria. They have been denied a national state by the western powers since WWI. Kurdish rebels in Iraq have been armed and financed by Israel since the 1970’s.

  When America’s Arab jihadists proved militarily feeble, the US turned to the Kurds, who are renowned fighters, arming and financing the Kurdish Syrian YPG which is part of the well-known PKK rebel group that fights Turkey.

  I covered the Turkish-Kurdish conflict in eastern Anatolia in the 1980’s in which some 40,000 died.

  Turkey is now again battling a rising wave of Kurdish attacks that caused the Turks to probe into northern Syria to prevent a link-up of advancing Kurdish rebel forces.

  So, Turkey, a key American ally, is now battling CIA-backed Kurdish groups in Syria. Eighty percent of Turks believe the recent failed coup in Turkey was mounted by the US – not the White House, but by the Pentagon which has always been joined at the hip to Turkey’s military.

  This major Turkish-Kurdish crisis was perfectly predictable, but the obtuse junior warriors of the Obama administration failed to grasp this point.

  Now the Russians have entered the fray in an effort to prevent their ally, Bashar Assad, from being overthrow by western powers. Also perfectly predictable. Russia claimed to be bombing ISIS but in fact is targeting US-backed groups. Washington is outraged that the wicked Russians are doing in the Mideast what the US has done for decades.

  The US and Russia now both claim to have killed a senior ISIS commander in an air strike. Their warplanes are dodging one another, creating a perfect scenario for a head-on clash at a time when neocons in the US are agitating for war with Russia.

  Does anyone think poor, demolished Syria is worth the price? Hatred for the US is now seething in Turkey and across the Mideast. Hundreds of millions of US tax dollars have been wasted in this cruel, pointless war.

  Time for the US to stop stirring this witch’s brew.

  *  *  *

  And if that didn't 1) drive you crazy, and/or 2) confuse you, here is UK's Channel 4 to explain in pictures…

  Who is fighting who in #Syria? The question’s simple – the answer’s not. pic.twitter.com/3LD6p6oSPO

  — Channel 4 News (@Channel4News) September 5, 2016

  

  

• As Class 8 Truck Orders Continue Collapse, VW Has A "Fix" For Navistar's Diesel Emission Issues

  Truck-related stocks have massively outperformed the broader markets this year up over 30% while the S&P 500 is up only around 7%. This outperformance has come despite abysmal Class 8 net orders which seem to just get worse each month with August 2016 net orders down over 25% compared to last year.  In fact, the level of trailing 12-month net orders is the lowest since January 2011 with YoY changes now in negative territory for 18 consecutive months.

  

  

   

  This news comes as Volkwagen just announced a $256mm investment in Navistar International and agreed to collaborate on "strategic technology" and to establish a procurement joint venture.  The news pushed Navistar stock up over 40% on the day alleviating near-term investor concerns over an aggressively levered balance sheet and massive pension under-funding. 

  The investment in Navistar comes after its market share in heavy-duty trucks has been cut in half over the past five years on the back of a diesel emissions scandal.  The scandal ultimately resulted in Navistar paying the SEC $7.5mm to settle allegations it misled investors over its ability to comply with new diesel emission standards that went into effect in 2010.  Navistar had attempted to develop a proprietary solution to comply with the new 2010 regulations, rather than using the same technology as the rest of the truck and engine industry…a bet that obviously didn't work out as planned.  Per Bloomberg:

  Navistar sought to comply with federal engine emission rules that took effect in 2010 by using an exhaust gas recirculation (EGR) technology that funnels emissions back into the engine’s cylinders as a way of lowering the nitrogen oxide that is released. The trouble for Navistar is that the technique did not reduce the emissions sufficiently to meet the U.S. rules, which led to the company paying a penalty of nearly $2,000 per engine. Rival engine makers, such as Cummins, Paccar, and Daimler, use a system called selective catalytic reduction that applies a urea-water fluid to the exhaust gases to convert the harmful nitrogen oxide to water and nitrogen.

   

  In July 2012, the Lisle (Ill.) company reversed its decade-long course and said it would abandon the technology in its engines. The board soon ousted CEO Dan Ustian, and two months later the company reached a deal with Cummins to supply its widely used ISX15 diesel engines for Navistar’s largest truck models. That engine also meets emissions requirements that take effect in 2014.

  Luckily for Navistar, if they ever want to revive that EGR technology we hear that VW has an excellent "fix" to help meet diesel emission standards. 

  

  

• USDJPY Tumbles On Sankei Article BOJ Is Struggling To Reach Policy Consensus

  After having dropped all day following the latest set of poor US data making a September rate hike virtually impossible, moments ago the USDJPY snapped lower by nearly 80 pips, tumbling as much as 101.25, as stops were hit, reaching the pari’s lowest level since August 26.

  

   

  Among the reasons cited for the steep drop on trading desks, is that according to an article in Japan’s Sankei published just over an hour ago, the BOJ is struggling to form a unified opinion on policy review. The Sankei explains, without saying who provided the information, that policy board members are struggling to reach a consensus position on comprehensive policy review to be released at Sept. 20-21 meeting.

  It goes on to say that members are divided between those who support negative interest rates, prioritizing government bond purchase, and others who oppose additional easing measures:

  • Governor Haruhiko Kuroda seen to be a negative interest rate supporter
  • Deputy Governor Kikuo Iwata seen to support expanding monetary base
  • Takahide Kiuchi, Takehiro Sato seen to oppose additional easing

  In other words, chaos, with the Sankei concluding that the BOJ likely to debate until final moments on whether to present unified view or list individual positions.

  This fits with what Abe advisor Koichi Hamada said in an interview earlier today when according to Bloomberg he suggested that the BOJ should wait until after the Fed decides on interest rates before acting itself, said Koichi Hamada, an economic adviser to Prime Minister Shinzo Abe. Hamada correctly pointed out that the BOJ risks having its efforts overshadowed if it expands monetary stimulus at its policy meeting on Sept. 21 and the Fed then just hours later decides to keep U.S. interest rates unchanged.

  “The BOJ should wait for the Fed,” said Hamada, in an interview in Tokyo on Monday. “The present focus of attention is on the U.S. exit policy.”

  As Bloomberg adds, a Fed decision to raise borrowing costs would do more to weaken the yen than anything the BOJ would do, according to Hamada, a retired Yale University professor. The BOJ would still have the opportunity to increase stimulus at meetings in November and December.  BOJ Governor Haruhiko Kuroda will want to avoid a repeat of what happened in January, when he introduced a negative interest rate only to see the yen strengthen as part of a global flight to safety.

  Previously, in a speech delivered by Kuroda on Monday, BOJ governor Kuroda called for a comprehensive review of the BOJ’s monetary policy for the board to consider at its September meeting. Specifically, he signaled a willingness to bolster already record levels of stimulus and undertake new measures. Hamada said the BOJ should refrain from cutting the negative rate further for now because it has already had some negative effects on the banking industry and hurt household sentiment.

  The market’s reaction to the speech was negative, sending the Yen higher as Kuroda failed to indicate a firm commitment to any specific policy, something the Sankei story has validated.

  Further weakening the dovish case, was another report according to which PM Shinzo Abe told reporters at the close of a Group of 20 meeting in Hangzhou, China, late on Monday that foreign bond purchases are illegal under the Bank of Japan Law if they are meant as a form of currency intervention, which means that the plan floated by Hamada to buy foreign bonds will likely not be implemented in the near-term, if at all.

  What is more curious, based on the latest Hamada’s comments, is that not only is the BOJ no longer data – or even market – dependent, but is entirely reactionary, and its policy will be driven almost entirely by what the Fed will do prior to the Bank of Japan’s own decision has to be made. 

  In short, the BOJ has lost control of its own monetary policy, and is forced to respond to any and every announcement and action by the Fed.

  

  

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• Three Big Lies That Pervade America's 'News' Media

  Authored by Eric Zuesse via Strategic-Culture.org,

  (This news-report is being submitted to virtually all U.S. national ‘news’ media, almost all of which are the very same ‘news’ media that hide these historical truths, which facts thus remain as «news» in America, since they still haven’t yet been reported as «news», even though they’ve now become history — history that’s suppressed in America.)

  The Big Lies that pervade the U.S. ‘news’ media are the ones that are essential to sustain in order for the deceived American public to accept the fraudulent basis upon which the U.S. regime of Barack Obama has ‘justified’ his economic sanctions against Russia, and his pouring of U.S. troops and weapons onto and near Russia’s borders:

  1: Calling the bloody U.S. coup that overthrew the democratically elected President of Ukraine in February 2014 instead a ‘democratic revolution’ against him, which established ‘democracy in Ukraine,’ instead of established adictatorship and a civil war there.

   

  As even that scholarly source calling it a ‘democratic revolution’ acknowledged, this ‘democratic revolution’ «featured civic self-organization aided by the use of Internet-based social media, neighborhood initiatives, and online news sites,» and this online operation (directed mainly at neo-Nazis in Ukraine) fits precisely the «tech camps» that started inside the U.S. Embassy in Ukraine on 1 March 2013, after Google’s CEO Eric Schmidt and Google’s and the U.S. State Department’s Jared Cohen had deceived wikileaks’ founder Julian Assange into informing them, on 23 June 2011, how to foment massive public demonstrations online.

   

  Schmidt asked Assange there: «One of the questions I have is how do you decide which ISPs [to use]…

   

  JA: OK. That's a very good question.

   

  ES: Yeah, it is a pretty complicated question.

   

  JA: Yeah, so I will give you an example of how not to choose them. So we dealt with a case in the Cacos islands where there was a great little group called the TCI journal. The Turks and Cacos Islands Journal, which is sort of a best use case of the internet. So who are they? Well they are a bunch of legal reformers… People are going from… young people are going from apolitical to political. It is a very very interesting transition to see».

   

  Assange even bragged to Schmidt and Cohen (who was very close to Cohen’s other boss Hillary Clinton) «Something I am certain about is that we changed the outcome of the Kenyan election in 2007». Assange, at that time, seems to have had no idea at all, that he was actually telling this to coup-plotters, instead of to democracy-champions.

   

  Only in retrospect did Assange come to recognize that, as he headlined in October 2014, «Google Is Not What It Seems». That’s when he noted, «Jared Cohen could be wryly named Google’s 'director of regime change'».

   

  This coup (called ’the Maidan revolution’ or «Euromaidan») started being organized inside the U.S. Embassy in Ukraine by no later than 1 March 2013, but wikipedia says instead: «Euromaidan started in the night of 21 November 2013 when up to 2,000 protesters gathered at Kiev's Maidan Nezalezhnosti and began to organize themselves with the help of social networks». (Nothing was mentioned there about the U.S. Embassy’s having organized them.)

   

  The Carnegie Endowment for International Peace, and other sales-promotion operations for Lockheed Martin etc., blame the increased misery in Ukraine after the coup, on Ukrainians, such as: «Under attack from within and without, Ukraine cannot build a democratic future without Western support [from Western taxpayers, to fund those weapons-sales]. Both financial and security assistance are critical to the [new fascist Ukrainian] state’s survival. Yet there is one caveat: Ukraine’s friends should recall their experiences providing aid to other post-communist countries, and enforce strict conditionality, especially regarding control over powerful elites [such as those who actually worked with Obama’s coup], to ensure that their support achieves its desired aims. Constructing a new democracy in Ukraine will take extraordinary care and vigilance». In other words: ‘we’ tried our best; ’they’ failed. ‘We’ didn’t impose this bloody outcome on them; ‘they’ — America’s victims — did it to themselves.

   

  This coup and its aftermath (ethnic cleansing to get rid of the people in the area of Ukraine that had voted 90 % for the man Obama overthrew) were the most-censored news story of 2014, and the U.S. ‘news’ media still don’t report any of it, because for them to report it truthfully would be for them to acknowledge what they’d been covering-up and lying about ever since the February 2014 coup — and they never report about their own cover-up operations.

   

  2: Ignoring that the breakaway of Crimea from Ukraine, and that the 90+% vote of Crimeans, for Crimea to rejoin Russia (of which Crimea had been a part until the Soviet dictator transferred it to Ukraine in 1954), resulted directly from America’s violent overthrow of the Ukrainian President, for whom 75% of Crimeans had voted.

   

  On 20 February 2014, at the very height of the bloody U.S. coup that ended democracy in Ukraine, the Obama Administration’s rabidly Russia-hating nazi-inspired thugs beat and brutally killed many Crimeans who were escaping from Kiev after having been peacefully demonstrating there against the U.S.-nazi overthrow-Yanukovych operation. This «Korsun massacre» is ignored in the ‘news’ accounts in America, but it played a key role in terrifying the Crimean population against the coup-installed regime and in motivating them to seek the protection of Russia by voting, on 16 March 2014, for Crimea to rejoin Russia.

   

  3: Lying to say that a majority of Syrians want to replace Bashar al-Assad as Syria’s President, and to say that the Obama regime wants a democratic Syria and that the Russian government does not.

   

  Of course, because the U.S. used to be predominantly a democracy, the myth of America’s still being a ‘democracy’ is considered acceptable to promulgate even today. However, not only was today’s U.S. government one of only three governments at the U.N. voting to oppose a resolution condemning nazism and denial of the Holocaust, but on at least two occasions the U.N. Secretary General Ban ki-Moon criticized the Obama Administration’s insistence that in the next Syrian Presidential election the Syrian people must be prohibited from being allowed to vote for Bashar al-Assad.

  *  *  *

  Most Americans still don’t know any of these facts, because the U.S. ‘news’ media refused to report these — and many other important — facts to them. Can such a country even possibly be an authentic democracy?

  It’s no different than the lies that were stenographically reported as ‘truth’ about ‘Saddam’s WMD’, except that, this time, the lies can produce nuclear war with Russia.

  

  

• The Greater Depression – Part 2: "Cinderella Man"

  Submitted by Jim Quinn via The Burning Platform blog,

  In Part One of this article I made a fact based case that most Americans are experiencing an economic depression on par with the Great Depression of the 1930’s. In Part Two I will compare and contrast two very different men who raised the spirits of the common man during difficult economic times. As we approach the perilous portion of this Fourth Turning, it will take more than hope to get us through to the other side.

  

  Cinderella Man

  Likening Braddock to Trump might seem far-fetched, until you think about parallels between the economic conditions during the 1930’s and today, along with the deepening mood of crisis, despair and anger at the establishment. Braddock’s career coincided with the last Fourth Turning. James J. Braddock was born in 1905, to Irish immigrant parents Joseph Braddock and Elizabeth O’Toole Braddock in a tiny apartment on West 48th Street in New York City. His life personified that of a GI Generation hero. One of seven children, Jimmy enjoyed playing marbles, baseball and hanging around the old swimming hole on the edge of the Hudson River as a youngster. He discovered his passion for boxing as a teenager.

  Braddock refined his skills as an amateur fighter and in 1926 entered the professional boxing circuit in the light heavyweight division. Braddock overwhelmed the competition, knocking out multiple opponents in the early rounds of most fights. As a top light heavyweight, he stood over six feet two inches, but seldom weighed over 180 pounds. But his powerful right hand was no match for opponents that weighed close to 220 pounds. His star was ascending. He earned a shot at the title in 1929. On the evening of July 18th 1929, Braddock entered the ring at Yankee Stadium to face Tommy Loughran for the coveted light heavyweight championship. Loghran avoided Braddock’s deadly right hand for 15 rounds and won by decision. Less than two months later the stock market crashed and the country plunged into the Great Depression.

  As thousands of banks failed and unemployment swept over the land like a plague, Braddock, like so many other millions of Americans lost everything. He labored to win fights so he could put food on the table for his wife and three young children. His career hit the skids as he lost sixteen of twenty-two fights and shattered his right hand landing a punch. As his boxing career spiraled downward, like the economy, he ended up working on the docks as a longshoreman. When even that job couldn’t feed his family, Jim swallowed his pride, hung up his boxing gloves and filed for government relief to help support his family. The strength, spirit and tenacity that had made him a contender were drained from his demeanor. He became just another down on his luck palooka struggling to survive during the Great Depression.

  Thanks to a last-minute cancellation by another boxer, Braddock’s longtime manager and friend, Joe Gould, offered him a chance to fill in for just one night and earn cash. The fight was against the number-two contender in the world, Corn Griffin, on the undercard of the heavyweight championship fight between Max Baer and Primo Carnera. Braddock stunned the boxing experts and fans with a third-round knockout of his formidable opponent. He believed that while his right hand was broken, he became more proficient with his left hand, improving his boxing ability. Over the next nine months he upset John Henry Lewis and Art Lasky to become an unlikely contender for the heavyweight title of the world.

  Braddock remembered the humiliation of having to accept government relief money and paid it all back with the prize money he earned from his fights. He also made frequent donations to various Catholic Worker Houses, including feeding homeless guests with his family. He never forgot where he came from. He was one of the common men. When his rags to riches story got out, renowned sportswriter Damon Runyon dubbed him “The Cinderella Man“, and before long Braddock came to represent the hopes and aspirations of the American public struggling during the Great Depression. The year was 1935, with the majority of Americans still facing a bleak daily existence.

  Max Baer, the heavyweight champion, had a reputation as a destructive puncher and possibly the hardest hitter of all time. He had killed a man in the ring in 1930. On the evening of June 13th 1935 at Madison Square Garden Braddock, an 8 to 1 underdog, entered the ring to face Baer. Jim knew he could beat Baer if he stayed away from his hammering right hand, and that’s just what he did. In an amazing feat of courage and determination, Braddock won the 15 round decision to become the new heavyweight champion of the world. It was considered one of the greatest upsets in boxing history. The “Cinderella Man” had fulfilled the dreams and hopes of the common people, giving them a reason to battle on through those tough times.

  

  Damon Runyan described the event in newspapers across the country the next morning:

  Coming into the ring on the short end of the unheard-of price of 8 to 1 with even money he does not come out for the tenth round, and with his chances so little regarded that the crowd does not half fill the “graveyard of champions,” Braddock fights from the opening bell with the desperation of a man leading a forlorn hope.

  Brought back from Hasbeenville by the magic wave of the wand of sheer chance, after being such a down-and-outer that he had to go on relief in his home State of New Jersey at $24 per month to provide food for his wife and three children, James J. Braddock at 29 years of age suddenly finds himself occupying the pinnacle of the pugilistic heap, with an utterly new life before him.

  At the close of the fight, while the fighters are awaiting the announcement of the decision, the crowd begins filing out, knowing beforehand what the verdict will be, and so ends the fistic fairy tale, as all fairy tales should end, with the poor abused hero finding his pumpkins of failure turned into prancing white steeds of glittering success and his feet incased in the glass slippers of happiness, if you can follow all this twisted metaphor.

  Anyway, so ends the strange story of James J. Braddock “the Cinderella Man” of Fistiana. And you cannot match his story anywhere in the realm of the most fantastic fiction.

  Braddock lost his heavyweight title two years later in an 8 round KO to “The Brown Bomber”, Joe Louis. He retired after a final win over Tommy Farr in 1938. The beacon of hope for millions had done his part to revive the spirits of a country in crisis. And in true GI Generation fashion, at the age of 37, Jim and his manager both enlisted in the U.S. Army in 1942 where they became 1^st Lieutenants. Upon his return, he helped construct the Verrazano Bridge, raising his family, and living out his life as a business owner, happily married to his wife Mae until the day he died in 1974. He was the epitome of everything noble, good, honorable and proud about this country.

  Trump – The Anti-Cinderella Man

  It may seem like a reach to equate Donald Trump to James J. Braddock, but it really isn’t about the specific person. It’s about the mood of the country during tragically grim economic times and how average middle class (or former middle class) working Americans respond to the message and actions of celebrities they choose to follow or emulate.

  Their life stories couldn’t be more divergent.

  Braddock was born into poverty, had to work like a dog to gain a higher stature in life, always maintained a soft spoken humble nature, evoked sympathy and admiration for his rags to riches story, and ultimately inspired generations of Americans to experience a sense of redemption during the Great Depression through his boxing feats. Braddock was a man for his times.

  Donald Trump was born into wealth. He was born on third base, thinking he hit a triple. His is a story of riches to greater riches. His real estate developer father left him $100 million and the family business. To his credit, he turned the $100 million into billions. He’s been a deal maker and risk taker his entire life. He’s had spectacular successes and miserable failures. He has an ego the size of the Empire State Building. There isn’t a humble bone in his body. He’s brash, boisterous and prone to making outrageous declarations. His personality is more on par with Muhammed Ali’s among boxing legends. His is not a Cinderella story like Braddock’s. He is the anti-Cinderella man. Over the last year he has become the great last hope of the downtrodden middle class, as they struggle through their very own Greater Depression.

  This unlikely billionaire champion of the silent majority has defied all odds to become the Republican nominee for president, despite the scorn and ridicule of the GOP establishment, neo-cons, political pundits and both the right and left wing corporate media. He defeated more than a dozen GOP establishment lackeys who spent far more on their campaigns than he, with the largest primary vote tally in GOP history. Just as Braddock was considered washed up and a has been after losing sixteen of twenty two fights, Trump was considered a washed up reality TV parody of himself until he announced his intention to run for president. I, among millions of others, scoffed at him and thought it was nothing more than a publicity stunt to generate some new TV program.

  The press scoffed at the comeback of Braddock after he was given a new lease on life. Every time he prepared to fight a supposedly more talented opponent the odds makers and “experts” in the media expected him to get knocked out. But no one ever knocked him out and he defied the odds to earn a shot at the heavyweight championship of the world. The GOP establishment had crowned Jeb Bush the champion of their party, but Trump KO’d him in the 2^nd round. He methodically knocked out the rest of his opponents on the way to the coming heavyweight championship fight in November against the hand-picked heavyweight contender of the political establishment, Wall Street, the fallacious corporate media, the military industrial complex, and the rest of the Deep State apparatus.

  Max Baer was a monster of a man and a killer in the ring. He looked down upon his opponent as out of his league. His smug know it all demeanor was evident to all. He was not loved by the common man. He was respected for his pugilistic talents, but he didn’t inspire the crowds to root for him. He brimmed with over-confidence and took his opponent lightly. He underestimated the amount of fight still left in Braddock. The “experts” all but guaranteed an overwhelming victory for Baer, likely a knockout in the 1^st or 2^nd round.

  Hillary Clinton is the ultimate Washington establishment insider, with a reputation as a killer. She’s been hand-picked to continue the policies put in place by the establishment to benefit the establishment. She is loved by no one. She inspires adoration from no one. She can barely fill an auditorium without paying people to attend. She never mingles with the peasants. She collects hundreds of millions from her Hollywood elite friends, Wall Street titans, Soros, Buffett, the House of Saud and the rest of the billionaire oligarch class. She stays above the fray, letting her handlers set the agenda and telling her what to do and say. She sees blacks, Hispanics, and the working poor as voting blocs – not as real human beings deserving of respect.

  Her thirst for power and control is sociopathic as she will stop at nothing to quench that thirst by being elevated to the throne of the presidency. And she’ll hit below the belt to achieve that victory. She openly despises and denigrates her opponent. She believes she is intellectually and morally superior to Trump and believed the political pundit “experts” who declared she would win in a landslide. Overconfidence, hubris and believing the press clippings from an overwhelmingly liberal media are coming home to roost with two months to go until the election.

  In the Baer – Braddock fight of the century, Baer came out firing looking for the knockout punch in the early rounds. But Braddock took his best shots and kept plugging away. Hillary and her corner men have spent over $120 million on negatives ads to Trump’s $20 million in the early rounds. Her 10% post-convention lead has dwindled to zero as Trump has taken her best punches and is still standing. As the bout entered the middle rounds Braddock took control and Baer began to tire. Braddock dominated the late stages of the fight and won in a unanimous decision as the crowd went wild and average Americans around country glued to their radios reveled in jubilation as one of their own became champion.

  As Hillary’s lies, deleted emails, selling influence through her crooked Clinton Foundation, smashing blackberries with hammers, and brain damage weigh her down, Trump keeps firing punches. Her stamina is in question. Other than CNN (Clinton News Network) and the rest of the Hillary cheerleading press, a large swath of the American people are questioning her honesty, competency, and health. The demoralized and subjugated silent majority are hopeful Trump can deliver them from a political establishment that threw them under the bus thirty years ago. We’ve entered the late rounds and Trump shows no signs of tiring or allowing Hillary to land any knockout blows.

  The odds maker “experts” like Nate Silver (who was 90% sure Trump wouldn’t win the GOP nomination) still have Hillary winning in a landslide. The candidate of the ruling class, who pledges to maintain the status quo, is not the change agent of the masses. A victory by Hillary would be a victory for Wall Street, billionaire oligarchs, neo-con warmongers, propaganda media outlets, and corporate cronyism. A Trump victory would boost the morale of a middle class that has been abused, denigrated, belittled, ignored, and taken advantage of by the ruling class for decades. The hopes and dreams of millions are riding on a victory by the anti-Cinderella man. His popularity rides on a sea of rightful resentment, anger, and fury at how the average American has been screwed by the ruling class (both parties) for decades.

  I have no illusions Donald Trump can single handedly reverse decades of bad policies, bad choices, bad government, bad politicians, and shamefully horrendous Federal Reserve monetary policies designed to impoverish millions through man made inflation and debt issuance. His election would be the upset of the century and spit in the eye of the establishment.

  It would lift the spirits of disillusioned, angry Americans experiencing depressionary economic conditions who want to take this country back from the vested interests. James J. Braddock lifted the morale of a nation in the midst of a Great Depression, but he lost the championship two years later as the Great Depression eventually led to the bloodiest conflict in word history.

  If Trump can win an upset victory in November, the initial surge of confidence and anticipation of game changing policy changes will shortly be replaced by the left hook of reality. Trump will likely be thwarted at every turn by the corrupt members of both parties. Debt will continue to pile up at a $1 trillion per year rate. Trump’s volatile nature will inflame passions both domestically and abroad.

  His election would not change the nature of politics in Washington, but could be the push which brings this teetering welfare/warfare empire of debt crashing down. The destruction of the existing social order is the only chance for real change and Donald Trump is the only person who could trigger that change. His pugilistic demeanor may come in handy as our country confronts the final bloody stages of this Fourth Turning.

  The climax year of the American Revolution happened in 1781. Almost like clockwork, the Civil War climax year of 1863 followed 82 years later. The Great Depression/World War II climax year of 1944 followed 81 years later. This would put the climax year of our current Fourth Turning around 2025, at the end of an eight year presidency of Clinton or Trump (both Prophet Generation leaders). The years leading toward the climax of a Fourth Turning have always been chaotic, dangerous and bloody. The core elements of debt, civic decay, and global disorder will accelerate the chain of events leading to the climax, whatever it may be.

  No matter who is elected in November, the next eight years will try men’s souls and the outcome for our country could be glory or destruction. The technology exists to extinguish all life on the planet and human nature does not change. All it would take would be human malevolence, disastrous decision making by flawed leaders, and some bad luck to destroy the world. Who do you trust to lead during the most dangerous period of this Fourth Turning? Our choices do matter.

  “Imagine some national (and probably global) volcanic eruption, initially flowing along channels of distress that were created during the Unraveling era and further widened by the catalyst. Trying to foresee where the eruption will go once it bursts free of the channels is like trying to predict the exact fault line of an earthquake. All you know in advance is something about the molten ingredients of the climax, which could include the following:

  • Economic distress, with public debt in default, entitlement trust funds in bankruptcy, mounting poverty and unemployment, trade wars, collapsing financial markets, and hyperinflation (or deflation)
  • Social distress, with violence fueled by class, race, nativism, or religion and abetted by armed gangs, underground militias, and mercenaries hired by walled communities
  • Political distress, with institutional collapse, open tax revolts, one-party hegemony, major constitutional change, secessionism, authoritarianism, and altered national borders
  • Military distress, with war against terrorists or foreign regimes equipped with weapons of mass destruction” 

   The Fourth Turning – Strauss & Howe

  

  

• One Trillion Euros Spent & This Is What Draghi Has To Show For It

  It's been 16 months since the European Central Bank began its voyage into the unknowable in March 2015, and as The FT notes, this week marks a milestone – it has now purchased over EUR 1 trillion in government (and corporate) bonds since it began QE.

  The ECB buys bonds through the eurozone’s national central banks and in line with a member state’s overall contribution to eurozone GDP.

   

  Among its three largest economies, the ECB has snapped up a total of €238bn in German Bunds, €189bn in French paper, and €164bn in Italian bonds since last March.

   

  Policymakers announced they would begin buying non-bank corporate debt earlier this year. Total ECB holdings of company bonds now stand at €20.5bn, with asset backed securities hitting €19.91bn.

   

  The ECB will be meeting for its lateset monthly policy decision on Thursday and is poised to announce a six-month extension to its QE programme until September 2017.

   

  According to estimates from Credit Agricole, the ECB will have hoovered up over half the eligible universe of government debt by the end of the year, forcing policymakers to tweak their QE rules in a bid to keep hitting its €80bn a month purchase target.

  The trillion euro surge is driving the ECB's balance sheet up towards The Fed's…

  

   

  The big problem is – it's not helping the real world…

  

   

  But don't expect it to stop anytime soon. If the following utterly insane words from another ECB member show…

  • *ECB'S NOWOTNY: MON POLICY PROVED `MORE POTENT' THAN THOUGHT
  • *ECB'S NOWOTNY: EUROSYSTEM HAS SHOWN IT CAN ALWAYS DO MORE

  That's just total bullshit…

  

  Simply put – it's either pure propaganda-driven lies or the people pulling the strings are blinded by faith and aiming for the cognitively dissonant world record.

  

  

• Guest Post: Being A 'Famous Liberal Woman' Means… Never Having To Say You're Sorry

  Authored by Kurt Schlicher, originally posted at Townhall.com,

  Love means never having to say you’re sorry, and apparently so does being a famous liberal woman. In fact, being a famous liberal woman apparently means being exempt not only from basic social conventions but from actual laws whose breaking would result in lesser humans – meaning everyone who isn’t a famous liberal woman – being forced into a years-long journey involving the transformation of large rocks into many smaller rocks.

  Being a famous liberal woman makes you special and I guess us peasants ought to just get used to it.

  

  Re-entering our collective consciousness this week is famous liberal woman and scourge of Golden Corrals everywhere, Lena Dunham. She had faded from view for a blessed while after Hollywood realized that its inexplicable campaign to make her a superstar was cratering. She did not help it when she outed herself as history’s worst babysitter, nor when her HBO show became the only series in the history of cable television to lose ratings because of too much nudity.

  But now she’s back, with her dead cow eyes and her utter conviction that the world is waiting for her to verbalize every single random thought that wanders through the vast, empty expanse of her noggin. In July she complained that the poster for that new Jason Bourne movie none of us saw showed a pistol. It would have been hilarious if she had whined about it in terms of slamming Matt Damon’s gun fascist hypocrisy, but no, it was more of an aesthetic complaint. She just doesn’t think we should see guns because she doesn’t like guns. Then she committed her own aesthetic crime, unleashing upon an unsuspecting world un-retouched shots of her modeling lingerie. Caution: These visual IEDs are unsafe for work and everywhere else. You’ve been warned.

  But now she has gone beyond merely asserting her entitlement to decide for all of us what posters may depict and to redefine what is and is not attractive. Now she is demanding that black men adore her. Talking to Amy Schumer, another whiny Hollywood quarter-wit who puts the “over” in “over-rated,” Dunham said:

  "I was sitting next to Odell Beckham Jr., and it was so amazing because it was like he looked at me and he determined I was not the shape of a woman by his standards. He was like, ‘That's a marshmallow. That's a child. That's a dog.’ It wasn't mean — he just seemed confused.

   

  The vibe was very much like, 'Do I want to f*** it? Is it wearing a … yep, it's wearing a tuxedo. I'm going to go back to my cell phone.

   

  It was like we were forced to be together, and he literally was scrolling Instagram rather than have to look at a woman in a bow tie. I was like, 'This should be called the Metropolitan Museum of Getting Rejected by Athletes.'"

  Yes, Whitey McMayonaise was outraged that an African-American man somehow resisted her – the nerve of him, preferring to bury himself in his iPhone instead of fussing and cooing over her awesomeness! “I was not the shape of a woman by his standards…” How dare he have standards – if that catches on, Dunham and Schumer and the cast of the new Ghostbusters and the rest of the hard threes Hollywood seems intent on forcing down America’s throat are doomed.

  Maybe, just maybe, Beckham looked over at her and saw an ugly person – not physically, but in terms of her sense of entitlement and narcissism. There’s a word for this whole sorry scene, and no Lena, it’s not “sexism” or even “fatism.” It’s more like “racism.” Imagine how the social justice warriors would go on the social justice warpath if some wealthy conservative jerk pulled a Margaret Dumontesque “Well, I never!” when a minority dared to reject her dubious charms. But hey, Lena’s a famous liberal woman and special rules apply.

  Of course, it’s all fun and games with Lena Dunham, unless you’re her sister or that guy she falsely accused of sexually assaulting her.

  But there’s another famous liberal woman who is ignoring the rules too, blatantly, openly, and without apology. And these are not mere social convention kind of rules. These are laws, the kind of laws where other people who break them go to jail. And these are laws involving the security of our country.

  That famous liberal woman is, of course, Hillary Clinton.

  Just the other day – you know, late afternoon on the Friday before Labor Day – the FBI released more documents and reports related to her email shenanigans. What they revealed was, of course, that a situation that was already terrible was actually about ten times more terrible than we ever imagined. Not only did the Woman Most Qualified Ever To Be President not know how classification works, and not only did the bar-failing, chronically sick crone forget pretty much everything she ever did or said or heard, but she also managed to lose about a dozen Blackberry phones that she used to transmit classified materials.

  Now, for those of you who have not worked with classified material and the equipment that transmits it, let me share with you how it might go for someone who, say, was a military guy and not a famous liberal woman:

  Hi Colonel. How’s it going? By the way, I think I misplaced about 13 of those communication devices we use for classified materials. Wacky me, right? I forget where. Maybe I left them out at the range, or maybe at the base Burger King. I was getting one of those Whopperritos – yum!

   

  Say Colonel, you don’t look so good. You’re all ashen and sweaty. Did you accidentally click on those Lena Dunham lingerie photos? Are you hungry? Do you want a bite of my Whopperito?

  Cue the lockdown of the base, the 24/7 search for the missing gear, and the MPs to come and haul away Lieutenant Schmuckarelli. Oh, but don’t worry about Hillary’s lost gear. Some of those missing phones were hit with hammers, which apparently Huma and Company believes magically erases electronic data, so I guess it’s all good.

  Are you freaking kidding me? If it wasn’t a famous liberal woman the elite is dying to install as president, this person would be Cool Hand Lukeing it in Leavenworth until the year 2100.

  But famous liberal women don’t have to play by the rules. They can be bizarrely racist and the trained seals of the media will happily clap their fins. They can commit clear, unequivocal crimes and the FBI will eagerly do on its reputation what a bear does in the woods to excuse her. Because, after all, unlike us peasants, famous liberal women are special.

  

  

• WTF Chart Of The Day: "Mother's Milk" Is Drying Up Fast

  Even FactSet gets the joke…

  As the bottom-up EPS estimate declined during the first two months of the quarter, the value of the S&P 500 increased during this same time frame.

   

  

   

  From June 30 through August 31, the value of the index increased by 3.4% (to 2170.95 from 2098.86). This quarter marked the 16th time in the past 20 quarters in which the bottom-up EPS estimate decreased during the first two months of the quarter while the value of the index increased during the first two months of the quarter.

  The blended earnings decline for Q2 2016 is -3.2% (with 2 companies yet to report). The second quarter marked the first time the index has seen five consecutive quarters of year-over-year declines in earnings since Q3 2008 through Q3 2009.

  But that doesn't matter… the drying up of the "mother's milk" of the stock market has become entirely irrelevant…

  

  

  

• Obama Tucks Tail, Officially Cancels Meeting With President Who Called Him "Son Of A Bitch"

  *Update – Earlier we reported that Obama was considering cancelling his meeting scheduled for tomorrow with Philippine President Rodrigo Duterte after being called a "son of a bitch."  Well, the cancellation is now official.

  .@POTUS will no longer be meeting with Philippines President Duterte in Laos, White House says

  — Jeff Mason (@jeffmason1) September 5, 2016

  _____

  After calling President Obama a "son of a bitch," both Philippine President Rodrigo Duterte and Obama have called into question whether a meeting between the two will go ahead as planned for tomorrow.  Obama expressed doubts the two could have "constructive, productive conversations" while Duterte responded to questions on whether the meeting would go ahead as planned by simply saying "Maybe, if I feel good." 

  Last week the White House announced that Obama would meet with Duterte on Tuesday to discuss tensions in the South China Sea, among other issues. The meeting would be the first between the world leaders since Duterte took office in June.  That said, Obama apparently now has questioned whether sitting down with someone who recently called him a "son of a bitch" would be "productive."  In comments from the G-20 summit in China, Obama said that before having a meeting he likes to make sure "it's actually productive and we're getting something done." Per Reuters:

  "Obviously the Filipino people are some of our closest friends and allies and the Philippines is a treaty ally of ours. But I always want to make sure that if I'm having a meeting that it's actually productive and we're getting something done."

   

  "I'm going to make an assessment … What is certainly true is that the issues of how we approach fighting crime and drug trafficking is a serious one for all of us, and we've got to do it the right way."

  For his part, Duterte has made clear that he will not be lectured by Obama about the war on drugs in the Philippines, noting "it is rude."  Despite objections from the Obama administration, Duterte has vowed to continue his brutal crackdown on drug manufacturers that has already led to the deaths of about 2,400 people since he became president two months ago.

  "Plenty will be killed until the last pusher is out of the streets. Until the (last) drug manufacturer is killed we will continue."

   

  "I am a president of a sovereign state and we have long ceased to be a colony."

   

  "Who is he to confront me? As a matter of fact, America has one too many to answer for.  Everybody has a terrible record of extrajudicial killings."

  Of course, we can understand the conflict between the two.  Duterte's war on drugs comes just as President Obama (aka the "Cummuter-in-Chief") rushes to commute the sentences of 100's of convicted felons serving time for drug-related offenses in the U.S..  Per Pardon Power, Obama has already commuted more sentences in a single year than any president since at least 1885 and he still has several months left.  Call it a fundamental difference on opinion on how to fight the war on drugs. 

  

  

  

• Investors Are Sticking With Pavlov's Dog Until Everything Breaks

  Remember when “bad news is good news” first leapt into common parlance? At first it was used as a way to describe the reaction function of Fed policy-makers. It was taken as a cute turn of phrase in encapsulating the state the of the world. Over time, as Bloomberg's Richard Breslow explains, it’s morphed into an ugly and cynical way of justifying mindless investing behavior.

  

  Central banks that cultivated and encouraged irrational exuberance as their main transmission mechanism of monetary policy are now hopelessly caught in its infinite loop. Seemingly feeling the need to continue doing more of the same, no matter the efficacy.

  

  Too many investors now believe, or hope, there will be no policy reversal for the balance of their careers. They explain the world in terms that justify the status quo. It’s become their world view and they’re sticking with it and hope to get out of town before the market gets trickier.

  It’s a sad commentary, that the term was actually coined by two psychologists in the 1990s studying faults in human decision-making.

  After last Friday’s non-farm payroll report, analyst’s joyfully leapt to the hasty conclusion that it was sure to once again derail a hapless FOMC. No one dare seriously consider September as a legitimate possibility. No discussion of probabilities. The answer is no. Happy days.

  

   

  Wait for it. Wait for it. There they were. Banner headlines celebrating, “Jobs data saves the day,” “SPX surges on payrolls.”

  

   

  And the good feelings have carried through the weekend with “Asian stocks rally most in eight weeks on weak U.S. jobs data.” Ignore bond yields, what do they know, anyway?

  

  Departing India RBI Governor Raghuram Rajan reminded us over the weekend that low global interest rates risk distorting markets and are very hard to abandon. That countries become “trapped” by the fear that rate rises could harm growth.

  He was not arguing that, therefore, any excuse not to raise rates should be sought. Quite the contrary. Nor was Fed Chair Yellen when she said the case for higher interest rates had strengthened.

  Forward guidance may be lower for longer, but it most certainly has moved away from nothing for as far as the eye can see. And Kahneman and Tversky would have pointed out that Behavioral Economics isn’t the study of the Pavlovian Response.

  

  

• Trump Slams Yellen: The Fed Has Created A "Stock Bubble" And "A False Economy" To Boost Obama

  One month ago, Donald Trump urged his followers to sell stocks, warning of “very scary scenarios” for investors, and accused the Fed of setting the stage for the next market crash when he said that “interest rates are artificially low” during a phone interview with Fox Business. “The only reason the stock market is where it is is because you get free money.”

  Earlier today, speaking to a reporter traveling on his plane who asked Trump about a potential rate hike by the Fed in September, Trump took his vendetta to the next level, saying that the Fed is “keeping the rates artificially low so the economy doesn’t go down so that Obama can say that he did a good job. They’re keeping the rates artificially low so that Obama can go out and play golf in January and say that he did a good job. It’s a very false economy. We have a bad economy, everybody understands that but it’s a false economy. The only reason the rates are low is so that he can leave office and he can say, ‘See I told you.'”

  

  He then lashed out at Yellen, whom he accused of having a political mandate when conducting monetary policy: “So far, I think she’s done a political job. You understand that.”

  On whether we can have a rate hike in September: “Well, the only thing that’s strong is the artificial stock market. That’s only strong because it’s free money because the rates are so low. It’s an artificial market. It’s a bubble. So the only thing that’s strong is the artificial market that they’re created until January. It’s so artificial because they have free money… It’s all free money. When rates are low like this it’s hard not to have a good stock market.“

  His conclusion: “At some point the rates are going to have to change.”

  Indeed they will, and that’s precisely what almost every bank, from Goldman yesterday to Citi today, and many others inbetween, have been warning about in recent months.

  Until recently, Trump’s latest anti-Fed outburst would have been swept under the rug as just another example of the deranged ramblings of an anti-Fed conspiracy theorist (trust us, we’ve been there). However, considering the spike in anti-Fed commentary in recent weeks coming from prominent, and established institutional sellside analysts all the way to the WSJ, it may be that Trump was once again simply saying what everyone else thought but dared not mention.

  

  

• Son Of China's "Grand General" Reveals Reason Behind China's Capital Flight"

  Over the past year, two recurring China-related themes have generated substantial media attention: the first is what we dubbed in early March, China’s wave of bizarro M&A, or what passed for “China’s most innovative capital outflow yet.” As we explained then, in China’s relentless eagerness to transfer funds and capital abroad (and thus, away from the domestic banking system which locals are well aware just how precarious it is), numerous Chinese corporations were engaged in seemingly idiotic deals with zero cost-discrimination, just so they had a legal basis to funnel cash abroad.

  We presented some examples:

  • Take Zoomlion, a lossmaking Chinese machinery company that is partially state-owned: its total debt stands at 83 times its EBITDA.
  • Or how about Fosun, a serial Chinese acquirer that spent $6.5bn on stakes in 18 overseas companies during a six-month period last year, had a a 55.7x total debt/EBITDA in June 2015. “Fosun has bought brand names such as Club Med and Cirque du Soleil as well as a host of other assets including the German private bank Hauck & Aufhaeser.”
  • Or maybe the highly publicized purchase of China Cosco Holdings of the Greek Piraeus Port Authority for €368.5m. Cosco has promised to invest €500m in the Greek port despite having total debt at 41.5x its EBITDA!
  • Or Cofco Corporation, which recently reached an agreement with Noble Group under which its subsidiary, Cofco International, would acquire a stake in Noble Agri for $750m (in the process preventing the insolvency of the biggest Asian commodities trader), has total debt equivalent to 52 times its EBITDA!
  • Or how about Bright Food, which bought the breakfast group Weetabix for $1.2bn last year, and has total debt at 24 times EBITDA!

  

   

  Which brings us to theme number two: when it comes to offshore M&A activity, nobody had come anywhere close to one of China’s biggest conglomerates, Anbang Insurance Group. The relatively obscure Anbang is best known for two things: being the company which tried to buy Starwood Hotels, and pulled out in the last moment without providing a reason (as it turned out, it could not provide a legitimate source of funds). The other reason behind Anbang’s fascination is because so very little is known about it.

  Actually, that is not exactly true: over the last few months, there have been several insightful exposes on the mysterious sources of cash behind Anbang’s quiet facade, the latest such report coming from the NYT which last week posted a must-read two piece report on the conglomerate (we urge readers to skim both “Behind China’s Anbang: Empty Offices and Obscure Names” and “A Chinese Mystery: Who Owns a Firm on a Global Shopping Spree?”).

  However, what especially attracted our attention was not so much the narrative of Anbang’s cash provenance, but a tangent explaining why China’s upper echelons are all so eager to quietly transfer their local funds and park them abroad, whether in Vancouver housing, in US corporations, or any of the other “8 Things The Chinese Are Scrambling To Buy In America.” It was the following:

  Luo Yu, the son of a former chief of staff of China’s military, said China’s most politically powerful families had been transferring money out of the country for some time.

   

  “They don’t believe they will hold on to power long enough — sooner or later they would collapse,” said Mr. Luo, a former colonel in the Chinese Army whose younger brother was a business partner with one of Anbang’s founders. “So they transfer their money.”

  As a recent VOA interview with Luo Yu explains, he “has a special status. He is a princeling who knew Xi Jinping personally. His father was Luo Ruiqing, one of the ten Grand Generals (ranking lower than ten Marshalls but higher than other Generals) that China conferred in 1955, after the Chinese Communist Party (CCP) took over in China.”

  
  Luo Yu, son of revolutionary Chinese at an interview with Epoch Times and NTD TV

  To be sure, If anyone is aware of the thinking behind the scenes of China’s grand capital flight, especially among China’s top power echelons, Yu is likely one of them. Which is disturbing, because what he told the NYT is that it is only a matter of time before China does what it tends to do every so often: have a revolution, and as such the oligarchs of the current regime are urgently moving their cash away from the mainland.

  And while they are able to circumvent with ease the traditional capital controls like China’s limit of $50,000 in outbound cash, the bigger concern is that the broader population, which holds tens of trillions in deposits in China’s banking system will likewise do the same, leading to the worst case scenario for China’s banking system: a bank run.

  Finally, if the surge in capital outflows over the past year has been any indication, and if Yu is correct, the “collapse” which China’s rich and powerful families are preparing for, appears to be getting perilously close.

  

  

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• Le Pen Praises Brexit, Promises Frexit Referendum On EU

  Submitt edby Michael Shedlock via MishTalk.com,

  French National elections take place in two rounds of voting 2017. Marine le Pen is widely expected to be one of the final two candidates.

  Today she praised the UK for choosing their own destiny and repeated her pledge to have a referendum on France’s membership in the EU.

  

  In her first public meeting after a summer break in the tiny village of Brachay in northeastern France, Le Pen portrayed herself as the sole credible defender of law and order and national unity, saying the best way to combat terrorism was the ballot paper.

   

  “This referendum on France belonging to the European Union, I will do it. Yes it is possible to change things. Look at the Brits, they chose their destiny, they chose independence … We can again be a free, proud and independent people,” she said.

   

  Le Pen’s increasingly popular party thrives on anti-Europe and anti-immigration sentiment and opinion polls see her making it to an early May run-off in France’s presidential election, but losing that second round to a mainstream candidate, as a majority of voters do not want her as president.

  Can Le Pen Win?

  Reuters noted a majority do not want Le Pen to win. That’s true enough because a majority do not want any particular candidate to win.

  In the US, a majority do not want Hillary or Trump. Voters will have to make a choice anyway.

  Many will claim Frexit is “impossible”. They said the same thing about “Brexit”.

  For now, I will go with the majority who believe French socialists would rather see any other candidate than Le Pen.

  That is true today. But it may not be true when it matters, next May.

  For more on how the 2017 election shapes up, please see French Economy Minister Resigns to “Regain Freedom”; His Political Party “En March”

  

  

• Don`t Conflate Seasonality in Oil Market With Rebalancing

  By EconMatters

  
  

  

  Price doesn`t equate a market being in balance, and seasonality has a drawing and a building season in the oil market. A market being in balance means supplies are stagnant not going up or down. Total supplies are still going up during the drawing season. Therefore, oil market still in surplus mode, and not rebalancing.

  

   

  

   

  

   

  

   

   

  

  

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

  

• The Ultimate 21st Century Choice: OBOR Or War

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

  The G20 meets in tech hub Hangzhou, China, at an extremely tense geopolitical juncture.

  China has invested immense political/economic capital to prepare this summit. The debates will revolve around the main theme of seeking solutions “towards an innovative, invigorated, interconnected and inclusive world economy.”

  G20 Trade Ministers have already agreed to lay down nine core principles for global investment. At the summit, China will keep pressing for emerging markets to have a bigger say in the Bretton Woods system.

  But most of all China will seek greater G20 backing for the New Silk Roads – or One Belt, One Road (OBOR), as they are officially known – as well as the new Asian Infrastructure Investment Bank (AIIB).

  So at the heart of the G20 we will have the two projects which are competing head on to geopolitically shape the young 21st century.

  China has proposed OBOR; a pan-Eurasian connectivity spectacular designed to configure a hypermarket at least 10 times the size of the US market within the next two decades.

  The US hyperpower – not the Atlanticist West, because Europe is mired in fear and stagnation — “proposes” the current neocon/neoliberalcon status quo; the usual Divide and Rule tactics; and the primacy of fear, enshrined in the Pentagon array of “threats” that must be fought, from Russia and China to Iran. The geopolitical rumble in the background high-tech jungle is all about the “containment” of top G20 members Russia and China.

  It doesn’t take an oracle to divine which project is intriguing — and in many ways seducing — the Global South, as well as an array of G20 member-nations.

  That connectivity frenzy

  Shuttling between the West and Asia, one can glimpse, in myriad forms, the graphic contrast between paralysis and paranoia and an immensely ambitious $1.4 trillion project potentially touching 64 nations, no less than 4.4 billion people and around 40 per cent of the global economy which will, among other features, create new “innovative, invigorated, interconnected and inclusive” trade horizons and arguably install a post-geopolitics win-win era.

  An array of financial mechanisms is already in place. The AIIB (which will fund way beyond the initial commitment of $100 billion); the Silk Road Fund ($40 billion already committed); the BRICS’s New Development Bank (NDB), initially committing $100 billion; plus assorted players such as the China Development Bank and the Hong Kong-based China Merchants Holdings International.

  Chinese state companies and funds are relentlessly buying up ports and tech companies in Western Europe – from Greece to the UK.

  Cargo trains are now plying the route from Zhejiang to Tehran in 14 days, through Kazakhstan and Turkmenistan; soon this will be all part of a trans-Eurasia high-speed rail network, including a high-speed Transiberian.

  The $46 billion China-Pakistan Economic Corridor (CPEC) has the potential to unblock vast swathes of South Asia, with Gwadar, operated by China Overseas Port Holdings, slated to become a key naval hub of the New Silk Roads.

  Deep-sea ports will be built in Kyaukphyu in Myanmar, Sonadia island in Bangladesh, Hambantota in Sri Lanka. Add to them the China-Belarus Industrial Park and 33 deals in Kazakhstan covering everything from mining and engineering to oil and gas.

  Back in February, PwC was already detailing $250 billion in OBOR projects that had been built, recently started or agreed on and signed.

  An array of Silk Road projects now crisscross Eurasia, progressively networking east-west and north-south corridors through many an economic zone; an expanding connectivity and infrastructure development frenzy involving Russia, China, India, Pakistan, Iran, Southeast and Central Asia. Connectivity, now more than geography, is destiny.

  It’s not by accident that a lot of the action happens in member-states or observers of the Shanghai Cooperation Organization (SCO). The New Silk Roads are about to be totally intertwined with the reprogramming of the SCO as a security-economic cooperation umbrella.

  In parallel Russia, with the progressive coordination of the Eurasia Economic Union (EEU) with the New Silk Roads, projects the Russia-China strategic partnership much further than just New Silk Road connectivity to Europe.

  Follow those CUES

  Southeast Asia – via the Maritime Silk Road — is a key hub in the New Connectivity Game in Eurasia. Which brings us to the alleged illegality of the “nine-dash line” Chinese claim of indisputable sovereignty as recently ruled in The Hague.

  The US and the Philippines have a mutual defense treaty since 1951, according to which “island territories under [Manila’s] jurisdiction” must also be defended. Washington under a potential neoliberalcon Hillary Clinton presidency – and Kurt Campbell, who conceptualized the “pivot to Asia” as possible Secretary of State — might be tempted to declare the treaty applies to offshore islands, atolls, “rocks” and even underwater features such as Scarborough Shoal.

  Beijing won’t wait to fall into this possible trap. Following a recent meeting in Inner Mongolia, China and ASEAN are set to launch an emergency diplomatic hotline and eventually adopt a Code for Unplanned Encounters at Sea (CUES).

  ASEAN and East Asian powers, meanwhile, keep weighing the merits of the Regional Comprehensive Economic Partnership (RCEP) — 16 nations, 29% of global trade – as an alternative to the US corporate-pushed TPP, a sort of NATO-on-trade that excludes China.

  China is hyperactive on all fronts. It will boost the use of Singapore know how to advance New Silk Road projects. Singapore, with a population nearly 75% ethnic Chinese, is China’s largest foreign investor and a major overseas hub for yuan trade. More than 20% of Singapore’s GDP is linked to China.

  At the same time, planning for a post-war Syria, Beijing is committed to boost trade and economic cooperation with Damascus, another future OBOR hub. It does not hurt this is also asymmetrical payback for Pentagon interference in the South China Sea and the deployment of THAAD in South Korea.

  Beijing has made it clear that the South China Sea won’t be discussed at the G20. Philippine President Rodrigo Duterte for his part has insisted, "We're not in a hurry to wage war, we're in a hurry to talk."

  The heart of the matter in the OBOR-linked South China Sea is not sovereignty over “rocks” or even unexploited reserves of oil and gas; it hinges on the capacity of the Chinese Navy to regulate and eventually deny “access” to the Pentagon and the US Navy. What’s certain is that the US Navy will take no prisoners to prevent China from strategically dominating the Western Pacific, as much as Washington will go no holds barred to ram TPP to prevent China from economically reign over the Asia-Pacific.

  Deng Xiaoping's maxim – “never take the lead, never reveal your true potential, never overstretch your abilities" – now belongs to the past. At the G20 China once again is announcing it is taking the lead. And not only taking the lead – but also planning to overstretch its abilities to make the hyper-ambitious OBOR Eurasia integration masterplan work. Call it a monster PR exercise or a soft power win-win; the fact that humanitarian imperialism as embodied by the Pentagon considers China a major “threat” is all the Global South – and the G20 for that matter — needs to know.

  

  

  

• "Blunt Language" – Goldman Explains Why It Is So Confident The Fed Will Hike In Under 3 Weeks

  After Friday’s payrolls miss, the market’s initial reaction was to aggressively fade the probability of a near-term Fed rate hike, as September odds initially tumbled, only to quickly rebound into the afternoon. What catalyzed this jump? As we reported at the time, the move was almost entirely driven by an unexpected note by Goldman’s Jan Hatzius who bucked the trend set by other sellside lemmings, and instead of punting the September hiking date to December, the Goldman strategist said that the weak jobs report was nonetheless “strong enough” to prompt him to boost his Sept. rate hike odds from 40% to 55%.

  Realizing the severity of his prediction, and the collapse in credibility he would suffer is he is – again – wrong (as we have duly documented, the past two years have been absolutely abysmal for Goldman predictions and recommendations), earlier today Goldman took time away from his holiday schedule and penned a note to explain why he is confident that, contrary to every other forecaster, he expects a better than even chance of a rate hike to be announced in just over two weeks when the Fed meets on September 20-21.

  As he puts it, Yellen’s Jackson Hole speech used “blunt language” for a Fed chair, “which would have been unnecessary if she was only trying to convey a general sense that rates would be moving higher over time, or to signal a potential hike that was still 3½ months away. There are plenty of other opportunities to prepare markets for a move before the December meeting.”

  Just as important was Goldman’s take on the the consensus call that the Fed would not hike until the election. As Goldman rhetorically puts it, “wouldn’t the tactics favor waiting until December given the presidential election?” To which it responds: “This is a widespread view, but we have not found much evidence that the election calendar has an impact on monetary policy—the Greenspan Fed started to tighten in June 2004 and continued to move right through the election, and the Bernanke Fed announced the then-controversial QE3 in September 2012, not December.”

  So just maybe, Yellen (and Goldman) may have it in for Hillary. The rest of Hatzius’ contrarian reasoning is laid out in the following rhetorical Q&A dubbed “Why September?“

  For the sake of what little is left of his credibility, we hope he is correct this time.

  From Goldman Sachs:
  

  Today we depart from our usual US Views format and discuss the outlook for Fed policy in Q&A format.

  Q: You moved up your probability of a hike at the September meeting to 55% on Friday despite a below-consensus payroll number. Why?

  A: Largely because the speech by Chair Yellen at Jackson Hole suggested a relatively low bar for this report. She said that “in light of the continued solid performance of the labor market and our outlook for economic activity and inflation, I believe the case for an increase in the federal funds rate has strengthened in recent months”. The condition was that the data must “continue to confirm” the committee’s outlook—not a very stringent test, in our view, because it signals a predisposition to think that the outlook is on track.

  Q: What makes you think Chair Yellen meant a hike in September, not December?

  A: Two things. First, nothing happens without a good reason in these speeches, especially as far as monetary policy signals are concerned. The phrasing “case…has strengthened” was blunt language for a Fed Chair, which would have been unnecessary if she was only trying to convey a general sense that rates would be moving higher over time, or to signal a potential hike that was still 3½ months away. There are plenty of other opportunities to prepare markets for a move before the December meeting.

  Second, when Vice Chairman Fischer was asked by Steve Liesman on CNBC later that day whether the “strengthened” comment meant that we should be “on the edge of our seats for a rate hike next month” (i.e. in September), he answered “what the Chair said today was consistent with answering yes”. This wording sounded like a deliberate signal that both of them, not just Fischer personally, think September is on the table for a hike.

  Q: Did this shift come out of the blue?

  A: The strength of the message surprised us, but we don’t think it came out of the blue. Back in the spring, the committee was ready to go in June or July, but then the weak May payroll report and the Brexit vote interfered. Now both of these worries have dissipated, the labor market has made further headway, financial conditions are easier than they were three months ago, and no major new risks have appeared. If they thought a hike made sense then, it should make more sense now. In this context, it is also noteworthy that the number of regional Federal Reserve Bank boards asking for discount rate increases—a barometer of policy sentiment within the system—has risen further in recent months and now stands at 8 (the highest since December).

  Q: Did Friday’s payroll data clear the bar?

  A: It is a closer call than we’d like, but on balance we think so. First, even the 151k August number in isolation is well above the “breakeven” pace—the number that Fed officials believe is consistent with unchanged labor market slack in the medium term—of less than 100k per month. Second, the longer-term trend measures such as the 3-month average (232k), 6-month average (175k), or 2016 year-to-date average (182k) are all higher. And third, preliminary August payroll numbers have had a tendency to surprise on the downside initially but ultimately to be revised higher, by an average of 71k since 2011; Fed officials are undoubtedly aware of this.

  Q: What about other indicators?

  A: They have been mixed to slightly weaker. On the labor market, the August household survey was a bit soft, with a flat 4.9% unemployment rate, but jobless claims remain low and household labor market assessments have improved further. On growth, the manufacturing surveys for August weakened, but GDP tracking estimates for the third quarter have been moving higher—our own estimate is 2.9% now, the NY Fed is at 2.8%, and the Atlanta Fed at 3.5%. On inflation, the latest core PCE number was only 0.1% but the year-on-year rate still stands at 1.6%. And on wages, Friday’s average hourly earnings number was only 0.1% month-to-month, but we think it was held back by calendar effects (our forecast was 0.0% for that reason); moreover, our broader wage tracker stands at 2.6% and still signals gradual acceleration. Overall, we think these numbers are probably sufficient to “continue to confirm” the committee’s outlook, alongside the more important payroll numbers.

  Q: Many market participants believe that the talk about September was only an attempt to “create optionality” in case the data were very strong and the committee felt it had no choice but to hike. Do you agree with that?

  A: Not really, because it overstates the FOMC’s sensitivity to one single month of data, or maybe even one release. It is very rare for one strong payroll number to turn the committee from wanting to stay on hold to feeling they have to tighten now. (There is an asymmetry here, as one very bad payroll report in early June was largely to blame for the committee’s change of heart about a June/July hike even before the Brexit vote.)

  Q: Wouldn’t the tactics favor waiting until December given the presidential election?

  A: This is a widespread view, but we have not found much evidence that the election calendar has an impact on monetary policy—the Greenspan Fed started to tighten in June 2004 and continued to move right through the election, and the Bernanke Fed announced the then-controversial QE3 in September 2012, not December.

  Q: How much does it matter if they go in September or in December?

  A: In the grand scheme of things, not much. But September does have some tactical advantages if they think a move sometime this year is very likely. It would avoid the need to first go through yet another press conference meeting with no hike, yet another reduction in the projected funds rate path—at a minimum to a one-hike baseline for 2016—and yet another labored explanation why holding off now does not mean that the plan for higher rates has been abandoned. Many market participants believe that the FOMC likes to talk about hiking soon but ultimately always flinches. A hike in September would undermine this narrative.

  Q: If they do go, how much would financial conditions tighten?

  A: This is of course uncertain. As a starting point, our research has shown that a funds rate hike on average tightens financial conditions by about 20bp. The variation around this is obviously large, and there is some (weak) evidence that the effects are bigger in an environment of greater global monetary policy divergence. But we would keep two things in mind. First, our FCI is now almost 50bp easier than on May 18, the day the hawkish April FOMC minutes were published. So there is some room for FCI tightening before it looks worrisome. Second, we think the committee would combine the hike with a reduction in the projected path for the funds rate to a one-hike baseline for 2016, i.e. a message that the Fed is done for the year, as well as a downgrade in the assessment of the stance of monetary policy from “accommodative” to “moderately accommodative” or the like. We think this could help keep the FCI impact moderate.

  Q: Why do you think the market is only pricing a 30% probability of a hike?

  A: Part of the reason is that the recent data have been a bit softer. But the more important factor may be that markets have short memories, and fading the Fed’s willingness to tighten has been a winning trade all year. That is our best explanation for why the initial response to Chair Yellen’s Jackson Hole speech, in particular, was so small. The market only moved significantly after the Fischer interview, and even that move was largely reversed in the following days, on little new information.

  Q: Would the committee move in September if market pricing stays where it is?

  A: Probably not. Historically, 90% of all hikes have been at least 70% priced on the eve of the meeting. We don’t think this is a hard and fast threshold, but suspect that the committee would want the probability to be materially higher than the current 30%. So we would probably need to see some hawkish Fedspeak between now and the start of the blackout period on September 13 to keep the chance of a hike alive. A signal that the August employment report showed sufficient employment growth to confirm the committee’s baseline outlook might be enough to shift market expectations toward a hike at the September meeting.

  In terms of opportunities for providing such a signal, there is not very much on the calendar at the moment—speeches by Presidents Williams (September 6) and Rosengren (September 9) as well as Congressional testimony by Presidents George and Lacker (September 7). However, unscheduled press interviews are always possible.

  Q: How confident are you that we will see that?

  A: Not very confident, or else our probability would be higher than 55%. That said, we are much more confident (80%) that there will be a hike before the end of the year.

  

  

• Merkel Stunned By Defeat To Anti-Immigrant Party In Her Home State

  Last Thursday we previewed that in today’s regional election in Mecklenburg-Western Pomerania, the home state of Angela Merkel, she was looking at the unthinkable: losing and not just to anyone but to her nemesis, the anti-immigration AfD. This is what we reported: “According to the latest shock poll, released late on Wednesday, the AfD is leading the CDU by 23 percent to 20 percent, with the Social Democrats, who currently run the rural state in coalition with Merkel’s party, at 28 percent support. What’s more, according to Bloomberg the AfD’s recent history in regional votes suggests it will perform better on election day than predicted in polls.”

  Sure enough, according to the first exit polls released moments ago, Merkel’s CDU has come in third, in line with expectations, and more importantly, behind the AfD, which is the only party to see popular support in the elections as all other major parties have seen an exodus in popularity

  • SPD 30.5 %, -5.1%
  • AfD 21 %, +21%
  • CDU 19 %, -4.0%
  • Linke 12.5 %, -5.9%
  • Grüne 5 %, -3.7%
  • NPD 3.5 %, -2.5%
  • FDP 3 %, 0.2%

  

  The second exit poll does not show any notable change:

  • SPD 30.4%
  • AfD 21%
  • CDU 19.2%
  • Linke 12.6%
  • Grüne 5%
  • NPD 3.3%
  • FDP 2.9%

  The media Europhiles are once again disturbed, and quickly point out that Mecklenburg is Germany’s poorest state, which is indeed the case.

  

  What the apologists don’t realize is that in a world in which the middle class is disappearing due one after another failed central bank policy, what happened in Germany’s poorest state today will happen in most other places soon enough (and already did in the UK, the same place all the apologists said a vote for Brexit was unthinkable).

  The good news, according to ARD, is that – for now – the grand SPD-CDU coalition in Mecklenburg-Western Pomerania can continue, but the real news is that Merkel’s CDU has been beaten by by an anti-immigrant party. As Bloomberg put it last week, “defeat in her home state by the AfD would prove a political embarrassment for Merkel, and likely reignite grumblings about her refugee policies among some in her bloc.

  What makes the defeat even more bitter is Merkel’s aggressive recent campaigning in her home state: she has campaigned hard to win back support, crisscrossing Mecklenburg-Western Pomerania in recent weeks. Yet ironically, she’s adopted a law-and-order tone at rallies, calling for a larger police force and “more video surveillance of public spaces”, precisely the things potential voters loathe the most. Just as inexplicably, she’s doubled-down on the question of refugees, refusing to step back from her “we can do this” slogan adopted last year as 1 million asylum seekers poured into the country. Her opponents have ridiculed the remarks as naïve.

  It’s only downhill from here: as reported before, Sunday’s vote will mark the start of a tough month for the chancellor. It will be followed on Sept. 18 by a regional election in Berlin, where the CDU is trailing the SPD and has virtually no hope of winning power.

  And now the fingerpointing begins.

  

  

• The Greater Depression – Part 1

  Submitted by Jim Quinn via The Burning Platform blog,

  There are several movies I will watch every time they are aired on one of my generally useless 600 cable channels. They all have the same thing in common – a compelling character portrayal which keeps you riveted and mesmerized by how the protagonist deals with adversity and circumstances beyond their control. The movies I can’t resist include: The Godfather I & II, The Green Mile, Shawshank Redemption, Apocalypse Now, and Patton. Another captivating movie, which didn’t do well at the box office, is Cinderella Man. The portrayal of Depression era heavyweight boxing champion James J. Braddock by Russell Crowe is inspirational, with a rousing and improbable victory by the champion of the common man. While watching this great movie a few weeks ago I found myself equating the themes to the current presidential campaign.

  

  The Greater Depression

  Braddock was an inspiration to all downtrodden demoralized Americans during the Great Depression. The parallels between the 1930’s Great Depression and today’s Greater Depression are uncanny, despite the propaganda emitted by the establishment politicians, media and banking cabal that all is well. The corporate mainstream media faux journalists scorn and ridicule anyone who makes the case we are currently in the midst of another Great Depression. They are paid to peddle a recovery narrative to keep the masses ignorant, sedated, and distracted by latest adventures of Caitlyn Jenner and the Kardashians. An impartial assessment of the facts reveals today’s Depression to be every bit as dreadful for the average American as it was in the 1930’s.

  The Obama administration has used the identical failed fiscal policies utilized by FDR. $800 billion stimulus packages, cash for clunkers, payroll tax holidays, student loans for anyone with a pulse, and hundreds of other useless Keynesian claptrap ideas have driven the national debt from $10 trillion in September 2008 to $19.4 trillion eight years later, a 94% increase. The national debt in October 1929 was $17 billion. Eight years into the Great Depression, after billions in wasteful New Deal programs the national debt stood at $36.5 billion, a 115% increase.

  The Great Depression lasted from 1929 through World War II despite the tens of billions spent on fiscal stimulus. After eight years of the largest budget deficits in history, the economy is still dead in the water, with GDP barely growing. And its pitiful growth is from the surge in consumer spending due to the calamitous Obamacare program and the continuous wars we wage across the world.

  

  It’s the black and white photographs of disheartened men and hungry children from the 1930’s that define the Great Depression for present day generations. Of course after years of government run social engineering disguised as education, most people couldn’t even define when or what constituted the Great Depression. These heart wrenching portraits of average Americans suffering and in despair capture the zeitgeist of the last Fourth Turning crisis.

  

  Apologists for the status quo contend the last eight years couldn’t possibly be classified as a depression. The narrative of economic recovery has been peddled by corporate media mouthpieces, feckless politicians, Too Big To Trust Wall Street bankers, Federal Reserve puppets, and government apparatchiks flogging manipulated data as proof of economic advancement. They point to the lack of soup lines as proof we couldn’t be experiencing a depression.

  First of all, if there were soup lines, the corporate media would just ignore them. If they don’t report it, then it isn’t happening. Secondly, the soup lines are electronic, as the government downloads the “soup” onto EBT cards so JP Morgan can reap billions in fees to run the SNAP program. Just because there are no pictures of starving downtrodden Americans in shabby clothes waiting in soup lines, doesn’t mean the majority of Americans aren’t experiencing a depression.

  

  If the country has actually been experiencing an economic recovery for the last seven years, why would 14% to 15% of all Americans be dependent on food stamps to survive? When the economy is actually growing and employment is really below 5%, the percentage of Americans on food stamps is below 8%. If the government economic data was truthful, there would not be 43.5 million people living in 21.4 households (17% of all households) dependent on food stamps. More than 100 million Americans are now dependent on some form of federal welfare (not including Social Security or Medicare). If the economy came out of recession in the second half of 2009, why would 6 million more Americans need to go on welfare over the next two years?

  

  Federal, state, and local governments will spend approximately $1.08 trillion on welfare programs in 2016, including $600 billion for Medicaid and $480 billion for the rest. In 2009, 18.6% of the population was participating in at least one means-tested benefit program. After three years of “economic recovery” that number was up to 21.3% by 2012. If we were in the midst of an expanding economy why would 41.6% of African Americans and 36% of Hispanics be receiving means-tested benefits each month? The social safety net during the Great Depression was sparse. Spending in excess of $1 trillion per year to sustain over one-third of the U.S. population sure sounds like a Depression to me.

  The appalling optics of Americans waiting in food lines and/or living on the streets is not being broadcast by the mainstream corporate media, as their duty is to sustain the establishment narrative of economic recovery at any cost. As I drive to work through West Philly, every Thursday the Grace Lutheran Church at 36^th & Haverford Ave. distributes food to the local community and the line at 7:30 a.m. in the morning extends around the block.

  This scene is duplicated in crumbling urban enclaves and deteriorating suburban municipalities across the land. Food banks and homeless shelters throughout the country are being inundated by those who haven’t benefited from the Fed’s QE and ZIRP “Save a Wall Street Banker” monetary schemes. One in seven Americans – 46 million people – rely on food pantries and meal service programs to feed themselves and their families.

  

  There are 600,000 homeless Americans on any given night. In June 2016, there were 60,000 homeless people, including 15,000 homeless families with 23,000 homeless children, sleeping each night in the New York City municipal shelter system. Meanwhile, the sociopathic Wall Street titans pillage and plunder the nation’s wealth on a daily basis with their high frequency trading supercomputers, rigging the game with help of their Federal Reserve benefactors and captured politicians in D.C., and retire to their penthouse suites each night while spending their weekends in the Hamptons.

  The divergence between the obscene levels of wealth acquired through illicit means by the chosen few and tens of millions experiencing extreme poverty due to the immoral and illegal actions of those chosen few has only been this extreme once before. It isn’t a coincidence that wealth inequality hasn’t been this high since the Great Depression.

  Every monetary and fiscal action taken by the establishment since 2008 has been designed to benefit the rich, powerful, connected crony capitalists. Boosting the stock market to all-time highs, while impoverishing senior citizens and middle class savers, has left a stagnating economy on life support with no hope of revival. The hopelessness, despair, and anger of those not part of the establishment or profiting from establishment schemes is palpable.

  

  The most blatant attempt by the ruling class to subvert the truth regarding our ongoing depression is the despicably absurd propaganda churned out by the government apparatchiks at the Bureau of Labor Statistics. With a working age population of 253.9 million people and only 151.6 million of them employed (27 million part-time, 15 million self-employed, 7 million working multiple jobs and worst of all 22 million government workers), the BLS has the gall to report only a 4.9% unemployment rate. There are 102.3 million working age Americans not working, but only 7.8 million of them are unemployed according to the highly educated establishment lackeys at the BLS. The other 94.5 million non-working Americans must be frolicking in the surf, sipping margaritas and counting the millions they’ve made in the rigged Wall Street casino.

  Would the labor participation rate and employment to population ratio be hovering at levels last seen in 1978 if the jobs market was booming? And don’t blame it on Baby Boomers retiring. With 28% of people over 55 years old with no retirement savings and the median retirement savings of those 55 to 61 years old of $17,000, few Boomers can afford to retire on $12,000 of Social Security per year. The percentage of those over 55 years old working is at an all-time high, while the percentage of men 25 to 54 (prime working years) working is at an all-time low. Since 2007 the country has added 5.6 million mostly low paying service jobs, while 15.7 million Americans have supposedly left the labor force of their own free will, and the unemployment rate is virtually the same. Only an Ivy League educated economist or highly paid CNBC pundit would believe such malarkey.

  

  If job growth was as strong as government and corporate media proclaim, how could weekly wages be growing by only 1.5% annually today and averaging only 2% over the last five years. When inflation on things you need to live (rent, healthcare, energy, food, education, autos) tallies in excess of 5% annually, you’re earning .25% if you have any savings and your wages have been going up at less than 2% per year, your daily existence is depressionary. Real median household income is lower than it was in 1989, even using the hugely understated and manipulated CPI.

  

  Back before seasonal adjustments, birth death model phantom excel spreadsheet created jobs, pretending working age people weren’t in the workforce and the existence of government bureaucrats whose job it was to paint a rosy picture, we had actual unemployment figures. Every able bodied American was in the labor force during the Great Depression. The true unemployment rate fluctuated between 15% and 25% during most of the 1930’s. They had to stand in line for their relief checks and food. It wasn’t wired into their bank accounts or downloaded onto an EBT card.

  

  The government approved false unemployment rate (U3) regurgitated by the corporate mainstream media with no qualifications or clarifications is 4.9%. The U-6 unemployment rate is the broadest unemployment measure, including short-term discouraged and other marginally-attached workers as well as those forced to work part-time because they cannot find full-time employment. It stands at 9.7%, almost double the mainstream media reported rate. You never hear this figure mentioned by the compliant lackey media.

  But, if you want the true unemployment rate you must adjust the government figures for the misinformation which began in 1994. Long-term discouraged workers were defined out of official existence in 1994. If you stop looking for a job because there are no jobs available, the BLS pretends you no longer exist and you are dropped from their unemployment calculations. John Williams at Shadowstats rightfully adds these discouraged workers, who are willing to work, back into the calculation and surprise, surprise, the real unemployment rate in this country has been between 18% and 23% for the last seven years. Those rates are identical to the worst years of the Great Depression.

  

  Once you obliterate the false economic propaganda peddled by the purveyors of the establishment, they fall back onto their one remaining false idol – the stock market. How could we possibly be in a depression when the stock market has gone up by 165% since its March 2009 bottom? It’s within 2% of its all-time high. This is after a 55% plunge from 2007 highs to the March 2009 lows. We know history might not repeat, but it certainly rhymes.

  The market fell 86% from its 1929 highs to the 1932 lows. Those in control didn’t think to suspend mark to market accounting so the Wall Street banks could falsify their financial statements, like our beloved leaders did in March 2009. But, even though the entire 1930’s constitute the Great Depression, the stock market soared by 260% between 1932 and 1937, making the current cyclical bull seem puny in comparison.

  

  Did the 260% increase in the stock market over five years in the midst of the Great Depression benefit the average American in any way whatsoever? Absolutely not. They didn’t own stocks. The 0.1% benefitted, just as they benefited from the crony capitalism New Deal programs that poured money into their coffers. Fast forward 80 years to the next Fourth Turning and you have the same dynamic.

  The 160% increase in the stock market over the last seven years has enriched the Wall Street sociopaths, billionaire oligarchs, corporate chieftains, and the leeches and cronies who prop up the fetid establishment. The Federal Reserve QE and ZIRP monetary policies, along with the Obama fiscal debt expansion machinations, were solely designed to benefit Wall Street, not Main Street. The beneficiaries in NYC, D.C., S.F. and L.A. are rolling in the dough, while grandmas across the land are forced to eat Friskies for dinner.

  Again, we refer to the entire 1930’s as the Great Depression despite the fact real GDP surged by 40% between 1933 and 1937. If today’s mainstream media existed during the 1930’s they would have been proclaiming the “tremendous” GDP growth and “spectacular” stock market gains. They would have really boosted the spirits of the millions receiving government relief and standing for hours waiting for a cup of soup and some stale bread. The real GDP in this country has grown by a pathetic 15.4% since the 2009 low. Using a true measure of inflation reveals we’ve essentially been in recession since the early 2000’s, with a depression since 2008.

  

  Central bankers around the globe have all implemented identical monetary schemes to sustain the unsustainable. They have always had only one tool in their toolkits – printing money and creating enormous amounts of unpayable debt to prop up crooked corporate cronies, their morally bankrupt banker puppeteers and the slimy snakes slithering within the halls of Congress. Total credit market debt to GDP peaked at 261% in the mid-1930’s as FDR’s debt financed New Deal programs did absolutely nothing to lift the country out of its Great Depression. Obama and his Keynesian acolytes have tried the same solutions since 2009, with an equally dismal result. Total credit market debt to GDP peaked in 2010 at 381%, but six years later still stands at 345% as the stagnant economy grinds to a halt.

  

  The debt end game approaches. With a national debt of $19.4 trillion (106% of GDP) poised to skyrocket by $1 trillion per year as entitlement programs on automatic pilot explode under the weight of Baby Boomers, interest rates at 5,000 year lows, a willfully ignorant iGadget distracted populace, and spineless corrupt politicians unable or unwilling to address the debt crisis, this depression is poised to go down in history as the Greater Depression.

  As the Fed talks as if they have everything under control, their actions and/or inactions reveal an extreme level of desperation. As corporate profits soared to record highs and unemployment fell to 2007 levels, the Federal Reserve discount rate should have been elevated to 4%. Instead they keep it locked at an emergency crisis level of .25%. This proves they are lying about economic recovery narrative.

  And now they are pondering negative interest rates, which have failed across Europe already. These academics, who’ve never worked a day of their lives in the real world, impose their demented monetary theories and guesses upon the citizens of the world, leading to havoc, chaos, heartache and ultimately war. When did capitalism devolve from saving and investing to borrowing and spending? Does 1913 ring a bell? Stanley Fischer, the vice chairman of the Federal Reserve revealed his disdain and contempt for the commoners in an interview this week:

  “Well, clearly there are different responses to negative rates. If you’re a saver, they’re very difficult to deal with and to accept, although typically they go along with quite decent equity prices. But we consider all that and we have to make trade-offs in economics all the time and the idea is the lower the interest rate the better it is for investors.”

  To paraphrase George Carlin, “he doesn’t give a fuck about you”. He knows there are more than 90 million American over the age of 55 in this country who are risk averse. Eight years ago they could earn a relatively risk free 4% in a money market fund. A retired couple with $250,000 could generate $10,000 per year in interest to supplement their Social Security. Today, due to the policies promoted and implemented by Fischer, Yellen and their cohorts, that couple can earn about $600.

  And now he wants the elderly to pay him for keeping their money in the bank. These demented Federal Reserve schemes are guaranteed to blow up pension funds, endowments, and any other investor in bonds. The hubris and inhumanity of Fischer and his ilk makes me want to wretch. Fischer’s sole purpose in life is to serve his Wall Street and establishment masters. Screw the peasants. They are expendable.

  There are now $11 trillion of negative yielding government bonds floating around the planet. No one in their right mind would buy a negative yielding bond. It’s not an asset. It’s a liability. An investor is guaranteed to lose money. You know the debt endgame approaches when governments issue negative yielding bonds that are then bought by central bankers and the banks that control them. It’s nothing but a stalling tactic to fend off the imminent collapse. Bill Gross, a relatively honest financial titan, contends Yellen and her contemporaries have taken reckless actions which are destroying capitalism:

  “I and others however, have for several years now, suggested that the primary problem lies with zero/negative interest rates; that not only do they fail to provide an “easing cushion” should recession come knocking at the door, but they destroy capitalism’s business models – those dependent on a yield curve spread or an interest rate that permits a legitimate return on saving, as opposed to an incentive for spending.

   

  They also keep zombie corporations alive and inhibit Schumpeter’s “creative destruction” which many argue is the hallmark of capitalism. Capitalism, almost commonsensically, cannot function well at the zero bound or with a minus sign as a yield. This watch is ticking because of high global debt and out-of-date monetary/fiscal policies that hurt rather than heal real economies. Sooner rather than later, Yellen’s smooth shot from the fairway will find the deep rough.”

  In Part One of this article I’ve made the case most people in this country are experiencing a Depression, on par with the Great Depression of the 1930’s. In Part Two I will compare and contrast the lives and influence of James J. Braddock and Donald J. Trump, while assessing their impact on the American people during times of economic despair.

  

  

• Why This $1.6 Billion Hedge Fund Is 50% In Cash

  "The whole world is wrongly positioned," warns Norwegian hedge fund firm Sector Asset Management's founder Peter Andersland, "the common denominator for everything is the long duration — real estate, stocks, bonds. Everything is much more rate sensitive now."

  As Bloomberg reports, Andersland's $1.6 billion holds as much as 50 percent in cash in one of its funds, because holding cash is the best protection against bond and stock markets inflated by record monetary stimulus.

  “What can kill us now?,” Peter Andersland, the 55-year-old founder of Sector, said in an interview on Tuesday at his office overlooking the Oslo fjord. “It’s the correlation between stocks and bonds that will be induced by higher rates. That’s the biggest risk in the capital markets today, not geopolitics or Trump.”

  Massive central bank stimulus with below zero rates and quantitative easing has led to increasingly dysfunctional markets, with even the negative correlation between stocks and bonds breaking down. As we have noted previously, they are now largely moving in the same direction as markets have become more driven by central banks, leaving investors with no place to hide.

  

   

  “Everyone is thinking about managing risk through diversification, a little bit in bonds, a little bit in stocks,” he said. “But if the correlation increases between those two then that risk management based on diversification doesn’t help. Because everyone is doing that.”

  Sector, which bets on trends for countries, sectors and stocks, is protecting itself against the rising correlation by shortening duration in its investments and placing bets that will pay off when volatility rises. To do this they are holding more cash, shorting stocks and buying cheap put options, according to Andersland.

  “The whole world is wrongly positioned,” he said. “The common denominator for everything is the long duration — real estate, stocks, bonds. Everything is much more rate sensitive now.”

  

  “Risk is what you don’t think about, you can’t calculate it,” he said. “My analysis is five to ten percent more upside for global stocks, 40 to 60 percent downside for global stocks, MSCI ACWI. So it’s very skewed.”

  

  

• Dr. Drew Asked To Retract Hillary Health Comments – Received "Scary, Creepy" Phone Calls

  Submitted by Joseph Jankowski via PlanetFreeWill.com,

  Eight days after Board-certified medicine specialist and TV personality Dr. Drew Pinsky expressed his grave concern over Hillary Clinton’s health and the healthcare she was receiving, his popular show on HLN, the sister channel of CNN, was cancelled.

  Appearing on KABC’s McIntyre in the Morning, Pinsky said he and his colleague Dr. Robert Huizenga became “gravely concerned……not just about her health but her health care” after analyzing what medical records on Hillary had been released.

   

  Pinsky pointed out that after Clinton fainted and fell in late 2012, she suffered from a “transverse sinus thrombosis,” an “exceedingly rare clot” that “virtually guarantees somebody has something wrong with their coagulation system.”

   

  According to sources close to Pinsky, the medicine specialist had been asked to retract his statements on the democratic nominee’s health and also received a series of nasty phone calls and e-mails over the his comments.

  “CNN is so supportive of Clinton, network honchos acted like the Mafia when confronting Drew,” a source told Richard Johnson of Page Six. “First, they demanded he retract his comments, but he wouldn’t.”

  What followed, according to a source close to Pinsky, was a series of nasty phone calls and e-mails which were described as “downright scary and creepy.”

  The fact that Dr. Pinsky was asked to retract his comments, and even received “scary” calls and emails over what he said, can lead one to believe that it was indeed his concern for Clinton’s health that lead to his show being cancelled.

  But according to a spokeswoman for Pinsky, the show’s cancellation had been decided weeks before Pinsky’s comments, as part of a HLN revamp that includes the end of Nancy Grace’s show.

  “I know the timing is suspicious, and I know it’s hard to believe, but the two things had nothing to do with each other,” Pinsky’s rep Valerie Allen told Page Six‘s Richard Jones.

  What makes Dr. Pinksy’s cancellation even more suspicious is that he is not the only one who has received repercussions for questioning Clinton’s health.

  Just last week the Huffington Post banned journalist David Seaman from posting on their website for penning a commentary piece discussing questions surrounding Hillary’s health problems.

  “Both of my articles have been pulled without notice of any kind, just completely deleted from the Internet, and both of those articles mentioned Hillary’s health,”  Seaman said in a video posted to his YouTube channel.

  “I’ve filed hundreds of stories over the years as a journalist and I’ve never had anything like this happen….I’ve never experienced this,” remarked Seaman, adding that he was now seeking legal counsel.

  “This is spooky, to me this is extremely spooky – I don’t like it,” he added.

  

  

• Want "Unlimited Access To A Target's Mobile Devices… Leaving No Trace"? Ask NSO Group

  For the affordable price of $650,000, Israeli company NSO Group will enable you to invisibly spy on 10 iPhone owners without their knowledge. The cost is a little higher for Blackberry users (5 for $500,000).. and there is a 17% maintenance fee every thereafter to ensure "leaving no traces whatsoever." Welcome to the new world of private companies selling surveillance tools to the 'average joe'…

  

  NSO Founders

  Since its founding six years ago, the NSO Group has kept a low profile. But, as The New York Times reports, last month, security researchers caught its spyware trying to gain access to the iPhone of a human rights activist in the United Arab Emirates. They also discovered a second target, a Mexican journalist who wrote about corruption in the Mexican government.

  NSO is one of a number of companies that sell surveillance tools that can capture all the activity on a smartphone, like a user’s location and personal contacts. These tools can even turn the phone into a secret recording device.

   

  The company is one of dozens of digital spying outfits that track everything a target does on a smartphone. They aggressively market their services to governments and law enforcement agencies around the world.

   

  The industry argues that this spying is necessary to track terrorists, kidnappers and drug lords.

   

  The NSO Group’s corporate mission statement is “Make the world a safe place.” Now, internal NSO Group emails, contracts and commercial proposals obtained by The New York Times offer insight into how companies in this secretive digital surveillance industry operate.

  The New York Times points out that critics note that the company’s spyware has also been used to track journalists and human rights activists.

  “There’s no check on this,” said Bill Marczak, a senior fellow at the Citizen Lab at the University of Toronto’s Munk School of Global Affairs. “Once NSO’s systems are sold, governments can essentially use them however they want. NSO can say they’re trying to make the world a safer place, but they are also making the world a more surveilled place.”

  The NSO Group’s capabilities are in higher demand now that companies like Apple, Facebook and Google are using stronger encryption to protect data in their systems, in the process making it harder for government agencies to track suspects. Since it is privately held, not much is known about the NSO Group’s finances, but its business is clearly growing.

  Two years ago, the NSO Group sold a controlling stake in its business to Francisco Partners, a private equity firm based in San Francisco, for $120 million.

   

  Nearly a year later, Francisco Partners was exploring a sale of the company for 10 times that amount, according to two people approached by the firm but forbidden to speak about the discussions.

  In its commercial proposals, the NSO Group asserts that its tracking software and hardware can install itself in any number of ways, including “over the air stealth installation,” tailored text messages and emails, through public Wi-Fi hot spots rigged to secretly install NSO Group software, or the old-fashioned way, by spies in person.

  Much like a traditional software company, the NSO Group prices its surveillance tools by the number of targets, starting with a flat $500,000 installation fee. To spy on 10 iPhone users, NSO charges government agencies $650,000; $650,000 for 10 Android users; $500,000 for five BlackBerry users; or $300,000 for five Symbian users — on top of the setup fee, according to one commercial proposal.

   

  You can pay for more targets. One hundred additional targets will cost $800,000, 50 extra targets cost $500,000, 20 extra will cost $250,000 and 10 extra costs $150,000, according to an NSO Group commercial proposal.

   

  There is an annual system maintenance fee of 17 percent of the total price every year thereafter.

   

  What that gets you, NSO Group documents say, is “unlimited access to a target’s mobile devices.” In short, the company says: You can “remotely and covertly collect information about your target’s relationships, location, phone calls, plans and activities — whenever and wherever they are.”

   

  And, its proposal adds, “It leaves no traces whatsoever.”

  *  *  *
  The cone of personal privacy is shrinking at an every-accelerating pace and we wonder whether private companies' "consulting efforts" such as those NSO offfers are the military's 'non-boots-on-the-ground' "advisers" political workaround for the security state amid every growing public concerns over big brother?

  

  

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