Today’s News 25th December 2019

  • The Child That Christmas Forgot: How Would Jesus Fare In The American Police State?
    The Child That Christmas Forgot: How Would Jesus Fare In The American Police State?

    Authored by John Whitehead via The Rurtherford Institute,

    “Once upon a midnight clear, there was a child’s cry, a blazing star hung over a stable, and wise men came with birthday gifts. We haven’t forgotten that night down the centuries. We celebrate it with stars on Christmas trees, with the sound of bells, and with gifts… We forget nobody, adult or child. All the stockings are filled, all that is, except one. And we have even forgotten to hang it up. The stocking for the child born in a manger. It’s his birthday we’re celebrating. Don’t let us ever forget that. Let us ask ourselves what He would wish for most. And then, let each put in his share, loving kindness, warm hearts, and a stretched out hand of tolerance. All the shining gifts that make peace on earth.”—The Bishop’s Wife (1947)

    The Christmas story of a baby born in a manger is a familiar one.

    The Roman Empire, a police state in its own right, had ordered that a census be conducted. Joseph and his pregnant wife Mary traveled to the little town of Bethlehem so that they could be counted. There being no room for the couple at any of the inns, they stayed in a stable (a barn), where Mary gave birth to a baby boy, Jesus. Warned that the government planned to kill the baby, Jesus’ family fled with him to Egypt until it was safe to return to their native land.

    Yet what if Jesus had been born 2,000 years later?

    What if, instead of being born into the Roman police state, Jesus had been born at this moment in time? What kind of reception would Jesus and his family be given? Would we recognize the Christ child’s humanity, let alone his divinity? Would we treat him any differently than he was treated by the Roman Empire? If his family were forced to flee violence in their native country and sought refuge and asylum within our borders, what sanctuary would we offer them?

    A singular number of churches across the country are asking those very questions, and their conclusions are being depicted with unnerving accuracy by nativity scenes in which Jesus and his family are separated, segregated and caged in individual chain-link pens, topped by barbed wire fencing.

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    These nativity scenes are a pointed attempt to remind the modern world that the narrative about the birth of Jesus is one that speaks on multiple fronts to a world that has allowed the life, teachings and crucifixion of Jesus to be drowned out by partisan politics, secularism, materialism and war.

    The modern-day church has largely shied away from applying Jesus’ teachings to modern problems such as war, poverty, immigration, etc., but thankfully there have been individuals throughout history who ask themselves and the world: what would Jesus do?

    What would Jesus—the baby born in Bethlehem who grew into an itinerant preacher and revolutionary activist, who not only died challenging the police state of his day (namely, the Roman Empire) but spent his adult life speaking truth to power, challenging the status quo of his day, and pushing back against the abuses of the Roman Empire—do?

    Dietrich Bonhoeffer asked himself what Jesus would have done about the horrors perpetrated by Hitler and his assassins. The answer: Bonhoeffer risked his life to undermine the tyranny at the heart of Nazi Germany.

    Aleksandr Solzhenitsyn asked himself what Jesus would have done about the soul-destroying gulags and labor camps of the Soviet Union. The answer: Solzhenitsyn found his voice and used it to speak out about government oppression and brutality.

    Martin Luther King Jr. asked himself what Jesus would have done about America’s warmongering. The answer: declaring “my conscience leaves me no other choice,” King risked widespread condemnation when he publicly opposed the Vietnam War on moral and economic grounds.

    Even now, despite the popularity of the phrase “What Would Jesus Do?” (WWJD) in Christian circles, there remains a disconnect in the modern church between the teachings of Christ and the suffering of what Jesus in Matthew 25 refers to as the “least of these.”

    As the parable states:

    “Then the King will say to those on his right, ‘Come, you who are blessed by my Father; take your inheritance, the kingdom prepared for you since the creation of the world. For I was hungry and you gave me something to eat, I was thirsty and you gave me something to drink, I was a stranger and you invited me in, I needed clothes and you clothed me, I was sick and you looked after me, I was in prison and you came to visit me.’ Then the righteous will answer him, ‘Lord, when did we see you hungry and feed you, or thirsty and give you something to drink? When did we see you a stranger and invite you in, or needing clothes and clothe you? When did we see you sick or in prison and go to visit you?’ The King will reply, ‘Truly I tell you, whatever you did for one of the least of these brothers and sisters of mine, you did for me.’ Then he will say to those on his left, ‘Depart from me, you who are cursed, into the eternal fire prepared for the devil and his angels. For I was hungry and you gave me nothing to eat, I was thirsty and you gave me nothing to drink, I was a stranger and you did not invite me in, I needed clothes and you did not clothe me, I was sick and in prison and you did not look after me.’ They also will answer, ‘Lord, when did we see you hungry or thirsty or a stranger or needing clothes or sick or in prison, and did not help you?’ He will reply, ‘Truly I tell you, whatever you did not do for one of the least of these, you did not do for me.’”

    This is not a theological gray area: Jesus was unequivocal about his views on many things, not the least of which was charity, compassion, war, tyranny and love.

    After all, Jesus—the revered preacher, teacher, radical and prophet—was born into a police state not unlike the growing menace of the American police state. When he grew up, he had powerful, profound things to say, things that would change how we view people, alter government policies and change the world. “Blessed are the merciful,” “Blessed are the peacemakers,” and “Love your enemies” are just a few examples of his most profound and revolutionary teachings.

    When confronted by those in authority, Jesus did not shy away from speaking truth to power. Indeed, his teachings undermined the political and religious establishment of his day. It cost him his life. He was eventually crucified as a warning to others not to challenge the powers-that-be.

    Can you imagine what Jesus’ life would have been like if, instead of being born into the Roman police state, he had been born and raised in the American police state?

    Consider the following if you will.

    • Had Jesus been born in the era of the America police state, rather than traveling to Bethlehem for a census, Jesus’ parents would have been mailed a 28-page American Community Survey, a mandatory government questionnaire documenting their habits, household inhabitants, work schedule, how many toilets are in your home, etc. The penalty for not responding to this invasive survey can go as high as $5,000.

    • Instead of being born in a manger, Jesus might have been born at home. Rather than wise men and shepherds bringing gifts, however, the baby’s parents might have been forced to ward off visits from state social workers intent on prosecuting them for the home birth. One couple in Washington had all three of their children removed after social services objected to the two youngest being birthed in an unassisted home delivery.

    • Had Jesus been born in a hospital, his blood and DNA would have been taken without his parents’ knowledge or consent and entered into a government biobank. While most states require newborn screening, a growing number are holding onto that genetic material long-term for research, analysis and purposes yet to be disclosed.

    • Then again, had Jesus’ parents been undocumented immigrants, they and the newborn baby might have been shuffled to a profit-driven, private prison for illegals where they first would have been separated from each other, the children detained in make-shift cages, and the parents eventually turned into cheap, forced laborers for corporations such as Starbucks, Microsoft, Walmart, and Victoria’s Secret. There’s quite a lot of money to be made from imprisoning immigrants, especially when taxpayers are footing the bill.

    • From the time he was old enough to attend school, Jesus would have been drilled in lessons of compliance and obedience to government authorities, while learning little about his own rights. Had he been daring enough to speak out against injustice while still in school, he might have found himself tasered or beaten by a school resource officer, or at the very least suspended under a school zero tolerance policy that punishes minor infractions as harshly as more serious offenses.

    • Had Jesus disappeared for a few hours let alone days as a 12-year-old, his parents would have been handcuffed, arrested and jailed for parental negligence. Parents across the country have been arrested for far less “offenses” such as allowing their children to walk to the park unaccompanied and play in their front yard alone.

    • Rather than disappearing from the history books from his early teenaged years to adulthood, Jesus’ movements and personal data—including his biometrics—would have been documented, tracked, monitored and filed by governmental agencies and corporations such as Google and Microsoft. Incredibly, 95 percent of school districts share their student records with outside companies that are contracted to manage data, which they then use to market products to us.

    • From the moment Jesus made contact with an “extremist” such as John the Baptist, he would have been flagged for surveillance because of his association with a prominent activist, peaceful or otherwise. Since 9/11, the FBI has actively carried out surveillance and intelligence-gathering operations on a broad range of activist groups, from animal rights groups to poverty relief, anti-war groups and other such “extremist” organizations.

    • Jesus’ anti-government views would certainly have resulted in him being labeled a domestic extremist. Law enforcement agencies are being trained to recognize signs of anti-government extremism during interactions with potential extremists who share a “belief in the approaching collapse of government and the economy.”

    • While traveling from community to community, Jesus might have been reported to government officials as “suspicious” under the Department of Homeland Security’s “See Something, Say Something” programs. Many states, including New York, are providing individuals with phone apps that allow them to take photos of suspicious activity and report them to their state Intelligence Center, where they are reviewed and forwarded to law-enforcement agencies.

    • Rather than being permitted to live as an itinerant preacher, Jesus might have found himself threatened with arrest for daring to live off the grid or sleeping outside. In fact, the number of cities that have resorted to criminalizing homelessness by enacting bans on camping, sleeping in vehicles, loitering and begging in public has doubled.

    • Viewed by the government as a dissident and a potential threat to its power, Jesus might have had government spies planted among his followers to monitor his activities, report on his movements, and entrap him into breaking the law. Such Judases today—called informants—often receive hefty paychecks from the government for their treachery.

    • Had Jesus used the internet to spread his radical message of peace and love, he might have found his blog posts infiltrated by government spies attempting to undermine his integrity, discredit him or plant incriminating information online about him. At the very least, he would have had his website hacked and his email monitored.

    • Had Jesus attempted to feed large crowds of people, he would have been threatened with arrest for violating various ordinances prohibiting the distribution of food without a permit. Florida officials arrested a 90-year-old man for feeding the homeless on a public beach.

    • Had Jesus spoken publicly about his 40 days in the desert and his conversations with the devil, he might have been labeled mentally ill and detained in a psych ward against his will for a mandatory involuntary psychiatric hold with no access to family or friends. One Virginia man was arrested, strip searched, handcuffed to a table, diagnosed as having “mental health issues,” and locked up for five days in a mental health facility against his will apparently because of his slurred speech and unsteady gait.

    • Without a doubt, had Jesus attempted to overturn tables in a Jewish temple and rage against the materialism of religious institutions, he would have been charged with a hate crime. Currently, 45 states and the federal government have hate crime laws on the books.

    • Had anyone reported Jesus to the police as being potentially dangerous, he might have found himself confronted—and killed—by police officers for whom any perceived act of non-compliance (a twitch, a question, a frown) can result in them shooting first and asking questions later.

    • Rather than having armed guards capture Jesus in a public place, government officials would have ordered that a SWAT team carry out a raid on Jesus and his followers, complete with flash-bang grenades and military equipment. There are upwards of 80,000 such SWAT team raids carried out every year, many on unsuspecting Americans who have no defense against such government invaders, even when such raids are done in error.

    • Instead of being detained by Roman guards, Jesus might have been made to “disappear” into a secret government detention center where he would have been interrogated, tortured and subjected to all manner of abuses. Chicago police have “disappeared” more than 7,000 people into a secret, off-the-books interrogation warehouse at Homan Square.

    • Charged with treason and labeled a domestic terrorist, Jesus might have been sentenced to a life-term in a private prison where he would have been forced to provide slave labor for corporations or put to death by way of the electric chair or a lethal mixture of drugs.

    Indeed, as I show in my book Battlefield America: The War on the American People, given the nature of government then and now, it is painfully evident that whether Jesus had been born in our modern age or his own, he still would have died at the hands of a police state.

    Thus, as we draw near to Christmas with its celebrations and gift-giving, we would do well to remember that what happened on that starry night in Bethlehem is only part of the story. That baby in the manger grew up to be a man who did not turn away from evil but instead spoke out against it, and we must do no less.


    Tyler Durden

    Tue, 12/24/2019 – 23:55

  • Japan Proposes Dumping Radioactive Waste Into Pacific As Storage Space Dwindles
    Japan Proposes Dumping Radioactive Waste Into Pacific As Storage Space Dwindles

    As the decade comes to an end, the future of nuclear power in the west remains in doubt. Almost nine years ago, a powerful underwater earthquake triggered a 15-meter tsunami that disabled the power supply and cooling at three of the reactors at the Fukushima Daiichi nuclear power plant.

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    The accident caused the nuclear cores of all three damaged reactors to melt down, prompting the government to issue evacuation orders for all people living within a 30 kilometer radius of the damaged reactors, a group that included roughly 100,000 people.

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    And the evacuation zone:

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    Now, the Epoch Times reports that Japan’s Economy and Industry Ministry has proposed that TEPCO gradually release, or allow to evaporate, massive amounts of treated but still radioactive water being stored at the power plant. TEPCO, or the Tokyo Electric Power Co, is the owner of the Fukushima plant, and is also responsible for leading the clean-up of the damaged reactors.

    But as regulators have stepped in to try and guide TEPCO as it struggles to dispose of all the contaminated water, one ministry has offered a proposal that is almost guaranteed to anger the fishermen who have resisted all of TEPCO’s other plans for dumping the contaminated water.

    In its Dec. 23 proposal, the ministry suggested a “controlled release” of the contaminated water into the Pacific. Offering another option, the ministry also suggested allowing the water to evaporate, or a combination of the two methods.

    The government is stepping up the pressure on TEPCO to do something as Fukushima’s ‘radioactive water crisis’ worsens. The problem is that TEPCO is running out of room to store the contaminated water.

    But the ministry insisted that the controlled release of the contaminated water into the sea would be the best option because it would “stably dilute and disperse” the water from the plant, while also allowing the government and TEPCO to more easily monitor the operation.

    And as we have reported, the Japanese fishing industry isn’t the only party that objects to the government’s plan. South Korea has also complained to the IAEA about TEPCO’s plans to dump the radioactive water.

    The project is expected to take years to fully dispose of the water.

    Still, the fishermen are bound to be skeptical because of one radioactive element that TEPCO has been unable to remove from the contaminated water: It’s called tritium.

    Fukushima fishermen and the National Federation of Fisheries Co-operative Associations have strongly opposed past suggestions by government officials that the water be released to the sea, warning of an “immeasurable impact on the future of the Japanese fishing industry,” with local fishermen still unable to resume full operations after the nuclear plant accident.

    The water has been treated, and the plant operator, Tokyo Electric Power Co., states that all 62 radioactive elements it contains can be removed to levels not harmful to humans except for tritium. There is no established method to fully separate tritium from water, but scientists say it isn’t a problem in small amounts. Most of the water stored at the plant still contains other radioactive elements including cancer-causing cesium and strontium and needs further treatment.

    Tritium is routinely found in nuclear explosions and other nuclear accidents, including the meltdown at Three-Mile Island back in 1979. But experts at the IAEA recommend that the controlled release of the tritium-laced water at Fukushima into the sea is probably the best option for handling the situation – even if the Japanese decide to wait until after the Summer Olympics in 2022.

    The ministry noted that tritium has been routinely released from nuclear plants around the world, including Fukushima before the accident. Evaporation has been a tested and proven method following the 1979 core meltdown at Three Mile Island nuclear plant in the United States, where it took two years to get rid of 8,700 tons of tritium-contaminated water.

    TEPCO says it is currently storing more than 1 million tons of radioactive water and only has space to hold up to 1.37 million tons, or until the summer of 2022, raising speculation that the water may be released after next summer’s Tokyo Olympics. TEPCO and experts say the tanks get in the way of ongoing decommissioning work and that space needs to be freed up to store removed debris and other radioactive materials. The tanks also could spill in a major earthquake, tsunami, or flood.

    Experts, including those at the International Atomic Energy Agency who have inspected the Fukushima plant, have repeatedly supported the controlled release of the water into the sea as the only realistic option.

    On Dec. 22, some experts on the panel called for more attention to be given to the impact on the local community, which already has seen its image harmed by accidental leaks and the potential release of water.

    “A release to the sea is technologically a realistic option, but its social impact would be huge,” said Naoya Sekiya, a University of Tokyo sociologist and an expert on disasters and social impact.

    Other possible strategies for disposing of the contaminated water have included injecting the water deep into the Earth’s crust. Another strategy, which called for storing the nuclear waste in large industrial tanks outside the plant, was ruled out because of fears that leaks in the tanks could contaminate some of Japan’s most important fishing waters.


    Tyler Durden

    Tue, 12/24/2019 – 23:30

  • Escobar: You Say You Want A (Russian) Revolution?
    Escobar: You Say You Want A (Russian) Revolution?

    Authored by Pepe Escobar via ConsortiumNews.com,

    Once in a blue moon an indispensable book comes out making a clear case for sanity in what is now a post-MAD world. That’s the responsibility carried by “The (Real) Revolution in Military Affairs,” by Andrei Martyanov (Clarity Press), arguably the most important book of 2019.

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    Martyanov is the total package — and he comes with extra special attributes as a top-flight Russian military analyst, born in Baku in those Back in the U.S.S.R. days, living and working in the U.S., and writing and blogging in English.

    Right from the start, Martyanov wastes no time destroying not only Fukuyama’s and Huntington’s ravings but especially Graham Allison’s childish and meaningless Thucydides Trap argument — as if the power equation between the U.S. and China in the 21stcentury could be easily interpreted in parallel to Athens and Sparta slouching towards the Peloponnesian War over 2,400 years ago. What next? Xi Jinping as the new Genghis Khan?

    (By the way, the best current essay on Thucydides is in Italian, by Luciano Canfora (“Tucidide: La Menzogna, La Colpa, L’Esilio”). No Trap. Martyanov visibly relishes defining the Trap as a “figment of the imagination” of people who “have a very vague understanding of real warfare in the 21st century.” No wonder Xi explicitly said the Trap does not exist.)

    Martyanov had already detailed in his splendid, previous book, “Losing Military Supremacy: The Myopia of American Strategic Planning,” how “American lack of historic experience with continental warfare” ended up “planting the seeds of the ultimate destruction of the American military mythology of the 20thand 21stcenturies which is foundational to the American decline, due to hubris and detachment of reality.” Throughout the book, he unceasingly provides solid evidence about the kind of lethality waiting for U.S. forces in a possible, future war against real armies (not the Taliban or Saddam Hussein’s), air forces, air defenses and naval power.

    Do the Math

    One of the key takeaways is the failure of U.S. mathematical models: and readers of the book do need to digest quite a few mathematical equations. The key point is that this failure led the U.S. “on a continuous downward spiral of diminishing military capabilities against the nation [Russia] she thought she defeated in the Cold War.”

    In the U.S., Revolution in Military Affairs (RMA) was introduced by the late Andrew Marshall, a.k.a. Yoda, the former head of Net Assessment at the Pentagon and the de facto inventor of the “pivot to Asia” concept. Yet Martyanov tells us that RMA actually started as MTR (Military-Technological Revolution), introduced by Soviet military theoreticians back in the 1970s.

    One of the staples of RMA concerns nations capable of producing land-attack cruise missiles, a.k.a. TLAMs. As it stands, only the U.S., Russia, China and France can do it. And there are only two global systems providing satellite guidance to cruise missiles: the American GPS and the Russian GLONASS. Neither China’s BeiDou nor the European Galileo qualify – yet – as global GPS systems.

    Then there’s Net-Centric Warfare (NCW). The term itself was coined by the late Admiral Arthur Cebrowski in 1998 in an article he co-wrote with John Garstka’s titled, “Network-Centric Warfare – Its Origin and Future.”

    Deploying his mathematical equations, Martyanov soon tells us that “the era of subsonic anti-shipping missiles is over.” NATO, that brain-dead organism (copyright Emmanuel Macron) now has to face the supersonic Russian P-800 Onyx and the Kalibr-class M54 in a “highly hostile Electronic Warfare environment.” Every developed modern military today applies Net-Centric Warfare (NCW), developed by the Pentagon in the 1990s.

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    Rendering of a future combat systems network. (soldiersmediacenter/Flickr, CC BY 2.0, Wikimedia Commons)

    Martyanov mentions in his new book something that I learned on my visit to Donbass in March 2015: how NCW principles, “based on Russia’s C4ISR capabilities made available by the Russian military to numerically inferior armed forces of the Donbass Republics (LDNR), were used to devastating effect both at the battles of Ilovaisk and Debaltsevo, when attacking the cumbersome Soviet-era Ukrainian Armed Forces military.”

    No Escape From the Kinzhal

    Martyanov provides ample information on Russia’s latest missile – the hypersonic Mach-10 aero-ballistic Kinzhal, recently tested in the Arctic.

    Crucially, as he explains, “no existing anti-missile defense in the U.S. Navy is capable of shooting [it] down even in the case of the detection of this missile.” Kinzhal has a range of 2,000 km, which leaves its carriers, MiG-31K and TU-22M3M, “invulnerable to the only defense a U.S. Carrier Battle Group, a main pillar of U.S. naval power, can mount – carrier fighter aircraft.” These fighters simply don’t have the range.

    The Kinzhal was one of the weapons announced by Russian President Vladimir Putin’s game-changing March 1, 2018 speech at the Federal Assembly. That’s the day, Martyanov stresses, when the real RMA arrived, and “changed completely the face of peer-peer warfare, competition and global power balance dramatically.”

    Top Pentagon officials such as General John Hyten,  vice chairman of the Joint Chiefs, have admitted on the record there are “no existing countermeasures” against, for instance, the hypersonic, Mach 27 glide vehicle Avangard (which renders anti-ballistic missile systems useless), telling the U.S. Senate Armed Services Committee the only way out would be “a nuclear deterrent.” There are also no existing counter-measures against anti-shipping missiles such as the Zircon and Kinzhal.

    Any military analyst knows very well how the Kinzhal destroyed a land target the size of a Toyota Corolla in Syria after being launched 1,000 km away in adverse weather conditions. The corollary is the stuff of NATO nightmares: NATO’s command and control installations in Europe are de facto indefensible.

    Martyanov gets straight to the point: “The introduction of hypersonic weapons surely pours some serious cold water on the American obsession with securing the North American continent from retaliatory strikes.”

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    Kh-47M2 Kinzhal; 2018 Moscow Victory Day Parade. (Kremilin via Wikimedia Commons)

    Martyanov is thus unforgiving on U.S. policymakers who “lack the necessary tool-kit for grasping the unfolding geostrategic reality in which the real revolution in military affairs … had dramatically downgraded the always inflated American military capabilities and continues to redefine U.S. geopolitical status away from its self-declared hegemony.”

    And it gets worse: “Such weapons ensure a guaranteed retaliation [Martyanov’s italics] on the U.S. proper.” Even the existing Russian nuclear deterrents – and to a lesser degree Chinese, as paraded recently — “are capable of overcoming the existing U.S. anti-ballistic systems and destroying the United States,” no matter what crude propaganda the Pentagon is peddling.

    In February 2019, Moscow announced the completion of tests of a nuclear-powered engine for the Petrel cruise missile. This is a subsonic cruise missile with nuclear propulsion that can remain in air for quite a long time, covering intercontinental distances, and able to attack from the most unexpected directions. Martyanov mischievously characterizes the Petrel as “a vengeance weapon in case some among American decision-makers who may help precipitate a new world war might try to hide from the effects of what they have unleashed in the relative safety of the Southern Hemisphere.”

    Hybrid War Gone Berserk

    A section of the book expands on China’s military progress, and the fruits of the Russia-China strategic partnership, such as Beijing buying $3 billion-worth of S-400 Triumph anti-aircraft missiles — “ideally suited to deal with the exact type of strike assets the United States would use in case of a conventional conflict with China.”

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    Beijing parade celebrating the 70th anniversary of the People’s Republic, October 2019. (YouTube screenshot)

    Because of the timing, the analysis does not even take into consideration the arsenal presented in early October at the Beijing parade celebrating the 70thanniversary of the People’s Republic.

    That includes, among other things, the “carrier-killer” DF-21D, designed to hit warships at sea at a range of up to 1,500 km; the intermediate range “Guam Killer” DF-26; the DF-17 hypersonic missile; and the long-range submarine-launched and ship-launched YJ-18A anti-ship cruise missiles. Not to mention the DF-41 ICBM – the backbone of China’s nuclear deterrent, capable of reaching the U.S. mainland carrying multiple warheads.

    Martyanov could not escape addressing the RAND Corporation, whose reason to exist is to relentlessly push for more money for the Pentagon – blaming Russia for “hybrid war” (an American invention)  even as it moans about the U.S.’s incapacity of defeating Russia in each and every war game. RAND’s war games pitting the U.S. and allies against Russia and China invariably ended in a “catastrophe” for the “finest fighting force in the world.”

    Martyanov also addresses the S-500s, capable of reaching AWACS planes and possibly even capable of intercepting hypersonic non-ballistic targets. The S-500 and its latest middle-range state of the art air-defense system S-350 Vityaz will be operational in 2020.

    His key takeway: “There is no parity between Russia and the United States in such fields as air-defense, hypersonic weapons and, in general, missile development, to name just a few fields – the United States lags behind in these fields, not just in years but in generations [italics mine].”

    All across the Global South, scores of nations are very much aware that the U.S. economic “order” – rather disorder – is on the brink of collapse. In contrast, a cooperative, connected, rule-based, foreign relations between sovereign nations model is being advanced in Eurasia – symbolized by the merging of the New Silk Roads, or Belt and Road Initiative (BRI), the Eurasia Economic Union (EAEU), the Shanghai Cooperation Organization (SCO), the Asia Infrastructure Investment Bank (AIIB), the NDB (the BRICS bank).

    The key guarantors of the new model are Russia and China. And Beijing and Moscow harbor no illusion whatsoever about the toxic dynamics in Washington. My recent conversations with top analysts in Kazakhstan last month and in Moscow last week once again stressed the futility of negotiating with people described – with  overlapping shades of sarcasm – as exceptionalist fanatics. Russia, China and many corners of Eurasia have figured out there are no possible, meaningful deals with a nation bent on breaking every deal.

    Indispensable? No: Vulnerable

    Martyanov cannot but evoke Putin’s speech to the Federal Assembly in February 2019, after the unilateral Washington abandonment of the INF treaty, clearing the way for U.S. deployment of intermediate and close range missiles stationed in Europe and pointed at Russia:

    “Russia will be forced to create and deploy those types of weapons…against those regions from where we will face a direct threat, but also against those regions hosting the centers where decisions are taken on using those missile systems threatening us.”

    Translation: American Invulnerability is over – for good.

    In the short term, things can always get worse. At his traditional, year-end presser in Moscow, lasting almost four and a half hours, Putin stated that Russia is more than ready to “simply renew the existing New START agreement”, which is bound to expire in early 2021: “They [the U.S.] can send us the agreement tomorrow, or we can sign and send it to Washington.” And yet, “so far our proposals have been left unanswered. If the New START ceases to exist, nothing in the world will hold back an arms race. I believe this is bad.”

    “Bad” is quite the euphemism. Martyanov prefers to stress how “most of the American elites, at least for now, still reside in a state of Orwellian cognitive dissonance” even as the real RMA “blew the myth of American conventional invincibility out of the water.”

    Martyanov is one of the very few analysts – always from different parts of Eurasia — who have warned about the danger of the U.S. “accidentally stumbling” into a war against Russia, China, or both which is impossible to be won conventionally, “let alone through the nightmare of a global nuclear catastrophe.”

    Is that enough to instill at least a modicum of sense into those who lord over that massive cash cow, the industrial-military-security complex? Don’t count on it.

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    Pepe Escobar, a veteran Brazilian journalist, is the correspondent-at-large for Hong Kong-based Asia Times. His latest book is “2030.” Follow him on Facebook.


    Tyler Durden

    Tue, 12/24/2019 – 23:05

  • Christmas Trees: The Battle Between Pine & Plastic
    Christmas Trees: The Battle Between Pine & Plastic

    Starting in early December, many U.S. families carry out an annual and important ritual: an outing to find the perfect Christmas tree. Once the most desirable tree is found, it’s then lugged home and lavishly decorated while its piney smell wafts through the house.

    As nice as that smell is, a real tree has numerous disadvantages such as prickly pines that shed and it eventually needs to be disposed of.

    For some families, its just too much hassle and assembling a plastic three that spends most of the year in the basement is the preferred option. It also represents a once-off purchase, another advantage over its real counterpart.

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    So, with America firmly experiencing prime Christmas tree shopping season, how do sales of real and plastic trees compare?

    Interestingly, as Statista’s Niall McCarthy notes, while sales of plastic trees have increased noticeably over the past decade, sales of real trees have remained fairly stable according to historic data from the National Christmas Tree Association of America.

    Infographic: Christmas Trees: The Battle Between Pine & Plastic | Statista

    You will find more infographics at Statista

    32.8 million real trees were sold in the U.S. last year, the highest total since 2013. That’s despite the huge increase in people buying fake trees with their sales numbers climbing from 10.9 million in 2012 to 23.6 million in 2018.

    There is bad news for fans of real trees this year and that’s a supply shortage. During the recession, farmers planted fewer trees and that’s now impacting the industry a decade later. Industry workers say that everyone intent on buying a real tree will find one but that prices are going up, something that has the potential to drive more families towards plastic. In 2017, the average price of a real tree was $75 and that went up to $78 in 2018. Meanwhile, the average price of a plastic tree fell from $107 to $104 during the same period.


    Tyler Durden

    Tue, 12/24/2019 – 22:40

  • Could Invisible Ink Tattoos Be Used By The Elites To Identify Unvaccinated Kids?
    Could Invisible Ink Tattoos Be Used By The Elites To Identify Unvaccinated Kids?

    Authored by Mac Slavo via SHTFplan.com,

    Because it’s becoming difficult for the ruling class and Big Pharma to keep track of people who have been vaccinated and those who have not, a suggestion to use “tattoos” has surfaced. A new technology created by researchers at the Massachusetts Institute of Technology can now help authoritarians track the unvaccinated.

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    According to Futurism, this means that they have found a covert way to embed the record of a vaccination directly in a patient’s skin rather than documenting it electronically or on paper. This tracking seems to be a lower-risk tracking system than vaccines themselves at least, and it could greatly simplify the process of maintaining accurate vaccine records, especially on a larger scale.

    “In areas where paper vaccination cards are often lost or do not exist at all, and electronic databases are unheard of, this technology could enable the rapid and anonymous detection of patient vaccination history to ensure that every child is vaccinated,” researcher Kevin McHugh said in a statement.

    If that’s what it’s used for, it will eventually also be used to force vaccines on those who wish to not receive them. There’s an obvious agenda here too when you follow the money: the Bill and Melinda Gates Foundation funded the team’s research.

    This new research, which was published in the journal Science Translational Medicine on Wednesday, came about after following a direct demand from Microsoft founder Bill Gates himself, who has been personally involved in efforts to eradicate polio and measles through vaccinations, according to Scientific American.

    The invisible “tattoo” accompanying the vaccine is a pattern made up of minuscule quantum dots — tiny semiconducting crystals that reflect light — that glows under infrared light. The pattern — and vaccine — gets delivered into the skin using hi-tech dissolvable microneedles made of a mixture of polymers and sugar. –Futurism

    Researchers have already tested this new tattoo on rats and human cadavers.

    “It’s possible someday that this ‘invisible’ approach could create new possibilities for data storage, biosensing, and vaccine applications that could improve how medical care is provided, particularly in the developing world,” MIT professor and senior author Robert Langer said in the statement.


    Tyler Durden

    Tue, 12/24/2019 – 22:15

  • Breaking The Ice: Mapping A Changing Arctic
    Breaking The Ice: Mapping A Changing Arctic

    The Arctic is changing. As retreating ice cover makes this region more accessible, Visual Capitalist’s Nicholas LePan notes that nations with Arctic real estate are thinking of developing these subzero landscapes and the resources below.

    As the Arctic evolves, a vast amount of resources will become more accessible and longer shipping seasons will improve Arctic logistics. But with a changing climate and increased public pressure to limit resource development in environmentally sensitive regions, the future of northern economic activity is far from certain.

    This week’s Chart of the Week shows the location of major oil and gas fields in the Arctic and the possible new trade routes through this frontier.

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    A Final Frontier for Undiscovered Resources?

    Underneath the Arctic Circle lies massive oil and natural gas formations. The United States Geological Survey estimates that the Arctic contains approximately 13% of the world’s undiscovered oil resources and about 30% of its undiscovered natural gas resources.

    So far, most exploration in the Arctic has occurred on land. This work produced the Prudhoe Bay Oil Field in Alaska, the Tazovskoye Field in Russia, and hundreds of smaller fields, many of which are on Alaska’s North Slope, an area now under environmental protection.

    Land accounts for about 1/3 of the Arctic’s area and is thought to hold about 16% of the Arctic’s remaining undiscovered oil and gas resources. A further 1/3 of the Arctic area is comprised of offshore continental shelves, which are thought to contain enormous amounts of resources but remain largely unexplored by geologists.

    The remaining 1/3 of the Arctic is deep ocean waters measuring thousands of feet in depth.

    The Arctic circle is about the same geographic size as the African continent─about 6% of Earth’s surface area─yet it holds an estimated 22% of Earth’s oil and natural gas resources. This paints a target on the Arctic for exploration and development, especially with shorter seasons of ice coverage improving ocean access.

    Thawing Ice Cover: Improved Ocean Access, New Trading Routes

    As Arctic ice melts, sea routes will stay navigable for longer periods, which could drastically change international trade and shipping. September ice coverage has decreased by more than 25% since 1979, although the area within the Arctic Circle is still almost entirely covered with ice from November to July.

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    Typically shipping to Japan from Rotterdam would use the Suez Canal and take about 30 days, whereas a route from New York would use the Panama Canal and take about 25 days.

    But if the Europe-Asia trip used the Northern Sea Route along the northern coast of Russia, the trip would last 18 days and the distance would shrink from ~11,500 nautical miles to ~6,900 nautical miles. For the U.S.-Asia trip through the Northwest Passage, it would take 21 days, rather than 25.

    Control of these routes could bring significant advantages to countries and corporations looking for a competitive edge.

    Competing Interests: Arctic Neighbors

    Eight countries lay claim to land that lies within the Arctic Circle: Canada, Denmark (through its administration of Greenland), Finland, Iceland, Norway, Russia, Sweden, and the United States.

    There is no consistent agreement among these nations regarding the claims to oil and gas beneath the Arctic Ocean seafloor. However, the United Nations Convention on the Law of the Sea provides each country an exclusive economic zone extending 200 miles out from its shoreline and up to 350 miles, under certain geological conditions.

    Uncertain geology and politics has led to overlapping territorial disputes over how each nation defines and maps its claims based on the edge of continental margins. For example, Russia claims that their continental margin follows the Lomonosov Ridge all the way to the North Pole. In another, both the U.S. and Canada claim a portion of the Beaufort Sea, which is thought to contain significant oil and natural gas resources.

    To Develop or Not to Develop

    Just because the resources are there does not mean humans have to exploit them, especially given oil’s environmental impacts. Canada’s federal government has already returned security deposits that oil majors had paid to drill in Canadian Arctic waters, which are currently off limits until at least 2021.

    In total, the Government of Canada returned US$327 million worth of security deposits, or 25% of the money oil companies pledged to spend on exploration in the Beaufort Sea. In addition, Goldman Sachs announced that it would not finance any projects in the U.S.’s Arctic National Wildlife Refuge.

    The retreat of Western economic interests in the Arctic may leave the region to Russia and China, countries with less strict environmental regulations.

    Russia has launched an ambitious plan to remilitarize the Arctic. Specifically, Russia is searching for evidence to prove its territorial claims to additional portions of the Arctic, so that it can move its Arctic borderline — which currently measures over 14,000 miles in length — further north.

    In a changing Arctic, this potentially resource-rich region could become another venue for geopolitical tensions, again testing whether humans can be proper stewards of the natural world.


    Tyler Durden

    Tue, 12/24/2019 – 21:50

  • What Percentage Of Americans Celebrate Christmas?
    What Percentage Of Americans Celebrate Christmas?

    Authored by Lydia Saad via Gallup.com,

    Ninety-three percent of Americans in December 2019 report celebrating Christmas, in line with the level Gallup has recorded over the past quarter century.

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    Near universal observance of Christmas is seen across all gender, age, education and income subgroups of Americans with more than 9 in 10 in each saying they celebrate, and the holiday is also a unifying event for Republicans and Democrats.

    The only Americans less likely to observe Christmas are those who say that religion is not very important to them, and among them the figure is 85%. Participation stretches to 96% among those who are “very” and “fairly” religious.

    While the overall percentage of Americans celebrating Christmas remains high, fewer today (71%) than a decade ago (82%) say it is a strongly or somewhat religious holiday for them.

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    For more on this trend, read More Americans Celebrating a Secular Christmas.


    Tyler Durden

    Tue, 12/24/2019 – 21:25

  • Russia's New Floating Nuclear Power Plant Begins Delivering Electricity To The Arctic
    Russia’s New Floating Nuclear Power Plant Begins Delivering Electricity To The Arctic

    On September 14, we reported that the world’s first ever floating nuclear power plant, the Akademik Lomonosov, reached the port city of Pevek in Russia’s Chukotka after covering a distance of more than 4,700km from Murmansk.

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    Russia’s first floating nuclear power plant has two KLT-40S reactor units that collectively generate 70 MW of energy.

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    A year ago we noted video of the beginning of the ships’ voyage (from St.Petersburg to Murmansk)

    https://platform.twitter.com/widgets.js

    And now, as The Barents Observer reports that at 11 am Moscow Times on December 19th, the “Akademik Lomonosov” delivered its first electricity to the grid in Pevek, Arctic Russia.

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    As Thomas Nilsen reports, symbolically, given the season, the town’s Christmas tree was first to be lighted with electricity produced by the two reactors on board the plant that is moored in the port.

    Additional to the town of Pevek, the grid includes the Chaun-Bilibino junction in the Chukotka Autonomous Okrug, Rosatom informs.

    “Today a historic event occurred, the first connection of the “generators of “Akademik Lomonosov” floating nuclear heat- and electricity nuclear power plant were connected to the grid,” Rosenergoatom Director General Andrey Petrov said.

    He said Pevek is now the new energy capital of the region, “a stronghold for the development of western Chukotka and a key link for the Northern Sea Route.”

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    As we concluded previously, the launch of the first ever floating nuclear power plant has become an important engineering breakthrough that will impact the energy sphere on a global scale. This technology, which could potentially provide safe and clean energy to a large part of the planet, could also be provided at an attractive price.


    Tyler Durden

    Tue, 12/24/2019 – 21:00

  • This Christmas, Over Half A Million Americans Will Struggle With Homelessness
    This Christmas, Over Half A Million Americans Will Struggle With Homelessness

    Authored by Alan Macleod via MintPressNews.com,

    The government estimates ending homelessness would cost around $20 billion, less than Americans spend on Christmas decorations, yet there appears to be little appetite to address the growing problem…

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    While millions of Americans celebrate Christmas this year with loved ones, carving turkey and sharing gifts, others are not so fortunate. According to the Department of Housing and Urban Development, over half a million of us will spend Christmas on the streets. The government agency estimates that on any given day, around 553,000 Americans are homeless. A third of those are families with young children. African Americans and those with disabilities are particularly likely to become homeless. 

    Yet these distressing numbers are sure to be underestimates of the true problem as they do not include the many more sleeping in vehicles or other makeshift accommodation, sofa surfing or relying on friends. Around 1.5 million people sleep at a shelter annually, according to figures from the National Alliance to End Homelessness. Furthermore, the 500,000 number itself is likely an underestimate. A 2017 experiment done by The Guardian, where it placed actors posing as homeless people on the streets, found that authorities missed around one in three of them. And they were wishing to be seen, not individuals keen to go undetected.

    Tens of millions of Americans are barely managing to stave off the same fate. Almost half of America is broke, and 58 percent of the country is living paycheck to paycheck, with savings of less than $1,000. 37 million Americans go to bed hungry and around 130 million admit an inability to pay for basic needs like food, housing or healthcare. After a decade of decline, the homeless population is again creeping up.

    The Trump administration is believed to be readying a “get tough” approach to the problem. Singling out California, earlier this year, Trump claimed that its cities were “going to hell” thanks to illegal encampments that increase environmental pollution. The number of unsheltered homeless people in Los Angeles Country alone increased by over 10 percent this year, to 44,214.

    Yet the United Nations has decried the already inhumane treatment of homeless Americans, claiming that the state “effectively criminalizes” them “for the situation in which they find themselves.” In many cities, activities like sleeping rough, panhandling or public urination (in locations with zero pubic bathrooms) have been turned into arrestable offenses, ensuring a carceral “solution” to the problem. Homeless people can be given tickets for infractions as innocuous as loitering, leading to warrants and unpayable fines, trapping them in a cycle of criminality which they cannot escape as their record prohibits them from subsequent employment and access to most housing. Thus, the UN report concludes that it is “effectively a system for keeping the poor in poverty while generating revenue” for the state to employ more police to speed the system up.

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    Despite being a very visible representation of the economic and social dislocation in society, there currently appears to be little political appetite in Washington to solve the problem. The government estimates ending homelessness would cost around $20 billion– less than Americans spend on Christmas decorations alone. Yet there may be an even easier and cheaper way to fix the problem. Amnesty International reported that there are five times as many vacant properties in the U.S. as there are homeless people. Legislation enacted to make use of those as emergency accommodation could be enacted.

    If Democrats manage to unseat Trump in 2020 there is hope that this could be the last year of mass homelessness at Christmas. Vermont Senator Bernie Sanders, for example, has made housing for all a key pillar of his campaign message.

    “In the richest country in the history of the world, every American must have a safe, decent, accessible, and affordable home as a fundamental right” his website declares, pledging to end homelessness, fight gentrification and protect tenants’ rights.

    Sanders also promises to invest $2.5 trillion into building nearly 10 million “permanently affordable housing units.”

    Other major candidates, like former Vice President Joe Biden and Massachusetts Senator Elizabeth Warren, have discussed measures to address the epidemic, but nothing as substantial as Sanders’. On the other hand, as Mayor of South Bend, Indiana, Pete Buttigieg conducted a relentless campaign against homeless people under his jurisdiction.

    Media often treat the problem of homelessness not as a condemnation of the callous disregard for human life of modern society, but as merely a natural function of the market. For example, in one supposedly heartwarming story about a good samaritan helping the homeless during the Chicago polar vortex last winter, CBS News casually noted that 22 homeless people had already died of exposure during the cold weather.

    Society does its best to hide or normalize homelessness. Or, worse still, blame them for their own predicament. But, like slavery and apartheid, it is not natural and is a consequence of a man-made system that can be changed. Americans in 2020 will have an opportunity to decide what solution they wish to see enacted. For now, though, it won’t be a very merry Christmas for those at the bottom of the economic scale.


    Tyler Durden

    Tue, 12/24/2019 – 20:35

  • The Biggest Empires In Human History
    The Biggest Empires In Human History

    In 1913, 412 million people lived under the control of the British Empire, 23 percent of the world’s population at that time. As Statista’s Niall McCarthy notes, it remains the largest empire in human history and at the peak of its power in 1920, it covered an astonishing 13.71 million square miles – that’s close to a quarter of the world’s land area.

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    At its height, it was described as “the empire on which the sun never sets” but of course the sun finally did set on it.

    Infographic: The Biggest Empires In  Human History | Statista

    You will find more infographics at Statista

    Today, Britannia no longer rules the waves and its remnants consist of 17 small dependent and unincorporated territories scattered across the world such as the Falkland Islands and Gibraltar.

    The Mongol Empire existed during the 13th and 14th centuries and it is recognized as being the largest contiguous land empire in history. It of course originated in Mongolia and once stretched from Eastern Europe to the Sea of Japan, extending into the Indian subcontinent and the Middle East, covering 9.27 million square miles.

    The Russian Empire comes third on the list with a peak land area of 8.8 million square miles.

    The data for this infographic was published by website World Atlas.


    Tyler Durden

    Tue, 12/24/2019 – 20:10

  • Profs Urge NYTimes To Correct The Many Errors In Its '1619 Project'
    Profs Urge NYTimes To Correct The Many Errors In Its ‘1619 Project’

    Authored by Jennifer Kabbany via The College Fix,

    Five historians have written a letter to the editor to The New York Times telling the “newspaper of record” to correct the major and serious errors that riddle its 1619 Project.

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    The 1619 Project sought to “reframe the country’s history, understanding 1619 as our true founding,” due to the arrival in that year of 20 African slaves to a Virginia colony.

    The correction request was signed by Victoria Bynum of Texas State University, James McPherson and Sean Wilentz of Princeton University, James Oakes of the City University of New York and Gordon Wood of Brown University, reports The Washington Post.

    Their letter was published shortly after The Wall Street Journal reported on several of those professors’ concerns about the project that had been circulating on social media.

    The letter states in part:

    These errors, which concern major events, cannot be described as interpretation or “framing.” They are matters of verifiable fact, which are the foundation of both honest scholarship and honest journalism. They suggest a displacement of historical understanding by ideology. Dismissal of objections on racial grounds — that they are the objections of only “white historians” — has affirmed that displacement.

    On the American Revolution, pivotal to any account of our history, the project asserts that the founders declared the colonies’ independence of Britain “in order to ensure slavery would continue.” This is not true. If supportable, the allegation would be astounding — yet every statement offered by the project to validate it is false. Some of the other material in the project is distorted, including the claim that “for the most part,” black Americans have fought their freedom struggles “alone.”

    Still other material is misleading. The project criticizes Abraham Lincoln’s views on racial equality but ignores his conviction that the Declaration of Independence proclaimed universal equality, for blacks as well as whites, a view he upheld repeatedly against powerful white supremacists who opposed him. The project also ignores Lincoln’s agreement with Frederick Douglass that the Constitution was, in Douglass’s words, “a GLORIOUS LIBERTY DOCUMENT.”

    Instead, the project asserts that the United States was founded on racial slavery, an argument rejected by a majority of abolitionists and proclaimed by champions of slavery like John C. Calhoun.

    Given that the 1619 Project is being developed into a book and student curriculum, the scholars state it is very important that these errors be amended to reflect an accurate history of America.

    But The New York Times said no.

    “New York Times Magazine editor Jake Silverstein addressed each concern from the professors but stood firmly behind the reporting and declined to correct it,” the Post reports.

    Read the letter to the editor in the Times and the Post’s coverage of it.


    Tyler Durden

    Tue, 12/24/2019 – 19:45

  • SEC Investigating BMW For Using "Sales Punching" To Potentially Inflate Sales Numbers
    SEC Investigating BMW For Using “Sales Punching” To Potentially Inflate Sales Numbers

    While Tesla continues to waltz around regulators, breaking any and all securities laws it wants to, underreserving its warranty liabilities and allowing its self-driving cars with human beta testers to slam into inanimate objects before bursting into flames, regulators have decided to instead pay attention to BMW.

    It was reported yesterday that the SEC has now opened an investigation into whether BMW’s sales figures have been manipulated, according to the Wall Street Journal. On a side note, there’s been no word on whether or not BMW counts its “factory gated” vehicles in its press releases. 

    Instead, the SEC is looking at whether or not the automaker has engaged in “sales punching”, a practice that encourages dealers to register cars despite them not being sold.

    BMW acknowledged they were being investigated, stating: “We have been contacted by the SEC and will cooperate fully with their investigation.”

    BMW also faces litigation by European authorities on allegations of colluding with rivals to manipulate prices and control emissions. BMW has vowed to fight the case and took a $1.1 billion charge as a result in April. 

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    The company has also faced headwinds due the U.S./China trade war’s effect on its Spartanburg, S.C. factory exports. 

    The SEC investigation comes as U.S. officials are reportedly pursuing other car companies suspected of engaging in the same practice.

    Fiat paid a $40 million fine in September to settle claims by the SEC that the company had paid dealers to report exaggerated sales numbers. But don’t worry, the company has said it “reviewed and refined its sales reporting procedures and was committed to maintaining strong controls.”

    We feel better.

    Fiat was also forced to revise several years of sales results, nullifying a streak of 75 months of sales increases. Using the revised numbers, the streak ended in September 2013. 

    Regulators also found that VW had defrauded U.S. consumers and the U.S. government in 2015 by rigging their cars to cheat emissions tests. 

    As a reminder, the investigation into BMW comes at arguably the peak of the auto bubble – as well as the peak of auto regulator apathy. We recently reported that only 7% of incomes had been verified on new auto loans since 2017 and, despite these ongoing investigations into other companies, the name we see as the industry’s main offender, Tesla, has been mostly left alone by regulators. 


    Tyler Durden

    Tue, 12/24/2019 – 19:20

  • How The Soviets Replaced Christmas With A Socialist Winter Holiday
    How The Soviets Replaced Christmas With A Socialist Winter Holiday

    Authored by Ryan McMaken via The Mises Institute,

    Leftist revolutionaries have long been in the habit of reworking the calendar so as it make it easier to force the population into new habits and new ways of life better suited to the revolutionaries themselves.

    The French revolutionaries famously abolished the usual calendar, replacing it with a ten-day week system with three weeks in each month. The months were all renamed. Christian feast days and holidays were replaced with commemorations of plants like turnips and cauliflower.

    The Soviet communists attempted major reforms to the calendar themselves. Among these was the abolition of the traditional week with its Sundays off and predictable seven-day cycles.

    That experiment ultimately failed, but the Soviets did succeed in eradicating many Christian traditional holidays in a country that had been for centuries influenced by popular adherence to the Eastern Orthodox Christian religion.

    Once the communists took control of the Russian state, the usual calendar of religious holidays was naturally abolished. Easter was outlawed, and during the years when weekends were removed, Easter was especially difficult to celebrate, even privately.

    But perhaps the most difficult religious holiday to suppress was Christmas, and much of this is evidenced in the fact that Christmas wasn’t so much abolished as replaced by a secular version with similar rituals.

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    Emily Tamkin writes at Foreign Policy:

    Initially, the Soviets tried to replace Christmas with a more appropriate komsomol (youth communist league) related holiday, but, shockingly, this did not take. And by 1928 they had banned Christmas entirely, and Dec. 25 was a normal working day.

    Then, in 1935, Josef Stalin decided, between the great famine and the Great Terror, to return a celebratory tree to Soviet children. But Soviet leaders linked the tree not to religious Christmas celebrations, but to a secular new year, which, future-oriented as it was, matched up nicely with Soviet ideology.

    Ded Moroz [a Santa Claus-like figure] was brought back. He found a snow maid from folktales to provide his lovely assistant, Snegurochka. The blue, seven-pointed star that sat atop the imperial trees was replaced with a red, five-pointed star, like the one on Soviet insignia. It became a civic, celebratory holiday, one that was ritually emphasized by the ticking of the clock, champagne, the hymn of the Soviet Union, the exchange of gifts, and big parties.

    In the context of these celebrations, the word “Christmas” was replaced by “winter.” According to a Congressional report from 1965,

    The fight against the Christian religion, which is regarded as a remnant of the bourgeois past, is one of the main aspects of the struggle to mold the new “Communist man.” … the Christmas Tree has been officially abolished, Father Christmas has become Father Frost, the Christmas Tree has become the Winter Tree, the Christmas Holiday the Winter Holiday. Civil-naming ceremonies are substituted for christening and confirmation, so far without much success.

    It is perhaps significant that Stalin found the Santa Claus aspect of Christmas worth preserving, and Stalin apparently calculated that a father figure bearing gifts might be useful after all.

    According to a 1949 article in The Virginia Advocate,

    at children’s gatherings in the holiday season … grandfather frost lectures on good Communist behavior. He customarily ends his talk with the question “to whom do we owe all the good things in our socialist society?” To which, it is said, the children chorus the reply, ‘Stalin.’


    Tyler Durden

    Tue, 12/24/2019 – 18:55

  • Movie Theater Stocks Slump Amid Underwhelming Year, Not Even Star Wars Can Save Dying Industry 
    Movie Theater Stocks Slump Amid Underwhelming Year, Not Even Star Wars Can Save Dying Industry 

    Movie theater stocks plunged on Monday following a disappointing opening weekend for Disney’s Star Wars: The Rise Of Skywalker, reported Bloomberg

    AMC Entertainment Holdings, Cinemark Holdings Inc., and Cineworld Group Plc all plunged after reports over the weekend indicated weak ticket sales from Dec. 20 to Dec. 22 for Star Wars. 

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    Theater stocks have exhibited declines throughout most of the year. 

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    The movie generated a whopping $176 million over the weekend, making it the third-largest December debut ever but tracked below $183 million estimates.

    “Hollywood was banking on a strong showing to boost receipts,” Geetha Ranganathan, an analyst at Bloomberg Intelligence, wrote.

    “The reception, far below predecessors, may have been partly due to mixed critical reviews.”

    According to Comscore estimates, North American movie ticket sales slumped in 2019 by 3.6% to $11.5 billion, despite several blockbuster debuts this year, including Avengers: EndgameThe Lion King, and Star Wars: The Rise of Skywalker. 

    North America’s movie theater industry has been in limbo since the emergence of streaming services. A consolidation wave among movie theaters continues despite Hollywood’s softer domestic performance in 2019. Operators have been hunting for additional growth channels, including expansion in Asia.

    U.K.-based Cineworld is expected to become North America’s largest movie theater operator as it acquires Canada’s Cineplex in a $1.86 billion deal. 

    The movie theater consolidation wave began in 2012 when China’s Dalian Wanda Group purchased AMC Entertainment. 

    Netflix has undoubtedly disrupted the industry by releasing its content on television screens and mobile devices instead of at the box office.  Netflix released 371 new movies and TV shows in 2019, over 50 percent more than they did last year, according to data compiled by Variety Insight. 

    Infographic: Netflix Beats TV Industry's Output Before 2006 | Statista

    You will find more infographics at Statista

    The movie theater industry is always changing, there are ups and downs, but these days — it’s in a secular decline as streaming services have undoubtedly changed consumer preferences of how they watch movies. So in the next decade, or let’s say by 2030 — will movie theaters even exist?  


    Tyler Durden

    Tue, 12/24/2019 – 18:30

  • Christmas Is Canceled
    Christmas Is Canceled

    Authored by Steve Watson via Summit News,

    No matter how good old St Nick Chris Cringle is, in his red and white suit, he’s not as good as Orange man is bad. And that’s why Christmas is canceled for leftists.

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    Whingy Amanda Marcotte of Salon complains that everything about Christmas is ruined, because all of her family are fans of President Trump, so she can no longer have any relationship with them.

    In an op-ed titled “How Donald Trump ruined Christmas,” Marcotte complains that Trump “ruins everything he touches” and that “Christmas isn’t fun for me anymore.”

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    “My family is mostly a bunch of Trump voters, sucked up into a vortex of propaganda and lies, unable even to admit basic facts about the world that run contrary to what their tribal politics dictate,” she whines.

    “That sort of thing is stressful on a normal day but makes a mockery of the idea of familial love and harmony.” Marcotte further sobs.

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    The unhinged whinging just gets more and more pathetic as the piece progresses. Marcotte explains that because she is a liberal, feminist, atheist, her “enthusiasm for the Christmas season was always weak”, but now because of Trump it’s gone altogether.

    “This isn’t a matter of political differences that can be set aside for the sake of the holiday,” she blathers.

    “This is about not being able to make merry with people who think nothing of voting for a man who is on tape bragging about sexual assault, a man who cheats in elections and runs concentration camps on the border. A man whose racism has inspired a wave of terrorist violence, including in my hometown of El Paso, Texas.”

    “It’s a sad reminder that we are not the country we pretend to be when we sing songs about love and joy at this supposedly wonderful time of the year.” Marcotte snivels.

    Maybe the actual reality is that the entirety of her family just don’t like to wallow around in misery for a fortnight complaining about how shit everything is?

    But wait… Christmas is actually for white supremacists now, Marcotte argues, saying that because “Trump and his minions” have gotten hold of it, it has “morphed into something even uglier, a way to imply that the point of Christmas is to declare white supremacist America as the only ‘real’ America and to tell everyone else they can go hang.”

    What?

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    Marcotte argues that Thanksgiving is still ok, because she can avoid her family and just hang out in a safe space bubble with her friends, who all presumably agree with her about everything and never challenge anything she says. If only the entire world was like that!!

    “It seems a little silly to make a big thing out of a holiday that just reminds me how my own family and so many other people in America have been sucked up into the Trump cult.” Marcotte adds, saying “I’d rather just read a book or binge-watch some TV.”

    Miserable and deranged.

    She then ends with a diatribe about how evil capitalism is, and claims “I can sense the shaming, criticism and condescension coming my way, let me be clear: I am not a joyless person.”

    Could’ve fooled me.

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    Tyler Durden

    Tue, 12/24/2019 – 18:05

  • Russia's Su-57 Stealth Fighter Crashes During Factory Test Flight
    Russia’s Su-57 Stealth Fighter Crashes During Factory Test Flight

    Tass News is reporting that Russia’s most advanced stealth fighter crashed Tuesday during a test flight in the Khabarovsk Region in the Far East of the country. 

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    The fifth-generation Su-57 fighter jet experienced technical failure of the aircraft’s control system, a defense source told Tass.

    “According to the preliminary information, the crash is due to a failure of the Su-57’s control system,” one of the sources said.

    Another source said, “the tail control failed.”

    At the time of the incident, a civilian pilot was operating the Su-57, ejected from the aircraft 69 miles from the airfield. 

    Russia’s United Aircraft Corporation (UAC) also confirmed the crash on Tuesday.

    The company said the Su-57’s emergency system performed well and ejected the pilot to safety. 

    TASS noted that this is the first crash of the Su-57, a fifth-generation multirole fighter that is designed to rival the US’ Lockheed Martin F-22 Raptor and Lockheed Martin F-35 Lightning II stealth fighters.

    The Su-57 was first tested in early 2010 and has since flown combat missions in Syria. 

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    Last month, UAC started series production of the Su-57, rolled off the first production jet, and delivered it to Russia’s Aerospace Force.

    Russia’s Aerospace Force is expecting to receive 76 Su-57s by 2028. 

    Back in August, Deputy Defense Minister Alexei Krivoruchko told the press that Su-57 is “the most advanced fifth-generation multirole fighter jet, which will boost the domestic Aerospace Force’s combat capabilities” across the country. 

    Russia is planning on arming the stealth jets with hypersonic missiles to become the deadliest planes in the world.

     


    Tyler Durden

    Tue, 12/24/2019 – 17:40

  • The Great Cover Up Of The Biggest Scandal In American History
    The Great Cover Up Of The Biggest Scandal In American History

    Via The Z-Man blog,

    Joe diGenova has been talking about the seditious plot to overturn the 2016 election for at least a year, maybe longer. Unlike a lot of the people commenting on this in the mass media, he is not using it to sell books or boost his cable career. He also knows how the FBI and DOJ works from a practical matter. Being knowledgeable makes him a rare guy in the commentariat. Most of the people brought on as experts for the cable chat shows know very little about their alleged areas of expertise.

    Regardless, he has been one of the most hawkish people on the Barr investigation, claiming that it is a real investigation with real criminal targets. In this recent radio interview he goes into the details of both the Barr investigation and the ongoing impeachment fiasco. He is a Trump partisan, so his opinions on impeachment are predictable, but his thoughts on the conspiracy are interesting. He probably has access to information from the Trump White House.

    The interesting thing about all of this is just how widespread the conspiracy was during the 2015-2016 period. In that interview he talks about former NSA Director Admiral Mike Rogers, who is allegedly cooperating with Barr and Durham. What makes the Rogers issue interesting is that he was the original whistle-blower. He is not treated as such, because the media hates Trump and anyone associated with him, but Rogers was the guy who blew the whistle on the spying to the Trump people.

    What’s also interesting about Rogers is he seems to have been a good guy, who decided to put an end to the shenanigans with regards to access to top-secret data by FBI contractors. He closed off their access at some point in 2016, which put him in bad odor with the Obama administration. He was eventually pushed out, which suggests the conspiracy has roots into the Obama inner-circle. That may explain why the easy cases to be made against the FBI conspirators are on hold.

    That’s the other thing about the Rogers case. As CTH explains in that post, his addition to the story reveals that the use of the NSA database by political contractors working for the Democrats goes back to at least 2012. It is an axiom of white-collar crime that the practice always goes back much further than the evidence initially reveals. Anyone who has done forensic accounting knows this. You find the first evidence of a crime, but it turns out that the pattern goes back much further.

    That may be what lies beneath all of this. The great puzzle thus far has been the lack of prosecutions, despite ample evidence. The FBI agents are all guilty of crimes that have been detailed in public documents and the IG reports. There is now proof that Comey perjured himself many times. Just from a public relations perspective alone, rounding up these guys and charging them with corruption seems like a no-brainer. Almost a year into his tenure and Barr has charged no one with a crime.

    One obvious explanation is that Barr is running a long con on Trump and the rest of the country, on behalf of the inner party. Robert Mueller was supposed to use his investigation to hoover up all the data so it could not be made public, in addition to harassing the Trump White House. His incompetence meant Barr took over the job and is now hoovering up all the information on the various parties. That way, everyone has an excuse for not doing anything about plot.

    One bit of evidence in support of this is the handling of the James Wolfe issue. He was the Senate staffer caught leaking classified information to one of the prostitutes hired by the Washington Post. Big media hires good looking young women to sleep with flunkies like Wolf in order to get access to information. Wolf was caught and charged, but instead of getting a couple years in jail, he got two months. He will come out and land into a six-figure job as a reward for being a good soldier.

    An alternative explanation is that what started as a straight forward political corruption case bumped into a long pattern of behavior. In the course of investigating that pattern, the trail went much further back than the 2016 election. If there is evidence of abuse going back to 2012, maybe it goes back further. It was the Bush people, after all, who pushed for the creation of secret courts and secret warrants. Maybe Dick Cheney was listening to your phone calls after all.

    It is not just the linear aspect of this. The sheer number of people involved in just the FBI scandal is phenomenal. There are at least 20 FBI people named and dozens of bit players in the media and DOJ. So far, the “contractors” with access to the NSA database have not been revealed, but that could be hundreds of people, given that it seems to have been a free-for-all. The corruption may not only go back a long time, but cover a wide swath of official Washington.

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    That may be the answer to the great cover up. That’s what we are seeing. This is a great cover up of the biggest scandal in American history. To date, no one has been charged with a crime, despite hundreds of crimes being documented. Many of the principals are now enjoying high six figure lives, based on the fact they were part of the seditious plot to overturn the 2016 election. Instead of the scandal of the century, it is the celebration of the century for the inner party.

    One of the signs of ruling class collapse is when they can no longer enforce the rules that maintain them as a ruling class. When the Romans started making exceptions to republican governance, it was a matter of time before someone simply decided the rules no longer applied to them. Perhaps the robot historians will consider Obama our Marius or Sulla. Maybe that person is in the near future. Either way, the rule of law is over and what comes next is the rule of men.


    Tyler Durden

    Tue, 12/24/2019 – 17:15

  • US Must "Pursue Targeted Decoupling" From China's Economy, Says Former US Ambassador
    US Must “Pursue Targeted Decoupling” From China’s Economy, Says Former US Ambassador

    Despite the latest Sino-American phase one deal to ease tensions over trade, one former top US official is now calling for a decoupling between both economies, reported the South China Morning Post (SCMP). 

    Former US ambassador to India Ashley Tellis explains in a new book titled Strategic Asia 2020: US-China Competition for Global Influence — that the world’s two largest economies have entered a new period of sustained competition. 

    Tellis said Washington had developed a view that “China is today and will be for the foreseeable future the principal challenger to the US.”

    “The US quest for a partnership with China was fated to fail once China’s growth in economic capabilities was gradually matched by its rising military power,” he said.

    Tellis said Washington must resume its ability to support the liberal international order established by the US more than a half-century ago, and “provide the global public goods that bestow legitimacy upon its primacy and strengthen its power-projection capabilities to protect its allies and friends.”

    He said this approach would require more strategic cooperation with allies such as Australia, Japan, and South Korea.

    “The US should use coordinated action with allies to confront China’s trade malpractices … should pursue targeted decoupling of the US and Chinese economies, mainly in order to protect its defense capabilities rather than seeking a comprehensive rupture.”

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    The latest phase one deal between both countries is a temporary trade truce — likely to be broken as a strategic rivalry encompasses trade, technology, investment, currency, and geopolitical concerns will continue to strain relations in the early 2020s.

    A much greater decoupling could be dead ahead and likely to intensify over time, as it’s already occurring in the technology sector. 

    Tellis said President Trump labeling China as a strategic competitor was one of “the most important changes in US-China relations.” 

    The decoupling has already started as Washington races to safeguard the country’s cutting-edge technologies, including 5G, automation, artificial intelligence, autonomous vehicle, hypersonics, and robotics, from getting into the hands of Chinese firms.

    A perfect example of this is blacklisting Huawei and other Chinese technology firms from buying US semiconductor components.  

    Liu Weidong, a US affairs specialist from the Chinese Academy of Social Sciences, told SCMP that increased protectionism among Washington lawmakers suggests the decoupling trend between both countries is far from over.

    The broader shift at play is that decoupling will result in de-globalization, economic and financial fragmentation, and disruption of complex supply chains. 


    Tyler Durden

    Tue, 12/24/2019 – 16:50

  • The TSA and Security Theater: Understanding American Airport Security Following 9/11
    The TSA and Security Theater: Understanding American Airport Security Following 9/11

    Authored by Brian Miller via Ammo.com,

    Following the attacks of September 11th, Congress passed the Aviation and Transportation Security Act (ATSA), creating the Transportation Security Agency (TSA). The TSA replaced private security screening companies with one government agency. Since then, air travelers have bowed to pat downs, bans on water bottles and other inconvenient, intrusive procedures as the “new normal” at our nation’s airports. But does any of this make us safer?

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    The short answer is no, it doesn’t. What’s more, laid out below is the quantifiable evidence that the TSA is a massive boondoggle that has done little to keep Americans safe while they travel. Indeed, it might make us less safe by providing a false sense of security, as American politicians shy away from ever questioning the efficacy of the TSA (or other elements deemed necessary for “homeland security”).

    Perhaps more disturbing is the established record of TSA agents stealing from passengers. You’re far more likely to get robbed by a TSA agent than you are to get protected by one, a shorthand for the bureaucratic state if there ever was one.

    We did an in-depth study about the history, practices and statistics of the Transportation Security Agency. Whether you’re skeptical of the TSA efficacy, convinced of their incompetence, or just irritated about having to get groped to go on a plane, this article is a must read.

    SECURITY THEATER AND THE TSA

    Security expert Bruce Schneier coined the term “security theater” to describe some of the TSA’s procedures and screening practices. Security theater provides the appearance of enhanced security without actually making anyone more secure.

    Since 9/11, the TSA has implemented new screening procedures on an almost constant basis. The structural problem with these new screening procedures is two-fold. First, these procedures are almost always in response to past threats, not in anticipation of future threats. Second, average Americans suffer the consequences for years to come in the form of ever-increasing screening procedures and lost time.

    Sadly, the TSA’s accumulated procedures and screening practices are actually causing more American deaths. Cornell University researchers found decreased air travel after 9/11 led to an extra 242 road fatalities per month. In all, the researchers estimate that 1,200 people died as a result of decreased air travel. In 2007, the Cornell researchers studied TSA screening procedures implemented in 2002, and found that they decreased air travel by 6% – leading to an additional 129 road fatalities in the last three months of 2002. In terms of casualties, that’s the same as blowing up a fully loaded Boeing 737.

    THE TSA’S SECURITY THEATER TIMELINE

    There have been significant and numerous changes in the TSA’s security theater since 9/11. Here are some of the highlights and lowlights:

    • September 12, 2001: During the months after 9/11, National Guard troops are posted at the nation’s airports. Their guns are empty.

    • November 19, 2001: President Bush signs the Aviation and Transportation Security Act (ATSA), replacing private security screening with the Transportation Security Administration (TSA).

    • November 22, 2001: British national Richard Reid tries to blow up a Paris-Miami flight using explosives hidden in his shoes. The TSA institutes a random shoe-screening policy.

    • April 2002: The TSA deploys 6,000 explosive trace detection machines, or “puffers,” at all American airports. Fewer than 100 machines are deployed and the plan is scrapped. The total cost of the project is more than $30 million.

    • September 2004: The TSA orders all jackets and belts removed and X-rayed. Visitors banned from gate area.

    • March 31, 2005: TSA adds all lighters to its list of prohibited items.

    • December 2005: In response to the Madrid train bombings the year before, the TSA starts the Visible Intermodal Prevention and Response (VIPR) program to secure America’s transportation infrastructure beyond airports.

    • August 10, 2006: All passengers now required to remove shoes during security screening.

    • August 10, 2006: In response to a foiled plot using liquid explosives in Britain, the TSA adds all liquids, gels and aerosols to its list of prohibited items.

    • September 2006: The TSA implements its 3-1-1 Rule, allowing liquids in 3-ounce containers that fit in a single 1-quart plastic bag.

    • 2007: The TSA repeals the lighter ban and the agency’s chief Kip Hawley says that taking lighters away is “security theater.”

    • October 2007: In response to intelligence about remote-detonated explosives, the TSA starts training screeners to carry out additional screening of remote control toys.

    • Christmas Day, 2009: Nigerian citizen Umar Farouk Abdulmutallab tries to blow up a flight from Amsterdam to Detroit using explosives concealed in his underwear. The TSA orders mandatory full-body scans for all passengers. Passengers who refuse to be scanned will receive a physical pat-down search instead.

    • Early 2010: The TSA starts introducing full-body scanners that use backscatter radiation to produce effectively nude images of passengers. By the end of the year, more than 500 scanners are operational.

    • August 2010: The TSA achieves its goal of screening 100% of all checked baggage and cargo on board domestic flights.

    • October 2010: Saudi intelligence discovers a plot to blow up aircraft with explosives hidden in printer cartridges. The TSA bans all printer cartridges from carry-on luggage.

    • November 16, 2010: Hundreds of body scan images are leaked to the press. The leak causes a wave of demands to ban the fully-body scanners. In response to public outcry, Congress orders the TSA to purchase machines that generate a more generic picture of passengers’ bodies.

    • November 17, 2010: The TSA institutes new “enhanced” pat-down procedures that allow screeners to touch passengers’ inner thighs, groins, buttocks and breasts – areas previously off limits.

    • End of 2011: Every U.S. airport has at least one full-body scanner.

    • March 2012: Shoe removal rules are relaxed to allow passengers younger than 12 and older than 75 to keep their shoes on during screening.

    • July 6, 2014The TSA bans powerless devices on direct flights to the United States from certain overseas airports. Smartphones, laptops and any device with dead batteries “will not be permitted onboard aircraft.”

    • October 2018: The TSA lays out plans to use facial recognition software for domestic flights. And they order travelers to pay $1.4 million in civil penalties for bringing guns to airports.

    Nowadays, the TSA runs background checks on all travelers before they even arrive at the airport. Using the Department of Homeland Security’s Automated Targeting System, a massive database that employs algorithms to identify potential terrorists, the TSA automatically places thousands of travelers on the so-called selectee list, which earns them an “SSSS” stamp on their boarding pass and extra screening every time they fly. For travelers who want to avoid extra screening, there’s the TSA’s PreCheck program, which lets passengers keep their shoes, belts and jackets on and skip lengthy lines in exchange for a background check, fingerprinting and a fee.

    THE TSA’S 95% FAILURE RATE IN REHEARSALS

    Although security procedures have gotten more aggressive under the TSA, detection rates seem no better than they were before September 11, 2001. An undercover investigation by the DHS in 2018, found that the TSA had equipment or procedure failure more than half the time.

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    Numbers don’t lie. The TSA’s failure rate at weapon detection remains strong, which is likely 80% at some major airports. And during undercover tests, that failure rate increases. During covert tests conducted by the DHS in 2015, TSA agents failed to detect guns and fake explosives 95 percent of the time. In one test, an undercover DHS agent was stopped and received an “enhanced” pat-down search after setting off a metal detector, but the TSA screener failed to detect the fake bomb taped to the agent’s back.

    The U.S. hasn’t suffered any major attacks since 9/11. However, incidents like shoe bomber Richard Reid weren’t thwarted by the TSA – they were stopped by watchful passengers.

    HOW TO SPOT A TERRORIST

    Since 2006, the TSA has spent more than $1 billion on training so-called Behavior Detection Officers (BDOs) who watch passengers for suspicious behavior so they can be singled out for extra screening at airports. The program is called Screening Passengers by Observation Techniques (SPOT).

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    The specific behaviors that BDOs are trained to look for are supposed to be secret, but a leaked copy of the behavior checklist includes fidgeting, sweating, yawning and “suspicious” eye movements. SPOT operates on a point system. Sweaty palms and whistling earns travelers one point. Arrogance, a cold stare and good posture earn travelers two points. Other indicators include a recently shaved face, looking at the floor, clearing your throat, and complaining about the screening process. Travelers who get enough points can be flagged for extra screening.

    Since its inception in 2006, and after spending more than $1 billion, the SPOT program has only identified one man who could be called a terrorist. Kevin Brown, a Jamaican citizen, was waiting for his flight back home at Orlando International Airport in 2008. He checked his two bags, but not before a BDO flagged him as suspicious and ordered extra screening of his checked luggage – which contained pipes, caps, fuses, fuel and a handy printout explaining how to put them all together to make a bomb.

    Fewer than one out of the 30,000 passengers who are flagged every year as “suspicious” and are searched, end up getting arrested (usually for carrying drugs, undeclared currency or having outstanding warrants or being in the country illegally). A report by the Government Accountability Office in 2013 surveyed more than 400 scientific studies and found no evidence that terrorists can be identified by the behaviors on the SPOT checklist, and recommended that the TSA cut funding for SPOT and stop training new BDOs.

    THE ISRAELI ART OF CONVERSATION

    Israel faces more terrorist threats than any other country in the world, yet their airport security is a model of sensible, measured response to a very real danger.

    The screening process at Ben Gurion International Airport starts with a vehicle and bag inspection before passengers even enter the airport. Once inside the airport, passengers must pass through increasing layers of security, facing heavier and heavier scrutiny until they board. The level of technology at Ben Gurion hasn’t changed much since the 1980s. Metal detectors, X-ray scanners and bomb-sniffing dogs are still considered state-of-the-art.

    Israeli security screeners approach passengers to ask about their travel plans as standard practice. If passengers’ answers seem practiced or implausible, security personnel can order extra screening. Instead of a checklist, Israeli security screeners rely on intuition and the art of conversation to judge passengers’ intentions. Science bears this out as a more effective technique than a behavior checklist.

    Under the rules of the SPOT program, a BDO may see a passenger they feel is suspicious. However, the BDO cannot order extra screening unless the passenger displays approved “suspicious” behaviors like clearing their throat or looking at the floor. Since BDOs are supposed to remain undercover, they cannot approach passengers to gauge their intentions through conversation. That forces American airport security to rely on body language alone, which is actually worse than chance at identifying liars and others with concealed intent.

    There are three problems with the Israeli screening procedures, however: First, Israelis in general are used to higher levels of security scrutiny as part of their overall culture. This means both a greater acceptance of the idea of profiling and police interaction, but also a greater deal of confidence and trust in security and police forces.

    Perhaps more importantly, there are potential Constitutional issues. Profiling – racial or otherwise – does not currently violate Fourth Amendment protections, but no one is eager to test this in a court of law. Still, as proponents of the Israeli system are quick to point out, their profiling is behavioral, relying less upon unsuccessful pseudoscience and more upon a general “feel” officers trained in behavioral sciences get from interacting directly with travelers.

    Finally, there are concerns that the Israeli system simply won’t scale. Still, it’s worth asking how the Israeli system applied to the United States could get any worse.

    BEYOND SECURITY THEATER

    The TSA’s poor performance record has led some airports back to the private screening companies that handled security before 9/11. Under the TSA’s Screening Partnership Program, an approval process that typically takes years, airports can hire private security screeners. The only requirement is that the private outfits maintain the same level of security as the TSA. More than 20 local and international airports have joined the program – with San Francisco and Kansas City already onboard and more set to join as the TSA promises waiting times will reach three hours at busy airports during the spring and summer travel seasons.

    Private screeners at SPP airports have proven themselves to be more efficient and more effective than the TSA. A report by a House oversight committee in 2013 found that private screeners at San Francisco International Airport were much better at detecting prohibited items than TSA screeners at LAX, and wait times were shorter. As a result of the report, calls are growing in Congress to abolish the TSA and return to private screening companies.


    Tyler Durden

    Tue, 12/24/2019 – 16:25

Digest powered by RSS Digest

Today’s News 24th December 2019

  • Negative Rates & The Destruction Of Money: Sweden Ends Its Experiment
    Negative Rates & The Destruction Of Money: Sweden Ends Its Experiment

    Authored by Daniel Lacalle,

    Negative rates are the destruction of money, an economic aberration based on the mistakes of many central banks and some of their economists who start from a wrong diagnosis:

    the idea that economic agents do not take more credit or invest more because they choose to save too much and therefore saving must be penalized to stimulate the economy.

    Excuse the bluntness, but it is a ludicrous idea.

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    Inflation and growth are not low due to excess savings, but because of excess debt, perpetuating overcapacity with low rates and high liquidity and zombifying the economy by subsidizing the low productivity and highly indebted sectors and penalizing high productivity with rising and confiscatory taxation.

    Historical evidence of negative rates shows that they do not help reduce debt, they incentivize it, they do not strengthen the credit capacity of families, because the prices of non-replicable assets (real estate, etc.) skyrocket because of monetary excess, and the lower cost of debt does not compensate for the greater risk.

    Investment and credit growth are not subdued because economic agents are ignorant or saving too much, but because they don’t have amnesia. Families and businesses are more cautious in their investment and spending decisions because they perceive, correctly, that the reality of the economy they see each day does not correspond to the cost and the quantity of money.

    It is completely incorrect to think that families and businesses are not investing or spending. They are only spending less than what central planners would want. However, that is not a mistake from the private sector side, but a typical case of central planners’ misguided estimates, that come from using 2001-2007 as “base case” of investment and credit demand instead of what those years really were: a bubble.

    The argument of the central planners is based on an inconsistency: That rates are negative because markets demand them, not because they are imposed by the central bank. If that were the case, why don’t they let rates float freely if the result was going to be the same? Because it is false.

    Think for a moment what type of investment, company or financial decision is one that is profitable with rates at -0.5% but unviable with rates at 1%. A time bomb. It is no surprise that investment in bubble-prone sectors are rising with negative rates and non-replicable and financial assets skyrocket.

    Public debt trades at artificially low yields and, instead of strengthening economies, negative rates make governments more dependent on cheap debt. Politicians abandon any reformist impulse and prefer to accumulate more debt.

    The financial repression of central banks begins with a misdiagnosis, assuming that low growth and below-target inflation is a problem of demand, not of the previous excess, and ends up perpetuating the bubbles that they sought to solve.

    The policy of negative types can only be defended by people who have never invested or created a job because no one that has worked in the real economy can believe that financial repression will lead economic agents to take much more credit and strengthen the economy.

    Negative rates are a huge transfer of wealth from savers and real wages to the government and the indebted. A tax on caution. The destruction of the perception of risk that always benefits the most reckless. The bailout of the inefficient.

    Central banks ignore the effects of demography, technology and competition on inflation and growth of consumption, credit, and investment, and with the wrong policies generate new bubbles that become more dangerous than the previous ones. The next bubble is to increase again the fiscal imbalances of the countries. Even worse. When central banks present themselves as the agent that will reverse the effect of technology and demographics, they create a greater risk and bubble.

    Sweden launched its failed negative rate plan almost five years ago and now reverses it due to the financial risks that are created. The most interesting thing is that it reverses the policy of negative rates precisely because of the risk of an economic slowdown because the evidence shows that investment and consumption decisions do not increase with financial repression.

    In Sweden, with negative rates, the real estate price index has increased 50% (from 160 points to 240), the average residential index has risen 27%, non-replicable assets have risen between 30% and 70 % (infrastructure, etc.), the stock market has risen more than 20%. In that period, household consumption and investment (gross capital formation) have increased very little and real wages have remained stagnant.

    Monetary policy has gone from being a support for structural reforms to an excuse to avoid them. Now, governments are delighted to read that “fiscal measures” must be implemented. And when a government hears “fiscal measures” it translates into “spending.” And when the eurozone governments start spending, the result is always the same: more debt and higher taxes.

    In the eurozone, the economic aberration of negative rates continues despite the evidence of the collateral risks they generate. Meanwhile, you and I are blamed for not spending and borrowing more. What can go wrong?


    Tyler Durden

    Tue, 12/24/2019 – 02:00

  • Turkey Can't Handle New Refugee Explosion & Greece Will Be First To Feel Impact: Erdogan
    Turkey Can’t Handle New Refugee Explosion & Greece Will Be First To Feel Impact: Erdogan

    At a moment Erdogan has his hands dirty in Syria and is preparing to get more militarily involved in Libya, Turkey’s president has yet again threatened Europe with a refugee horde so large no country will be able to handle it. He’s now specifically threatened Greece as being among the first to bear the brunt of the first waves of refugees unleashed by Turkey.

    His threats are now centering on the major uptick in airstrikes by Russia and Syria on Idlib province, said to number in the “hundreds” since a new operation began on Dec.16. Since then, tens of thousands of civilians living under al-Qaeda’s Hayat Tahrir al-Sham (HTS) have reportedly fled. 

    “Turkey cannot handle a fresh wave of migrants from Syria, President Tayyip Erdogan said on Sunday, warning that European countries will feel the impact of such an influx if violence in Syria’s northwest is not stopped,” Reuters reports. 

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    File image: refugee crisis hit the Greek island of Lesvos in 2015.

    Common estimates now put the number of Syrian refugees hosted on Turkish soil at 3.7 million, with another 3 million inside war-torn Idlib province, which means the refugee crisis is set to explode dramatically higher in terms of numbers — a likely scenario given Damascus has vowed to return “every inch” of Idlib and all Syrian territory to its control.

    Thus far thousands have fled into neighboring Turkey, but there’s been on the ground reports suggesting HTS militants are blocking the bulk of refugees from leaving, perhaps using them as ‘human shields’ amid the Russian-Syrian onslaught.

    During a public speech in Istanbul on Sunday night, Erdogan claimed over 80,000 people were currently fleeing Idlib for the safety of Turkey, and repeated his urgent appeal for Europe to give additional support. 

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    “If the violence toward the people of Idlib does not stop, this number will increase even more. In that case, Turkey will not carry such a migrant burden on its own,” Erdogan said.

    And he named Greece while invoking the peak of the migrant crisis in 2015, promising a “repeat” if nothing is done:

    “The negative impact of the pressure we will be subjected to will be something that all European nations, especially Greece, will also feel,” he said, adding that a repeat of the 2015 migrant crisis would become inevitable.

    “We call on European countries to use their energy to stop the massacre in Idlib, rather than trying to corner Turkey for the legitimate steps it took in Syria,” Erdogan said, referencing the Turkish army’s own ongoing ‘Operation Peace Spring’ against US-backed Syrian Kurds.

    Erdogan further called the some $3 billion in support offered by the United Nations refugee agency last week “not enough”.

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    As for Erdogan’s targeting Greece in his latest remarks, this comes amid Turkey’s new jostling to secure oil and gas exploration and drilling rights across a broad swath of the eastern and southern Mediterranean, especially following a contentious deal with Libya’s GNA in Tripoli. 

    Greek sources: Foreign Minister Nikos Dendias traveled to Benghazi, Libya, on Sunday, where he met with the head of the Libyan National Army, General Khalifa Haftar, according to a ministry statement.

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    Athens is reportedly preparing to formally recognize Gen. Khalifa Haftar’s Benghazi-based administration as the official government of Libya, at a moment he and Turkey are in direct open war with each other, given Ankara is said to be shipping more military supplies and possibly even troops to help repel his ongoing offensive against Tripoli. Turkey is the closest military supporter to the UN-recognized government in Tripoli, despite the UN-led arms embargo in place (which no one seems to be abiding by). 

    Greece has also vowed to thwart Turkish exploration and drilling vessels from traversing its waters to enter disputed maritime regions off Libya. 

    Thus with Athens now more closely embroiled in the emerging maritime dispute involving Turkey, Cyprus, Libya and Egypt, Erdogan has all the more reason to target Greece with threats of flooding the islands with migrants — as happened in 2015, and which has been a steady stream of new arrivals ever since. 


    Tyler Durden

    Tue, 12/24/2019 – 01:00

  • The Christmas Truce Of WWI Paused The Murderous Demands Of The State
    The Christmas Truce Of WWI Paused The Murderous Demands Of The State

    Authored by Will Grigg via The Libertarian Institute,

    For a tragically short time, the Spirit of the Prince of Peace drowned out the murderous demands of the State.

    In August 1914, Europe’s major powers threw themselves into war with gleeful abandon. Germany, a rising power with vast aspirations, plowed across Belgium, seeking to checkmate France quickly before Russia could mobilize, thereby averting the prospect of a two-front war. Thousands of young Germans, anticipating a six-week conflict, boarded troop trains singing the optimistic refrain: “Ausflug nach Paris. Auf Widersehen auf dem Boulevard.” (“Excursion to Paris. See you again on the Boulevard.”)

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    The antagonists found themselves mired along a static line of trenches running for hundreds of miles through France and Belgium.

    The French were eager to avenge the loss of Alsace and Lorraine to Germany in 1870. The British government, leery of Germany’s growing power, mobilized hundreds of thousands of young men to “teach the Hun a lesson.” Across the continent, writes British historian Simon Rees, “millions of servicemen, reservists and volunteers … rushed enthusiastically to the banners of war…. The atmosphere was one of holiday rather than conflict.”

    Each side expected to be victorious by Christmas. But as December dawned, the antagonists found themselves mired along the Western Front – a static line of trenches running for hundreds of miles through France and Belgium. At some points along the Front, combatants were separated by less than 100 feet. Their crude redoubts were little more than large ditches scooped out of miry, whitish-gray soil. Ill-equipped for winter, soldiers slogged through brackish water that was too cold for human comfort, but too warm to freeze.

    The unclaimed territory designated No Man’s Land was littered with the awful residue of war – expended ammunition and the lifeless bodies of those on whom the ammunition had been spent. The mortal remains of many slain soldiers could be found grotesquely woven into barbed wire fences. Villages and homes lay in ruins. Abandoned churches had been appropriated for use as military bases.

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    Many of those pressed into service on the Western Front had not succumbed to the initial frenzy of bloodlust. Fighting alongside French, Belgian, and English troops were Hindus and Sikhs from India, as well as Gurkhas from the Himalayan Kingdom of Nepal.

    As losses mounted and the stalemate hardened, war fever began to dissipate on both sides.

    These colonial conscripts had been transported from their native soil and deployed in trenches carved out of wintry Belgian cabbage patches. Highland Scots were also found at the Front, proudly wearing their kilts in defiance of the bitter December cold.

    The German troops were led by elite Prussian officers, representatives of the bellicose Junker aristocracy. The German rank and file included Bavarian, Saxon, Westphalian, and Hessian reservists, more than a few of whom had lived – or even been born – in England and spoke perfect English. Bismarck’s efforts to unite the scattered German principalities notwithstanding, many German troops remained more attached to their local communities than to what for them was an abstract German nation.

    Comrades at Arms

    Wallowing in what amounted to cold, fetid sewers, pelted by freezing rain, and surrounded by the decaying remains of their comrades, soldiers on both sides grimly maintained their military discipline. On December 7, Pope Benedict XV called for a Christmas cease-fire. This suggestion earned little enthusiasm from political and military leaders on both sides. But the story was different for the exhausted frontline troops.

    A December 4 dispatch from the commander of the British II Corps took disapproving notice of a “live-and-let-live theory of life” that had descended on the Front. Although little overt fraternization was seen between hostile forces, just as little initiative was shown in pressing potential advantages. Neither side fired at the other during meal times, and friendly comments were frequently bandied about across No Man’s Land. In a letter published by the Edinburgh Scotsman, Andrew Todd of the Royal Engineers reported that soldiers along his stretch of the Front, “only 60 yards apart at one place… [had become] very ‘pally’ with each other.”

    With Christmas approaching, the scattered gestures of goodwill across enemy lines increased.

    Rather than flinging lead at their opponents, the troops would occasionally hurl newspapers (weighted with stones) and ration tins across the lines. Barrages of insults sometimes erupted as well, but they were delivered “generally with less venom than a couple of London cabbies after a mild collision,” reported Leslie Walkinton of the Queen’s Westminster Rifles.

    As December waxed, the combat ardor of the frontline troops waned. With Christmas approaching, the scattered and infrequent gestures of goodwill across enemy lines increased. About a week before Christmas, German troops near Armentieres slipped a “splendid” chocolate cake across the lines to their British counterparts. Attached to that delectable peace offering was a remarkable invitation:

    We propose having a concert tonight as it is our Captain’s birthday, and we cordially invite you to attend – provided you will give us your word of honor as guests that you agree to cease hostilities between 7:30 and 8:30…. When you see us light the candles and footlights at the edge of our trench at 7:30 sharp you can safely put your heads above your trenches, and we shall do the same, and begin the concert.

    The concert proceeded on time, with the bewhiskered German troops singing “like Christy Minstrels,” according to one eyewitness account. Each song earned enthusiastic applause from the British troops, prompting a German to invite the Tommies to “come mit us into the chorus.” One British soldier boldly shouted, “We’d rather die than sing German.” This jibe was parried instantly with a good-natured reply from the German ranks: “It would kill us if you did.” The concert ended with an earnest rendition of “Die Wacht am Rhein,” and was closed with a few shots deliberately aimed at the darkening skies – a signal that the brief pre-Christmas respite was ended.

    Elsewhere along the Front, arrangements were worked out to retrieve fallen soldiers and give them proper treatment or burial.

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    In a letter to his mother, Lt. Geoffrey Heinekey of the 2nd Queen’s Westminster Rifles described one such event that took place on December 19. “Some Germans came out and held up their hands and began to take in some of their wounded and so we ourselves immediately got out of our trenches and began bringing in our wounded also,” he recalled.

    “The Germans then beckoned to us and a lot of us went over and talked to them and they helped us to bury our dead. This lasted the whole morning and I talked to several of them and I must say they seemed extraordinarily fine men…. It seemed too ironical for words. There, the night before we had been having a terrific battle and the morning after, there we were smoking their cigarettes and they smoking ours.”

    Football in No Man’s Land

    Soon talk along the Front turned to the prospect of a formal cessation of hostilities in honor of Christmas. Again, this idea met resistance from above. Comments historian Stanley Weintraub, in his book, Silent Night: The Story of the World War I Christmas Truce:

    Most higher-ups had looked the other way when scattered fraternization occurred earlier. A Christmas truce, however, was another matter. Any slackening in the action during Christmas week might undermine whatever sacrificial spirit there was among troops who lacked ideological fervor. Despite the efforts of propagandists, German reservists evidenced little hate. Urged to despise the Germans, [British] Tommies saw no compelling interest in retrieving French and Belgian crossroads and cabbage patches. Rather, both sides fought as soldiers fought in most wars – for survival, and to protect the men who had become extended family.

    In a sense, the war itself was being waged within an extended family, since both Germany’s Kaiser Wilhelm II and England’s King George V were grandsons of Queen Victoria. More importantly, the warring nations were all part of what had once been known as Christendom. The irony of this fact was not lost on those sentenced to spend Christmas at the Front.

    By Christmas Eve, the German side of the Front was radiant with glowing Tannenbeume – small Christmas trees set up, sometimes under fire, by troops determined to commemorate the holy day. “For most British soldiers, the German insistence on celebrating Christmas was a shock after the propaganda about Teutonic bestiality, while the Germans had long dismissed the British as well as the French as soulless and materialistic and incapable of appreciating the festival in the proper spirit,” writes Weintraub. “Regarded by the French and British as pagans – even savages – the pragmatic Germans were not expected to risk their lives on behalf of each beloved Tannenbaum. Yet when a few were felled by Scrooge-like gunfire, the Saxons opposite the [British line] stubbornly climbed the parapets to set the endangered trees up once more.”

    Troops extracted themselves from their trenches and dugouts, approaching each other warily, and then eagerly, across No Man’s Land.

    The radiant Christmas trees reminded some Indian conscripts of lanterns used to celebrate the Hindu “Festival of Lights.” Some of them must have been puzzled over finding themselves freezing, undernourished, and confronting a lonely death thousands of miles from their homes as soldiers in a war which pitted Christian nations against each other. “Do not think that this is war,” wrote one Punjabi soldier in a letter to a relative. “This is not war. It is the ending of the world.”

    But there were souls on each side of that fratricidal conflict determined to preserve the decencies of Christendom, even amid the conflict. As Christmas dawned, German Saxon troops shouted greetings to the British unit across from it: “A happy Christmas to you, Englishmen!” That welcome greeting prompted a mock-insulting reply from one of the Scottish troops, who was mildly irritated at being called an Englishman: “The same to you Fritz, but dinna o’er eat youself wi’ they sausages!”

    A sudden cold snap had left the battlefield frozen, which was actually a relief for troops wallowing in sodden mire. Along the Front, troops extracted themselves from their trenches and dugouts, approaching each other warily, and then eagerly, across No Man’s Land. Greetings and handshakes were exchanged, as were gifts scavenged from care packages sent from home. German souvenirs that ordinarily would have been obtained only through bloodshed – such as spiked pickelhaube helmets, or Gott mit uns belt buckles – were bartered for similar British trinkets. Carols were sung in German, English, and French. A few photographs were taken of British and German officers standing alongside each other, unarmed, in No Man’s Land.

    Near the Ypres salient, Germans and Scotsmen chased after wild hares that, once caught, served as an unexpected Christmas feast. Perhaps the sudden exertion of chasing wild hares prompted some of the soldiers to think of having a football match. Then again, little prompting would have been necessary to inspire young, competitive men – many of whom were English youth recruited off soccer fields – to stage a match. In any case, numerous accounts in letters and journals attest to the fact that on Christmas 1914, German and English soldiers played soccer on the frozen turf of No Man’s Land.

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    British Field Artillery Lieutenant John Wedderburn-Maxwell described the event as “probably the most extraordinary event of the whole war – a soldier’s truce without any higher sanction by officers and generals….”

    This isn’t to say that the event met with unqualified approval. Random exchanges of gunfire along the Front offered lethal reminders that the war was still underway.

    From his rearward position behind the lines, a “gaunt, sallow soldier with a thick, dark mustache and hooded eyes” witnessed the spontaneous eruption of Christian fellowship with hateful contempt. The German Field Messenger of Austrian birth heaped scorn on his comrades who were exchanging Christmas greetings with their British counterparts. “Such a thing should not happen in wartime,” groused Corporal Adolf Hitler. “Have you no German sense of honor left at all?” “More than patriotic scruples were involved” in Hitler’s reaction, notes Weintraub. “Although a baptized Catholic, he rejected every vestige of religious observance while his unit marked the day in the cellar of the Messines monastery.”

    What If…?

    In a January 2, 1915 account of the Christmas Truce, the London Daily Mirror reflected that “the gospel of hate” had lost its allure to soldiers who had come to know each other.

    “The soldier’s heart rarely has any hatred in it,” commented the paper. “He goes out to fight because that is his job. What came before – the causes of the war and the why and wherefore – bother him little. He fights for his country and against his country’s enemies. Collectively, they are to be condemned and blown to pieces. Individually, he knows they’re not bad sorts.”

    “Many British and German soldiers, and line officers, viewed each other as gentlemen and men of honor,” writes Weintraub. The rank and file came to understand that the man on the other end of the rifle, rather than the soulless monster depicted in ideological propaganda, was frightened and desperate to survive and return to his family. For many along the Front, these realities first became clear in the light cast by the German Tannenbaum.

    The informal truce held through Christmas and, at some points along the Front, through the following day.

    In the shared symbol of the Christmas tree – an ornament of pagan origins appropriated by Christians centuries ago – British and German troops found “a sudden and extraordinary link,” observed British author Arthur Conan Doyle after the war (a conflict that claimed his son’s life). “It was an amazing spectacle,” Doyle reflected, “and must arouse bitter thought concerning the high-born conspirators against the peace of the world, who in their mad ambition had hounded such men on to take each other by the throat rather than by the hand.”

    In a remarkable letter published by The Times of London on January 4, a German soldier stated that “as the wonderful scenes in the trenches [during Christmas] show, there is no malice on our side, and none in many of those who have been marshaled against us.” But this was certainly not true of those who orchestrated the war, the “high-born conspirators against the peace of the world.” As British historian Niall Ferguson points out, the war-makers’ plans for the world required “Maximum slaughter at minimum expense.”

    The informal truce held through Christmas and, at some points along the Front, through the following day (known as “Boxing Day” to British troops). But before New Year’s Day the war had resumed in all of its malignant fury, and the suicide of Christendom continued apace.

    Most wars are senseless exercises in mass murder and needless destruction. World War I, however, is remarkable not only for being more avoidable and less justifiable than most wars, but also for its role in opening the gates of hell. Mass starvation and economic ruin inflicted on Germany during the war and its aftermath cultivated the National Socialist (Nazi) movement. Nearly identical ruin wrought in Russia thrust Lenin and the Bolsheviks to power. Benito Mussolini, a socialist agitator once regarded as Lenin’s heir, rose to power in Italy. Radical variants of intolerant totalitarian nationalism ulcerated Europe. The seeds of future wars and terrorism were deeply sewn in the Middle East.

    The truce – a welcome fermata in the symphony of destruction – illustrated a timeless truth.

    What if the Christmas Truce of 1914 had held? Might a negotiated peace have ensued, preserving Christendom for at least a while longer? We do not know. It is doubtful that the “high-born conspirators against the peace of the world” would have been long deterred in pursuing their demented plans. But the truce – a welcome fermata in the symphony of destruction – illustrated a timeless truth of the nature of the human soul as designed by its Creator.

    Reflecting on the Christmas Truce, Scottish historian Roland Watson writes: “The State bellows the orders ‘Kill! Maim! Conquer!’ but a deeper instinct within the individual does not readily put a bullet through another who has done no great offense, but who rather says with them, ‘What am I doing here?’”

    For a tragically short time, the Spirit of the Prince of Peace drowned out the murderous demands of the State.


    Tyler Durden

    Mon, 12/23/2019 – 23:45

  • Baltimore Resurrects Spy Plane Program To Monitor Citizens
    Baltimore Resurrects Spy Plane Program To Monitor Citizens

    Baltimore City announced last week the return of a surveillance plane program that will use high-tech sensors to monitor citizens and help deter violent crime, reported WJZ Baltimore

    Police Commissioner Michael Harrison held a press conference Friday about three new spy planes that could hit the skies by May 2020. 

    Harrison said the new pilot program could utilize as many as three spy planes and will test whether the planes can aid investigators in solving violent crimes. 

    Ross McNutt, the president of Persistent Surveillance Systems, the company that operates the spy planes, told WJZ that the aircraft would be used to “save as many lives as possible.” McNutt said as many as three planes could start flying next May. 

    We noted several months ago about the possibility of the planes returning to the skies of Baltimore. 

    Each plane has high-tech sensors that can monitor up to 32 square miles at a time, and each would fly 45 to 50 hours a week. 

    As early as 2015, we reported that Persistent was flying a Cessna 182T Skylane over the streets of Baltimore during the riots. 

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    The funding for the planes will be provided by Texas billionaire philanthropists John and Laura Arnold. There’s no expense to taxpayers to fly the aircraft for the first six months. 

    “We will be the first American city to use this technology in an effort to deter violent crime, “Harrison said. “It is important we are transparent about how the program will and will not be used going forward. “

    We noted Monday morning that Baltimore City’s homicide count for 2019 stands at 336, likely to breach the all-time high of 342 in the coming week, resulting in one of the worst years ever for violent crime in the city. 

    The resurrection of the spy plane program shows what happens when an American city implodes — the response by politicians is to create a surveillance state.  

     


    Tyler Durden

    Mon, 12/23/2019 – 23:25

  • After Blowing $3 Trillion On Lies In Afghanistan, Congress Just Authorized A Trillion More For 2020
    After Blowing $3 Trillion On Lies In Afghanistan, Congress Just Authorized A Trillion More For 2020

    Authored by Daisy Luther via The Organic Prepper blog,

    It’s rare that I read something on the Washington Post that I don’t find highly biased, even repugnant. But with their recent article on the Afghanistan Papers, they truly knocked the ball out of the park.

    The facts they shared should have every American protesting in the streets.

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    Trillions of dollars have been spent on a war that the Pentagon knew was unwinnable all along. More than 2300 American soldiers died there and more than 20,000 have been injured. More than 150,000 Afghanis were killed, many of them civilians, including women and children.

    And they lied to us constantly.

    Congress just proved that the truth doesn’t matter, though. A mere 22 hours after the release of this document, the new National Defense Authorization Act that breezed through the House and Senate was signed by the President. That bill authorized $738 billion in military spending for 2020, actually increasing the budget by $22 billion over previous years.

    So, how is your representation in Washington, DC working out for you?

    What are the Afghanistan Papers?

    The Afghanistan Papers are a brilliant piece of investigative journalism published by the Washington Post and the article is very much worth your time to read. I know, I know – WaPo. But believe me when I tell you this is something all Americans need to see.

    This was an article that took three years of legal battles to bring to light. WaPo acquired the documents using the Freedom of Information Act and got more than 2000 pages of insider interviews with “people who played a direct role in the war, from generals and diplomats to aid workers and Afghan officials.” These documents were originally part of a federal investigation into the “root failures” of the longest conflict in US history – more than 18 years now.

    Three presidents, George W. Bush, Barack Obama, and Donald Trump, have been involved in this ongoing war. It turns out that officials knew the entire time this war was “unwinnable” yet they kept throwing American lives and American money at it.

    Here’s an excerpt from WaPo’s report. Anything that is underlined is taken verbatim from the papers themselves – you can click on them to read the documents.

    In the interviews, more than 400 insiders offered unrestrained criticism of what went wrong in Afghanistan and how the United States became mired in nearly two decades of warfare.

    With a bluntness rarely expressed in public, the interviews lay bare pent-up complaints, frustrations and confessions, along with second-guessing and backbiting.

    “We were devoid of a fundamental understanding of Afghanistan — we didn’t know what we were doing,” Douglas Lute, a three-star Army general who served as the White House’s Afghan war czar during the Bush and Obama administrations, told government interviewers in 2015. He added: “What are we trying to do here? We didn’t have the foggiest notion of what we were undertaking.”

    “If the American people knew the magnitude of this dysfunction . . . 2,400 lives lost,” Lute added, blaming the deaths of U.S. military personnel on bureaucratic breakdowns among Congress, the Pentagon and the State Department. “Who will say this was in vain?” (source)

    The important thing to note about these interviews is that the interviewees never expected their words to become public. They weren’t “blowing the whistle.” They were answering questions for a federal investigation. So they didn’t hold back. These aren’t “soundbites.” It’s what the real witnesses are saying.

    The U.S. government has not carried out a comprehensive accounting of how much it has spent on the war in Afghanistan, but the costs are staggering.

    Since 2001, the Defense Department, State Department and U.S. Agency for International Development have spent or appropriated between $934 billion and $978 billion, according to an inflation-adjusted estimate calculated by Neta Crawford, a political science professor and co-director of the Costs of War Project at Brown University.

    Those figures do not include money spent by other agencies such as the CIA and the Department of Veterans Affairs, which is responsible for medical care for wounded veterans.

    “What did we get for this $1 trillion effort? Was it worth $1 trillion?” Jeffrey Eggers, a retired Navy SEAL and White House staffer for Bush and Obama, told government interviewers. He added, “After the killing of Osama bin Laden, I said that Osama was probably laughing in his watery grave considering how much we have spent on Afghanistan.” (source)

    The US government deliberately misled the American people.

    What’s more, if you officials, up to and including three presidents, knew they were throwing money at something that could never be achieved. They did it anyway and they lied to our faces about it.

    The documents also contradict a long chorus of public statements from U.S. presidents, military commanders and diplomats who assured Americans year after year that they were making progress in Afghanistan and the war was worth fighting.

    Several of those interviewed described explicit and sustained efforts by the U.S. government to deliberately mislead the public. They said it was common at military headquarters in Kabul — and at the White House — to distort statistics to make it appear the United States was winning the war when that was not the case.

    Every data point was altered to present the best picture possible,” Bob Crowley, an Army colonel who served as a senior counterinsurgency adviser to U.S. military commanders in 2013 and 2014, told government interviewers. “Surveys, for instance, were totally unreliable but reinforced that everything we were doing was right and we became a self-licking ice cream cone. (source)

    It’s been an epic 18-year-long exercise in CYA. (Cover Your A$$). I don’t see how anyone could fail to be outraged by this. And what I’ve cited here is just the crap icing on the maggot cupcake. It’s a festering mess and I urge you, if you really want to know the truth, to read this article on WaPo and click on these links.

    How was all this money spent?

    A lot of it went to building infrastructure in Afghanistan. It was flagrantly and frivolously used there while we live in a place where people are going bankrupt at best and dying at worst because they can’t afford medical care and there are places in our country without clean running water or toilets.

    One unnamed executive with the U.S. Agency for International Development (USAID) guessed that 90 percent of what they spent was overkill: “We lost objectivity. We were given money, told to spend it and we did, without reason.”

    … One unidentified contractor told government interviewers he was expected to dole out $3 million daily for projects in a single Afghan district roughly the size of a U.S. county. He once asked a visiting congressman whether the lawmaker could responsibly spend that kind of money back home: “He said hell no. ‘Well, sir, that’s what you just obligated us to spend and I’m doing it for communities that live in mud huts with no windows.’ ” (source)

    Aren’t you angry about this? Don’t you feel betrayed as more Americans struggle to pay their bills and eat food and keep a roof over their heads each month?

    Who benefits from this?

    As usual, follow the money.

    The defense industry certainly reaped rewards and it’s highly likely a lot of people who had the power to allow it to go on made some “wise investments” that have paid off for them.  But for the rest of us, this conflict has done nothing except ensure that our tax dollars are not here improving our infrastructure or helping Americans lead better and more productive lives.

    Dr. Ron Paul refers to this as the crime of the century.

    It is not only members of the Bush, Obama, and Trump Administrations who are guilty of this massive fraud. Falsely selling the Afghanistan war as a great success was a bipartisan activity on Capitol Hill. In the dozens of hearings I attended in the House International Relations Committee, I do not recall a single “expert” witness called who told us the truth. Instead, both Republican and Democrat-controlled Congresses called a steady stream of neocon war cheerleaders to lie to us about how wonderfully the war was going. Victory was just around the corner, they all promised. Just a few more massive appropriations and we’d be celebrating the end of the war.

    Congress and especially Congressional leadership of both parties are all as guilty as the three lying Administrations. They were part of the big lie, falsely presenting to the American people as “expert” witnesses only those bought-and-paid-for Beltway neocon think tankers.

    What is even more shocking than the release of this “smoking gun” evidence that the US government wasted two trillion dollars and killed more than three thousand Americans and more than 150,000 Afghans while lying through its teeth about the war is that you could hear a pin drop in the mainstream media about it. Aside from the initial publication in the Washington Post, which has itself been a major cheerleader for the war in Afghanistan, the mainstream media has shown literally no interest in what should be the story of the century. (source)

    And it’s most likely that nobody will ever face punishment for this deception. If this is not the very definition of the term “war crimes” I can hardly imagine what is. Dr. Paul continues:

    We’ve wasted at least half a year on the Donald Trump impeachment charade – a conviction desperately in search of a crime. Meanwhile one of the greatest crimes in US history will go unpunished. Not one of the liars in the “Afghanistan Papers” will ever be brought to justice for their crimes. None of the three presidents involved will be brought to trial for these actual high crimes. Rumsfeld and Lute and the others will never have to fear justice. Because both parties are in on it. There is no justice. (source)

    The response? Silence and a budget increase.

    The people in government don’t care that we know about all this. Sure, it’s mildly inconvenient but “whatever.”

    How do I know this?

    Simple. Less than a full day after the story broke, the new NDAA ended up on President Trump’s desk and was signed, authorizing an additional 22 billion dollars for next year’s defense spending. And all anyone can talk about is, “Oooohhhh Space Force!!!”

    Government: “Merry Christmas. We’re going to blow through more of your tax money and you won’t get a damned thing for it.”

    I couldn’t make this up if I tried. In a notable, must-read op-ed, Darius Shahtahmasebi cited some horrific incidents and concluded:

    We can’t let this recent publication obscure itself into nothingness. The recent reaction from Congress is a giant middle finger designed to tell you that (a) there will never be anything you can do about it and (b) they simply don’t care how you feel. Democracy at its finest from the world’s leading propagator of democratic values. (source)

    When is enough going to be enough? Why are we not enraged en masse? Why haven’t we recalled these treasonous bastards and taken our country and our budget back?

    For a country that is ready to take up arms and waste countless hours “impeaching” Trump over something he said on a phone call, it sure says a lot about those same people ignoring 18 years of treasonous behavior by three separate administrations.

    Why isn’t the media raising hell over this? Why aren’t these lives important? Why isn’t sending trillions of our dollars to be frittered away an outrage?

    People love to say “America First” and “impeach Trump for treason” and all that jazz. They love to call anti-war people “un-American” and recommend a quick, one-way trip to Somalia if we don’t “support our troops.” However, I think is far more evidence of supporting our troops to want out of there, not risking their lives based on a castle of lies that further enriches powerful and wealthy people who have nothing to lose.

    Most people love to be outraged about frivolous matters. But when a report like this and its following insult are met with resounding silence, it’s pretty obvious that hardly anybody is really paying attention.


    Tyler Durden

    Mon, 12/23/2019 – 23:05

    Tags

  • China Slams New US Space Force As Weaponizing A "New Battlefield" 
    China Slams New US Space Force As Weaponizing A “New Battlefield” 

    Entirely to be expected, China has slammed Trump’s newly established Space Force, calling it an unnecessary first move on the part of Washington to weaponize space

    Warning of a new Cold War style weapons space race, China’s Foreign Ministry said it is “deeply concerned” and “resolutely opposed” to the United States’ newest sixth branch of the military, calling it a threat to peaceful space missions undertaken by other countries.

    Coming days after Trump signed into law the defense bill which formally establishes United States Space Force, foreign ministry spokesman Geng Shuang said: “The relevant U.S. actions are a serious violation of the international consensus on the peaceful use of outer space, undermine global strategic balance and stability, and pose a direct threat to outer space peace and security,” according to the Associated Press

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    Illustration image via Axios

    He also said the US initiative marking the first time in 70 years that a new branch has been established could make space into a “new battlefield”

    However, Washington officials and pundits have pointed to Beijing’s own ambitious space program which has advanced rapidly since China’s first crewed mission in 2003, per the AP:

    China in 2007 conducted an unannounced missile strike against one of its own defunct satellites, creating an enormous amount of space debris.

    Geng dismissed such concerns, calling them “unfounded counter charges” that merely provided the U.S. with a justification for its own actions. China, he said, has consistently opposed the weaponization of space and believes international treaties on arms control in outer space need to be negotiated.

    According to a prior report in Axios, China’s ambitions and intentions in space remain somewhat ambiguous, and while it “has publicly maintained that its goals in space are peaceful” it remains that it’s “military is also working toward shoring up its capabilities in space, driving the U.S. to take stock of its own orbital defenses.”

    The Chinese Foreign Ministry spokesman added further: “We hope that the international community, especially the major powers concerned, will adopt a cautious and responsible attitude to prevent outer space from becoming a new battlefield and work together to maintain lasting peace and tranquility in outer space.”

    Trump’s own remarks upon signing the 2020 NDAA which authorized the Space Force didn’t bring Beijing any reassurances. He had said

    “The Space Force will help us deter aggression and control the ultimate high ground.”

    “For the first time since President Harry Truman created the Air Force over 70 years ago — think of that — we will create a brand new American military service. That’s such a momentous statement,” Trump said at the signing ceremony.

    “With my signature today, you will witness the birth of the Space Force, and that will be now officially the sixth branch of the United States Armed Forces. That is something really incredible. It’s a big moment. That’s a big moment, and we’re all here for it. Space, going to be a lot of things happening in space,” he added.


    Tyler Durden

    Mon, 12/23/2019 – 22:45

  • What The Hell Is A 'FinTech' Anyway?
    What The Hell Is A ‘FinTech’ Anyway?

    Authored by Omid Malekan via Medium.com,

    Decentralized Finance, or DeFi, has really shined in the past year, and proven resilient during the crypto bear market. If you haven’t been paying attention, there is now a rich ecosystem of blockchain-based, fully-transparent and mostly-decentralized applications that offer lending, saving, trading, market making, derivatives, synthetic assets and even insurance.

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    MakerDAO, the leader of the bunch and by far the most sophisticated project on the Ethereum platform, recently pulled off a successful transition to version 2.0. It now boasts a $115m loan portfolio backed by close to $350m in assets. It also outputs the most reliable stablecoin in the blockchain ecosystem, one that is always fully backed (unlike Tether) based on sound financial principles (unlike Basis) and doesn’t have any corporate baggage (unlike Libra).

    If Maker were a FinTech, the VC community would be tripping over itself to get access. The Fintech Insider podcast wouldn’t stop blabbing about it and PYMNTS would have done an entire series on the transition to multi collateral Dai. But nobody considers Maker a FinTech. If you google “MakerDAO + FinTech” the only hit is the project’s own GitHub.

    Most FinTech experts probably don’t even know it exists. That’s not due to size, as Maker is presently at half-Unicorn status. It’s not due to traction either given the over 100,000 different loans the service has already dished out and the hundreds of millions of dollars worth of assets it currently holds as collateral. Maybe the experts are thrown off by the fact that MakerDAO is profitable , violating the sacred notion that the best startups are the ones that lose money today and will lose even more tomorrow.

    Or maybe it’s just a lack of imagination. Most FinTechs are nothing more than an old business model using new infrastructure. Stripe is a digital knuckle-buster that embeds into websites. Robinhood is a discount broker with a slick interface (but without the profits discount brokers used to be known for.) PayPal is Western Union using TCP/IP instead of telegraph. Revolut is digitized travelers checks with some random other businesses thrown in (because when losing money is a virtue, you should go into as many random business as possible). Chime is a bank, like any other bank, except that it’s done away with branches, and positive cash flows.

    These companies have smart and hard working founding teams and millions of loyal users, for which they deserve credit. They also have the old guard of financial services on their toes to upgrade their systems, which is good for everyone. Some even deploy new tech such as AI in genuinely creative ways. They are incrementally innovative, but only by the standards of existing financial services, an industry that only recently discovered the internet.

    Fintechs are far from revolutionary. Most still do what their predecessors have done for centuries — use proprietary ledgers to move client money around or intermediate between savers and borrowers. They have typical management structures and, like those who came before them, gain user trust from reputation and regulation. You, as a concerned client, know as much about what’s going on inside their systems as customers of the First Bank of Wichita did 100 years ago (actually FBW had a banking license, which many Fintechs don’t, so it probably had tighter disclosure requirements). But hey, they use Python, so there’s that.

    DeFi projects like Maker are actually different because the root of trust on top of which they are designed is an open, decentralized and censorship resistant blockchain platform. Here is the actual list of every loan Maker has ever given out, open for anyone to see. It’s also the first bank to tell you, Joe Schmo Public, its exact leverage ratio in real-time — a privilege that even the CEO of the hottest challenger bank probably doesn’t have.

    Like all DeFi projects, MakerDAO has never discriminated based on race, gender, nationality, income level or any other factor beyond financial qualification. A poor person in Vietnam borrowing a few dollars from Maker pays the same interest rate as a billionaire in America taking down a giant loan. Can your favorite FinTech offer the same?

    Then there is the superfluidity of the DeFi ecosystem. Every user can move seamlessly from borrowing to saving to trading to market making to investing in synthetic assets, and from crypto exposure to dollars to gold to the S&P 500, all within a few minutes and for just pennies in fees.

    Compare that to the FinTech world where PNC Bank just kicked out Plaid so users can’t cash out from Venmo. That’s problematic for Venmo users wanting to transfer a balance to PayPal, because even though both services are owned by the same company, they don’t interoperate. #innovation

    Despite the best efforts of many smart people, the FinTech industry is a lot closer to the legacy financial system than the blockchain-based one. There are projects on Ethereum such as Uniswap for which there is no historical analog. The word innovation has been abused to the point of meaninglessness, but if we are to ever resurrect it, it should mean “that which has not existed before, but should.”

    So what the hell is a FinTech anyway? Depends on what you are looking for. If you are looking for easy to understand projects with nice interfaces and fat valuations, look to the traditional names. If you are looking for originality, then it’s time to start paying attention to DeFi. You’ll know you are confronted by actual innovation by how confusing most of the projects will be at the outset. Confusion is a necessary condition of understanding something seminal.

    Just as 2019 was the year stablecoins exploded onto the scene, 2020 will be the year DeFi breaks the world, in a great way. Business models will be challenged, the uninformed will be embarrassed and regulators will have yet another freak out. The world will actually change a little bit.


    Tyler Durden

    Mon, 12/23/2019 – 22:25

  • Here Are The 50 US Housing Markets Already Turning Ugly 
    Here Are The 50 US Housing Markets Already Turning Ugly 

    Plunging mortgage rates in late 2018 through 2019 wasn’t enough to revive the housing market (despite the hope of 20-year homebuilder sentiment). Cracks are already starting to appear in many metro areas across the country, as a more profound slowdown could be imminent. 

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    Last week, Home Depot ruined the party and pretty much declared that a housing boom in 2020 is non-existent. 

    The home-improvement chain cut its sales forecast for 2020, signaling that real estate and consumers could exhibit weakness in the year ahead. 

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    The disappointing 2020 forecast comes amid a report that 50 housing markets across the country are already showing signs of a downturn. 

    GOBankingRates evaluated 500 metro areas for high rates of foreclosures and underwater mortgages, variations in median home listing prices, the number of days homes are on the market, and the percentage of for-sale listings with price cuts, against the national average and determined the 50 most at-risk metro areas that are already turning south.

    GOBankingRates determined that Peoria, Illinois, is the most at-risk metro area of seeing its housing market implode. Florida had the highest amount of real estate markets that were slowing. Here’s the full list: 

    50. Fort Myers, Florida

    • Median list price: $249,999

    • 2-year price change: -1.4%

    • Percentage of underwater mortgages: 6.9%

    • Foreclosures: 1 in every 1,921 homes

    House prices are dropping in this city in southwest Florida. While home prices nationwide have climbed an average of 9.4% over the past two years, prices have dropped 1.4% in Fort Myers over the same period. Plus, houses for sale spend 105 days on the market in Fort Myers, on average, compared with a national average of 66 days.

    49. Newport News, Virginia

    • Median list price: $190,000

    • 2-year price change: 8.4%

    • Percentage of underwater mortgages: 19.2%

    • Foreclosures: 1 in every 2,172 homes

    The percentage of underwater mortgages in this city in southeastern Virginia near Virginia Beach is more than double the national average of 8.2%. However, the real estate market here hasn’t turned too ugly yet. In fact, the percentage of listed home with price cuts in Newport News — 12.6% — is lower than the national average of 17.5%.

    48. Cumming, Georgia

    • Median list price: $383,511

    • 2-year price change: 1.2%

    • Percentage of underwater mortgages: 4%

    • Foreclosures: 1 in every 2,311 homes

    Home prices still are rising in this suburb of Atlanta — but not nearly as much as the national average. In fact, home prices in Cumming increased an average of just 0.7% over the past year. And 21.8% of listed homes here have seen price cuts compared with a national average of 17.5%.

    47. Toledo, Ohio

    • Median list price: $84,900

    • 2-year price change: 8.8%

    • Percentage of underwater mortgages: 24.7%

    • Foreclosures: 1 in every 1,428 homes

    Home price growth has slowed over the past year in this western Ohio city on the banks of Lake Erie. However, the bigger problem here is the high percentage of underwater mortgages — which is about three times the national average. Plus, the number of foreclosed homes is higher than the national average.

    46. Naperville, Illinois

    • Median list price: $439,990

    • 2-year price change: -2.2%

    • Percentage of underwater mortgages: 6.5%

    • Foreclosures: 1 in every 3,897 homes

    This Chicago suburb has made it onto plenty of “best places to live” lists. However, the housing market has been slumping here. Home prices have dropped more than 2% over the past two years. And at 26.4%, Naperville has the highest percentage of listed homes with prices cuts of any city on this list.

    45. Sarasota, Florida

    • Median list price: $359,000

    • 2-year price change: 5.6%

    • Percentage of underwater mortgages: 4.5%

    • Foreclosures: 1 in every 1,520 homes

    South of Tampa on Florida’s Gulf Coast, Sarasota has a real estate market that could turn ugly. Home price growth has slowed. Houses for sale are sitting on the market for an average of 99 days, far longer than the national average of 66 days. On top of that, the foreclosure rate is higher in Sarasota than it is nationwide.

    44. Fort Lauderdale, Florida

    • Median list price: $499,900

    • 2-year price change: -0.2%

    • Percentage of underwater mortgages: 7%

    • Foreclosures: 1 in every 1,507 homes

    The current housing market is slumping in this tourist destination about 30 miles north of Miami. Home prices in Fort Lauderdale have fallen in the past two years. And the average number of days houses stay on the market here — 133 — is double the national average.

    43. Menifee, California

    • Median list price: $380,000

    • 2-year price change: 8.3%

    • Percentage of underwater mortgages: 5.5%

    • Foreclosures: 1 in every 808 homes

    This city in Southern California is part of the Los Angeles metro area. The median home price in Menifee is well above the national median. However, the housing market here could be headed for trouble. Menifee has the third-highest foreclosure rate among cities on this list.

    42. Tuscaloosa, Alabama

    • Median list price: $207,988

    • 2-year price change: 0%

    • Percentage of underwater mortgages: 11.7%

    • Foreclosures: 1 in every 2,393 homes

    Home to the University of Alabama, Tuscaloosa has a higher percentage of homeowners with negative equity than the nation as a whole. Nearly 12% of mortgages are underwater here compared with about 8% nationwide. The foreclosure rate also is slightly higher in Tuscaloosa than the average across the U.S.

    41. Wilmington, Delaware

    • Median list price: $194,550

    • 2-year price change: 0.5%

    • Percentage of underwater mortgages: 15%

    • Foreclosures: 1 in every 1,218 homes

    The percentage of foreclosed properties in Delaware’s largest city is twice as high as the national average. And the percentage of underwater mortgages in Delaware is almost double the percentage nationwide.

    40. Naples, Florida

    • Median list price: $407,990

    • 2-year price change: -8.8%

    • Percentage of underwater mortgages: 6%

    • Foreclosures: 1 in every 2,515 homes

    The housing market has been slowing in this city on Florida’s Gulf Coast. While home prices nationwide have climbed 9.4%, on average, over the past two years, they’ve fallen 8.8% in Naples over the same period. And the average number of days that homes are on the market here — 140 — is more than double the national average.

    39. West Palm Beach, Florida

    • Median list price: $298,000

    • 2-year price change: 1.4%

    • Percentage of underwater mortgages: 7.3%

    • Foreclosures: 1 in every 1,297 homes

    Although home prices have risen slightly in West Palm Beach over the last two years, they’ve fallen in the past year. In addition, houses for sale stay on the market in this city north of Miami an average of 119 days compared with an average of 66 days nationwide. The foreclosure rate here is also higher than the national rate.

    38. Waterbury, Connecticut

    • Median list price: $125,000

    • 2-year price change: 11.9%

    • Percentage of underwater mortgages: 29.4%

    • Foreclosures: 1 in every 1,159 homes

    Home prices have risen more in this city 77 miles northeast of New York City over the past two years than across the U.S. However, the housing market in Waterbury could be in trouble. The percentage of underwater mortgages here is higher than in any other city on this list.

    37. Plainfield, Illinois

    • Median list price: $284,450

    • 2-year price change: 3.6%

    • Percentage of underwater mortgages: 7.7%

    • Foreclosures: 1 in every 1,138 homes

    Home prices have been rising in this village 35 miles southwest of Chicago but not at the same pace as the national average. More telltale signs, though, that the housing market in Plainfield could be turning ugly are the relatively high foreclosure rate and percentage of homes for sale with price cuts. In fact, Plainfield has the second-highest percentage of listed homes with price cuts at 25.3%.

    36. Bakersfield, California

    • Median list price: $276,400

    • 2-year price change: 1.1%

    • Percentage of underwater mortgages: 11.8%

    • Foreclosures: 1 in every 1,095 homes

    Home price growth is slowing in this agriculture hub in California’s Central Valley region. However, foreclosures and underwater mortgages are even bigger problems for Bakersfield’s real estate market. The rates for both are higher than the national averages.

    35. Jacksonville, Florida

    • Median list price: $219,000

    • 2-year price change: 11.8%

    • Percentage of underwater mortgages: 11.2%

    • Foreclosures: 1 in every 814 homes

    Home prices are rising at a faster rate in Florida’s largest city, on average, than across the U.S. But Jacksonville has one of the highest foreclosure rates of any city on this list. The percentage of underwater mortgages in this city on the Atlantic Coast also tops the national average.

    34. Orlando, Florida

    • Median list price: $289,000

    • 2-year price change: 5.7%

    • Percentage of underwater mortgages: 6.6%

    • Foreclosures: 1 in every 1,328 homes

    The current housing market in Orlando could use some Walt Disney World magic to keep it from turning ugly. Home price growth in this tourist destination has been slowing. And the percentage of listed homes with price cuts — 21.2% — is higher than the national percentage. The foreclosure rate in Orlando also is higher than the foreclosure rate nationwide.

    33. McKinney, Texas

    • Median list price: $379,243

    • 2-year price change: -1.3%

    • Percentage of underwater mortgages: 4.3%

    • Foreclosures: 1 in every 2,546 homes

    Home prices have been falling in this fast-growing city that is 30 miles north of Dallas. While home prices have risen an average of 9.4% over the past two years across America, prices have fallen 1.3% in McKinney. Plus, McKinney has one of the highest percentages of listed homes with price cuts among the cities on this list.

    32. Summerville, South Carolina

    • Median list price: $268,293

    • 2-year price change: 4.9%

    • Percentage of underwater mortgages: 6.3%

    • Foreclosures: 1 in every 1,279 homes

    Houses for sale are lingering on the market longer in Summerville than the national average — 72 days versus 66 days. The increase in home prices in this city 24 miles northwest of Charleston also is lagging behind the national average. And the foreclosure rate in Summerville is twice as high as the rate nationwide.

    31. Annapolis, Maryland

    • Median list price: $499,181

    • 2-year price change: 0.7%

    • Percentage of underwater mortgages: 9.5%

    • Foreclosures: 1 in every 3,964 homes

    Although the foreclosure rate in Annapolis is lower than the rate nationwide, the capital of Maryland’s housing market is showing some signs of trouble. Home price growth has slowed over the past year. In fact, the city has a higher percentage of listed homes with price cuts than the percentage nationwide. And houses are staying on the market 14 days longer than the U.S. average.

    30. Stamford, Connecticut

    • Median list price: $569,950

    • 2-year price change: 3.5%

    • Percentage of underwater mortgages: 11.1%

    • Foreclosures: 1 in every 4,498 homes

    The housing market is slowing in this city about 30 miles from New York. Home prices haven’t risen over the past year, and houses for sale are staying on the market longer than the U.S. average. Plus, the percentage of mortgages underwater in Stamford is higher than the percentage nationwide.

    29. Champaign, Illinois

    • Median list price: $164,900

    • 2-year price change: 3.2%

    • Percentage of underwater mortgages: 11%

    • Foreclosures: 1 in every 2,173 homes

    The housing market in this city that is home to the University of Illinois is showing signs of weakness. The growth in home prices has been slowing. Houses spend more days on the market in Champaign than they do nationwide. And both the foreclosure rate and percentage of homes underwater are higher than the national rates.

    28. Port Saint Lucie, Florida

    • Median list price: $247,280

    • 2-year price change: 7.6%

    • Percentage of underwater mortgages: 6.2%

    • Foreclosures: 1 in every 1,171 homes

    Although the percentage of underwater mortgages is below the national average in this city that’s halfway between Miami and Orlando, the foreclosure rate is twice as high. Plus, home price growth has slowed in Port Saint Lucie.

    27. Bradenton, Florida

    • Median list price: $293,700

    • 2-year price change: 1.7%

    • Percentage of underwater mortgages: 6.6%

    • Foreclosures: 1 in every 1,799 homes

    The housing market is slowing more in Bradenton than in neighboring Sarasota. Home prices have fallen 0.3% over the past year. And 21% of listed homes have price cuts compared with 19.8% in Sarasota and 17.5% nationwide.

    26. Ocala, Florida

    • Median list price: $181,900

    • 2-year price change: 8.9%

    • Percentage of underwater mortgages: 10.3%

    • Foreclosures: 1 in every 972 homes

    The foreclosure rate in this city in north-central Florida is among the top 10 highest on this list. Plus, the percentage of underwater mortgages in Ocala is higher than the U.S. average. To top it off, home price growth has slowed over the past year.

    25. Dayton, Ohio

    • Median list price: $67,000

    • 2-year price change: 16.5%

    • Percentage of underwater mortgages: 27.6%

    • Foreclosures: 1 in every 1,820 homes

    The big increase in home prices in Dayton over the past two years might signal to some that the real estate market in this southwestern Ohio city is doing just fine. However, Dayton has the second-highest percentage of underwater mortgages among the cities on this list. And the foreclosure rate is higher here than the national rate.

    24. Lehigh Acres, Florida

    • Median list price: $180,000

    • 2-year price change: 6.5%

    • Percentage of underwater mortgages: 6.9%

    • Foreclosures: 1 in every 1,189 homes

    Although the percentage of underwater mortgages in Lehigh Acres is lower than the percentage nationwide, the foreclosure rate is higher here than the U.S. average. In addition, this city in the Fort Myers metro area on Florida’s Gulf Coast has seen a slowdown in home price growth over the past year. Twenty percent of homes listed for sale here have had price cuts.

    23. Rockford, Illinois

    • Median list price: $100,00

    • 2-year price change: 10.5%

    • Percentage of underwater mortgages: 21%

    • Foreclosures: 1 in every 890 homes

    Rockford’s real estate market could turn ugly because a significant percentage of homeowners here have negative equity. More than 20% of mortgages are underwater in this northern Illinois city compared with about 8% nationally. Plus, the foreclosure rate in Rockford is one of the highest among cities on this list.

    22. Mobile, Alabama

    • Median list price: $159,900

    • 2-year price change: 6.3%

    • Percentage of underwater mortgages: 16.1%

    • Foreclosures: 1 in every 2,149 homes

    Home prices are still rising in this port city on the Gulf Coast, but not as fast as prices are increasing across the U.S. However, the bigger problem for Mobile’s real estate market is homeowners with negative equity. The percentage of underwater mortgages here is twice the national average.

    21. Cape Coral, Florida

    • Median list price: $262,200

    • 2-year price change: 4.2%

    • Percentage of underwater mortgages: 5.5%

    • Foreclosures: 1 in every 1,191 homes

    This city near Fort Myers has seen rapid growth, but its current housing market is experiencing a slowdown. Home prices increased just 0.1%, on average, over the past year. Nearly 22% of homes listed for sale have price cuts. And houses in Cape Coral stay on the market an average of 103 days compared with a national average of 66 days.

    20. Fort Pierce, Florida

    • Median list price: $199,900

    • 2-year price change: 0.5%

    • Percentage of underwater mortgages: 9.7%

    • Foreclosures: 1 in every 1,585 homes

    While home prices climbed more than 9% nationwide over the past two years, they barely budged in this small city on Florida’s Atlantic Coast. Nearly 10% of mortgages are underwater in Fort Pierce compared with about 8% nationwide. And the foreclosure rate is higher than the rate across the U.S.

    19. Suffolk, Virginia

    • Median list price: $282,785

    • 2-year price change: 0%

    • Percentage of underwater mortgages: 14.8%

    • Foreclosures: 1 in every 1,846 homes

    Home prices haven’t risen any, on average, over the past two years in Suffolk. And homes for sale stay on the market an average of 76 days compared with a national average of 66 days. The other problems the real estate market is facing in this city — which is part of the Virginia Beach metro area — are the relatively high percentage of underwater mortgages and high foreclosure rate.

    18. Laurel, Maryland

    • Median list price: $350,000

    • 2-year price change: -2.8%

    • Percentage of underwater mortgages: 12.6%

    • Foreclosures: 1 in every 1,457 homes

    Home prices have been falling in this city that’s located between Baltimore and Washington, D.C. On top of that, nearly 13% of mortgages are underwater in Laurel compared with about 8% nationwide. And the foreclosure rate is higher than the U.S. average.

    17. Joliet, Illinois

    • Median list price: $169,900

    • 2-year price change: 9.6%

    • Percentage of underwater mortgages: 15.5%

    • Foreclosures: 1 in every 812 homes

    Although home prices in Joliet increased 9.6% over the past two years, prices haven’t risen any, on average, over the past year. What’s more troubling, though, are the high number of foreclosures and underwater mortgages in this city 30 miles southwest of Chicago. Joliet has the fourth-highest foreclosure rate among cities on this list. And the percentage of underwater mortgages here is almost double the percentage nationwide.

    16. Valdosta, Georgia

    • Median list price: $154,900

    • 2-year price change: 0%

    • Percentage of underwater mortgages: 22.7%

    • Foreclosures: 1 in every 3,304 homes

    The foreclosure rate in this city near the Georgia-Florida border is lower than the U.S. average. However, Valdosta has one of the highest percentages of underwater mortgages among cities on this list. Home prices here have also fallen more than 6% over the past year.

    15. Decatur, Illinois

    • Median list price: $99,900

    • 2-year price change: 8.5%

    • Percentage of underwater mortgages: 20.4%

    • Foreclosures: 1 in every 5,785 homes

    Decatur has the lowest foreclosure rate among the cities on this list. But the housing market in this central Illinois city could turn ugly due to its high percentage of underwater mortgages. Decatur also has a higher percentage of homes with price cuts than half of the cities on this list, and homes for sale spend more days on the market here than in a majority of cities.

    14. Elgin, Illinois

    • Median list price: $240,000

    • 2-year price change: 7.8%

    • Percentage of underwater mortgages: 11.9%

    • Foreclosures: 1 in every 1,223 homes

    The foreclosure rate in this Chicago suburb is twice the national rate. Plus, home price growth in Elgin has slowed over the past year, and nearly 20% of homes listed for sale have had price cuts.

    13. Riverview, Florida

    • Median list price: $252,990

    • 2-year price change: 2.2%

    • Percentage of underwater mortgages: 7.2%

    • Foreclosures: 1 in every 796 homes

    Like other cities in the Tampa area, Riverview has a housing market that could turn ugly. It has the second-highest foreclosure rate on this list. Home price growth has slowed over the past year. And nearly 25% of homes listed for sale have had price cuts compared with 17.5% nationwide.

    12. Atlanta

    • Median list price: $339,500

    • 2-year price change: 1.6%

    • Percentage of underwater mortgages: 8.8%

    • Foreclosures: 1 in every 1,942 homes

    Home prices have dropped 3% over the past year in Georgia’s capital and largest city. Atlanta is also seeing homes stay on the market longer than the U.S. average. Plus, the foreclosure rate here is higher than the rate nationwide.

    11. Lawton, Oklahoma

    • Median list price: $99,900

    • 2-year price change: 5%

    • Percentage of underwater mortgages: 25.7%

    • Foreclosures: 1 in every 1,661 homes

    Lawton has the fourth-highest percentage of underwater mortgages among cities on this list. The foreclosure rate also is higher in this southwestern Oklahoma city than it is nationwide. And homes stay on the market an average of 117 days compared with a U.S. average of 66 days.

    10. Hampton, Virginia

    • Median list price: $182,000

    • 2-year price change: 4.8%

    • Percentage of underwater mortgages: 19.9%

    • Foreclosures: 1 in every 2,148 homes

    Hampton is one of the fastest-growing cities in the Hampton Roads region on the Chesapeake Bay. However, it’s housing market has been slowing. Home prices have fallen nearly 3%, on average, over the past year. And the percentage of underwater mortgages here is double the percentage nationwide.

    9. Aurora, Illinois

    • Median list price: $220,000

    • 2-year price change: 4.7%

    • Percentage of underwater mortgages: 11.8%

    • Foreclosures: 1 in every 1,491 homes

    This Chicago suburb is actually the second-largest city in Illinois. Its current housing market is showing signs of trouble, though. Aurora has the fourth-highest percentage of homes with price cuts at 23.7%. And the foreclosure rate and percentage of underwater mortgages are higher than the U.S. averages.

    8. Bridgeport, Connecticut

    • Median list price: $189,900

    • 2-year price change: 11.1%

    • Percentage of underwater mortgages: 26.9%

    • Foreclosures: 1 in every 1,453 homes

    This port city 60 miles from New York has the second-highest percentage of underwater mortgages on this list. The foreclosure rate is higher than the national rate. And houses stay on the market an average of 102 days compared with a U.S. average of 66 days.

    7. Norfolk, Virginia

    • Median list price: $220,000

    • 2-year price change: 3.3%

    • Percentage of underwater mortgages: 20.6%

    • Foreclosures: 1 in every 2,094 homes

    Home to the world’s largest naval base, Norfolk is located in southeastern Virginia on the Chesapeake Bay. Home prices have been flat this past year, and houses are staying on the market here slightly longer than the national average. The bigger problem in Norfolk, though, is the high percentage of underwater mortgages, which is more than double the percentage nationwide.

    6. Miami Beach, Florida

    • Median list price: $499,000

    • 2-year price change: -5%

    • Percentage of underwater mortgages: 14.5%

    • Foreclosures: 1 in every 2,374 homes

    While home prices have been rising, on average, across the U.S. over the past two years, they’ve fallen 5% in this resort city across the Biscayne Bay from Miami. Plus, houses for sale spend more days on the market here — 225 — than in any other city on this list.

    5. Baltimore

    • Median list price: $169,900

    • 2-year price change: 17.1%

    • Percentage of underwater mortgages: 26.5%

    • Foreclosures: 1 in every 1,376 homes

    Maryland’s largest city has had the biggest percentage increase in median home list prices over the past two years of any city on the list. However, Baltimore saw a 0.6% drop in home prices over the past year; it now has a higher percentage of homes with price cuts than most cities. And Baltimore has the third-highest percentage of underwater mortgages in this study.

    4. Columbus, Georgia

    • Median list price: $115,450

    • 2-year price change: -10.2%

    • Percentage of underwater mortgages: 22.2%

    • Foreclosures: 1 in every 1,172 homes

    Home prices in Columbus have dropped more than in all but two cities on this list. The percentage of underwater mortgages in this city on the Georgia-Alabama border is among the highest rates in the study. And the foreclosure rate here is double the rate nationwide.

    3. Portsmouth, Virginia

    • Median list price: $165,700

    • 2-year price change: 1.5%

    • Percentage of underwater mortgages: 19.4%

    • Foreclosures: 1 in every 730 homes

    This port city in southwestern Virginia has the highest foreclosure rate of any city on this list. Portsmouth also has a higher percentage of underwater mortgages than most cities in our rankings.

    2. Lakewood, New Jersey

    • Median list price: $252,000

    • 2-year price change: -12.3%

    • Percentage of underwater mortgages: 9.4%

    • Foreclosures: 1 in every 1,187 homes

    This city about 70 miles south of New York City has seen home prices tumble more than 12% over the past two years — the second-biggest drop among cities in GOBankingRates’ ranking. The average number of days homes stay on the market here — 135 — is twice the national average. And the foreclosure rate is twice as high as the rate nationwide.

    1. Peoria, Illinois

    • Median list price: $124,450

    • 2-year price change: -15.9%

    • Percentage of underwater mortgages: 21%

    • Foreclosures: 1 in every 932 homes

    Peoria claims the No. 1 spot among cities with real estate markets that are turning ugly for several reasons. This city in central Illinois has seen the biggest drop in home prices over the past two years of any city on this list. The average number of days houses are on the market and the percentage of homes for sale with price cuts are higher than the national averages. The percentage of underwater mortgages here is more than double the percentage nationwide. And the foreclosure rate is among the highest on this list.

     


    Tyler Durden

    Mon, 12/23/2019 – 22:05

  • Can China Dethrone The US Dollar As Global Reserve
    Can China Dethrone The US Dollar As Global Reserve

    Authored by Steve Brown via TheDuran.com,

    On the US dollar as reserve currency, that is a tough thing to break especially for China since the yuan is not freely convertible. China has renminbi and yuan; one they peg to the dollar and the other is circulated in China. Try converting USD to yuan in Paypal for example?  The option is not there. Payments from the west to china sellers by Paypal (for example) are only in dollars.

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    It is a complex subject since China is the only foreign nation with a direct link into the US Treasury for purchase of US debt instruments, bypassing the Fed’s crooked relationship with its crooked primary dealers. This is done to manage China’s global trade relationships via the value of its currency which is somewhat pegged to the dollar (even if China and Trump claim otherwise) thus evading Federal Reserve gamesmanship. That’s why Trump messing with China is so dangerous, even if China has few options right now.

    As a result of this ‘trade war’ China has let the yuan slide versus the USD which is a warning to Trump, specifically Mnuchin, popularly known as one of the most slippery dealers (IndyMAC and One West) to ever walk the earth (and China knows that). China is hoping that a lower yuan will offset tariffs just as the US has ‘weaponized’ the dollar and has imposed sanctions and tariffs on China. Because the sums are so vast with China holding so much US debt, and because China depends on exports to the west, China is somewhat boxed in.

    So far China has been happy building ghost cities and high-quality infrastructure instead of blowing up their monetary reserves on the battlefield in useless wars as others do. If China wanted to blow up their trillion in US dollar reserves on the battlefield that would be very serious for the west indeed and so far, the Chinese leadership — and for that matter China’s people — have expressed no interest in doing so.

    China could reduce its ties to the US dollar (USD) by making the yuan freely convertible, noting the IMF’s inclusion of the yuan in the SDR as a first step. Next, China could reduce its US foreign debt holdings but the question is where that money will go… where is a nation to park billions upon billions or even one+ trillion in surplus if not in the US dollar? That’s still the great quandary for China.

    Besides the trade war, the US has engaged in Vicky Kagan-Nuland type jiggery-pokery in Hong Kong (perhaps inspired by John Bolton at the time?) attempting to pencilf China’s leadership in some very risky US gamesmanship along with Britain. And Trump gives the impression he is willing to screw the pooch and throw everything away in the China trade confrontation to make a point about US hegemony.

    The point being…. what option does China have in this war?  China has another option — rather than sell Treasury’s or fold to US trade demands — China could reveal its physical gold reserves and partially back the yuan with gold. (NB: return to a full gold standard in the present world economy is not possible – we are only discussing a partial backing, which has been the prevalent standard, ie partial not full, throughout modern monetary history until the adoption of a full by-decree currency by the US on August 15, 1971.)

    In this scenario China could do the former Swiss thing and partially back the yuan with gold, just as the Swiss once partially backed the swiss franc with gold (40% reduced to 25% in 1997) until the Swiss franc threatened to become the world reserve currency usurping the USD by 1999.

    What happened, the Swiss franc got so ‘strong’ against other currencies – and the USD – Swiss industries suffered. Also, the prospect then that the Swiss franc (now called the CHF) would usurp the USD as global reserve currency was absolutely terrifying to Swiss bankers who evidently prefer to be financial parasites instead of monetary leaders. [1]

    Deflationary pressures, domestic costs, and tariff problems became so bad by 1999, Switzerland held a public referendum and went off gold in 2000. Then the bankers decided to sell almost two-thirds of their gold reserves — until the US financial collapse of 2008 — for reasons that are still unknown. One suspicion is that the Swiss monetary pharaohs foresaw fiat by-decree currency as a permanent feature and future condition for the global monetary system, but there are many more potential reasons.

    The Swiss move to sell off 60% of its gold reserves from 2000 – 2008 was particularly surprising in light of Switzerland’s support for the gold carry trade. The old Swiss franc ended in 2000 and the current currency is the CHF.

    Back to China’s potential to re-define the yuan with partial gold backing, should the yuan fall further against the dollar that would be the time to introduce such backing. China would have to reveal its true gold reserves and say, for example, back the yuan by 10% of its gold reserves.

    But first, let’s posit that a full 1-to-1 ‘gold standard’ has never existed… not even in the United States, except for the period 1900-1913. Even then, National Bank Notes were not issued based on gold reserves although they purchased gold.

    [Historically the gold standard was implemented partially by cooperation of all the major monetary powers, where the chart here uses the example of partial gold backing in Britain showing 1830 to 1931 when Britain officially exited gold backing of its currency:

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    Note that a gold standard based on gold reserves only imposes monetary discipline on the monetary system, when not all governments intend fiat by-decree governmental and private debt issuance to be used for noble purposes, as Modern Money Theory hopes.

    Along with universal convertibility of the yuan, a move to 10% gold reserve backing by China would be a magnet to all currency traders since China would commit to maintain the value of its currency, when the US dollar is in process of continued and accelerating decline and devaluation. This is the bottom line that those who maintain the system wonder if you will ever know, that even partial gold backing of the yuan would dethrone the US dollar very quickly.

    The problem being that partial backing of the yuan by gold would impact the global economy, and cause China’s money  – no longer strictly a currency when partially backed by gold – to strengthen enormously in relation to the dollar, and perhaps even achieve a 3-to-1 ratio over time (just a guess) where the yuan is presently 7-to-1.

    Such a move would dethrone the US dollar but would also hurt China and possibly even lead to social unrest there. It would represent a fundamental change where China would have to become more like the US, relying on imports instead of exports; relying on ‘consumers’ to drive the economy, and war, just as the US has relied upon since November 22nd, 1963.

    So far, a partial gold backing of the yuan to challenge King Dollar is not in the mindset of China’s leaders despite the pointless trade provocations and arrogant prodding of the dragon and meddling in Hong Kong that the US is engaged in. Thus the odds of a partial gold-backed yuan happening soon do not appear hopeful… and note that HSBC is itself a primary Fed dealer!

    Which brings us to Fed dealers and the euro. As far as the euro challenging the USD? …that’s an easy one to address.  Some of Europe’s biggest banks are Primary Dealers of the Federal Reserve such as BNP Paribas, Barclays Capital, Credit Suisse AG, Deutsche Bank, and NatWest; they are actively engaged in maintaining the US dollar as global reserve currency.  Inducing the European banks to get their hands dirty with Federal Reserve dollars as primary dealers after 1971 was one key to establishing the USD as global reserve.

    Ending that European support for the US dollar is an impossibility now, just witness Europe’s inability to work around US Treasury sanctions on Iran regarding Iran’s oil trade to Europe. The big European banks will attempt to maintain parity with the US Dollar and cannot challenge it, since the USD is interwoven into their economies by their status as Federal Reserve primary dealers and their purchase of US securities and debt instruments.

    Even the US financial collapse of 2008 saw foreign funds flee to the ‘safety’ of US Treasury debt instruments, when US debt instruments caused that collapse in the first place. The prospect for Europe of China to dethrone the USD as global reserve currency looks bleak for now. Powell and other economists say the USD has at least fifty years remaining to reign supreme. However with the United States on the monetary path it has been on for fifty years now, the idea that the US can persist for another fifty years in its dominance of the global monetary system seems unlikely at best.

    Perhaps of interest is the Federal Reserve’s extraordinary program to pump billions in US Federal Reserve digits into the banking system nightly, mostly to four primary dealers according to Wall Street on Parade. The specific trade detail concerning these massive funding injections is largely unknown to the public… and there is no indication that the Fed will reveal the precise nature of this interbank lending issue any time soon. The Fed calls this massive bank of Big overnight funding operation a “technicality” — and, like the Fed itself, is evidently an opaque technicality with no end.


    Tyler Durden

    Mon, 12/23/2019 – 21:45

  • Australian PM Responds To Greta Thunberg: "We'll Do What We Think Is Right For Australia"
    Australian PM Responds To Greta Thunberg: “We’ll Do What We Think Is Right For Australia”

    Australian Prime Minister Scott Morrison and the patron saint of environmentalists, Greta Thunberg, have been duking it out in headlines as far as who is responsible for the raging brushfires near every major city across Australia.

    Morrison rejected Thunberg’s call for political action as bushfires spread across the country, reported Bloomberg.

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    Morrison said, during a news conference Sunday, it wasn’t the time to “make commentaries on what those outside of Australia think Australia should do” as he responded to Thunberg’s tweet that draws the connection between climate change and the raging inferno across the country.

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    Morrison said he’s not trying to “impress people overseas” and won’t cave to international climate change demands:

    “I have always acknowledged the connection between these weather events and these broader fire events and the impact globally of climate change. But I’m sure people equally would acknowledge that the direct connection to any single fire event, it’s not a credible suggestion to make that link.”

    Morrison said bushfires in Australia are nothing new and have been happening for a long time.

    “There are some fires that have been started by just carelessness, others sadly have been the result of direct arson, many have been created by dry lightning strikes,” Morrison said. “The drought conditions have certainly been a big contributor in terms of the dryness of the fuel load. There are also many other issues.”

    Left-leaning Green politicians have been critical of Morrison for not drawing the connection between extreme heat fueling some of the worst bushfires in the country’s history.

    Google News’ Saffron Howden tweeted a visual representation of the bushfires mapped out across the country, raging around almost every major city.

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    BBC news reported on Saturday that bushfires in Australia’s southeastern state of New South Wales were at the “catastrophic” levels.

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    The map below shows bushfires around Sydney were so bad over the weekend, that most roadways to exit the city were impassible.
     

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    And to make matters worse, the Australian Bureau of Meteorology reports there will be no major rain event across the country for at least the next two months.

    The Morrison Government appears to be the next target of climate change thugs, led by Thunberg and her “greenie” cult.


    Tyler Durden

    Mon, 12/23/2019 – 21:25

  • Deep Truths Of Deepfakes – Tech That Can Fool Anyone
    Deep Truths Of Deepfakes – Tech That Can Fool Anyone

    Authored by Shiraz Jagati via CoinTelegraph.com,

    In its most basic sense, a deepfake is a combination of face- and voice-cloning AI technologies that allow for the creation of life-like, computer-generated videos of a real person. 

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    image courtesy of CoinTelegraph

    In order to develop a high-quality deepfake of an individual, developers need to accumulate tens of hours of video footage associated with the person whose face/voice is to be cloned, as well as a human imitator who has learned the facial mannerisms and voice of the target.

    There are two humans involved in the creation of a deepfake, such that the target face/voice is that of the famous person while the other belongs to an unknown individual who is generally closely associated with the project.

    From tech to reality

    From a technical standpoint, visual deepfakes are devised through the use of machine learning tools that are able to decode and strip down the images of all the facial expressions related to the two individuals into a matrix consisting of certain key attributes, such as the position of the target’s nose, eyes and mouth. Additionally, finer details, such as skin texture and facial hair, are given less importance and can be thought of as secondary. 

    The deconstruction, in general, is performed in such a way that it is mostly always possible to fully recreate the original image of each face from its stripped elements. Additionally, one of the primary aspects of creating a quality deepfake is how well the final image is reconstructed – such that any movements in the face of the imitator are realized in the target’s face as well. 

    To elaborate on the matter, Matthew Dixon, an assistant professor and researcher at the Illinois Institute of Technology’s Stuart School of Business, told Cointelegraph that both face and voice can be easily reconstructed through certain programs and techniques, adding that:

    Once a person has been digitally cloned it is possible to then generate fake video footage of them saying anything, including speaking words of malicious propaganda on social media. The average social-media follower would be unable to discern that the video was fake.

    Similarly, speaking on the finer aspects of deepfake technology, Vlad Miller, CEO of Ethereum Express — a cross-platform solution that is based on an innovative model with its own blockchain and uses a proof-of-authority consensus protocol — told Cointelegraph that deepfakes are simply a way of synthesizing human images by making use of a machine learning technique called GAN, an algorithm that deploys a combination of two neural networks. 

    The first generates the image samples, while the second distinguishes the real samples from the fake ones. GAN’s operational utility can be compared to the work of two people, such that the first person is engaged in counterfeiting while the other tries to distinguish the copies from the originals. If the first algorithm offers an obvious fake, the second will immediately determine it, after which the first will improve its work by offering a more realistic image.

    Regarding the negative social and political implications that deepfake videos can have on the masses, Steve McNew, a MIT trained blockchain/cryptocurrency expert and senior managing director at FTI Consulting, told Cointelegraph:

    “Online videos are exploding as a mainstream source of information. Imagine social media and news outlets frantically and perhaps unknowingly sharing altered clips — of police bodycam video, politicians in unsavory situations or world leaders delivering inflammatory speeches — to create an alternate truth. The possibilities for deepfakes to create malicious propaganda and other forms of fraud are significant.”

    Examples of deepfakes being used for nefarious purposes

    Since deepfake technology is able to manipulate and imitate the facial features and personality characteristics of real-world individuals, it raises many legitimate concerns, especially in relation to its use for various shady activities. 

    Additionally, for many years now, the internet has been flooded with simple tutorials that teach people how to create digitally altered audio/video data that can fool various facial recognition systems.

    Not only that, but some truly disturbing instances of audio/video manipulation have recently surfaced that have called into question the utility of deepfakes. For example, a recent article claims that since 2014, deepfake technology has advanced to such levels that today, it can be used to produce videos in which the target can not only be made to express certain emotions but also bear resemblance to certain ethnic groups as well as look a certain age. On the subject, Martin Zizi, CEO of Aerendir, a physiological biometric technology provider, pointed out to Cointelegraph:

    “AI does not learn from mistakes, but from plain statistics. It may seem like a small detail, but AI-based on plain statistics — even with trillion bytes of data — is just that, a statistical analysis of many dimensions. So, if you play with statistics, you can die by statistics.”

    Zizi then went on to add that another key facet of facial recognition is that it is based on neural networks that are quite fragile in nature. From a structural standpoint, these networks can be thought of as cathedrals, wherein once you remove one cornerstone, the whole edifice crumbles. To further elaborate on the subject, Zizi stated:

    “By removing 3 to 5 pixels from a 12 million pixels image of someone’s face brings recognition to zero!  Researchers have found that adversarial attacks on neural net attacks can find those 3 to 5 pixels that represent the ‘cornerstones’ in the image.”

    One last big example of deepfake tech being misused for financial reasons was when the CEO of an unnamed United Kingdom-based energy firm was recently scammed into transferring 220,000 euros ($243,000) to an unknown bank account because he believed he was on the phone with his boss, the chief executive of the firm’s parent company. In reality, the voice belonged to a scammer who had made use of deepfake voice technology to spoof the executive.

    Blockchain may help against deepfakes

    As per a recent 72-page report issued by Witness Media Lab, blockchain has been cited as being a legitimate tool for countering the various digital threats put forth by deepfake technology. 

    In this regard, using blockchain, people can digitally sign and confirm the authenticity of various video or audio files that are directly or indirectly related to them. Thus, the more digital signatures that are added to a particular video, the more likely it will be considered authentic.

    Commenting on the matter, Greg Forst, director of marketing for Factom Protocol, told Cointelegraph that when it comes to deepfakes, blockchain has the potential to offer the global tech community with a unique solution — or at least a major part of it. He pointed out:

    “If video content is on the blockchain once it has been created, along with a verifying tag or graphic, it puts a roadblock in front of deepfake endeavors. However, this hinges on video content being added to the blockchain from the outset. From there, digital identities must underline the origins and creator of the content. Securing data at source and having some standardization for media will go a long way.”

    McNew also believes that owing to the blockchain’s overall immutability, once a particular data block has been confirmed by the network, its contents cannot be altered. Thus, if videos (or even photos, for that matter) are made to flow immediately into a blockchain verification application before being made available for sharing, altered videos could be easily identified as fake. 

    Lastly, a similar idea was shared by Miller, who is of the opinion that blockchain technology in conjunction with artificial intelligence can help solve many of the privacy and security concerns put forth by deepfakes. He added:

    “AI perfectly copes with the collection, analysis, sorting and transmission of data, improving the speed and quality of execution of internal processes. The blockchain, in turn, ‘makes sure’ that no one intervenes in the work of AI — it protects data and its sequence from any encroachment.”

    Blockchain technology has its own limitations

    As things stand, there are a few small drawbacks that are preventing blockchain technology from being actively used to monitor deepfakes on the internet. For starters, the technology is limited in its overall scalability, as the amount of computational resources and memory required to combat digitally manipulated A/V data in real-time is quite intense.

    Another potential issue that could arise as a result of blockchain being used for deepfake detection is a substantial curbing of crowdsourced video content (such as the material that is currently available on YouTube). On the issue, Dixon pointed out:

    “How does someone in a poor country reach the world with their message if they have to be approved by a Silicon Valley-based company? Should we be entrusting tech companies with such power? Liberty is always at stake when trust weakens.”

    A similar opinion is shared by Hibryda, creator and founder of Bitlattice, a distributed ledger system that uses a multidimensional lattice structure to address issues such as scalability, security, timing, etc. In his view:

    “The biggest drawback of blockchain tech lies in its inability to determine whether the signed media is really genuine or not. But that isn’t an internal issue of blockchain or related technologies — they only provide ledgers that are extremely hard to manipulate. It’s external and there’s no good way to solve that. While crowd-powered verification could be a partial solution, given crowds can be manipulated it’s rather impossible to build a system that provides reliable and objective fact-checking.”

    However, Forst told Cointelegraph that while the majority of people tend to believe that leveraging blockchain might be too expensive for deepfake detection, there are several open-source solutions that seek to do this. Forst then added that, “The biggest drawback is that blockchain doesn’t solve the problem with deepfakes in its entirety, rather it can be a piece of the solution.”


    Tyler Durden

    Mon, 12/23/2019 – 21:05

  • "A Farce" – China Denies Accusations Of Slave Labor After Chilling Note Found In Christmas Card
    “A Farce” – China Denies Accusations Of Slave Labor After Chilling Note Found In Christmas Card

    China on Monday denied accusations of forced labor at a Shanghai prison, one day after a young girl in a London supermarket was reportedly shocked to find a note from the Chinese gulag, according to Reuters.

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    The note allegedly read “We are foreign prisoners in Shanghai Qingpu Prison China. Forced to work against our will,” and urged whoever found it to contact British former journalist and corporate fraud investigator Peter Humphrey, who was imprisoned in the same Chinese jail from 2014 – 2015 for illegally obtaining the private records of Chinese citizens and selling the information to various clients – including drugmaker GalaxoSmithKline.

    Tesco suspended their relationship with the Chinese Christmas card supplier on Sunday and announced an investigation.

    “We were shocked by these allegations and immediately suspended the factory where these cards are produced and launched an investigation,” said a spokesman.

    According to Chinese Foreign Ministry spokesman Geng Shuang, however, “I can responsibly say, according to the relevant organs [!?], Shanghai’s Qingpu prison does not have this issue of foreign prisoners being forced to work.

    Ghuang said the entire story was “a farce created by Mr. Humphrey.”

    The card was found by six-year-old Florence Widdicombe, who showed it to her alarmed father, who in turn contacted Humphrey on LinkedIn.

    Writing in the Sunday Times, Humphrey said he did not know the identities or the nationalities of the prisoners, but he “had no doubt they are Qingpu prisoners who knew me before my release in June 2015”. –Reuters

    According to Reuters, Humphrey did not believe his activities in China were illegal. He told Sky News that he believes the card came from the Zheijiang Yunguang Printing factory, where prisoners were used in the production line as slave laborers.  


    Tyler Durden

    Mon, 12/23/2019 – 20:45

  • Gold Versus The US Dollar: Correlation Is Not What Most Think
    Gold Versus The US Dollar: Correlation Is Not What Most Think

    Authored by Mike Shedlock via MishTalk,

    Gold is not as correlated to the US dollar as most think.

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    I commented on this a few days ago in Gold Surprisingly Correlated With the US Dollar.

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    Gold has been positively correlated to the US dollar for well over a year.

    Most of the time gold is inversely correlated to the US dollar.

    The problem, as the lead chart shows, is that the strength of moves in gold vs the strength in moves in the US dollar are totally random.

    Look at the period between 1995 and 2005. A huge jump in the dollar index yielded a relatively small decline in the price of gold.

    Between 2005 and 2012 gold went on a long one-way tear up regardless of what the dollar did. The net result was a huge blast higher in gold vs the move in the US dollar index.

    Gold and Miners vs the S&P 500

    A few days ago someone Tweeted I was wrong about the positive correlation between gold and the dollar, stating that the correlation was between gold and miners and the S&P 500.

    That idea is more than silly as the following charts shows.

    Gold vs the S&P 500

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    $XAU vs S&P 500

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    Warning: Don’t use short-term charts as a basis for making generalized statements.

    Path of Least Resistance

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    That is another one of those blind statements that feeds the widespread belief that gold is largely about the dollar.

    Let’s look at this still one more way.

    Various Price Points of Gold

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    With the US dollar right where it is now, gold has been at $450, $380, $1080, and $1480.

    Moreover, and as shown above, sometimes gold has a positive correlation to the US dollar and sometimes negative.

    Gold’s Big Surge

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    Gold went on a huge surge from roughly $450 to $1924 with the US dollar index falling from roughly 90 to 72.70.

    Gold then fell to $1045 with gold bears coming out of the woodwork. Moves in the dollar once again do not explain. Here is a chart that does explain.

    Gold vs Faith in Central Banks

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    If you believe the Fed has everything under control, then the primary reason to own gold is insurance in case you are wrong.

    But one look at repo action and QE that allegedly is not QE ought to be enough reason to convince anyone that the Fed does not have things under control.

    Price Target?

    I have no price target, but I do have this observation:

    If the dollar falls to 72.70 and gold acts the same way, gold will be at well north of $2000.

    That is an “if and” statement, not a prediction. Yet, I do think $2000 gold has a very good shot. Dollar fundamentals help.

    Dollar Fundamentals

    1. The Fed is no longer tightening. The consensus opinion is the Fed is in for a long pause. I believe the Fed’s next move is another series of rate cuts. For discussion and an amusing set of “dot plots”, please see Fed Eyes Long Pause, No Rate Hikes in 2020

    2. European central banks are starting to see the folly of negative rate. If the ECB joins the rate hike party or at least stops QE, that will put upward pressure on the Euro and negative pressure on the dollar.

    3. Without a doubt the US stock market is extremely overvalued. This has led to dollar inflows from foreigners. When, not if, that reverses, the US dollar will reverse as well. For discussion, please see Where Will the Stock Market Be a Decade From Now?

    4. The US also suffers massively from a Ticking Time Bomb of Record High Corporate Debt. When that breaks, it will not be good for US equities.

    Where are We?

    Not only are gold fundamentals excellent, dollar fundamentals help.

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    Got Gold?


    Tyler Durden

    Mon, 12/23/2019 – 20:25

  • Baltimore City On Brink Of Worst-Ever Year For Homicides 
    Baltimore City On Brink Of Worst-Ever Year For Homicides 

    The latest shooting deaths in Baltimore City bring the homicide count to 336 in 2019, up from 309 last year.

    With eight days and 17 hours left in 2019 (as of 7 am est. Monday) — more homicides are expected in the region that could breach the record high of 342, achieved in 2017 and 2015.

    A mass shooting occurred over the weekend in Baltimore that got very little attention in the national press. Seven people were shot but no deaths. There were also three homicides, with two on Saturday and one on Sunday.

    The violent weekend angered Mayor Bernard C. “Jack” Young in a Sunday afternoon statement to the press that said: “The level of violence late into this weekend is completely unacceptable.”

    Baltimore Police Col. Richard Worley said the gunmen in the weekend’s mass shooting were “brazen” and said it is an example of the overall criminal culture in the city.

    “I think it’s the same thing that the commissioner [Michael Harrison] has been saying all along. The criminals are just brazen,” Worley said. “This guy gets out of a car with a rifle, not even a handgun, walks up the street and just opens fire on a line of people.”

    Cumulative homicide trends in the city show a massive jump in violence was sparked after the 2015 riots. Homicides from 2014 to 2015 jumped 62% over the year, and ever since, have sustained over 300 homicides per year. 2015 and 2016 were record-breaking years for murders, and 2019 could be another year for new highs.

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    Homicides in Baltimore are seasonal. Homicides ramp up in spring and peak in summer. Winter usually suppresses the number of killings but not this year. Most of the murders are by handguns.

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    Baltimore is a dangerous city, and if you have plans to visit the collapsing area for the holidays — please be advised you’re risking your life as the per capita homicide rate is some of the highest in the country.

     


    Tyler Durden

    Mon, 12/23/2019 – 20:05

  • Making A Fortune: 19 Million Public Employees Across America Cost Taxpayers Nearly $1 Trillion
    Making A Fortune: 19 Million Public Employees Across America Cost Taxpayers Nearly $1 Trillion

    Authored by Adam Andrzejewski via Forbes.com,

    For the first time in history, 19 million public employee salaries at every level of government across America have been mapped and posted online.

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    The work of our auditors at OpenTheBooks.com tells a compelling story: Public service is supposed to be about serving the people. However, the good intentions of America’s 19 million public employees come at a very high price for the people – nearly $1 trillion. In many cases, taxpayers generously fund these employee salaries.

    Our online database is free to use and includes most employees within the federal, state, and local governments. You can search in your backyard or across the nation. Find out just how much public employees made last year. The salary records include name, salary, position title, and employer for 2017.

    The data is full of stunning examples.

    • Tree trimmers in Chicago lopped off $106,000.

    • New York City school janitors cleaned off $165,000 while out earning the principals at $135,000.

    • Lifeguards in Los Angeles County, California, made up to $365,000.

    • In the small school district in Southlake, Texas (8,000 students), the school superintendent earned $420,000.

    Help the reform-minded mayors, school superintendents, legislators and members of Congress by finding the waste, overspending, and bloated government in your very own neighborhood.

    Search our interactive map of the top 2 million most highly compensated public employees across America. Just click a pin (your ZIP code) and scroll down to see the results that render in the chart beneath the map. Click here to access the map below.

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    Search 2 million public employee salaries by ZIP code at OpenTheBooks.com.

    Last year, we found 1.7 million public employees earned $100,000 or more. The vast majority – 1.3 million six-figure earners – worked at the state and local levels. There were 105,000 local and state government employees out-earning every governor of the 50 states at a salary of $190,000 or more.

    In Texas, 356 municipal employees made more than all governors ($190,000). Some of these towns are small, like Stanton (pop. 2,900), where the manager earned $314,696. In Whitesboro (pop. 4,000) and Manvel (pop. 10,000), the administrators were paid $312,000 and $292,529, respectively.

    In Florida, the city attorney of the seaside community Dania Beach, Florida (pop. 32,000) gleaned $436,917 – that’s more than any U.S. president. At the Port Authority of New York and New Jersey, eight police officers and detectives made between $300,000 and $783,000 last year.

    Nearly 10,000 employees of the University of California system pulled down more than $200,000. This includes 65 highly compensated public employees who made between $1 million and $3.6 million.

    The top 5 locations for highly compensated public employees.

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     OPENTHEBOOKS.COM

    Across the country, some of the largest salaries were paid out to athletic coaches at public universities. The retired football coach at University of Oregon received a $558,689 annual pension, and the fired Arizona State football coach got a $15 million payout. Nick Saban, at the University of Alabama, made $11 million.

    What will you find while searching the public payrolls in your community?

    Our recent investigation with Fox 32 Chicago found an Illinois superintendent earning $407,000 in a Calumet City district with only 1,100 students and no high school. Another superintendent made $206,000 in a New Lenox district with only 11 teachers and less than 100 students. Still another superintendent retired on a $300,000 pension at a Park Forest district, but, was then rehired on a $1,200 a day consulting contract – same position, same district.

    Before complaining about Washington, D.C., people must insist on good government where they live. The people have the power to hold local politicians accountable for tax and spend decisions. Our mission is to make this information available to citizens and policymakers.

    Government payrolls are the No. 1 issue affecting every service: public safety, healthcare, and welfare. Pay, perks, and pension benefits for public employees must be a priority in budgeting and deserve a rigorous, fact-based public debate.

    Highly compensated public employees banded by 2017 income.

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     OPENTHEBOOKS.COM

    Compiling this database was a spending genome project of sorts. It was a million-dollar effort. In one year, we filed requests and captured data from nearly 60,000 government employers, broke open the files, mapped the information, and posted it online.

    The result is treasure-trove of oversight opportunity. It represents approximately 85% of all public employment at every level of government.

    Now, it’s up to you to call out waste and inefficiency in your government bodies. Use our interactive map and search by ZIP code, the top 2 million public employees making more than $95,000. Or, use our website to see all 19 million salary records.

    Open the books on your local taxing body. See how they are spending your property, sales, and income taxes. Then, raise your voice and demand better government in your own backyard.

    Remember, it’s your money.


    Tyler Durden

    Mon, 12/23/2019 – 19:45

    Tags

  • Hunter Biden Denies Ukraine Money Laundering Allegations
    Hunter Biden Denies Ukraine Money Laundering Allegations

    Update: Biden has denied the allegations against him and asked the court to strike the filing from the record, claiming the allegations were improperly filed, and may constitute “redundant, immaterial, impertinent or scandalous” material, and that it was a “scheme by a non-party simply to make scandalous allegations in the pending suit to gain some quick media attention.”

    Biden also asked for attorney’s fees and costs to address the allegations.

    Judge Don McSpadden only agreed that it was improperly filed, striking the evidence on a technicality “as it was not filed in any acceptable manner to this court.”

    It is unclear whether it may be re-filed pursuant to (Ark R. Civ. P. 24).

    According to the New York Post: “Reached by phone, Dominic Casey, the D&A investigator who filed the papers, refused to say whether his group had been retained by Roberts, or sent the information to the court of its own volition.”

    ***

    A new filing in an Arkansas lawsuit against Hunter Biden claims that the former Vice President’s son “is the subject of more than one (1) criminal investigation involving fraud, money laundering and a counterfeiting scheme.”

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    Filed by private investigator Dominic Casey of D&A Investigations on behalf of Lunden Alexis Roberts – with whom Hunter fathered a child, Monday’s “Notice of Fraud and Counterfeiting and Production of Evidence” alleges that Hunter Biden and associates Devon Archer and John Kerry stepson Christopher Heinz engaged in a money laundering scheme which accumulated over $156 million between March 2014 and December 2015.

    According to the document, Biden, Archer and Heinz became directors of consulting firm Rosemont Seneca Bohai, LLC in order to “conceal their family members ownership,” establishing financial accounts at Morgan Stanley and China Bank, the latter of which was used in a money laundering scheme.

    Biden and associates are accused of using the counterfeiting scheme “to conceal the Morgan Stanley et al Average Account Value.

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    The filing also says that “Family members of DEFENDANT Robert Hunter Biden, Devon Archer and Christopher Heinz are business partners of Serhiy Leshchenko and Mykola Zlochevesky in the Ukraine, and are currently under investigation for their part in the counterfeiting scheme.

    Of note, Leshchenko is a former Ukrainian parliamentarian who made headlines in August 2016 for helping to leak the so-called “black ledger” that resulted in the firing of then-Trump campaign manager Paul Manafort – the supposedly ‘debunked’ Ukraine meddling detailed in a November, 2017 Politico article.

    Notably, following an outreach to the Ukrainian embassy by Democratic operative Alexandra Chalupa, Artem Sytnyk, Ukraine’s Director of the National Anti-Corruption Bureau of Ukraine and Leshchenko released the “black ledger” containing off-book payments to Manafort. In December of 2018, a Ukrainian court ruled that Sytnyk and Leshchenko “acted illegally” by releasing Manafort’s name – a conviction which was later overturned on a technicality.

    Zlochevsky, meanwhile, is the owner of Burisma.

    Read below:


    Tyler Durden

    Mon, 12/23/2019 – 19:30

    Tags

  • Surprise! Trust In Media Edges Down After Brief Recovery
    Surprise! Trust In Media Edges Down After Brief Recovery

    Often referred to as the “Fourth Estate”, the media plays an important role in any democratic society. A free press is essential to holding governments accountable and informing the public, thus enabling voters to partake in political debate and make qualified decisions.

    The United States also has a long history of a free and independent press, with organizations such as the New York Times, TIME or CNN historically renowned and respected around the world.

    In recent years however, as Statista’s Felix Richter notes, Americans themselves started losing faith in their country’s media organizations.

    Infographic: Trust in Media Edges Down After Brief Recovery | Statista

    You will find more infographics at Statista

    While the trend in the loss of faith in the media, as the infographic above shows, has been going on for over two decades, the recent acceleration is possibly inspired by a presidential candidate who made no secret of his aversion towards the press (which has for four years done nothing but attack him and parrot establishment anti-Trump rhetoric – only to be busted for it numerous times thanks to Mueller and Horowitz), the percentage of U.S. adults having a great deal or a fair amount of trust and confidence in mass media dropped to a historic low of 32 percent in 2016, according to Gallup data.

    Since then, some trust has been recovered, but 2019 saw the level of trust in American media deteriorate again after consecutive improvements in 2017 and 2018.


    Tyler Durden

    Mon, 12/23/2019 – 19:25

    Tags

  • How Everyone Messes Up At Once: Austrian Business Cycle Theory, Summarized
    How Everyone Messes Up At Once: Austrian Business Cycle Theory, Summarized

    Authored by Art Carden via The American Institute for Economic Research,

    The price system is a thing of beauty. F.A. Hayek was exactly right when he said that it would be considered among humanity’s greatest achievements had it actually been designed, created, and implemented. Instead, it just emerged without central planning or a wise order from a wise ruler. 

    The prices free markets generate aggregate and convey important information about what, how, where, when, and for whom to produce. As the economist Tim Harford put it in his book The Undercover Economist, competitive markets create a world of truth: he notes that in a competitive market, we produce the right stuff the right way for the right people and in the right proportions. The properties of competitive equilibrium have a certain beauty to them. We produce everything that is worth more than it costs to produce. We produce nothing that is worth less than it costs to produce. What gets produced is produced by the lowest-cost producers and consumed by the highest-value consumers. It’s an undesigned and unappreciated marvel.

    That raises an uncomfortable question. If markets are so great, why do we have business cycles? What’s the deal with the roller coaster rides of boom and bust that create widespread reductions in output and employment, also known as recessions?

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    There are a lot of reasons. 

    In what follows, I want to explore one of the elements of the Austrian theory of the business cycle: a cluster of errors by people who, presumably, aren’t stupid and who, presumably, don’t waste resources intentionally.

    Here’s the punchline: monetary mischief means that prices are conveying inaccurate information about what, when, where, how, and for whom to produce. The signals that make markets work — prices, profits, and losses — are distorted relative to those that would what would tell the truth about underlying patterns of preferences and production possibilities. Hence, people make systematic errors. The prices, in other words, are lying.

    Friedrich Hayek emphasizes the price we pay for the right to use other people’s money and stuff now rather than later: the interest rate. Let’s consider a couple of concrete scenarios. In the first case, the interest rate changes due to a change in saving and tells us the truth about people’s willingness to sacrifice present for future consumption. In the second case, the interest rate lies about what is really going on because the creation of new money is not the same thing as the creation of new resources. Here’s a parable: the parable of the asteroid miners and the chicken restaurants.

    Suppose there is a change in people’s saving behavior. For this paper, I have been rereading James M. Buchanan’s Ethics and Economic Progress, and he devotes one chapter to the idea that, by our own standards and preferences, we would be better off if we all saved more — hence, Buchanan argues, the saving ethic has important “economic content.” Suppose that, on hearing this, people generally start saving more. This increases the supply of loanable funds and decreases the interest rate.

    In his legendary lectures on Austrian business cycle theory, Roger Garrison distinguishes between the derived-demand effect and the interest rate effect. For retailers, restaurants, and other firms that serve consumers directly, the derived-demand effect dominates. If people suddenly stop buying sandwiches at Popeye’s and Chick-fil-A, this is going to have a larger effect on their production decisions than lower borrowing costs.

    In the late stages of production, firms like Popeye’s and Chick-fil-A contract (relative to what they would have done, at any rate) because they aren’t selling as many sandwiches. Their (relative) contraction is a big part of what frees up the resources that make it easier for firms farther removed from immediate consumption to expand — companies like asteroid-mining firms with their eyes on asteroids said to be worth billions or trillions or even quintillions of dollars.

    These firms expand because the interest rate effect dominates the derived-demand effect. They are far enough removed from the retail market for chicken sandwiches that what’s going on there isn’t going to affect them much. What will matter will be what the falling interest rates tell them about the wisdom of long-term investment. Lower interest rates make far-future payoffs more valuable.

    At an interest rate of 5 percent, $1,000 one year from today is worth $952.38. At an interest rate of 1 percent, it is worth $990.10. The interest rate is transmitting extremely valuable information: people are now more willing to wait than they were before. Hence, it is a better idea to invest in projects that aren’t going to pay off for a very long time. Even if the payoff is a thousand years from now, we can in principle estimate the present value of a $700 quintillion asteroid. Suppose this is off by many orders of magnitude and the asteroid is worth “only” $7 quadrillion. If the interest rate is 1 percent and the payoff isn’t coming for a thousand years, that $7 quadrillion asteroid still has a present value of over $334 billion. At an interest rate of 2 percent, it’s about $17.5 million. 

    The interest rates are almost certainly too low because asteroid mining is a pretty risky venture. Lloyd’s of London will insure a lot of things, but the possibility of a 70.25-mile-wide asteroid hitting the Earth is a pretty spectacular risk. It probably wouldn’t be as dramatic as this simulation of a 500 km asteroid hitting the Earth, but it would almost certainly be an extinction event. The interest rates are low and the time scale is kind of absurd to make a point: small changes in interest rates can lead to big changes in asset values.

    This all goes fine if the changes are happening because of an increase in saving. Some firms and sectors — those closest to consumers — contract. Other firms and sectors — those farthest from consumers — expand. The economy grows faster as we add capital goods.

    Things go awry, however, when the change in the interest rate comes from the monetary authority messing around with things rather than a change in saving. A credit expansion, where the monetary authority creates new money, lowers interest rates and begins a cascade of errors because the lower interest rates are sending incorrect signals about what is most valuable where. The monetary authority creates more money; it does not, however, create more real resources to support expanded production.

    The lower interest rate has two effects, one on consumers and the other on firms in the early stages of the structure of production like mining, where all the action aims at creating stuff and skills that are a few years away from being finished goods or services. People consume more because interest rates are lower and the reward for delaying gratification isn’t what it used to be. In response to higher sales, firms in the late late stages (like retailers and restaurants) sell more and make plans to expand.

    In the earlier stages, the interest rate effect dominates. Firms in these stages, like the companies eyeing what they think are trillion- and quadrillion-dollar asteroids elsewhere in the solar system, see the present value of possible long-term investments rise. They try, therefore, to expand as well. In the short run, everything looks great. People are consuming more. People are investing more. Unemployment is falling, wages are rising. The economy is booming.

    There’s just one problem: prices are lying. Specifically, the interest rate is lying, and as Hayek emphasizes, the lying prices sow the seeds of an eventual bust even though everything looks wonderful. 

    Everyone is trying to expand their operations because of the lower interest rate and higher spending on consumption goods; however, there simply isn’t enough real saving to support everyone’s plans at the same time. To be sure, there are more loanable funds, which gives every appearance of real saving; however, people aren’t actually cutting back on consumption and leaving real materials like lumber, bricks, and nails for others. 

    Every chicken restaurant orders more chicken at the same time, driving up prices and encouraging their suppliers to expand. They all plan to build new restaurants while, at the same time, asteroid-mining firms are borrowing money and trying to expand. This increases the prices of lumber, land, construction materials, labor, and everything else, but again, the real saving isn’t there to support it. People are making terrible choices and systematically malinvesting capital goods not because they are stupid but because the prices are not reliable. Importantly, this is not a theory of overinvestment, where people invest too much. It is a theory of malinvestment, where people invest in the wrong things.

    They find this out when it turns out the prices they expected to remain stable start rising. This is just an unpleasant surprise for some people who may not enjoy as large a profit as they expected when they decided to expand their chicken restaurants and chicken farms and asteroid-mining concerns, but it is a catastrophe for others who were just on the margin of deciding to enter the market and who pulled the trigger once interest rates fell (in the early stages of production) or sales jumped up just a little bit (in the late stages of production). 

    This means there are half-built restaurants and half-built office towers that can’t be completed without more lumber, concrete, window glass, and copper wiring — but there’s not enough of these materials to go around. A lot of people have nowhere to turn but bankruptcy. The boom is over, and a bust — during which capital, land, and materials are liquidated and reallocated — is the inevitable consequence.


    Tyler Durden

    Mon, 12/23/2019 – 19:05

  • Natgas Futures Plunge Into Bear Market On Warmer Weather Outlook
    Natgas Futures Plunge Into Bear Market On Warmer Weather Outlook

    Last week we described how “A cold shot of air” was going to blast Boston, New York, Philadelphia, and Washington, D.C., through the weekend, then lead to unseasonably warm temperatures through Jan. 02. Much of the cold weather has already exited the Northeast on Monday, resulting in a plunge in Natgas futures on warmer weather outlooks. 

    Front-month gas futures on the New York Mercantile Exchange were down .10 cents, or -4.21%, at $2.231 per million British thermal units (mmBtu) at 12:30 am est. 

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    Natgas futures stumbling into a bear market.

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    “(As) the weather last week was colder than normal we would expect a larger than usual storage draw. However, somewhat normal to above normal weather for this week and the holidays would mean reduced demand significantly,” Zhen Zhu, an economist at Oklahoma City-based C.H. Guernsey, told Reuters

    The Global Forecast System (GFS) shows from Washington, D.C., to New York to Boston, above-trend temperatures will be seen from Dec. 23 through Jan. 01. 

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    The Northeast heating degree day (HDD) index dips this week and won’t rise above trend until Jan. 02/03. This means that energy demand to heat a structure will decline due to warmer temperatures – more reasons why Natgas futures will remain on a decline through this week, or until weather forecasts show cooler weather is on the way. 

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    The Lower-48 HDD also shows energy demand across the U.S. to heat a structure will be on the decline for the next ten or so days. 

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    Traders told Refinitiv that Natgas prices have plunged since early November “due to milder than usual weather and expectations inventories will still rise over the five-year average in the coming weeks. Near-record production enables utilities to leave more gas in storage, wiping away lingering concerns of supply shortages and price spikes during the winter.”

     


    Tyler Durden

    Mon, 12/23/2019 – 18:45

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Today’s News 23rd December 2019

  • Zuesse: Proof That America's "Deep State" Exists And Controls The Government
    Zuesse: Proof That America’s “Deep State” Exists And Controls The Government

    Authored by Eric Zuesse via The Saker blog,

    Readers at the international-news site South Front tend to be technologically far more knowledgeable about the internet than most people (including myself) are, and so their responses to a news-report that I did on December 17th, titled “Former NSA Tech Chief Says Mueller Report Was Based on CIA-Fabricated ‘Evidence’”, explaining some technological details which enable a deeper understanding of how the CIA had perpetrated the ‘Russiagate’ hoax that Robert Mueller in his report as the U.S. Special Counsel had asserted to be a “Russiagate” fact (i.e., Mueller’s allegations that the Russian Government had hacked computers of the Democratic National Committee). Especially informative there was this reader-comment, which comes from one of the world’s leading experts on cyber technology, Luke Herbert-Hansen:

    Luke Herbert-Hansen  Peter Jennings

    Well FAT may not [be] a common OS file system anymore, but it is still widely used on various removable media such as a USB sticks.

    As everyone knows who has been closely following the most-reliable evidence regarding the question of how DNC emails had been copied and supplied to Wikileaks, there has been much credible, soundly-sourced, speculation that the DNC employee Seth Rich had physically copied the data from a computer there onto a thumb drive (or “USB stick”), which then was picked up in the U.S. by a Wikileaks agent, who physically delivered it to Julian Assange at London’s Ecuadorean Embassy.

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    The great independent investigative journalist (virtually barred since 2007 from being published in the U.S. anymore), Seymour Hersh, personally investigated the records of the murder of Seth Rich, both at the Washington DC police and at the FBI, and this is from the transcript I had made of his statement in a Web-posted phone-call [my boldfaces for emphasis]:

    (2:50-) At some time in late spring, which we’re talking about in June 21st, I don’t know, just late spring early summer, he makes contact with Wikileaks, that’s in his computer, and he makes contact. Now, I have to be careful because I met Julian [Assange] in Europe ten twelve years [ago], I stay the fuck away from people like that. He has invited me and when I am in London, I always get a message, ‘come see me at the Ecuadorean’ [Embassy], and I am fucking not going there. I have enough trouble without getting photographed. He’s under total surveillance by everybody.

    They found, what he had done, he [Seth Rich] had submitted a series of documents, emails from DNC — and, by the way, all this shit about the DNC, you know, was it a ‘hack’ or wasn’t it a ‘hack’ — whatever happened, it was the Democrats themselves wrote this shit, you know what I mean? All I know is that, he offered a sample, he sends a sample, you know, I am sure dozens of emails, and said I want money’. Later Wikileaks did get the password [SETH RICH DID SELL WIKILEAKS ACCESS INTO HIS COMPUTER.] He had a drop-box, a [password-]protected drop-box, which isn’t hard to do. I mean you don’t have to be a whiz at IT [information technology], he was not a dumb kid. They got access to the drop-box. This is all from the FBI report. He also let people know with whom he was dealing, I don’t know how he dealt, I’ll tell you all about Wikileaks in a second, with Wikileaks the mechanism, but according to the FBI report, he shared his box with a couple of friends, so ‘If anything happens to me, it’s not going to solve your problem’, okay? I don’t know what that means. But, anyway, Wikileaks got access. And, before he was killed, I can tell you right now, [Obama’s CIA Director John] Brennan’s an asshole. I’ve known all these people for years, Clapper is sort of a better guy but no rocket-scientist, the NSA guys are fuckin’ morons, and the trouble with all those guys is, the only way they’ll get hired by SAIC, is if they’ll deliver some [government] contracts, it’s the only reason they stayed in. With Trump, they’re gone, they’re going to live on their pension, they’re not going to make it [to great wealth]. I’ve gotta to tell you, guys in that job, they don’t want to live on their pension. They want to be on [corporate] boards like their [mumble] thousand bucks [cut]. 

    I have somebody on the inside, you know I’ve been around a long time, somebody who will go and read a file for me, who, this person is unbelievably accurate and careful, he’s a very high-level guy, he’ll do a favor, you’re just going to have to trust me, I have what they call in my business, long-form journalism, I have a narrative, of how that whole fucking thing began.

    (5:50-) It’s a Brennan operation. It was an American disinformation, and the fucking President, at one point when they even started telling the press — they were back[ground]-briefing the press, the head of the NSA was going and telling the press, the fucking cocksucker Rogers, telling the press that we [they] even know who in the Russian military intelligence service leaked it. All bullshit.

    In other words, besides the information from Bill Binney, who was an NSA whistleblower who took early retirement so he wouldn’t have to continue doing what people such as John Brennan demanded, Seymour Hersh there provided yet additional confirmation to this account from the also-early-retired whistleblowing UK Ambassador Craig Murray — a close friend of Assange — who claimed that he had “met” the person in DC who supplied the thumb drive (USB stick), which then was delivered (he didn’t say how) to Assange:

    Here is from my news-report on 6 January 2017 which confirms and documents that:

    Murray received the Hillary-campaign information on September 24th. Little over a week later, on October 7th, Wikileaks published documents from the computer of Hillary’s Campaign Chairman John Podesta, and politico announced it headlining The most revealing Clinton campaign emails in WikiLeaks release”. That same day, Politico also bannered Podesta: ‘I’m not happy about being hacked by the Russians’,” and the legend that ‘Russia hacked the Clinton campaign’ started immediately to compete in the day’s ‘news’ stories, and diminish focus on, the contents of that information which had been ‘hacked’.

    However, the information from the DNC itself had been published much earlier, on July 22nd, and so this could not have come from the September 24th leak. Whether it came from the same person, or through the same courier (i.e., Murray), isn’t yet known. [But it is now, from what Binney has just said, and the answer is “yes.”] The Obama Administration has made no distinctions between those two data-dumps, but charges that all of the leaks from the Obama-Clinton-DNC conspiracy — both the anti-Sanders campaign during the primaries, and the anti-Trump campaign during the general-election contest — came from ‘Russian hacking’. The reason why the emphasis is upon the anti-Trump portion is that the conspirators now are trying to smear Trump, not Sanders, and so to make this a national issue, instead of only an internal Democratic-Party issue. They are trying to de-legitimize Trump’s Presidency — and, at the same time, to advance Obama’s aim for the U.S. ultimately to conquer Russia. The mutual hostility between Obama and Trump is intense, but Obama’s hatred of Russia gives had Russia in his gunsights well before he, as a cunning politician, made political hay out of Mitt Romney’s statement that “Russia, this is, without question America’s number one geopolitical foe.”added impetus to his post-Presidential campaign here. This Nobel Peace Prize winner

    Only a fool trusts the U.S. government (and the U.S. ‘news’media) after Saddam’s WMD’ (which despite all the lies to the contrary, didn’t exist). Like Craig Murray said, “I used to be the head of the FCO unit that monitored Iraqi weapons of mass destruction, and I know for certain, I can tell you, they knew there weren’t any.”

    In my records, the politically progressive Craig Murray was the first individual to post to the Web a clear case that Russiagate was a U.S. Deep-State hoax: He headlined, on 31 December 2016, “Exit Obama in a Cloud of Disillusion, Delusion and Deceit”, and discussed the case which now is commonly called “Russiagate.” In fact, I had never found any evidence that anything he has said was false, and — especially considering the sheer number of his postings at his blog — this was a remarkable record of truthfulness (100%), which is attained by very few journalists, none of whom are publishable in the United States. These reporters are too honest, and too careful about the quality of the documentation they cite, to be publishable in the United States. They refuse to intentionally deceive their readers; and, to the exact contrary, they take great care never to deceive them. (However, I unfortunately did finally see a posting from him that included some false allegations.)

    Incidentally, my December 15th news-report, “Two Huge Suppressed News-Reports in a 3-Day Period Display Corrupt U.S.-&-Allied Mainstream Press”, shows how pervasive and deeply systemic this outright lying by the U.S.-and-allied press is.

    As to whom the individuals are who are America’s Deep State, that’s discussed here. In other words: the operatives (such as mainstream American journalists) are only agents for those individuals — they are not the Deep State itself. They can easily be replaced, but the Deep State is a far more deep-seated infection, in the American body-politic, and maybe cannot be removed, at all, without replacing the entire system. More-drastic measures than “reform” would therefore be needed, in order to eradicate the Deep State and restore whatever degree of democracy the United States formerly did have. (It’s now a dictatorship. In fact, that’s even been scientifically proven.) My research indicates that the Deep State took control of America starting on 26 July 1945.

    *  *  *

    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.


    Tyler Durden

    Sun, 12/22/2019 – 23:30

  • Bannon: Trump Impeachment Will Be "Trial Of The Century"
    Bannon: Trump Impeachment Will Be “Trial Of The Century”

    Having blasted the liberal elites earlier in the week for “not giving a f**k” about the average joe in America:

    “Look, this is what drives me nuts about the left. All immigration is to flood the zone with cheap labour, and the reason is because the elites don’t give a fuck about African Americans and the Hispanic working class. They don’t care about the white working class either. You’re just a commodity”.

    Former White House chief strategist Steve Bannon pulled no punches in an interview with Fox Business Network’s Trish Regan saying that the Senate impeachment trial of President Donald Trump will be the “trial of the century.”

    I think this trial is going to be the trial of the century, and the mainstream media is going to be all over it,” Bannon said.

    “That’s why I think it’s so important not just for his legacy, but for his presidency and his second term. He’s got to engage in this. He’s got to take them on. He’s got to have the whistleblower; we have to have the Bidens in front of the nation and the world. They’re going to have to stand and deliver under oath. And we’re going to get to the bottom of this. And I think that’s going to lead to an exoneration, not just an acquittal, but an exoneration of President Trump.”

    Bannon said Republicans ought to “turn the tables” on Democrats and demand a full trial that will force it to go into the Democratic presidential primary.

    “I think you ought to demand a full trial, where to get witnesses — and, hey, if it takes too long, it’s the Democrats to force this constitutional crisis over the Christmas holidays. If this trial goes on for a month or two into the Democratic primary, that’s a tough break for them. They’re the ones that forced this. One of the reasons they forced it is their field is so weak going in there. Nobody cares. Like I said, witness protection program. Nobody cares about their debate. They’re the ones that force this.

    Bannon went on to reiterate his belief that Hillary Clinton will “inevitably” be the Democratic Presidential nominee… but will lose… again:

    Hillary Clinton comes in at the moment that she feels that she can step in to save the Democratic Party and try to convince people that a rematch with President Trump is the best way that they have to try to defeat President Trump,” Bannon said.

    “They won’t beat him. Right now, there’s nobody, including Hillary Clinton out there, that can beat Donald Trump. But they’re going to get desperate here because look at tonight. Nobody cares about this debate, this debate’s in Los Angeles.”

    Finally, the former strategist raged against “the Washington Consensus”:

    “…this is the managed decline of the United States. This is about the Washington consensus. The Washington Post published the Afghanistan papers last week. Two trillion dollars. 2,400 dead. Tens of thousands wounded. What’s that? That’s the inter-agency consensus in 18 years that betrayed our country. That’s what betrayed our countries. With Brennan, that’s what betrayed our country, not Donald Trump. Donald Trump has stood up. The reasons people cheer for him, it’s their sons and daughters that have died in Afghanistan. It’s their lives, their kids’ lives being thrown away, and their tax dollars.

    And that, Bannon exclaimed, is why we need a trial in the Senate to expose the swamp.

    “And they understand that Donald Trump is fighting that. That’s why we need a trial, a real trial and Senate with witnesses. So, before the world, Donald Trump could get his day in court.

    Full Transcript:

    Trish Regan: I do believe the president heard that she wants to run again from this show, from none other than Mr. Stephen Bannon here on set with me, who talked about Hillary Clinton getting back in potentially again. And also, you called Bloomberg as well. So, Bloomberg’s in, is Hillary going to join?

    Steve Bannon: I think it’s inevitable. They had a poll out today that showed Biden at like 28, Bernie 21, Elizabeth Warren in the high teens. It looks like something that’s going to get to a — particularly with Super Tuesday, when Biden drops the nuclear weapon of his money on these in these big states. It’s going to lead to a brokered convention. Hillary Clinton, I think, is going to come in when it’s evident that none of the radical left of the Democratic Party can beat the President Trump —

    [cross talk]

    Steve Bannon: — A brokered convention. I think Hillary Clinton comes in at the moment that she feels that she can step in to save the Democratic Party and try to convince people that a rematch with President Trump is the best way that they have to try to defeat President Trump. They won’t beat him. Right now, there’s nobody, including Hillary Clinton out there, that can beat Donald Trump. But they’re going to get desperate here because look at tonight. Nobody cares about this debate, this debate’s in Los Angeles.

    Trish Regan: They should be watching you.

    Steve Bannon: Well, I’m talking about on MSNBC and CNN and their networks. They’re not they’re not running around saying, this thing is great. They understand these people, not just are boring, it’s not just about their star quality, it’s what they’re talking about is so off the mainstream, it’s not connecting with people. And they’re going to start getting desperate. Remember, their number one thing is that Donald Trump is an existential threat to the Democratic Party, to the established order and to the mainstream media, and they will do anything to take him down and destroy him. In particular, you saw last night what he’s talking about to the people; hey, they’re trying to come after you, they’re trying to come after me to get to you. We are in this together. And he saw people respond to that. That response of that audience last night for two hours, that stood out for hours in, what, 15- or 17-degree cold is quite remarkable.

    Trish Regan: What I find remarkable and, you know, we can say this is a couple Irishmen — or Irishman and an Irishwoman. You think about traditional Democrats, right? And I think about my family and how my dad’s family was, historically, big Irish Catholic family and you were a Democrat like you’re Catholic. Like, it was part of your religion, right? And, you know, my — and if you were lucky enough, you got a job in the union. And so, there was a feeling that you always voted blue, and that has changed.

    Steve Bannon: Last night you saw that. He’s connected with working class — listen to this. It’s the reason he won Wisconsin, Michigan, Pennsylvania, Ohio, Iowa. States they never thought we’d win again. And altogether because he went and he got, you know, Democrats, blue collar Democrats to vote for it and they believe in it. And they’re seeing — here’s the thing they’re seeing, the manifestation of his actions are making their lives better. You know, the Zogby poll today said that 53 percent of Democrats think that their party is spending too much time on impeachment instead of getting things done legislatively. It is so —

    Trish Regan: And they got that right. And it’s not just, you know, we talk about Irish Americans. I mean, I look at the African American population right now and you look at some of the poll numbers there. And he’s doing extremely well in a way that you wouldn’t really think he would with that particular population, given the media.

    Steve Bannon: Well that’s what the immigration policy — remember everything was to make sure that wasn’t more labor pressure on African Americans and Hispanics. That’s why you seen the approval rate — I think it’s 34 percent of African Americans approve now by Pew, and 36 percent of Hispanics. Because you’re seeing wages starting to rise. People — unemployment’s at historic lows, wages starting to rise. That’s why I think it’s so important, since they’ve smeared him in this process. He didn’t get to call any witnesses in this trial. And I think this trial will be — it’s going to be the trial of the century, and the mainstream media is going to be all over it. That’s why I think it’s so important not just for his legacy, but for his presidency and his second term. He’s got to engage in this. He’s got to take them on. He’s got to have the whistleblower; we have to have the Bidens in front of the nation and the world. They’re going to have to stand and deliver under oath. And we’re going to get to the bottom of this. And I think that’s going to lead to an exoneration, not just an acquittal, but an exoneration of President Trump.

    Trish Regan: The trial of the century. Wow. You know, a lot of people are worried, well, you get John Bolton. What is he going to do? What is John Bolton going to say? And what is this one going to say? What is that one going to say? What do you say to those concerns?

    Steve Bannon: The president — the call was perfect. He looked at everything that led up to it. This is why the American people heard him. And you just saw the bureaucrats that were in it that were testified. This is because that is the managed decline of the United States. This is about the Washington consensus. The Washington Post published the Afghanistan papers last week. Two trillion dollars. 2,400 dead. Tens of thousands wounded. What’s that? That’s the inter-agency consensus in 18 years that betrayed our country. That’s what betrayed our countries. With Brennan, that’s what betrayed our country, not Donald Trump. Donald Trump has stood up. The reasons people cheer for him, it’s their sons and daughters that have died in Afghanistan. It’s their lives, their kids’ lives being thrown away, and their tax dollars. And they understand that Donald Trump is fighting that. That’s why we need a trial, a real trial and Senate with witnesses. So, before the world, Donald Trump could get his day in court.

    Trish Regan: And you call them all. Disruption, right? It is the decade of disruption, and you’re one of the main disruptors there, according to The Wall Street Journal. In fact, one of the most powerful people here in Washington, the power players. Can we see that? So, you’re in some pretty significant company, there Mr. Bannon.

    Steve Bannon: Well, I got the disrupt look on President Trump. As President Trump says, I’m his top student and that’s where the top student got for being the top student. I got my slot.

    Trish Regan: Well, listen, we appreciate you being here tonight for that.

    Steve Bannon: Thank you for having me, Trish.

    Trish Regan: Very interesting insight, as always, Steve Bannon. I do want to point out to everyone they can listen to you every day. You can tune into a syndicated radio show and podcast on iTunes, War Room: Impeachment. Well, that’s aptly named. It airs seven days a week. Forgive me, I was thinking weekdays. Seven days a week, you’re on the case.

    Steve Bannon: Got to do it. Thank you so much for having me.


    Tyler Durden

    Sun, 12/22/2019 – 23:00

    Tags

  • The First Ever Mission To Remove Space Junk From Orbit Has Just Been Commissioned
    The First Ever Mission To Remove Space Junk From Orbit Has Just Been Commissioned

    Authored by Manuel Garcia Aguilar via TheMindUnleashed.com,

    By September of 2013, there were already more than 500,000 pieces of debris, or “space junk” orbiting Earth and that number is still increasing.

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    The bits of junk travel at speeds up to 17,500 mph—fast enough for a relatively small piece of orbital debris to damage a satellite or a spacecraft. This is also potential danger to space vehicles, but especially to the International Space Station, space shuttles, and other spacecraft with humans aboard.

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    Pixabay.

    “The greatest risk to space missions comes from non-trackable debris,” said Nicholas Johnson, NASA chief scientist for orbital debris.

    As a result of this risk, the European Space Agency signed a debris-removal contract with Swiss startup ClearSpace tasking the company with de-orbiting a substantial piece of a Vega rocket left in orbit in 2013.

    This mission, planned for launch in 2025, will be the first of its kind planned with the sole purpose of cleaning rather than exploring space.

    The spacecraft is still unnamed and will be designed to have a “high level of autonomy.” The entire craft should weigh less than 400 kilograms.

    Chemical propulsion appears to be the choice of the engineers for the first spacecraft, but future models could employ a mix of chemical and electrical thrusters.

    As mentioned before, there is one main target here and it is called Vespa, the leftover remnant from ESA’s Vega rocket launch in 2013. This piece of junk weighs roughly the same as a small satellite and has a simple shape. This would make it easy for the robotic arms to grab. Once it’s in the arms of the collector, it will be dragged out of orbit and allowed to burn up in the atmosphere.

    Unfortunately, this will also destroy the collector, but in the future, the agency hopes to improve this technology with future plans to de-orbit multiple objects without also destroying themselves.

    “And in the coming years, the number of satellites will increase by an order of magnitude, with multiple mega-constellations made up of hundreds or even thousands of satellites planned for low Earth orbit to deliver wide-coverage, low-latency telecommunications, and monitoring services. The need is clear for a ‘tow truck’ to remove failed satellites from this highly trafficked region,” says Luc Piguet, founder, and CEO of ClearSpace.

    So far ClearSpace has raised close to 2.3 million Swiss francs (close to $2.3 million USD) through a mix of investors and grants. The ClearSpace mission is set to cost $129 million.


    Tyler Durden

    Sun, 12/22/2019 – 22:30

  • Credit Suisse Ex-Employee Says "Striking Tall Blonde" Spy Followed Her In Manhattan And Long Island
    Credit Suisse Ex-Employee Says “Striking Tall Blonde” Spy Followed Her In Manhattan And Long Island

    When Colleen Graham heard a story of investigators looking into Credit Suisse for spying on its recently departed head of wealth management, something sounded familiar.

    She had recalled, years prior, when she was working on a JV between the bank and Palantir Technologies, a “striking tall blonde” had followed her in Manhattan after she refused to sign off on how revenue from the JV would be booked. She filed a complaint in 2017 alleging the bank had taken retaliatory measures against her, including the surveillance, according to Bloomberg

    Credit Suisse had “expressed strong frustration” about her stance on the revenue recognition, she claimed. 

    So she reached out to CEO Tidjane Thiam and Chairman Urs Rohner, offering up the details of her story. She also reached out to the law firm the bank hired to investigate. 

    However, on October 1, the lawyers came out and said they had “not identified any evidence that Credit Suisse had ordered observations of other employees.” Instead, it was COO Pierre-Olivier Bouee who had acted alone in ordering the former employee be followed. Rohner said that staff surveillance was not “part of our toolbox.”

    The bank said it’s “examining the new information.”

    Graham’s report didn’t make it into the lawyer’s findings. Additionally, Swiss newspaper NZZ reported on December 16 that the bank’s HR chief, Peter Goerke, was also followed for 3 days in February. 

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    The events continue to act as a headwind for Thiam, who is focused on trying to shift the narrative to Credit Suisse’s performance – and away from the scandal that has dented the bank’s reputation. Questions continue to be raised about who was “in the know” about the behavior at the bank.

    Credit Suisse said the results of its own investigation will be published on Monday. 

    Preliminary results show no evidence of Thiam having knowledge of the surveillance. Swiss financial regulators are also stepping up their investigation into the bank. Finma appointed an independent auditor to look into the spying allegations, according to a statement late on Friday. The activities raise “various compliance issues,” according to the regulator. 

    In an email to Thiam and Rohner in September, Graham says she was followed from the “lobby of my lawyer’s office into a pharmacy several blocks away and to the building where I was interviewing” at BlackRock. She also says she saw the same woman in a black Range Rover following her on Long Island. She said “the woman wanted me to know she was following me.”

    She heard nothing in response to her email, so she also wrote to the law firm, Homburger. A lawyer responded, suggesting they speak by phone on September 30, one day prior to the firm releasing their report.

    Graham worked as senior compliance executive at Credit Suisse before being hired to head Signac, a venture that used Palantir software to detect unauthorized trading by employees. Department of Labor investigators also looked at her allegations and dismissed the claims in April. Credit Suisse has called them “baseless”.

    Recall, this is hardly the first time “business intelligence firms” or spies have been used in the world of finance. Critics of the company Wirecard were recently targeted by spies, according to the FT. Well known short seller Carson Block even caught one spy on camera after he claimed to be a WSJ reporter while digging for information. 

    In 2017, another “gorgeous blonde” spy was famously outed after apparently seeking counterintelligence on a controversial insurance company. She was later found to be the woman who tried to coerce information out of Rose McGowan on behalf of Harvey Weinstein and in 2019, later outed herself officially in an embarrassing apology tour


    Tyler Durden

    Sun, 12/22/2019 – 22:00

  • As The Fiscal Doomsday Machine Powers On, David Stockman Rages "Impeach The Congress, Too!"
    As The Fiscal Doomsday Machine Powers On, David Stockman Rages “Impeach The Congress, Too!”

    Authored by David Stockman via LewRockwell.com,

    If bringing one’s country to fiscal ruin were an impeachable offense, you’d have to impeach the entire city of Washington.

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    On December 16 the gross Federal debt breached a new level to $23.1 trillion, while the net debt after $401 billion of cash weighed in at $22.71 trillion. The latter monstrous figure is notable because on June 30, 2019 it stood at $21.76 trillion.

    So what has happened in the last 167 days is a $948 billion increase in the Uncle Sam’s net debt, which amounts to a gain of $5.7 billionper day – including, as we like to say, weekends, holidays and snow days.

    Worse still, not a single dollar of that gain got absorbed in government trust funds. The Treasury float held by the public actually rose by $953 billion.

    So why in the world do the knuckleheads on bubblevision not understand where the spiking rates and ructions in the repo market came from?

    The law of supply and demand is still operative, and the US Treasury is literally flooding the bond pits with new supply. Even at the bottom of the Great Recession, Uncle Sam did not drain $5.7 billion per day from the bond market.

    But nary a soul down in the Imperial City has noticed this borrowing eruption at the tippy-top of the business cycle, which now teeters on borrowed time at a record 127 months of age. Instead, this very day the Congress is busily engaged in what is a fair approximation of abolishing the election process at the heart of American democracy.

    We will address today’s hideous impeachment Gong Show below. But here we note that every talking head showing up on the screen today is claiming that the market can keep on bubbling higher because the pending impeachment of the nation’s 45th president is a great big nothingburger.

    Au contraire!

    It’s real, deeper meaning is that the Washington end of the Acela Corridor is now morphing into a disruptive missile aimed right at the canyons of Wall Street.

    Of course, the Donald won’t be “convicted” by the Republican Senate. Indeed, the House impeachment resolution my never even be sent to the Senate if Nancy and her ship of fools conclude there won’t be a real “trial” in the Senate and therefore leave the resolutions sitting on the parliamentarian’s desk as camera ready campaign fodder for 2020.

    But, hey, a government which can treat the supposedly solemn and extraordinary process of impeachment as a mere exercise in campaign theatrics is a government that has given the term “dysfunctional” an altogether new definition. It means that the conduct of the actual business of the people’s government has virtually ceased.

    To be sure, we would ordinarily consider a government that does absolutely nothing to be praiseworthy. After all, the route to prosperity does not extend through the halls of Congress or the vast departments inside the beltway, but stems from the genius of free enterprise and the exertions and inspiration of workers, employers, savers, investors and inventors. They require neither help nor superintendence from an activist Federal government.

    Likewise, a reticent government is all we really need for national defense. The latter has been more than taken care of by the god-created ocean moats which secure our shores and our already paid for nuclear deterrent which keeps distant foes at bay. All the rest of the $900 billion of so-called national security spending and the vast and unremitting Washington machinations it funds are in behalf of Empire, not the safety and liberty of the homeland.

    But the fly in the ointment is that several generations of Washington politicians have turned the Federal budget into a Fiscal Doomsday Machine. Spending for both automatic entitlements and so-called discretionary programs alike gushes higher, pulling the public debt upwards as it goes, with virtually no meaningful legislative action.

    Consequently, the fractured and inflamed partisanship evident in today’s demented proceedings has become the handmaid of the nation’s impending fiscal catastrophe. That is, government must take positive and sweeping legislative action to brake the Doomsday Machine, but James Madison’s checks and balances have always made large-scale statutory enactments difficult, while today’s metastasized partisanship have made them well nigh impossible.

    It is generally understood that the giant entitlements – Social Security, Federal retirement, Medicare, Medicaid, Food Stamps and the lesser income security programs – are automatic, permanently authorized payments that currently flow to upwards of 160 million Americans and will continue to do so, whether Congress does its job or not.

    But what needs emphasis is that the rate of growth is accelerating – in effect, it is busting loose from the growth rate of the faltering national economy which must finance these massive entitlements.

    Thus, between 1987 and 2000, total Federal entitlement spending soared from $358 billion to $778 billion or by 117%. But during those first 13 years of Greenspan’s reign, the Fed’s easy money was able to goose nominal GDP by 115%, meaning that the entitlement claim on GDP remained constant at about 7.5%.

    Since then, it has been off to the races as shown in the graph below. During the last 19 years, nominal GDP (brown line) doubled again, but Federal entitlement spending (purple line) tripled, and it’s claim on GDP rose from 7.5% to 11.0%.

    What this means is that every year the legislative stalemate and inaction persists is another year in which the Fiscal Doomsday Machine gathers even more momentum.

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    Moreover, the surge of beneficiaries behind the above divergence is by no means over. The 80-million strong Baby Boom will continue to clamber on to the Social Security/Medicare welcome wagon at a rate of 11,000 per day until the end of the 2020s.

    The graph below is dispositive. The 39.7 million Medicare (and social security retirement, too) beneficiaries at the turn of the century are already more than 60 million, which total will rise to 81.5 million by 2030 and 92.4 million by 2050.

    Needless to say, the rate of entitlement spending growth, which has already broken loose from GDP, will diverge to an even greater degree during the decades ahead. Quite simply, the already baked-in-the cake demographics of American society guarantee that work force and GDP growth will continue to weaken, even as the exploding retirement population gets ever older (on average) and therefore more costly to support.

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    Nor is the automatic entitlement the only aspect of the budget threatening a further breakout in the Turbulent Twenties ahead. Mandatory interest on the debt is fixing to soar at quadruple the rate of the last 19 years owing to the math of debt and interest rates.

    To wit, the first 19 years of this century witnessed the full fury of central bank interest rate repression. The 10-year U.S. Treasury (UST) yield fell from 6.5% to a recent sub-basement level of just 1.75%.

    Accordingly, even as the Federal debt erupted from $5.7 trillion to nearly $23 trillion, or 300%, during that period, the interest expense of the US Treasury crept up at a far more moderate pace.

    Thus, interest outlays during Q3 2000 posted at a $353 billion annual rate, representing 6.2% of the $5.67 trillion of public debt then outstanding. But during the next 19 years of explosively growing Federal debt, interest expense crept up to just $584 billion at an annual rate during Q3 2019, representing but a 65% gain since the turn of the century.

    Here’s the thing. Annualized interest expense in Q3 2019 amounted to just 2.6% of the debt outstanding – or barely one-third of the 6.2% level registered in Q3 2000.

    It goes without saying that this disconnect between the debt and its cost of carry was a one-time fiscal windfall that has actually functioned to obfuscate the magnitude of the budget crisis gestating down below the top line. Yet according to the sheer math of the thing, it can’t happen again in the decades ahead because interest rates have already been pushed to sub-economic and unsustainable levels by the Fed and other central banks.

    At minimum, therefore, interest expense will grow just as fast as the baked-in-the-cake growth of the Federal debt, which is heading toward well in excess of $40 trillion by the end of the 2020s. Accordingly, even at today’s average yield Federal interest expense will surge to $1.1 trillion per year during the next 10 years, and a lot more when interest rates finally normalize.

    Growth of Federal Debt Versus Interest Expense, 2000-2019

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    Finally, even the so-called discretionary part of the budget – annual appropriations for defense and domestic programs – has succumbed to a form of de facto automaticity.

    To wit, the Imperial City has been so fiscally euthanized by the Fed’s gift of unending cheap money and massive monetization of the public debt that both parties are on the same side of the budgetary boat. That is, in favor of more spending – with the GOP neocons and hawks pushing defense spending skyward in trade for equivalent levitation of domestic appropriations, as especially favored by the Dems.

    Moreover, the Trumpified GOP has developed a deathly fear of being blamed for another government shutdown, which it falsely blames for its wipeout at the polls in 2018. So the GOP has essentially joined a bipartisan conspiracy in favor of a rolling suspension of the Federal debt limit and annual omnibus appropriations bills that are loaded with budget busting pork.

    Crazily, the talking heads on bubblevision this AM were making the absurd argument that there is smooth sailing ahead because Congress just passed a 2300 page $1.4 trillionomnibus appropriations bill for the balance of FY 2020, even as it is in the midst of a partisan donnybrook on impeachment.

    Supposedly, this means the government is still functioning. No sweat!

    Well, yes, it is functioning, but to literally blow the top off from even the tiny discretionary spending corner of the Federal budget that until the Donald came along was exhibiting a modicum of restraint.

    No more. The two-year budget deal being sent to the White House will blow the budget caps for FY2020-2021 by $320 billion, but even that isn’t the half of it.

    Due to Congress’ crooked, self-serving scoring rules, budgetary caps become the basis for the outyear current policy baseline in subsequent years. Accordingly, for FY 2020 the existing caps were supposed to cause total defense and non-defense appropriations to drop by $125 billion – from $1.244 trillion in FY 2019 to $1.119 trillion in FY 2020.

    This is shown in the solid black line in the chart below, and also shown by the dotted black line is the convention for projecting 10-year baseline spending from the old FY2020 and FY2021 caps.

    Thanks to Congress’ alleged ability to “function” in the midst of partisan madness, however, those caps have now been blown away and none have been enacted for subsequent years. Hence the baseline for discretionary spending in the outyears is now plotted by the dotted blue line.

    The difference over 10-year? A cool $1.7 trillion, and you can believe that the bipartisan duopoly on Capital Hill will drive every dime of this increase right into Uncle Sam’s trillion+ per year borrowing requirement.

    Even then they were not done as they honed today’s impeachment brickbats. While they were at it, they repealed $375 billion of health care taxes that the one and same Pelosi-led Dem majority rammed through in 2010 in order to prove that Obamacare would not add to the public debt!

    We have no particular brief for the medical taxes and are not surprised at all by the blatant Dem hypocrisy. After all, for the most part these massive taxes have never actually gone into effect because implementation has been deferred time and time again just before the effective dates.

    Still, if you can’t repeal ObamaCare spending as the GOP miserably failed to do in 2017 and 2018, why do you get to repeal these financing means and brag you have made a blow for America’s taxpayers?

    Not only do these actions bury taxpayers deeper in debt, they also guarantee that some day down the road even higher taxes will be imposed in order to finally stem the flood of red ink.

    Besides that, $200 billion of the revenue loss buried in the Omnibus appropriations bill is attributable to permanent repeal of the so-called Cadillac Tax on ultra-high cost, gold-plated – mainly union – health care plans, which have a total cost of more than $30,000 per year.

    That’s right. The bipartisan duopoly has now agreed to keep spending trillions over the next decade for ObamaCare but can’t even see its way clear to tax the excess value of health care plans which cost about the same as the average annual wage among the 170 million payroll tax filers in the US.

    Nevertheless, when you add $70 billion of other tax loopholes which were extended and the associated debt service cost, the very “functional” Congress at work this week blew a $500 billion hole in the revenue collections over the next decade to fit on top of the $1.7 trillion of added discretionary spending.

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    So the Federal budget has indeed become a full-bore Doomsday Machine. There is not a scintilla of capacity or will on either side of the partisan divide to even brake its trajectory. As shown below, the publicly-held debt is heading toward 150% of GDP – a level which would crush what remains of US economic growth or encourage the Fed to print so much money monetizing this exploding public debt as to virtually destroy the financial system in the process.

    Yet this gets us back to today’s contretemps.

    Obviously, the Dem impeachment case is absurd. The meddling in the 2016 election was done by the Deep State intelligence agencies with the encouragement of partisan Obama officials, not the Russians; and Ukraine’s cesspool of corruption would not have smeared American politics in the slightest had Washington not fomented a coup in February 2014 against a government it didn’t like for being too friendly with its historic Russian neighbor and suzerain.

    So the Donald had every reason of state to want the Ukraine corruption investigated. For crying out loud, the prosecutor fired by Biden has told exactly why it happened.

    In early 2106, he had seized the property of the corrupt Ukrainian oligarch and owner of Burisma, who had hired Hunter Biden and the son-in-law and chief of staff to the Secretary of State, John Kerry. Then out of the blue, wham! He was removed from office at Biden’s command in exactly the quid pro quo manner Uncle Joe famously bragged about before an audience at the Council on Foreign Relations.

    So how much stench do you really need in your nostrils to recognize that the Hunter Biden led crew of fortune hunters in Ukraine after February 2014 weren’t on the up and up?

    But actually, the threadbare articles of impeachment arising from the stench of Ukraine are not really about the Donald’s 25 minute phone call and purported quid pro quo at all. The Dems have adopted the posture that the American election process itself is imperiled by the nefarious meddling of Russkies and other fureners, and are focused not on governance, but on this alleged threat to their ability to win office and hold power.

    At the same time, the GOP has lost all sense of its fundamental missions in behalf of sound money, fiscal rectitude, free markers and homeland defense. Instead, it’s going full retard on its own fatuous version of the supposedly imperiled U.S. election process.

    That’s what the Donald’s insane Wall on the Mexican border and the GOP’s increasingly shrill anti-immigration policy is all about. It opposes more immigrants and brown people because it believes they will vote Democrat and thereby deprive the GOP of its rightful claim on political power.

    Needless to say, two parties fighting over alleged existential threats to the very essence of American democracy is the very opposite of the nothingburger ballyhooed by bubble vision this AM.

    What the Trump impeachment is really about is a brutal, raw struggle for power that threatens the very survival of American democracy, and which could end up in a hung 2020 election that would make the hanging-chad ordeal of 2000 look like a walk in the park.

    Even then, the Fiscal Doomsday Machine will power forward unrestrained.

    And these fools on bubble vision want you to buy-the-dip.

    Don’t you dare!


    Tyler Durden

    Sun, 12/22/2019 – 21:30

  • AG Barr Blasts Soros For Stoking Hatred Of Police
    AG Barr Blasts Soros For Stoking Hatred Of Police

    “They have started to win in a number of cities and they have, in my view, not given the proper support to the police.

    That is the warning that Attorney General William Barr has for Americans, as he told Fox News’ Martha MacCallum in a recent interview that liberal billionaire George Soros has been bankrolling radical prosecutor candidates in cities across the country.

    “There’s this recent development [where] George Soros has been coming in, in largely Democratic primaries where there has not been much voter turnout and putting in a lot of money to elect people who are not very supportive of law enforcement and don’t view the office as bringing to trial and prosecuting criminals but pursuing other social agendas,” Barr told Martha MacCallum.

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    Specifically, Barr warned that if the trend continues, it will lead to more violent crime, ading that the process of electing these prosecutors will likely cause law enforcement officers to consider whether the leadership in their municipality “has their back.”

    “They can either stop policing or they can move to a jurisdiction more hospitable,” he said.

    “We could find ourselves in a position that communities that are not supporting the police may not get the police protection they need.”

    The Washington Post recently reported that while two Virginia prosecutorial candidates – funded by Soros’ Justice and Public Safety PAC – have never prosecuted a case in a state court, they beat candidates with more than 60 years of experience between them.


    Tyler Durden

    Sun, 12/22/2019 – 21:00

    Tags

  • Virginia AG Says 2A Sanctuaries "Have No Legal Force." But Is That Actually True?
    Virginia AG Says 2A Sanctuaries “Have No Legal Force.” But Is That Actually True?

    Authored by Daisy Luther via The Organic Prepper blog,

    The Attorney General of Virginia stepped into the fray yesterday with an opinion on the validity of Second Amendment Sanctuaries that have sprung up across the state in response to draconian gun control legislation. He said that the Second Amendment Sanctuary resolutions have no legal force and that municipalities will have no choice but to enforce the unconstitutional laws, should the bill be turned into law in January.

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    But is this actually true? Or is it just a statement meant to discourage dissent? Digging into this, it seems that it’s certainly not as cut and dried as the AG would have us all believe.

    This article will be filled with lots of quotes from pertinent legal documents. I’m not an attorney so I’m just laying out my findings. The emphasis throughout is mine.

    You can draw your own conclusions.

    The Official Statement

    Let’s start out with what AG Mark Herring had to say.

    The Virginia Constitution, the Code of Virginia, and established common law doctrines all bear on these questions.

    First, the Constitution of Virginia provides that all local authority is subject to the control of the General Assembly. For example, Article V Il, Section 2 of the Constitution provides that “[t]he General Assembly shall provide by general law for the . powers . of counties, cities, towns, and regional governments.”[1]

    Second, the Code of Virginia establishes the supremacy of state law over local ordinances and policies. Section 1-248 provides:

    The Constitution and laws of the United States and of the Commonwealth shall be supreme. Any ordinance, resolution, bylaw, rule, regulation, or order of any governing body or any corporation, board, or number of persons shall not be inconsistent with the Constitution and laws of the United States or of the Commonwealth.[[2][3][4])

    As the Virginia Supreme Court has explained, because local authority is subordinate to state law, “local ordinances must conform to and not be in conflict with the public policy of the State as embodied in its statutes.

    Third, established common law doctrines specifically limit the authority of local governments. Virginia follows the Dillon Rule, which provides that local governments may exercise “only those powers expressly granted by the General Assembly, those necessarily or fairly implied therefrom, and those that are essential and indispensable. The Dillon Rule is one of strict construction: “[I]f there is a reasonable doubt whether legislative power exists, the doubt must be resolved against the local governing body. Thus, when a Virginia locality seeks to take any action, the Dillon Rule applies “to determine in the first instance, from express words or by implication, whether a power exists at all. If a locality cannot identify a reasonably specific source of delegated authority, “the inquiry is at an end” and the act in question is unauthorized.

    These constitutional, statutory, and common law doctrines establish that these resolutions neither have the force of law nor authorize localities or local constitutional officials to refuse to follow or decline to enforce gun violence prevention measures enacted by the General Assembly.

    l . By their own terms, these resolutions have no legal effect. Although the resolutions typically contain several “Whereas” clauses, the “be it resolved” clauses generally do not purport to take any concrete action. 15 Instead, the operative clauses: (a) “express[]” the “intent” of the locality’s Board of Supervisors “to uphold the Second Amendment rights of [the county’s] citizens,” (b) “express[]” the Board’s “intent that public funds of the [clounty not be used to restrict the Second Amendment rights of the [county’s] citizens,” and (c) “declare[]” the Board’s “intent to oppose” any “infringement” or “restrictions” of their residents’ Second Amendment rights using “such legal means [as] may be expedient, including without limitation, court action. These general statements do not direct or require any specific result, and any suggestion of potential future action is entirely speculative.

    It also bears emphasis that neither local governments nor local constitutional officers have the authority to declare state statutes unconstitutional or decline to follow them on that basis. “All actions of the General Assembly are presumed to be constitutional. Furthermore, it has long “been the indisputable and clear function of the courts, federal and state, to pass upon the constitutionality of legislative acts. It follows from these well-established principles that all localities and local constitutional officers are required to comply with all laws enacted by the General Assembly unless and until those laws are repealed by the legislature or invalidated by the judiciary.

    Nor may localities or local constitutional officers decline to enforce laws enacted by the General Assembly on the theory that requiring them to do so would “commandeer” local resources. Although the United States Supreme Court has held that “the Federal Government may not compel the States to implement . . . federal regulatory programs, that doctrine derives from the specific limitations on Congress’s legislative powers and the “residuary and inviolable sovereignty” retained by the states in our federal system. 25 In contrast, “the Constitution of Virginia is not a grant of legislative power to the General Assembly,„ 26 and, unlike Congress, [tlhe authority of the General Assembly shall extend to all subjects of legislation” not specifically “forbidden or restricted” by the State Constitution. 27 And neither the Federal Constitution nor Virginia law recognizes any “anti-commandeering” principle that allows localities or local constitutional officers to refuse to participate in the enforcement of state law.28

    Conclusion

    It is my opinion that these resolutions have no legal effect. It is my further opinion that localities and local constitutional officers cannot nullify state laws and must comply with gun violence prevention measures that the General Assembly may enact. (source)

    You can read Herring’s entire opinion and get the citations here.

    What is the Dillon Rule?

    This is a rule of government embraced by 39 states.

    Dillon’s Rule is derived from written decision by Judge John F. Dillon of Iowa in 1868. It is a cornerstone of American municipal law. It maintains that a political subdivision of a state is connected to the state as a child is connected to a parent. Dillon’s Rule is used in interpreting state law when there is a question of whether or not a local government has a certain power. Dillon’s Rule narrowly defines the power of local governments.

    The first part of Dillon’s Rule states that local governments have only three types of powers:

    -those granted in express words,
    -those necessarily or fairly implied in or incident to the powers expressly granted, and
    -those essential to the declared objects and purposes of the corporation, not simply convenient, but indispensable.

    The second part of Dillon’s Rule states that if there is any reasonable doubt whether a power has been conferred on a local government, then the power has NOT been conferred. This is the rule of strict construction of local government powers. (source)

    Virginia set a precedent with Dillon’s Rule back in 1896 and is considered one of the strictest states for the rule. It has been applied consistently ever since, taking power from local governments and centralizing it at a state level.

    However…

    It’s important to note that Dillon’s Rule is no more a law than Second Amendment Sanctuary resolutions. It’s a philosophy, albeit one that has consistently been applied in the Virginia Supreme Court for 125 years.

    The Dillon Rule was adopted by the Virginia Supreme Court 120 years after Virginia declared its independence and created its first constitution. The rule is not a law passed by the General Assembly, and it was not based on a specific section in the 1869 state constitution that was in effect when the court ruled on the Winchester arson reward lawsuit.

    The Virginia Supreme Court did not violate the separation of powers and somehow create a new law when adopting the Dillon Rule. Instead, when the court cited the Iowa justice’s rulings, it created the legal framework for interpreting the legality of many laws passed by state and local governments.

    The framework has empowered the General Assembly and limited the authority of local governments. Judge Dillon’s legal philosophy was based on the assumption that local government was less competent and more corrupt than state government. However, that ignores the professionalization of local government since 1896. (source)

    Dillon’s Rule can be federally preempted, too.

    The American University Law Review published a paper regarding the Dillon Law in regard to sanctuary states and cities that were acting in defiance of federal immigration laws.

    The issue of federal preemption of state law is a complex and prevalent topic in the immigration debate today,and the issue is relevant to Dillon’s Rule because it could be argued that preempts the outcome of a Dillon analysis in this context.

    Furthermore, the issue of preemption is particularly tricky here because Dillon’s Rule deals with what the law does not say, rather than an express provision of state law in conflict with federal law. Under preemption principles, where state and federal law conflict, federal law governs. However, where there is no conflict, state law applies. (source)

    The question here is whether federal law would conflict with state law enough to preempt Dillon’s rule.

    Does the Dillon Rule override the power of County Sheriffs?

    County sheriffs are often considered the last against unconstitutional legislation, with the authority to defy even federal law.

    Historically, some sheriffs have not only enforced the laws; they have also decided which laws not to enforce. They view this as protecting the people from the intrusions of the federal government.

    The “constitutional sheriff” movement is comprised of current and former members of law enforcement who believe that sheriffs are the ultimate authority in their jurisdiction—even above federal law enforcement…

    …While it may seem like a fringe movement, it is prevalent enough to be taken seriously. In 2013, 500 sheriffs agreed not to enforce any gun laws created by the federal government. In Utah, almost all elected sheriffs signed an agreement to protect the Bill of Rights—and fight any federal officials who tried to limit them. [Robert Tsai / Politico] (source)

    In 2013, Sheriff John D’Agostini of El Dorado County, California, famously kicked a federal agency out of his county.

    “The U.S. Forest Service, after many attempts and given many opportunities, has failed to meet that standard.”

    The sheriff has sent a letter to the US Forestry Service stating officers will no longer be able to enforce state law in his county.

    “The U.S. Forest Service, after many attempts and given many opportunities, has failed to meet that standard.”

    CBS 13 in Sacramento contacted a law professor to ask him if the sheriff’s actions are legal.

    “Looks to me as though the sheriff can do this,” he said. “They don’t have state powers in the first place, but essentially the sheriff can deputize individuals to have authority in his or her jurisdiction.”

    Fact: federal agencies do not have state powers. Due to the Constitution’s structure of dual sovereignty, the feds have no authority to enforce state laws. Furthermore, states cannot be compelled to enforce federal laws. (source)

    So does that mean that Dillon’s Rule does or does not apply to county sheriffs? It’s complicated.

    This Comment argues that Dillon’s Rule, a doctrine which limits the authority of cities, towns, and other localities to act unilaterally without authorization from the state legislature, creates a barrier to the enforcement of the 287(g) agreements currently in place between sheriffs’ offices and the federal government. Specifically, Dillon’s Rule precludes sheriffs from entering 287(g) agreements without authorization from the state legislature, rendering these agreements invalid in most cases. Accordingly, when an individual is detained or otherwise deprived of liberty or due process under an invalid 287(g) agreement, constitutional protections should apply. (source)

    Wouldn’t depriving gun owners of their Second Amendment rights fall under the category of something constitutionally protected?

    AG Herring’s statement contradicts a 2014 opinion.

    Attorney General Herring’s current opinion seems politically biased since he has previously rendered more than one opinion at odds with this statement. House Majority Leader C. Todd Gilbert (R) said:

    “Attorney General Herring’s opinion is interesting, as it directly contradicts his own statements and actions regarding the supremacy of state law over the preferences of the officials who must enforce them,” Gilbert states in a news release. “In 2014, Herring declined to defend Virginia law in state court, despite a statutory duty to do so.”

    Gilbert adds that Herring told the Richmond Times-Dispatch: “…If I think the laws are adopted and constitutional, (then) I will defend them…”

    “His opinion today notes that ‘it has long been the indisputable and clear function of the courts … to pass upon the constitutionality of legislative acts,’” Gilbert states. “This not only conflicts with his previous statement about his own conduct, but also the position of a number of Democratic commonwealth’s attorneys regarding (the) prosecution of marijuana possession. 

    “I look forward to the Attorney General following up with the Commonwealth’s Attorneys and Commonwealth’s Attorneys-elect in Arlington, Fairfax, Loudoun, Portsmouth, and Norfolk about the supremacy of state law over the policy preferences of local elected officials,” Gilbert adds. (source)

    Gilbert also provided another example of inconsistency.

    Todd Gilbert, R-Shenandoah, the current majority leader in the House of Delegates who will serve as minority leader in the next legislative session, issued a statement Friday afternoon drawing attention to what he sees as a contradiction between the sanctuaries opinion and Herring’s previous decision to not defend Virginia’s ban on same-sex marriages when Herring concluded the prohibition was unconstitutional, despite what Gilbert argues was a statutory requirement to do so. (source)

    That certainly does seem inconsistent with a “rule of strict construction.”

    Virginians are unlikely to back down over the AG’s opinion.

    Virginians are outraged at the prospective new laws and many gun owners are openly defiant. Counties, cities, and municipalities across the state are decrying the unconstitutional new laws and they are getting organized.

    When gun owners were threatened with the National Guard to enforce compliance, it only seemed to accelerate the Second Amendment Sanctuary movement.  One county officially established a militia and more sure to follow, either officially or unofficially.

    This is a battle of wills that’s being watched closely around the country. Where Virginia goes, the nation will follow, whether that’s compliance or outright refusal.

    Gun control advocates may have chosen the wrong state as a testing ground. The state government seems to have underestimated the unflinching resolve of rural residents. So far, despite the state government’s threats and posturing, Virginians seem unbowed and gun owners across the nation are supporting them.


    Tyler Durden

    Sun, 12/22/2019 – 20:30

  • Steven Mnuchin Explains Why $1.5 Trillion In $100 Bills Have Disappeared
    Steven Mnuchin Explains Why $1.5 Trillion In $100 Bills Have Disappeared

    Last week we reported that something strange was going on at the same time that central banks are injecting $100 billion each month in electronic money to crush volatility and ramp markets: a similar amount in physical currency and precious metals was literally disappearing.

    The mystery, in a nutshell, was as follows: while banks are printing more bank notes than ever, these seem to be “disappearing off the face of the earth” and nobody knows where or why, or as the WSJ notes, “central banks don’t know where they have gone, or why, and are playing detective, trying to crack the same mystery.”

    And while readers can read up much more on the topic of disappearing hard assets here, a few days after, Fox Business picked up on this thread, writing that almost $1.5 trillion of the world’s physical cash, with $100 dollar bills making up the vast majority, was reportedly unaccounted for.

    So what happened to the money?

    To get to the bottom of this mystery, this was the question FOX Business anchor Lou Dobbs asked the man who literally signs every single US dollar bill, Treasury Secretary Steven Mnuchin. The response” “Literally, a lot of these $100 bills are sitting in bank vaults all over the world,” Mnuchin said.

    Mnuchin pointed to the negative interest rates causing people to turn to American dollars as a solid investment.

    The dollar is the reserve currency of the world, and everybody wants to hold dollars,” Mnuchin said on “Lou Dobbs Tonight.” “And the reason why they want to hold dollars is because the U.S. is a safe place to have your money, to invest and to hold your assets.”

    Mnuchin said it’s interesting that, in a increasingly digital world, “the demand for U.S. currency continues to go up.” adding that “there’s a lot of Benjamins all over the world.”

    Actually, it’s not that interesting: the world’s growing appetite for physical assets such as paper dollars and gold, coupled with the continued interest in cryptocurrencies and other traditional currency alternatives, merely confirms that faith in artificially levitated markets is approaching a tipping point. Meanwhile the world’s “top 0.001%ers” continue to quietly cash out, literally, and put their Benjamins in secret vaults in the middle of somewhere, even as central banks do everything in their power to reduce the amount of physical currency in circulation and replace it with easily trackable digital alternatives.

    As we reported back in August, there are now more $100 bills in circulation than $1 bills, according to data from the Federal Reserve, which found there are more $100s than any other denomination of U.S. currency. And as an indication of just how much demand there is for physical stores of value, consider this: the number of bills featuring a picture of Benjamin Franklin has about doubled since the start of the recession.

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    In 2018, the Federal Reserve Bank of Chicago illustrated a correlation between low interest rates and high currency demand, though it also noted outside factors could help explain swelling demand.

    The bank estimated that 80% of all $100 bills last year were actually in circulation in foreign countries, and explained that residents in other countries, particularly those with unstable financial systems, often use the notes as a safe haven.

    To watch the exchange, click on the image below and fast forward to 7 minutes 30 seconds in.

    https://platform.twitter.com/widgets.js

    It’s not just US dollar that are disappearing, however.

    Few are as perplexed by the fate of the missing cash as the German central bank: according to the Bundesbank more than 150 billion euros are being hoarded in Germany. This has led the European Central Bank, and others, to ask the public for help.

    “Everyone says that they are not hoarding cash but the money is clearly somewhere,” said Henk Esselink, head of the issue and circulation section in the ECB’s currency management division.

    “People hide their money everywhere,” said Sven Bertelmann, head of the Bundesbank’s National Analysis Centre in Mainz, Germany. Sometimes bank notes are buried in the garden, where they start decomposing, or hidden in attics, where they are used by mice for building nests. “It happens again and again that people keep money in an envelope and then they shred it by mistake,” Bertelmann said. “We pick up the bank notes with tweezers and then start to put them together, like a jigsaw puzzle.”

    Australia’s central bank says its best guess is that only around a quarter of the bank notes in circulation are used for everyday transactions. Up to 8% of cash is used in the shadow economy—tax avoidance or illegal payments—while as much as 10% could have been lost. That is $7.6 billion Australian dollars ($5.2 billion) missing at the beach or in couch cushions Or simply lost in a “boating accident” to avoid the taxman until the rainy days arrive.

    The biggest use of cash is as a store of wealth “in safes, under beds and at the back of cupboards, both here in Australia and elsewhere around the world,” Mr. Lowe, the RBA governor, said.

    Swiss National Bank officials likewise found that hoarding of Swiss francs jumped around the year 2000, likely motivated by fear of the Y2K bug infecting computer systems, the bursting of the dot-com bubble, the September 11 terrorist attacks and introduction of the euro. The financial crisis that began in 2007 encouraged people to stash even more.

    Meanwhile, with a financial crisis looming – and getting closer by the day – for some countries, such as New Zealand, making money disappear is becoming a national pastime. Around a third of New Zealand’s new bank notes headed overseas in 2017, up from 6% four years earlier. That happened around the time that tourism overtook dairy as the country’s main export money-spinner, leading officials to speculate on the role played by currency exchanges, especially in Asia.

    The trail mostly ran cold after that. The bank could only identify the whereabouts of around 25% of New Zealand’s cash. The rest, of about 75%, has disappeared.

    “Our sense is that we’re in the same boat as a lot of other central banks out there,” said Christian Hawkesby, assistant governor at the RBNZ. “We can’t fully explain why holdings of cash are rising and where they are going.”

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    Unfortunate boating accident.


    Tyler Durden

    Sun, 12/22/2019 – 20:10

  • Bloomberg Recommends Virtue Signaling Elites Atone For Private Jet Use With Carbon Credits
    Bloomberg Recommends Virtue Signaling Elites Atone For Private Jet Use With Carbon Credits

    Are you a rich, virtue-signaling hypocrite experiencing ‘eco-guilt’ for bouncing all over world in a private jet while condemning others for their vastly smaller carbon footprint?

    Fear not, Bloomberg News has you covered.

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    To atone for your carbon sins – particularly if you just can’t bring yourself to fly commercial (private jets emit as much as 20x more carbon dioxide per passenger) – simply snap up some carbon credits! In addition to convincing yourself you’re not a hypocrite, you’ll be prepared for awkward interview questions in Aspen after igniting 400 gallons of jet fuel to shuttle your entourage to next year’s film festival.

    Beware of scams, however, as only Carbon credits which truly benefit the planet should only be purchased from ‘well-established NGOs.’

    If you have the money, the easiest way is to pay for carbon credits. To make sure you’re investing in a project that will truly benefit the planet, look for credits from groups that well-established nongovernmental organizations support. Gold Standard, which NGOs including the WWF created, has issued more than 100 million carbon credits from about 700 projects worldwide. For example, you can offset a ton of CO2 by donating $18 to a reforestation effort in East Timor or by giving $15 to a program that provides fuel-efficient stoves for women in North Darfur. –Bloomberg

    More Q&A for the curious (Via Bloomberg)

    How do I know how much I need to offset?

    It depends on factors such as the amount of fuel burned and the altitude reached in flight. “People are put off by the fact they can go to different calculators and get different estimates of what that footprint of their flight would be,” Leugers says. “The reality is there are different levels of calibration.” One “finely calibrated” online calculator for commercial flights is from German nonprofit Atmosfair, she says. The unique details involved with a personal jet trip mean you’ll probably need to call in your own expert. 

    Can I use biofuel for my jet?

    If you can find it. The 15 million liters (almost 4 million gallons) of aviation biofuel produced in 2018 accounted for less than 0.1% of total aviation fuel consumption, says the International Energy Agency. The IEA noted on its website in March that only five airports have regular biofuel distribution—Bergen, Norway; Brisbane, Australia; Los Angeles; Oslo; and Stockholm. Biofuels are also costlier. The aviation industry says this might eventually be resolved with ramped-up production of biofuels from cheap and plentiful feedstocks such as agricultural waste.

    Can I just buy an electric private plane?

    There are already small two- and four-seater electric planes in the air. Something comfier, in the 50-seat range, might be ready for short-haul flights by 2027, says Bertrand Piccard, co-founder of Solar Impulse, a solar-powered aircraft project. “Sixty-six years after the Wright Brothers, they put people on the moon,” he says. “That shows how fast innovation can go.”


    Tyler Durden

    Sun, 12/22/2019 – 19:30

  • A Funny Thing Happened As The Fed Cut Rates: Credit Card Rates Hit All Time Highs
    A Funny Thing Happened As The Fed Cut Rates: Credit Card Rates Hit All Time Highs

    Something “odd” happened as the Fed prematurely ended its rate hike cycle and cut rates 3 times starting this summer: while banks were quick to trim the interest they pay on deposits to match the Fed’s cuts (and in the case of some “retail banks” like Goldman, even cut ahead of the Fed) they pushed the rates they charge on credit cards to all time highs.

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    And while we are confident such stalwart defenders of Fed policy as supportive of US consumers (instead of, say, US banks) as Neel Kashkari will be quick to explain how it is that rate cuts have resulted in higher credit card interest rates, and why the Fed is doing nothing to reverse this latest handout from consumers to banks, here are some more charts from Deutsche Bank showing that after carrying the US economy for the past year (as we reported on Friday, consumption account for more than 100% of the GDP growth in Q3), this may soon be ending.

    First, it’s not just credit card rates that are surging – so are auto loan interest rates, and while they have yet to hit all time highs, they have risen by a material 2% in 2018 and also are showing no signs of reversing.

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    Worse, while bank auto loan rates have yet to hit cycle highs, when it comes to rates charged by finance companies, they are back to levels seen when the Fed Funds rates was about 3% higher.

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    One explanation for the relentless creep higher in rates banks charge consumers is that delinquency rates are also rising, and sure enough, that’s exactly what’s going on, although one would think that the 75bps cut this year would find at least some pass through to end markets. Alas, that is not the case.

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    Meanwhile, despite the recent surge in car loan delinquencies which is also fast approaching record levels, finance companies are allowing increasingly broke US consumers to take out ever longer loans and leases in order to make the monthly payments smaller while tacking on mandatory payments to the tail end, which has risen to as much as five and a half years.

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    And as maturities get ever longer, so total loan sizes rise to new all time highs, allowing OEMs to keep hiking average prices to new records. After all, why comparison shop and look for deals when one can just charge it and worry about the price the next billing cycle, and the next, and the next… with compounding interest.

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    Shifting away from cars, and looking at the broader consumer loan category, something ominous is taking place here too: after hitting an all time low 3 years ago, the number of defaults has spike, even as the increasingly unreliable and seasonally adjusted unemployment rate remains near all time lows.

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    Finally, while the big banks – which carefully season and select their portfolios have barely seen their credit card delinquency rates increase, the same can not be said for most US commercial banks that are not among the 100 largest: it is here that the next American delinquency crisis will hit first, because as noted here previously, delinquency rates among America’s small and medium banks are effectively at all time highs.

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    Tyler Durden

    Sun, 12/22/2019 – 19:11

  • The Fake Impeachment: Pelosi's Botched Ploy Helps Trump Towards Victory
    The Fake Impeachment: Pelosi’s Botched Ploy Helps Trump Towards Victory

    Authored by Joaquin Flores via The Strategic Culture Foundation,

    And so it came to pass, that in the deep state’s frenzy of electoral desperation, the ‘impeachment’ card was played. The hammer has fallen. Nearly the entirety of the legacy media news cycle has been dedicated to the details, and not really pertinent details, but the sorts of details which presume the validity of the charges against Trump in the first place. Yes, they all beg the question. What’s forgotten here is that the use of this process along clearly partisan lines, and more – towards clearly partisan aims – is a very serious symptom of the larger undoing of any semblance of stability in the US government.

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    The fact that the impeachment is dead in the water, by Pelosi’s own admission, is evident in Trump’s being adamant that indeed it must be sent to the Senate – where he knows he’ll be exonerated. But even if it doesn’t go to the Senate, what we’re left with still appears as a loss for Democrats. Both places are his briar patch. This makes all of this a win-win for team Trump.

    Only in a country that produces so much fake news at the official level, could there be a fake impeachment procedure made purely for media consumption, with no real or tangible possible victory in sight.

    For in a constitutional republic like the United States, what makes an impeachment possible is when the representatives and the voters are in communion over the matter. This would normally be reflected in a mid-term election, like say for example the mid-term Senatorial race in 2018 where Democrats failed to take control. Control of the Senate would reflect a change of sentiment in the republic, which in turn and not coincidentally, would be what makes for a successful impeachment.

    Don’t forget, this impeachment is fake

    Nancy Pelosi is evidently extraordinarily cynical. Her politics appears to be ‘they deserve whatever they believe’. And her aim appears to be the one who makes them believe things so that they deserve what she gives them. For little else can explain the reasoning behind her claim that she will ‘send the impeachment to the Senate’ as soon as she ‘has assurances and knows how the Senate will conduct the impeachment’, except that it came from the same person who told the public regarding Obamacare that we have to ‘We have to pass the bill so that you can find out what is in it.”.

    In both cases, reality is turned on its head – for rather we will know how the Senate intends to conduct its procedure as soon as it has the details, which substantively includes the impeachment documents themselves, in front of them, and likewise, legislators ought to know what’s in a major piece of legislation before they vote either way on it. Pelosi’s assault on reason, however, isn’t without an ever growing tide of resentment from within the progressive base of the party itself.

    We have quickly entered into a new era which increasingly resembles the broken political processes which have struck many a country, but none in living memory a country like the US. Now elected officials push judges to prosecute their political opponents, constitutional crises are manufactured to pursue personal or political vendettas, death threats and rumors of coups coming from media and celebrities being fed talking points by big and important players from powerful institutions.

    This ‘impeachment’ show really takes the cake, does it not? We will recall shortly after Trump was elected, narrator for hire Morgan Freeman made a shocking public service announcement. It was for all intents and purposes, a PSA notifying the public that a military coup to remove Trump would be legitimate and in order. Speaking about this PSA, and recounting what was said, would in any event read as an exaggeration, or some allegorical paraphrasing made to prove a point. Jogging our memories then, Freeman spoke to tens of millions of viewers on television and YouTube saying:

    We have been attacked. We are at war. Imagine this movie script: A former KGB spy, angry at the collapse of his motherland, plots a course for revenge – taking advantage of the chaos, he works his way up through the ranks of a post-soviet Russia and becomes … president.

    He establishes an authoritarian regime, then he sets his sights on his sworn enemy – the United States. And like the KGB spy that he is, he secretly uses cyber warfare to attack democracies around the world. Using social media to spread propaganda and false information, he convinces people in democratic societies to distrust their media, their political processes, even their neighbors. And he wins.

    This really set the tone for the coming years, which have culminated in this manufactured ‘impeachment’ crisis, really befitting a banana republic.

    It would be the height of dishonesty to approach this abuse of the impeachment procedure as if until this moment, the US’s own political culture and processes were in good shape. Now isn’t the time for the laundry list of eroded constitutional provisions, which go in a thousand and one unique directions. The US political system is surely broken, but as is the case with such large institutions several hundreds of years old, its meltdown appears to happen in slow motion to us mere mortals. And so what we are seeing today is the next phase of this break-down, and really ought to be understood as monumental in this sense. Once again revealed is the poor judgment of the Democratic Party and their agents, tools, warlords, and strategists, the same gang who sunk Hillary Clinton’s campaign on the rocks of hubris.

    Nancy Pelosi also has poor judgment, and these short-sighted and self-interested moves on her part stand a strong chance of backfiring. Her role in this charade is duly noted. This isn’t said because of any disagreement over her aims, but rather that in purely objective terms it just so happens that her aims and her actions are out of synch – that is unless she wants to see Trump re-elected. Her aims are her aims, our intention is to connect these to their probable results, without moral judgments.

    The real problem for the Democrats, the DNC, and any hopes for the White House in 2020, is that this all has the odor of a massive backfire, and something that Trump has been counting on happening. When one’s opponent knows what is probable, and when they have a track record for preparing very well for such, it is only a question of what Trump’s strategy is and how this falls into it, not whether there is one.

    Imagine being a fly on the wall of the meeting with Pelosi where it was decided to go forward with impeachment in the House of Representatives, despite not having either sufficient traction in the Senate or any way to control the process that the Senate uses.

    It probably went like this:

    We’ll say we impeached him, because we did, and we’ll say he was impeached. We’ll declare victory, and go home. This will make him unelectable because of the stigma of impeachment. ‘

    Informed citizens are aware that whatever their views towards Trump, nothing he has done reaches beyond the established precedent set by past presidents. Confused citizens on the other hand, are believing the manufactured talking points thrown their way, and the idea that a US president loosely reference a quid pro quo in trying to sort a corruption scandal in dealings with the president of a foreign country, is some crazy, new, never-before-done and highly-illegal thing. It is none of those things though.

    Unfortunately, not needless to say, the entirety of the direct, physical evidence against Trump solely consists of the now infamous transcript of the phone call which he had with Ukrainian president Zelensky. The rest is hearsay, a conspiracy narrative, and entirely circumstantial. As this author has noted in numerous pieces, Biden’s entire candidacy rests precisely upon his need to be a candidate so that any normal investigation into the wrongdoings of himself or his son in Ukraine, suddenly become the targeted persecution of a political opponent of Trump.

    Other than this, it is evident that Biden stands little chance – the same polling institutions which give him a double-digit lead were those which foretold a Clinton electoral victory. Neither their methods nor those paying and publishing them, have substantively changed. Biden’s candidacy, like the impeachment, is essentially fake. The real contenders for the party’s base are Sanders and Gabbard.

    The Democratic Party Activist Base Despises Pelosi as much as Clinton

    The Democratic Party has two bases, one controlled by the DNC and the Clintons, and one which consists of its energized rank-and-file activists who are clearer in their populism, anti-establishment and ant-corporate agenda. Candidates like Gabbard and Sanders are closest to them politically, though far from perfect fits. Their renegade status is confirmed by the difficulties they have with visibility – they are the new silent majority of the party. The DNC base, on the other hand, relies on Rachel Maddow, Wolf Blitzer, and the likes for their default talking points, where they have free and pervasive access to legacy media. In the context of increased censorship online, this is not insignificant.

    Among the important reasons this ‘impeachment’ strategy will lose is that it will not energize the second and larger base. Even though this more progressive and populist base is also more motivated, they have faced – as has the so-called alt-light – an extraordinarily high degree of censorship on social media. Despite all the censorship, the Democrats’ silent majority are rather well-informed people, highly motivated, and tend to be vocal in their communities and places of work. Their ideas move organically and virally among the populace.

    This silent majority has a very good memory, and they know very well who Nancy Pelosi is, and who she isn’t.

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    The silent majority remembers that after years of the public backlash against Bush’s war crimes, crimes against humanity, destruction of remaining civil liberties with the Patriot Act, torture, warrantless search – and the list goes on and on – Democrats managed to retake the lower house in 2006. If there was a legitimate reason for an impeachment, it would have been championed by Pelosi against Bush for going to war using false, falsified, manufactured evidence about WMD in Iraq. At the time, Pelosi squashed the hopes of her own electorate, reasoning that such moves would be divisive, that they would distract from the Democrats’ momentum to take the White House in ’08, that Bush had recently (?) won his last election, and so on. Of course these were real crimes, and the reasons not to prosecute may have as much to do with Pelosi’s own role in the war industry. Pelosi couldn’t really push against Bush over torture, etc. because she had been on an elite congressional committee – the House Intelligence Committee – during the Bush years in office which starting in 2003 was dedicated to making sure that torture could and would become normalized and entirely legal.

    It seems Pelosi can’t even go anywhere with this impeachment on Trump today, and therefore doesn’t even really plan to submit it to the Senate for the next stage. The political stunt was pulled, a fireworks show consisting of one lonely rocket that sort of fizzled off out of sight.

    Trump emerges unscathed, and more to the point, we are closer to the election and his base is even more energized. Pelosi spent the better part of three years inoculating the public against any significance being attached to any impeachment procedure. Pelosi cried wolf so many times, and Trump has made good on the opportunities handed to him to get his talking points in order and to condition his base to receive and process the scandals in such and such way. This wouldn’t have been possible without Pelosi’s help. Thanks in part to Pelosi and the DNC, Trump appears primed for re-election.

    Trump energizes his base, and the DNC suppresses and disappoints theirs. That’s where the election will be won or lost.


    Tyler Durden

    Sun, 12/22/2019 – 18:30

    Tags

  • Here's Why The Reflation Trade Is Doomed And Will Die Some Time Around April
    Here’s Why The Reflation Trade Is Doomed And Will Die Some Time Around April

    One of the big “hopes” heading into 2020 and the new decade, is that the reflation trade is once again coming back to life as the yield curve has steepened rather dramatically in recent months, commodity prices have quietly strengthened in the last few weeks, with US breakevens rising, cyclical stocks (modestly) outperforming, and China PMI rising to about 50.

    Then again, not everyone is buying it. We noted on Friday that as part of Charlie McElligott’s near-term outlook, the quant is fading the reflationary groupthink, largely for tactical, if also several secular reasons.

    Then there is the risk of too much reflation. As we noted in a recent article discussing Morgan Stanley‘s cross-asset take on markets in 2019 and its near-term outlook, the bank warned that it was not that long ago, in 2018, when markets viewed a rise in inflation as more problematic. In 2019, every asset has rallied. But in 2018, almost every asset declined, and markets began to worry that excess capacity in the global economy was being used up, or as the bank summarized, “Inflation is a risk to that we need to watch”, which we then paraphrased that “for all those hoping that reflation emerges in 2020 as a dominant theme, be careful what you wish for – you just may get it…”

    Others are similarly skeptical: in a note sent out on Friday by Nomura’s “other” quant, Masanari Takada, writes there are three specific things investors should focus on before wading into the Reflation trade.

    The first thing is the state of global geopolitical uncertainty, noting that “since the middle of this decade, increased global political uncertainty has put downward pressure on the economy and prices.” Takada thinks the present disinflationary tendency is an extension of this, “with political uncertainty playing a greater role than any concern over the economy itself.” From this angle, Nomura notes that while the first-stage trade deal between the US and China is good news for risk sentiment, there are a number of major political events coming up in 2020, including a prospective second-stage US-China trade deal and the US presidential election. As such, Takada concludes that “the question of whether the first-stage trade deal brings leads to reflationary conditions without a hitch cannot be considered in isolation from these future events.”

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    The second trigger for jumping into a reflation trade according to Nomura is a more pragmatic one: namely whether trend-chasing CTAs are joining in the reflation trade… which they aren’t. While most CTAs are backing out of disinflation trades (such as long positions in bond futures or short positions in commodities), they have yet to go any further. So unless CTAs start accumulating reflationary trade positions in earnest, “any rises in interest rates or gains in commodity prices that come along may turn out to be short-lived.”

    Looking at the benchmark of reflationary inflection points, US Treasuries, CTAs have closed out the bulk of their long positions in major government bond futures markets. If nothing else, Takada thinks that trend-chasing investors no longer have any incentives to continue making disinflation trades that assume downtrending long-term interest rates. That said, CTAs have not yet taken to staking out short positions in bond futures.

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    Furthermore, currently, CTAs have “square” market-neutral positions in both COMEX copper futures and WTI crude oil futures (and although CTAs have fully liquidated their short positions, they have from that point switched into wait-and-see mode). Of these two CTA positions, the aggregate net position in COMEX copper futures in particular has historically been strongly correlated with global manufacturing momentum (as measured by manufacturing sector PMI readings for the US & China). Although the manufacturing economy does appear to have found a floor, Nomura thinks that CTAs’ present position in copper futures is premised on quicker economic growth than there is currently evidence for.

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    Last, but certainly not least, Nomura believes that investors thinking of wading into the reflation trade should check whether China is pursuing credit expansion (as we have shown recently, China has nearly given up on an endogenous credit boom). As we have noted repeatedly in previous years (recall the thesis that China’s credit impulse is all that matters for the world originated on this blog), peak periods for the reflation trade have historically tended to be preceded by the proactive expansion of credit by China’s policy authorities (and vice versa). One can think of the performance of long-term holdings in terms of the 24-month Sharpe ratio (risk-adjusted return) for the performance of value over growth (buying value and selling growth) in global equities (MSCI ACWI).

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    The data show that this Sharpe ratio has been linked to China’s “credit impulse” (change in new credit issued as a percentage of GDP). What becomes apparent here is that the policy response of China’s authorities since the GFC has had a substantial impact on the global credit cycle. It may be difficult to even speak coherently about reflationary conditions taking shape in 2020 without an active effort by China to expand credit. And what is most troubling, is that as the yellow line below demonstrates, China’s credit impulse has barely stirred above its post-crisis lows for two simple reasons: China has too much debt and its financial system is constantly on the edge, and facing a barrage of defaults as a result.

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    And since any sustainable global reflationary impulse – beyond the initial burst traditionally catalyzed by central banks – always comes from China, anyone hoping that the meager push higher in China’s credit impulse over the past year will be sufficient, will be greatly disappointed.

    One final point.

    As the following DoubleLine chart shows, the recent curve steepening – for many a proxy of the reflation trade and evidence that it is working – is nothing more than another Fed-created artifact, and the only reason the 3M10Y curve has steepened substantially in recent months is because of the Fed’s QE 4 “NOT QE” has sent the Fed’s balance sheet higher by nearly $400 billion.

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    And while the return of QE – sorry, never, ever call it QE, the injection of up to $1 trillion in liquidity in 5 months is just to “fix” the broken repo market, pinky swear, cause everything else is just peachy – has once again stirred reflationary animal spirits, there will come a time in early 2020, when the Fed will end this latest gargantuan balance sheet expansion (absent a market crash of course). In fact, according as Morgan Stanley’s Rate Strategists expect, “the Fed will expand its balance sheet through April/May. After that, markets may once again have to confront a world with limited trade  progress and no further Fed support.”

    In other words, without a Chinese pillar of support, without validation from CTAs, and with the Fed’s “NOT QE” set to end in April, the reflation trade is nothing more than another Fed-created headfake, and has at most another 4 months before financial gravity, and a record $255 trillion in global debt, unleash the deflation trade.


    Tyler Durden

    Sun, 12/22/2019 – 18:00

  • California's Accounting System Cost Taxpayers $1.1 Billion And Still Can't Produce A State Checkbook
    California’s Accounting System Cost Taxpayers $1.1 Billion And Still Can’t Produce A State Checkbook

    Authored by Adam Andrzejewski via Forbes.com,

    California State Controller Betty Yee admits to paying 49 million bills last year. Yet, she won’t produce a single transaction subject to our public records request for line-by-line state spending.

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    Out of the 50 states, California is the only one that refuses to produce its state checkbook to our auditors at OpenTheBooks.com. Even though it’s home to Silicon Valley, the state government isn’t letting tech drive transparency when it comes to its own records.

    It shouldn’t take subpoenas and litigation to force open the books.

    Last year, Yee paid 49 million bills for about $320 billion in payments. If you can make the payment, then you can track the payment. The state controller’s office – whose job it is to stop waste, fraud, corruption, and taxpayer abuse – may be in violation of transparency laws.

    In 2013, then-California State Controller John Chang rejected our public records request for the state checkbook telling us: stop asking because the records can’t be located. Today, six-years later – Yee is still parroting the same answer.

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    So, how is the controller even doing her job without access to the records she helped create? We reached out to Yee for comment, and will update the piece if she responds.

    She’s charged with tracking “every dollar spent by the state.” Her duties include paying the bills and all state accounting, bookkeeping, payroll, and auditing– including financial and compliance audits and attestations.

    Our objective is to empower citizens, watchdogs, media, politicians, researchers, academics – everyone – with the ability to give oversight to the massive budget. Here are just three critical issues facing the Golden State:

    • Homeless populations: a 2014 state proposition taxed millionaires to provide funds for mental health services. Did San Francisco – home to 7,500 homeless people – receive its fair share? Last summer, we published an interactive map featuring 130,000 instances of human waste in the public way, which is in part connected to the state’s homeless problem.

    • Unsustainable public employee pay and pensions: five-years ago, we opened the books and have captured 2 million public employee salary and pension records annually in California. The data shows that lifeguards in Los Angeles County make up to $365,000 per year. There are 10,000 employees in University of California higher education earning more than $200,000.

    • Corruption: Controller Yee claims that she’s identified more than $4.35 billion in waste, abuse, and fiscal mismanagement of public funds since 2015 – about $1 billion per year. However, state government spent about $1.5 trillion during this period. Yee found only 34 pennies of waste for every $100 spent.

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    Just 34 pennies of every $100 spent by CA state government was identified as waste, fraud, abuse, or corruption by CA Controller Betty Yee since 2015. OPENTHEBOOKS.COM

    It’s time to open the state checkbook.

    Since 2005, the state has invested $1.1 billion in accounting software costs. Using this platform, a state agency, Financial Information System For California (FISCAL), promises to publish by September 2020 a full year of state checkbook on a rolling basis – minus approximately $100 billion in spending. When completed, 65-percent of what’s taxed and spent by the state will be online.

    It’s a start. However, the FISCAL website will never contain the spending for ten major units of state government including colleges and universities, the California Public Employees’ Retirement System, the state legislature, California State Teachers’ Retirement System, and the office of legislative counsel.

    Furthermore, another ten major business units are deferred for years to come. These substantial departments include corrections, rehabilitation, health and human services, the lottery, justice, motor vehicles, water resources, and transportation.

    That’s totally unacceptable. We are based in Illinois, which, sadly, is famous for corruption. Our experience tells us that government can hide a lot of taxpayer abuse in $100 billion of non-transparent spending.

    In 2012, our organization at OpenTheBooks.com sued then-Illinois Comptroller Judy Baar-Topinka (R) for the state checkbook. In 2018, we sued then-Wyoming State Auditor Cynthia Cloud (R).

    Because of our litigation, today, the books in these states are open.

    California spends an enormous sum of money. The state spends more than $320 billion per year with federal taxpayers funding $106 billion of it. If we can’t follow the money, then it’s tough to stop the schemes and other public swindles.

    Every state across America can produce a complete checkbook of public expenditures. And taxpayers aren’t just dreamin’ to believe that California can produce a full record too.


    Tyler Durden

    Sun, 12/22/2019 – 17:35

  • "This Pattern Is Unusual": Why Morgan Stanley Thinks 2019 Was One Of The Most Bizarre Years Ever
    “This Pattern Is Unusual”: Why Morgan Stanley Thinks 2019 Was One Of The Most Bizarre Years Ever

    After a dismal 2018, when the worst December since the Great Depression capped a year for markets when not a single asset class managed to beat inflation, 2019 has been a mirror image, and showed that a lot can change with just one phone call and one Fed capitulation.

    Indeed, as Morgan Stanley’s cross-asset strategist Andrew Sheets writes in his year-end review, “2019 will go down as one of the strongest years for global stocks in the last thirty” and adds that “as we head into the holidays, a time full of market retrospectives, we except this raw strength to dominate the narrative”, especially with Trump reminding his tens of millions of followers virtually every day that the S&P has hit all time highs at least 135 times since the 2016 election.

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    Yet classifying 2019 as simply “strong” is misleading, Sheets explains, noting the year’s gains mask a host of oddities, from the outperformance of defensive assets in a roaring market, to hedge funds getting clobbered and massively underperforming broader equity indexes, to a five-month period that saw no gains for stocks even as interest rates dropped, to an outsized number of 3-sigma moves.

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    The last point stands in contrast to the false conventional wisdom that 2019 was a “strong, calm, central bank supported year”; instead, 2019 contained quite a few surprises, suggesting underlying liquidity may be more temperamental than currently expected; worse, as Bank of America pointed out last week, “The World’s Most Liquid Stock Market Is Now As Illiquid As It Was In The 2008 Crisis.”

    In short, 2019 was one of the most bizarre years ever.

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    In listing out the ways in which 2019 was a stranger year, Sheets first notes that 2019 was…

    The Backwards Year.

    The first oddity of 2019 is that both cautious and aggressive investors will likely claim victory. Bulls, because of huge gains in stocks, credit, and Emerging Market fixed income. Bears, because bonds also rallied sharply, and the “alpha”of much of 2019 was in strategies that work when the world is a difficult place. Consider:

    Overall, 20yr+ US Treasuries nearly matched the performance of the S&P 500 for the 12 months leading up to December 12, 2019. Through August of this year, long-dated bonds were significantly outperforming stocks. Well into 2019, allocators could have been underweight equities, overweight duration, and outperformed.

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    In equities, US large caps outperformed small caps by ~7%, defensives outperformed cyclicals by ~1%, and in Europe, utilities, healthcare and “quality” stocks all outperformed in a market that climbed ~23% overall. In fixed income, US BBs outperformed lower-quality CCCs by ~655bp in excess return (i.e., duration-hedged), and ~740bp in total return. In securitized credit, senior CLO tranches outperformed more junior ones. In Emerging Markets, higher-rated sovereigns are generally tighter relative to recent history than their lower-rated counterparts.

    This pattern is, as Morgan Stanley says, unusual. In the next chart, Morgan Stanley shows the annual performance of the S&P 500 against the average of four “bullish” strategies: Cyclical vs. defensive equities, small vs. large cap equities, high yield vs. investment grade (total return), and BBs vs. CCCs (excess return). What happened in 2019, is that despite one of the best returns in the S&P in history, bullish strategies underperformed…

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    … which whiplashed virtually all hedge funds, resulting in the biggest equity outflows on record, and the fewest hedge fund launches since the start of the Millennium.

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    Or, as Morgan Stanley politely puts it: “In the last 30 years, there are not many that look like 2019.”

    2019 Was Also the Year Of Multiple Expansion

    Consider this: in 2019, global corporate earnings were down (both abroad and in the US), yet the MSCI ACWI is up 24% and the S&P500 is up almost 30%. Why? Two words: multiple expansion.

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    Here are the facts: since January 1, 2019, the forward P/E multiple for global equities (MSCI ACWI) has risen ~24%. That’s despite worsening global PMIs, an outright decline in 2019 earnings, and increases in US-China tariff rates over the time period. For the S&P 500, the multiple also increased ~24%.

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    The narrative this year (with more than a little bit of hindsight) has been that these valuation gains were supported by how much yields declined, as the lack of investment alternatives pushed money into stocks. But history shows the risks to this logic. In exhibit 8, Morgan Stanley has plotted the annual change in global equity valuations against the annual change in US 10yr yields. There is little (if no) correlation.

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    Meanwhile, equity fund flow show that record amounts of money came out of stocks in 2019!

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    And while the second higher forward PE multiple expansion on record did miracles for stocks in 2019…

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    … next year will be payback time. As Sheets puts it, “multiple expansion matters because it raises the pressure for companies to deliver on estimates in 2020.”

    Which brings us to what has become somewhat of a trademark for Morgan Stanley in recent years: the bank’s unrepentant bearishness. Because while the bank believes that outside the US, “a combination of better macro and micro trends will help earnings for stocks in Korea, Japan, Brazil, Spain and the UK meet or beat expectations, fundamental improvement that can support or even expand current valuations”, for US equities, however, the bank believes that its 0% EPS forecast for 2020 growth “will disappoint expectations, prevent further multiple expansion, and ultimately drive a modest contraction in the multiple, leaving the S&P 500 at ~3,000 by 4Q20.

    * * *

    If that’s not enough, another way to look back at 2019, is that it was “a year in three acts”, or as Sheets puts it, there really were three distinct phases. Considering global equities:

    • 1. Act I: A powerful rally from depressed valuations and sentiment, as the Federal Reserve made a dramatic reversal to its policy guidance (January 1 – April 30)
    • 2. Act II: A volatile period of no gains for five months, as the market worried about a lack of trade progress and continued weakness in global data (May 1 – September 30)
    • 3. Act III: A “year end” rally driven by hope that at least ‘phase one’ of the US-China trade deal could be completed, and balance sheet expansion from both the Fed and ECB

    Charted, these acts look as follows:

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    Why are the three acts important?

    Because as Morgan Stanley explains, it’s common to hear that equities and credit will be well supported as long as interest rates are low. But “Act II” demonstrates a clear, and very recent, threat to this notion, showing that markets can certainly stall given low rates if earnings growth disappoints and central banks offer little in the way of new policy.

    In fact, one can argue that only the “troubles in the repo market” which started in September, and triggered a nearly $400 billion expansion in the Fed’s balance sheet, including the launch of QE4, permitted the recent surge in stocks. More on that later.

    Going back to “Act II”, Morgan Stanley finds ominous similarities between this phase and its own 2020 forecast, in which it sees no S&P 500 earnings growth, no incremental progress on trade after phase one, and no incremental easing measures by G4 central banks (beyond what is already announced).

    That sounds a lot like “Act II”, and we note that our forecasts for next year (-6.0% to our year-end S&P 500 target of 3000), credit spreads (+123bp to our year-end high yield target) and range-bound US Treasury yields have some broad similarities to this phase of 2019.

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    A slightly more optimistic take can be extracted from Act III, which helps quantify risks around trade…: With “Act III” driven in part by increased confidence about a US-China trade deal, Sheets thinks rolling back the performance of “Act III” is a reasonable way to think about levels if trade tensions re-emerge. While the recently announced “phase one” deal was a bit better than the bank’s (if not Goldman’s) expectations, it was a little worse than what the market was expecting, and still contains key unknowns. Importantly, the bank’s Public Policy team remains skeptical about further progress, noting a significantly higher degree of difficulty in the issues that remain.

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    …and central bank policy: Trade optimism was one driver of the market’s rally since October. Central bank easing was another. The ECB ramped up its bond purchases, but more importantly, the Fed began expanding its balance sheet again to address a perceived shortage in system reserves.

    And here is the $64 trillion question: Morgan Stanley expects the Fed to expand its balance sheet through April/May.After that, markets may once again have to confront a world with limited trade progress and no further Fed support.” As Sheets concludes, “given the importance that markets have assigned to both trade and Fed policy this year, “sell in May and go away” could be very relevant in the year ahead.

    One final risk looking ahead, and as hinted by “Act III” is that “reflation” could become “inflation”, as commodity prices have quietly strengthened in the last few weeks, with US breakevens rising, cyclical stocks outperforming, and China PMI rising to about 50.

    For now, investors remain skeptical of a sustained rise of G3 inflation, or would welcome it as it would be seen as a sign of better growth and returning normality. Our economic forecasts also have inflation rising in 2020, but central banks effectively embracing that rise with no change in policy. But as Sheets reminds us, “it is not that long ago, in 2018, when markets viewed a rise in inflation as more problematic. In 2019, every asset has rallied. But in 2018, almost every asset declined, and markets began to worry that excess capacity in the global economy was being used up. Inflation is a risk to that we need to watch.” In other words, for all those hoping that reflation emerges in 2020 as a dominant theme, be careful what you wish for – you just may get it…


    Tyler Durden

    Sun, 12/22/2019 – 17:10

  • Caitlin Johnstone: Why Everything Is F**ked
    Caitlin Johnstone: Why Everything Is F**ked

    Authored by Caitlin Johnstone via Medium.com,

    We all slid out of the womb an itty bitty helpless information sponge into a world full of mentally ill giants who couldn’t wait to fill our tiny skulls with all of their inner demons. And now everything, understandably, is fucked.

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    That’s basically our whole entire situation in a nutshell. You can add on as many extra details as you like — plutocracy, corruption, mass media propaganda, billionaire wine cave fundraisers, whatever — but ultimately our plight is due to the fact that every single human showed up on this planet completely helpless and knowing nothing, forced to trust crazy giants to give them the grand introductory tour.

    Why were those giants crazy? Well you see, they got here the same way you did: small, slippery and completely clueless, surrounded by enormous gibbering lunatics who were all in a mad rush to teach them how to be insane.

    And those giants came into the world under the exact same circumstances, as did the giants who came before them, and the giants who came before them, and so on.

    It’s a grand old tradition of ours, ultimately stretching all the way back to our own evolutionary birth in this world and the emergence of a massive cerebral cortex in a mammal who up until that point had been primarily concerned with sneaking in a snack and a quick shag in between mad sprints away from sharp-fanged predators. This newfound capacity for complex abstract thought burst onto this frantic, confusing scene and was quickly seized and manipulated by the cleverer primates.

    And thus human madness was born.

    The most powerful early humans were the cleverest humans, the ones who understood how to use this new capacity for language and abstract thought to their own advantage. They realized that by simply saying something is true in a sufficiently confident way, they could persuade the less clever humans to treat it as true.

    Those clever humans used this newfound ability to place themselves in charge, and to make a bunch of rules to be passed down from generation to generation proclaiming that the less powerful humans must submit to the more powerful humans. Over the generations these rules became more and more numerous and complex, weaving in moralism, codes of filial piety, and insane, power-serving religions glorifying meekness, obedience and poverty.

    These power-serving rule sets were picked up and used to justify highly traumatizing behavior in the service of the powerful, from wars to genocides to institutionalized torture and brutal executions of the disobedient, and just within domestic power structures the institutionalized normalization of spousal rape and physical abuse in households all around the world.

    This eons-long tidal wave of deep trauma and power-serving rules structures passed from generation to generation to generation picking up more and more demented flotsam and jetsam as it went along, to ultimately come crashing down upon your crowning head as you emerged from your mother’s body.

    That is your legacy. That is everyone’s legacy. Countless generations of cumulative madness, washed into the present moment on a current of eons of exploitation and senseless cruelty stretching all the way back to the dawn of our species on this planet.

    This heritage of madness is funneled straight into our sponge-like brains from the moment we emerge from the womb and all the way through an extremely traumatic and confusing ordeal known as childhood, after which we are handed the keys to the world and told “You’re an adult now. You’re in charge. See if you can figure out how to run this place better than we did.”

    And we’re just like:

    We never stood a goddamn chance. None of us did. The deck was stacked against us long before we got here.

    And now you get political commentators constantly railing on about “Gosh, if only we could get people to stop listening to their televisions and vote third party and read World Socialist Website and turn up to demonstrations and take back the power of the people from our oppressors, we could turn this thing around!” Not realizing that everyone else in their country went through the same traumatic, confusing ordeal that they went through at the beginning of their lives, the only difference being that most of them got a lot less lucky in sorting out reality from madness. And not realizing that they themselves are still quite mad.

    This is ultimately the answer to every question about why things are fucked right now. Why does it seem like nothing changes no matter who wins the election? Why do the wars keep expanding instead of ending? Why is the news man always lying? Why are they locking up that white-haired fellow for publishing facts? Why are those nuclear superpowers hurtling closer toward direct confrontation? Why are the rainforests vanishing? Why are the whales dying? Why are the mass shootings increasing? Why is everyone so miserable?

    Because every adult on this planet started off tiny, helpless, impressionable, and surrounded by gargantuan madmen, and it made it almost impossible to be sane. That’s why.

    Notice I said “almost”. It is still possible to find one’s way into a relationship with reality that is guided by truth and untainted by madness, but you’ve got to start way, way, way back at the beginning and deeply re-examine even your most fundamental assumptions about what’s true and real. Because it turns out that while the mad giants gave us information that was very useful for interacting with other mad giants, it was almost entirely useless for learning how to navigate through life in a wise and truthful way.

    And that’s what I’m pointing to here: it’s important to get clear on just how far back the crazy goes and how fundamentally interwoven it is with the situation in which we now find ourselves. If you begin with the assumption that our problem is simply due to humans not voting and mobilizing correctly in alignment with the correct ideology, you’ll miss the real obstacle entirely. You’ve got to zoom the camera out much, much further to see the full picture.

    Can you become a deeply sane individual, untainted by your ancient heritage of madness? With a lot of work and uncompromising self-honesty you can.

    Can all humans become deeply sane and untainted by their ancient heritage of madness? It would take a miracle. A whole lot of miracles. Billions, to be precise.

    But then, I believe in miracles.

    *  *  *

    Thanks for reading! The best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for my website, which will get you an email notification for everything I publish. My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics on Twitter, checking out my podcast on either YoutubesoundcloudApple podcasts or Spotify, following me on Steemit, throwing some money into my hat on Patreon or Paypalpurchasing some of my sweet merchandise, buying my new book Rogue Nation: Psychonautical Adventures With Caitlin Johnstone, or my previous book Woke: A Field Guide for Utopia Preppers. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. Everyone, racist platforms excluded, has my permission to republish or use any part of this work (or anything else I’ve written) in any way they like free of charge.

    Bitcoin donations:1Ac7PCQXoQoLA9Sh8fhAgiU3PHA2EX5Zm2


    Tyler Durden

    Sun, 12/22/2019 – 16:45

  • Trump Has Quietly Appointed 25% Of Circuit Court Judges As Smug Liberals Celebrate 'Merry Impeachmas'
    Trump Has Quietly Appointed 25% Of Circuit Court Judges As Smug Liberals Celebrate ‘Merry Impeachmas’

    While the smug left clinks champagne for “Merry Impeachmas” after the House passed articles of impeachment against President Trump, they’re fast losing the battle when it comes to America’s judicial landscape.

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    Even if 20 GOP Senators somehow flipped on Trump and he was removed from office, he’s already appointed 25% of sitting US circuit court judges, not to mention given us a conservative Supreme Court – after Senate Republicans stalled in 2016 on confirming Obama’s choice to replace the late justice Antonin Scalia, Merrick Garland.

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    According to the Washington Post:

    Trump nominees make up 1 in 4 U.S. circuit court judges. Two of his picks sit on the Supreme Court. And this past week, as the House voted to impeach the president, the Republican-led Senate confirmed an additional 13 district court judges.

    In total, Trump has installed 187 judges to the federal bench. –Washington Post

    And as the Post notes, “Trump’s mark on the judiciary is already having far-reaching effects on legislation and liberal priorities.”

    For example, last week a Trump appointee on the 5th Circuit court of Appeals was one of two judges to strike down a key provision of the Affordable Care act. The case could move next to the Supreme Court, where two of the nine justices are Trump-appointed conservatives.

    The 13 circuit courts are the second most powerful in the nation, serving as a last stop for appeals on lower court rulings, unless the case is taken up by the Supreme Court. So far, Trump has appointed 50 judges to circuit court benches. Comparatively, by this point in President Obama’s first term, he had confirmed 25. At the end of his eight years, he had appointed 55 circuit judges.

    Trump’s appointments have flipped three circuit courts to majority GOP-appointed judges, including the U.S. Court of Appeals for the 2nd Circuit in New York. The president has also selected younger conservatives for these lifetime appointments, ensuring his impact is felt for many years. –Washington Post

    Spearheading the effort to fill benches with conservatives is Senate Majority Leader Mitch McConnell (R-KY) – who is “almost singularly focused on reshaping the federal judiciary,” having fast-tracked two Senate rule changes which speed up the confirmation process, despite objections from Democrats.

    Leave no vacancy behind,” McConnell has publicly stated.

    McConnell has bragged that blocking Garland in the off-chance Trump won the 2016 election was one of his greatest achievements. Consequently, Trump appointed conservative Justice Neil M. Gorsuch to fill Scalia’s seat.

    “I’ve always heard, actually, that when you become President, the most — single most important thing you can do is federal judges,” said Trump at a November White House event to celebrate his “federal judicial confirmation milestones.”

    “Now, President Obama was very nice to us. He gave us 142 empty positions. That’s never happened before,” Trump joked in the Oval Office on Thursday. “But, as you know, that’s said to be the most important thing that a President has.”

    What’s more, “There is only one circuit court vacancy left for Trump to fill, but more could open up next year. And if Trump wins in November, there will certainly be vacancies in his second term. There’s also the potential for additional openings on the Supreme Court. Ruth Bader Ginsburg, appointed by President Bill Clinton in 1993, is 86 and has had health problems. Justice Stephen G. Breyer, another Clinton pick, is also over 80,” according to the report.

    This is not going well for the resistance.


    Tyler Durden

    Sun, 12/22/2019 – 16:20

  • The Human Cost Of The EV Revolution
    The Human Cost Of The EV Revolution

    Authored by Anes Alic via OilPrice.com,

    There’s a chance that the iPhone you’re about to get for Christmas contains cobalt mined by a six-year-old. There’s also a chance that that six-year-old has been killed or maimed in the processes of mining in the Democratic Republic of Congo, where the lion’s share of the world’s cobalt comes from. 

    Or, maybe, for those whose Christmas lists are more upscale, you’ll be driving around in a new Tesla next week, with a battery containing cobalt from that same mine.

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    Our luxuries are necessarily someone else’s sacrifice – and sometimes that sacrifice is the ultimate one. 

    The EV and electronics revolutions have come at a steep human cost: a boom in child labor in the DRC as child cobalt miners offer battery makers and Big Tech cheap labor.

    That’s the focus of the first-ever lawsuit targeting giant tech firms as end-users of cobalt from mines in which young children have died. 

    Having failed to bring down giant miners of cobalt in DRC, such as Glencore, this time lawyers are going after the end users themselves.

    The first reports about child labor in the cobalt mines in the DRC emerged several years ago. And while no one likes to hear that their Tesla, lithium battery, smartphone, or fitness tracker has cost a child his health—or worse, his life—this is the reality of cobalt mining today.

    This week, International Rights Advocates filed a lawsuit against Tesla, Apple, Dell, Microsoft, and Alphabet for knowingly benefiting financially from child labor in the DRC. 

    The suit was filed on behalf of 13 families whose children died or were seriously injured while mining for cobalt. The suit also seeks damages from miners Glencore and Zhejiang Huayou Cobalt, which supply cobalt to the tech majors and to Tesla.

    The DRC is home to 3.4 million tons of cobalt: a grey metal that was once used for making bright blue pigment. Now, cobalt is an essential component of lithium ion batteries. This 3.4 million tons is more than half of all the cobalt in the world.

    The second-largest cobalt reserves are found in Australia, at 1.2 million tons.

    The DRC is also one of the poorest and most politically unstable countries in the world, creating the perfect environment for cheap labor—and even cheaper child labor. With many analysts pegging cobalt to soon slip into a shortage, cheap labor is a crucial advantage—an advantage that has trumped ethics, at least until the media shone a light on the human cost of the EV/Big Tech revolutions.

    Carmakers were quick to react, pre-empting a more targeted attack from the media and human rights organizations. Earlier this week, before the news of the lawsuit against Tesla broke, a number of large carmakers formed what they are calling the Responsible Sourcing Blockchain Network. Members include Volkswagen, Ford, Volvo and, the most recent addition, Fiat Chrysler. Interestingly enough, Glencore, which is a defendant in the International Rights Advocates case, is also a member of the network.

    “The Responsible Sourcing Blockchain Network is going to help us focus on the problems and give us enough visibility, which we could not do in the past,” according to Sai Yadati from IBM, which will power the blockchain network.

    Essentially, the network should enable carmakers and their cobalt suppliers to track the metal from the mine to the battery factory and ensure there was no child labor involved in mining it.

    The effectiveness of the network, however, only reaches as far as its members. If a mine joins it, the network would track the cobalt produced in it. Smaller mines, however, could still remain under the ethical radar and continue exploiting children. 

    In a further effort to distance themselves from the child labor stigma, some carmakers are investing in educational and farming initiatives in the DRC, to provide an alternative to working in the cobalt mines that so often results in death or serious maiming. However, what is moral is often unprofitable, which is how Big Tech and Tesla ended up in court.

    One logical question to ask in the context of cobalt mining is: why keep getting it from DRC when there are reserves elsewhere? Well, because it is cheap and abundant there. Miner wages in Australia—which has the second-largest cobalt reserves—are probably light years away from miner wages in the DRC, where one child laborer who Fortune interviewed last year said he made $9 “on good days”.

    Taking care to source your cobalt ethically is certainly the right thing to do for carmakers who plan to transform into EV makers in the future. Yet it is also the more expensive thing to do. Carmakers need the cobalt for EV batteries. Batteries are already the costliest component of an EV, and everyone in the industry is working hard to bring these costs down to make the EVs more affordable and ensure higher sales. Ethical mining is unlikely to bring these costs down: health and safety standards carry their own costs. This, in turn, may compromise future profits.

    Of course, there is no question that the ethical sourcing of cobalt or any other battery raw material for that matter is more important than profits. Yet this only holds true from a human, moral perspective. Businesses are not humans and they tend to be motivated by factors other than basic human morality. It will be wonderful to see a responsible car industry that foregoes much of its profits to ensure no children are laboring in the cobalt mines of the DRC. What we may actually see is a car industry scared into foregoing much of its EV profits to ensure it doesn’t end up in court on child labor aiding and abetting charges. In either case, carmakers may have to prepare for higher-for-longer prices for their batteries.


    Tyler Durden

    Sun, 12/22/2019 – 15:55

    Tags

  • Hong Kong Riot Cops Clash With Protesters Following Rally For China's Oppressed Muslims
    Hong Kong Riot Cops Clash With Protesters Following Rally For China’s Oppressed Muslims

    Riot police in Hong Kong forcefully broke up a pro-democracy rally in solidarity with millions of Uighurs – Chinese Muslims living under oppressive conditions, many in so-called ‘re-education camps.’

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    Around 1,000 protesters gathered near Hong Kong’s harbor, waving pro-Uighur posters and flags – in what appears to be the latest grievance between the pro-democracy movement and China’s influence. While largely peaceful, police used pepper spray to disperse the protesters. In response, protesters threw glass bottles and rocks.

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    We shall not forget those who share a common goal with us, our struggle for freedom and democracy and the rage against the Chinese Communist Party,” said one protester holding a megaphone.

    China runs Hong Kong under a “one country, two systems” model that grants the financial capital expanded freedoms not enjoyed on the mainland. Many Hong Kongers view China as encroaching on these freedoms and fear mainland policies will come to the city.

    What started as a movement against Chinese meddling has morphed into broader calls for greater democracy and police accountability following months of often violent protests.

    The huge scale of the surveillance and prison system in Xinjiang has been closely watched in Hong Kong, with many fearful that similar measures could befall the city. –DW

    The United nations and human rights organizations have widely condemned China’s treatment of Uighurs. Approximately 1 million have been forced to live in internment camps in the northwestern Xinjiang region. While Beijing calls them “vocational training centers” required to combat Islamic terrorism, those who have escaped tell shocking tales of torture and control.

    The Chinese government are control freaks; they can’t stand any opinions they disagree with,” a civil servant and protester named Kathrine told AFP before riot police moved in.

    “In Xinjiang they are doing what they are doing because they have the power to do so. When they take over Hong Kong, they will do the same.”


    Tyler Durden

    Sun, 12/22/2019 – 15:30

  • Michael Moore On 'Useful Idiots': "If The Election Were Held Today, Trump Would Win"
    Michael Moore On ‘Useful Idiots’: “If The Election Were Held Today, Trump Would Win”

    Authored by Matt Taibbi via RollingStone.com,

    In the first episode of Michael Moore’s new podcast, Rumblehe tells a story of being given a gift of a new reel-to-reel tape recorder as a child, kicking off his media career. He taped everyone in sight, produced his own ad-hoc version of The Tonight Show before nap time, and went on to launch his own newspaper at school. In an amusing precursor of future events, the paper would be shut down almost right away after criticism of school sports programs.

    More than half a century later, Moore is still going against the grain. His career arc is unique in the modern media landscape, being one of the very few figures to achieve commercial success and broad audience share without the full support of one or the other wing of the blue/red news media ecosystem.

    Moore came to prominence as a critic of corporate sociopathy in Roger and Me, and became a liberal icon in the Bush years with Fahrenheit 9/11 and Bowling for Columbine, but his anti-corporate, anti-war, pro-labor message has never aligned exactly with the Democratic Party, either. Most recently he’s been a pointed critic of Democratic policies that opened the door for Trump’s election in 2016, while also voicing criticisms of the cult of Robert Mueller and Barack Obama’s contribution to the Flint water crisis.

    He now feels the urgency of the political moment is such that he won’t wait to put out another movie, say, after next Election Day. The Rumble podcast will be a way for him to chime in all year long, and get out a message that is wholly his own, without having to go through studios or editors. “I’m going to say what I want to say,” he says. “I don’t have backers. I don’t have investors.”

    In 2016, Moore was one of the few people in the media who correctly predicted Trump’s success in the vital swing states of the Midwest. He was ignored. This time around, it might be worth listening earlier. In a visit to Rolling Stone, Moore sat with Katie Halper and me to talk about about the presidential race, how his new podcast scratches the same independent-media itch he had as a kid with a tape recorder, pedophile coffee shops in Utah, and other topics.

    Some highlights:

    On asking Donald Trump to fix the Flint water crisis . . .

    Trust me . . . if the water had been poisoned in Bloomfield Hills, or Grosse Point, or Ann Arbor, this would have been fixed within 30 days. And somebody would have gone to prison. . . . It’s such a heartbreaker for me, I don’t know what to do about it. I even thought, I should just see if Trump would privately meet with me. And I would say, “Look, you and I are about as opposite as things can get, and my mission is to remove you from this house that you’re currently occupying, but if you’d like to be remembered for something good, if there’s one thing you know, it’s construction. I even have a belief that you could operate a backhoe. You should come to Flint and fix the water.”

    On Barack Obama drinking a glass of water in Flint . . .

    I’ll have [Trump] meet the people who will tell him and show him that the water Obama drank in Flint came off Air Force One. … Do you think the Secret Service are going to let the president of the United States drink poisoned water? It was all a show. The number-one question that I do not have the answer to, and I hope to talk to him someday, is “Why? Why do that?”

    On being targeted by mail bomber Cesar Sayoc . . .

    He had a big picture of me on the side of his van with a bull’s-eye over it. . . . Frankly, to be honest, out of respect to him, while everyone else had a bull’s-eye over the face, he put mine over the shoulder. And I thought, OK . . . two things. Number one, that’s a really good picture of me! It’s hard to find a decent picture of me. And he didn’t put the bull’s-eye over [my face], he put it over here. …

    I said to [my producer], “I wonder if he’s been to any of the Trump rallies that we went to. Maybe we filmed him.” And we started going through the footage, and damn if he wasn’t right there in front of the rope line, screaming for Trump, and “make America great,” right into our camera.

    On his unsuccessful attempt to inject humor into the Clinton campaign in 2016 . . .

    I’ll tell you a story I probably shouldn’t tell. I won’t mention any names, other than Hillary’s. I thought the way to win this in part would be during the debates . . . if Hillary just had a comedy shiv, just something that she could use to go under [Trump’s] thin skin, to have him implode on national TV. People would go, “He is unhinged…”

    We offered this to Hillary and her people that we would do this quietly, nobody would know we would write lines for her, we would help with debate prep. She had political people helping her with lines — how about from myself or some of the top satirist-comedian types? And all she’s gotta do is land one or two of these…

    They turned us down. They were afraid if it ever got out, because this comedian is dirty, and that comedian said that once . . .

    On the Clinton campaign not wanting to distribute its own signs in Michigan in 2016 . . .

    Because, I spent a lot of time at my other apartment in Michigan. Trump signs were everywhere. More than Hillary signs. I found out the campaign in Brooklyn wouldn’t send signs. They were afraid if too many people saw it, it would inflame the Trump people, make them go out and vote. That actually happened.

    On New York’s culpability in inflicting Trump on the country . . .

    Something I never understood as a Midwesterner is why New York never took care of Trump. . . . If that guy, with the way he is, was from Pittsburgh or Detroit or Milwaukee, he never would have been foisted on the rest of you. He would have been dealt with. The fact that he got away with so much for so many years, and all he was was tabloid entertainment to the people of New York. He was a punchline. The Donald.

    On his brief tenure as editor of Mother Jones . . .

    The left liberals, whatever you want to call it, they’re not always friends of the working class. … I don’t know how you guys would describe it, that part of the so-called left. … They’re really centrists. They’re not really left. These centrists? These liberals? They love humanity, they just hate people. … I was fired on Labor Day 1986.

    The owner asked me to come in. They did not like this [column Moore commissioned by an autoworker], he did not like that I refused to publish things by these neo-liberals about Nicaragua that weren’t true. I wouldn’t participate in that.

    But the thing that really upset them … One day I’m sitting in my editor’s office. . . . Fifteen or 20 women came in and shut the door. They were unionized…. They say, “We’re going to go on strike, we’re going to do a wildcat, we’re walking out.” I say, “Whoa, what happened?” They say, “The publisher harasses women. We’re not respected, we’re hit on.

    I went to the owner’s house …. he cut me off. He said, “All right, what are you doing listening to these women? They’re always complaining.” [I say], “Are you saying it’s not true?” He said, “What I’m saying is, the publisher is getting help. … And your job is, you’re management. You’re editor. And you’re not to take their side.

    Side? It’s Mother Frigging Jones! I couldn’t believe it. I was booted, within the week.

    On pedophiles and coffee . . .

    The pedophile priests, the real criminals are the bishops. … They should all be in jail. The priests are sick. They have a really bad mental illness. But we don’t know how to fix that in our society. We don’t know the science, how to stop pedophilia. So I would propose we just find a chunk of land out in Utah … so they’re contained there. There are some people who are going to hurt other people, especially kids, and we can’t have that. We pay for the science to try to help them, and contain them in the city. It should be a nice city. You should go to the Cineplex. There should be a pedophilia Starbucks. I’m just saying, why should they be denied their Starbucks?

    On the 2020 election . . .

    This is going to be the biggest mess. We’re not even prepared for what we’re going to see. … I think if the election were held tonight, Trump would win. Not in the popular vote. Oh, no. Hillary won by 3 million votes? Whoever the Democratic nominee is, is going to win by 4 or 5 million votes. The gap will be even larger. … The popular vote is going to be huge. But Trump has not lost his base. They’ve gotten bigger, and angrier, and whiter, and madder.


    Tyler Durden

    Sun, 12/22/2019 – 15:05

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Today’s News 22nd December 2019

  • From Vietnam To Afghanistan, All US Governments Lie
    From Vietnam To Afghanistan, All US Governments Lie

    Authored by Gordon Evans via The Conversation,

    The Washington Post has, after more than two years of investigation, revealed that senior foreign policy officials in the White House, State and Defense departments have known for some time that the U.S. intervention in Afghanistan was failing.

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    Interview transcripts from the Special Inspector General for Iraq Reconstruction, obtained by the Post after many lawsuits, show that for 18 years these same officials have told the public the intervention was succeeding.

    In other words, government officials have been lying.

    Few people are shocked. That’s a stark contrast to 1971, when the Pentagon Papers, a classified study of decision-making about Vietnam, were leaked and published. The explosive Pentagon Papers showed that the U.S. government had systematically lied about the reality that the U.S. was losing the Vietnam War.

    The failure of the U.S. campaign in Afghanistan has been known for years. Virtually none of the U.S. goals have been met. These goals included a strong, democratic, uncorrupt central government; the defeat of the Taliban; eliminating the poppy fields that contribute to the world’s heroin problem; an effective military and police and creating a healthy, diversified economy.

    The Inspector General has repeatedly documented the reality in its widely available (and widely reported) audits.

    Despite this public record of failure, officials continued to trumpet political and military gains on the ground, even that the U.S. could prevail.

    Privately, they have been wringing their hands.

    Shades of Vietnam.

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    Public confidence in government was shaken by the publication of the Pentagon Papers in 1971. AP/Jim Wells

    Sad history of Vietnam

    The Pentagon Papers revealed that senior officials asserted in the 1960s that the Viet Cong were dying in record numbers, enemy leadership was decapitated and there was “light at the end of the tunnel.” Defense Secretary Robert McNamara and his commanders, who knew the reality, continuously called for even more force from 1961 to 1969.

    H.R. McMaster, in his classic study of Vietnam decision-making, excoriated the military for not bringing the truth to President Lyndon Johnson, for presenting Johnson with the “lies that led to Vietnam.”

    The U.S. was winning in Vietnam, until it was not. Right up to the moment diplomats in the U.S. embassy turned the lights off and were airlifted off the building’s roof.

    Are comparisons justified?

    Afghanistan is not Vietnam, it is said.

    Former Afghanistan Ambassador Ryan Crocker argues that the U.S. must be in Afghanistan for America’s security even if reconstruction fails. Brookings analyst Michael O’Hanlon asserts that there were no lies; officials were clear the policy was in trouble. He avoids discussing the voluminous true statements The Washington Post uncovered that were not made publicly.

    The U.S. was ignorant about both countries. Serving in the Obama transition in 2008, for example, I learned that Lt. Gen. Douglas Lute, the Bush-Obama Afghanistan coordinator, was carrying out a policy review process that led to a military surge.

    Now we learn, courtesy of The Washington Post, that, when interviewed in 2015 as part of Special Inspector General’s “Lessons Learned” project, Lute said, “We were devoid of a fundamental understanding of Afghanistan … we didn’t have the foggiest notion of what we were undertaking.”

    While Afghanistan is clearly not Vietnam, Washington is still Washington.

    Prevarication as policy

    After more than 30 years of policy work, government experience, teaching and research, I see no mystery here. Concealment, deception and outright lies have characterized U.S. national security policy for decades – from the overthrow of democratically elected governments in Iran and Guatemala to the overthrow of Saddam Hussein and more.

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    The U.S. secretly plotted and carried out the overthrow of the democratically elected leader of Iran, Mohammad Mossadeq, in 1953. Here, an Iranian protests U.S. involvement in the coup. Pahlavi Dynasty, public domain

    But Vietnam was the big lie, permanently exposing the gap between myth – the government knows everything better – and reality – that policy is failing.

    Since Vietnam, the media and congressional, think-tank and scholarly investigators have suspected something with every intervention. To the public, the truth about Afghanistan has been clear; public opinion has been way ahead of what The Washington Post revealed.

    Good reasons for lies

    Lies are an integral part of national security operations. They seek credibility for government policy. They mislead adversaries, cover up mistakes and failures.

    Above all, they are intended to secure public support for policy and defeat opposition at home. Political scientist John Mearsheimer has noted that governments don’t often lie to their allies and adversaries, “but instead seem more inclined to lie to their own people.”

    In particular, secrecy and deception convey power. As philosopher Sissela Bok says, “Deception can be coercive. When it succeeds, it can give power to the deceiver.”

    Secrecy allows policies to be tweaked outside public view. Insiders gain influence arguing for new approaches to the same goals. Even the goals can shift as interventions deteriorate. The political consequences of failure may be avoided.

    It is rare for an official to acknowledge failure and reverse policy; personal, political and national credibility may be at stake. President Johnson insisted that he was not going to be the “first president to lose a war.” Bush, Obama and even Trump did not want to “lose” Afghanistan.

    An act of political courage – like the 1960-61 Algeria departure decision of French President Charles de Gaulle, who understood France had lost its fight, is rare.

    Trust broken

    Why has The Washington Post series not been explosive?

    In part, the Pentagon Papers broke the code of secrecy; the bond of trust between the policymakers and the American people was severed forever.

    In part, the lies about Afghanistan have been in plain sight for years, courtesy of the media and the Special Inspector General.

    And in part, the public is less directly engaged. The warriors are now volunteer professionals, not conscripts drawn from the general public. Casualties are one-twentieth of what they were in Vietnam.

    Nonetheless, lying about military interventions carries a serious risk. The Pentagon Papers eroded public faith in the credibility of our democratic government. That erosion was later reinforced by the Watergate scandal. As Bok, the philosopher, wrote, “deception of this kind strikes at the very essence of democratic government.”

    British leader Winston Churchill said, “In war-time truth is so precious that she should always be attended by a bodyguard of lies.” Deception aimed at the public and the Axis was an essential part of Churchill’s war strategy.

    The Afghanistan papers reveal yet again that statesmen still believe the truth should be concealed. But the credibility of statecraft and leadership itself were seriously eroded by the Vietnam lies, weakening the fabric of democracy.

    The mild reaction to lying in plain sight about Afghanistan suggests the U.S. may be well down the road to unravelling government’s credibility and our democracy altogether.


    Tyler Durden

    Sat, 12/21/2019 – 23:30

    Tags

  • Is This Kim's "Christmas Gift"? Satellite Images Suggest North Korea Readying ICBM Tests
    Is This Kim’s “Christmas Gift”? Satellite Images Suggest North Korea Readying ICBM Tests

    Just a few short days after Pyongyang warned it is entirely up to the US what Christmas gift it will select to get” after N.Korea test-fired two short-range missiles on Thanksgiving Day, and then one just days before, it appears Kim is repeating an all too familiar pattern of doing threatening things on American holidays.

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    As we noted previously, the north has launched dozens of “short-range” missiles since May, but has largely stuck to its word that it would refrain from ICBM tests, despite occasional disputes about the precise the nature of some of the tests.

    “We’re watching it very closely,” Trump said this week, noting he would be “disappointed” if that happens.

    But tonight, NBC News reports, citing new satellite images shared by Jeffrey Lewis, director of the East Asia Nonproliferation Program at the Middlebury Institute of International Studies, that North Korea has begun fresh work at a factory involved in the development and production of intercontinental ballistic missile launchers.

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    Lewis said Saturday Pyongyang is expanding work at the March 16 Factory in Pyongsong, where North Korean leader Kim Jong-un “watched preparations” for the 2017 test of the Hwasong-15 missile, which was theoretically capable of reaching the U.S. mainland.

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    “The site makes trucks to transport and launch ICBMs, so this is a long-term development,” Lewis told Axios via email.

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    “But what it shows is that North Korea is broadly expanding its missile capabilities.” 

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    “We believe North Korea erects this structure when the facility is involved in producing or modifying ICBM launchers,” Lewis concluded in a written analysis.

    “There is activity at a number of locations indicating that North Korea is laying the groundwork for an expansion of their ICBM program — more systems, more buildings, more capabilities,” he said.

    Gen. Charles Brown, commander of Pacific Air Forces and air component commander for U.S. Indo-Pacific Command said this week:

    “What I would expect is some type of long-range ballistic missile would be the gift. It’s just a matter of does it come on Christmas Eve, does it come on Christmas Day, does it come after the New Year.”

    Suggesting he knows what to expect as North Korea’s “Christmas gift” to Washington: a long-range ballistic missile test.

    When North Korea conducted a series of long-range missile tests in 2017, Trump threatened the nation with “fire and fury.”

    “The only option is to accept the reality that North Korea is a nuclear-armed state that holds the U.S. at risk,” Lewis said.

    “The Trump administration had an opportunity, and I think they’ve blown it.”

    How will Trump respond this time, given his “beautiful” relationship with Kim (and leverage on phase one trade deal details with China – Kim’s apparent puppetmaster – now off the table)?


    Tyler Durden

    Sat, 12/21/2019 – 23:00

    Tags

  • The 12 Strongest Arguments That Douma Was A False Flag
    The 12 Strongest Arguments That Douma Was A False Flag

    Authored by Caitlin Johnstone via Medium.com,

    There have been many US military interventions that were based on lies. This is not a conspiracy theory. It is not some kooky blogger’s opinion. It is an extensively documented and indisputable fact.

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    Nothing has ever been done to address this extensively documented and indisputable fact. No laws were ever changed. No war crimes tribunals were ever held. No policies or procedures were ever revised. No one was ever even fired. No changes were implemented to prevent the Iraq deception from happening again, and, when it happened again, no changes were implemented to prevent the Libya deception from happening again.

    When you make a mistake, you take measures afterward to ensure that you never make the same mistake again. When you do something on purpose, and you intend on doing it again, you do not take any such measures.

    There is a large and growing body of evidence that we have been lied to about Syria to an extent and to a level of sophistication that may be historically unprecedented. One particular aspect of the US-centralized empire’s military involvement in that nation, the 2018 airstrikes by the US/UK/France alliance and the alleged chemical weapons incident which preceded it, has been subject to intense scrutiny ever since it took place. And with good reason: there are many pieces of evidence indicating that the Douma incident was staged to falsely implicate the Syrian government.

    I don’t claim to know exactly who would have been involved in such a staging and to what extent. It is technically possible, as the UK’s Admiral Lord West speculated at the time, that it was perpetrated independently by the vicious al-Qaeda-linked Jaysh al-Islam forces who’d been occupying Douma, a last-ditch attempt to provoke a western military response that might save them from the brink of defeat at the hands of the surging Syrian Arab Army. Jaysh al-Islam has an established record of deliberately massacring civilians, and of using civilians as military leverage by locking them in cages on rooftops in strategic Douma locations to prevent airstrikes. The narrative management operation known as the White Helmets would also have been involved to some extent, and it’s very possible that Saudi Arabia, who backs Jaysh al-Islam, was involved as well.

    Any number of other allied intelligence agencies could have also been involved to some degree (perhaps with the more expanded goal of ensuring continued US military commitment in Syria during an administration that is vocally opposed to it), and it’s unknown if anyone involved would have had direct contact with any part of any US government agency regarding any of this. All we know for sure is that there’s a growing mountain of evidence that the Syrian government was not involved, and that this raises extremely important questions about (A) who really killed those civilians in Douma and (B) how seriously any future demands for military action should be taken from the US power alliance.

    That mountain of evidence includes the following 12 items. Taken individually they are reason enough to be skeptical of the narratives that are being promoted by a government with a known history of using lies, propaganda and false flags to advance preexisting military agendas. Taken together, and looked at with intellectual honesty, they are enough to obliterate anyone’s trust in what we’ve been told about Douma.

    1. A leaked OPCW Engineering Assessment concluded that the gas cylinders on the scene were manually placed there.

    The Organisation for the Prohibition of Chemical Weapons (OPCW) is a purportedly neutral and international watchdog group dedicated to eliminating the use of chemical weapons around the world. In May of this year, a leaked internal OPCW document labeled “Engineering Assessment of Two Cylinders Observed at the Douma Incident” was published by the Working Group on Syria, Propaganda and Media. The Engineering Assessment was signed by a South African ballistics expert named Ian Henderson, whose name is seen listed in expert leadership positions on OPCW documents from as far back as 1998 and as recently as 2018, and its authenticity was quickly confirmed by the OPCW in a statement sent to multiple journalists that it was “conducting an internal investigation about the unauthorised release of the document in question.”

    Henderson ran some experiments and found no scientifically grounded theory for how the cylinders could possibly have been dropped vertically from the air while being found in the condition and locations that they were found in, concluding instead that they were manually placed on the scene. This is a huge difference, since the Assad coalition was the only side with aircraft and Jaysh al-Islam were the only forces on the ground.

    “The dimensions, characteristics and appearance of the cylinders, and the surrounding scene of the incidents, were inconsistent with what would have been expected in the case of either cylinder being delivered from an aircraft,” Henderson wrote. “In each case the alternative hypothesis produced the only plausible explanation for observations at the scene.”

    “In summary, observations at the scene of the two locations, together with subsequent analysis, suggest that there is a higher probability that both cylinders were manually placed at those two locations rather than being delivered from aircraft,” Henderson concludes.

    This is unsurprising, since the hypothetical physics of the empire’s airdrop narrative make no sense to anyone with any understanding of how material objects move. To get a simple explanation of this, watch the breakdown in this three-minute animation. For a more in-depth look, check out this long Twitter thread by Climate Audit’s Stephen McIntyre.

    The existence of Henderson’s report was kept secret from the public by the OPCW, which might make more sense after we get through #2 on this list.

    2. US officials reportedly pressured the OPCW to find evidence of Assad’s guilt.

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    In addition to whoever leaked the Henderson report in May, a second whistleblower going by the pseudonym of “Alex” emerged in October to give a presentation before the whistleblower’s advocacy group Courage Foundation exposing far more plot holes in the official Douma narrative. This same whistleblower also spoke with award-winning British journalist Jonathan Steele, who published a bombshell report on Alex’s revelations in CounterPunch last month.

    Among the most stunning revelations in Steele’s article was Alex’s report that US officials attempted to pressure OPCW inspectors during the Organisation’s drafting of its Interim Report on their Douma investigation in July 2018, and that this intercession was facilitated by an OPCW official named Bob Fairweather.

    “On July 4 there was another intervention,” Steele writes. “Fairweather, the chef de cabinet, invited several members of the drafting team to his office. There they found three US officials who were cursorily introduced without making clear which US agencies they represented. The Americans told them emphatically that the Syrian regime had conducted a gas attack, and that the two cylinders found on the roof and upper floor of the building contained 170 kilograms of chlorine. The inspectors left Fairweather’s office, feeling that the invitation to the Americans to address them was unacceptable pressure and a violation of the OPCW’s declared principles of independence and impartiality.”

    It’s unknown what forces were at play that enabled the US government to insert itself into into an ostensibly impartial OPCW investigation with the help of an OPCW official, but it wouldn’t be the first time the US government leveraged the Organisation into facilitating preexisting regime change agendas against a disobedient Middle Eastern nation. In 2002 Mother Jones reported that the US government, spearheaded by John Bolton, had used the threat of withdrawing its disproportionately high percentage of funding from the Organisation if it didn’t oust its then-Director General Jose Bustani. The popular Bustani, who’d previously been unanimously re-elected to his position, had been hurting the case for war with his successful negotiations with Saddam Hussein’s Iraq. In March 2018, after Bolton was selected as Trump’s National Security Advisor, The Intercept revealed that the campaign to remove Bustani had also included Bolton personally threatening his children.

    Bolton was operating at the highest levels of the Trump White House throughout the entire duration of the OPCW’s Douma investigation. He was Trump’s National Security Advisor from April 9, 2018 to September 10, 2019. The OPCW’s Fact-Finding mission didn’t arrive in Syria until April 14 2018 and didn’t begin its investigation in Douma until several days after that, with its final report being released in March of 2019.

    3. Levels of chlorinated organic chemicals didn’t indicate any chlorine gas attack took place.

    “The main point is that chlorine gas degrades rapidly in the air,” Jonathan Steele told Tucker Carlson last month detailing what was told to him by Alex. “So coming in two weeks later, you wouldn’t find anything. What you would find is that the gas contaminates or affects other chemicals in the natural environment. So-called chlorinated organic chemicals [COCs]. The difficulty is they exist anyway in the natural environment and water. So the crucial thing is the levels: were there higher levels of chlorinated organic chemicals found after the alleged gas attack than there would have been in the normal environment?”

    “When they got back to the Netherlands, to The Hague where the OPCW has its headquarters, samples were sent off to designated laboratories, then there was a weird silence developed,” Steele continued. “Nobody told the inspectors what the results of the analysis was. It was only by chance that the inspector found out through accident earlier the results would come in and there were no differences at all. There were no higher levels of chlorinated organic chemicals in the areas where the alleged attack had happened where there is some suspicious cylinders had been found by opposition activists. So it didn’t seem possible that there could have been a gas attack because the levels were just the same as in the natural environment.”

    “[Alex] got sight of the results which indicated that the levels of COCs were much lower than what would be expected in environmental samples,” Steele reported in CounterPunch. “They were comparable to and even lower than those given in the World Health Organisation’s guidelines on recommended permitted levels of trichlorophenol and other COCs in drinking water. The redacted version of the report made no mention of the findings.”

    “Had they been included, the public would have seen that the levels of COCs found were no higher than you would expect in any household environment”, Alex told Steele.

    This inconvenient fact was omitted from both the OPCW’s Interim Report in July 2018 and its Final Report in March 2019.

    4. Many signs and symptoms of alleged chlorine gas poisoning weren’t consistent with chlorine gas poisoning.

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    The OPCW’s Final Report on Douma in March 2019 assures us that the team found “reasonable grounds that the use of a toxic chemical as a weapon took place. This toxic chemical contained reactive chlorine. The toxic chemical was likely molecular chlorine.” A leaked internal OPCW email, featuring an inspector voicing objections to the aforementioned Bob Fairweather over vital information being omitted from the developing Interim Report on Douma, contradicts this assurance, saying observed symptoms weren’t consistent with chlorine gas poisoning.

    “In this case the confidence in the identity of chlorine or any choking agent is drawn into question precisely because of the inconsistency with the reported and observed symptoms,” the email reads. “The inconsistency was not only noted by the FFM [Fact-Finding Mission] team but strongly noted by three toxicologists with expertise in exposure to CW [Chemical Weapons] agents.”

    So the OPCW’s investigative team as well as three toxicologists said what was observed didn’t match chlorine gas poisoning symptoms. This information was, of course, hidden from us by the OPCW.

    leaked first draft of the Interim Report on Douma, before OPCW officials started cutting out chunks which didn’t suit the US narrative, gives more detail. Here are some excerpts (emphases mine):

    “Some of the signs and symptoms described by witnesses and noted in photos and video recordings taken by witnesses, of the alleged victims are not consistent with exposure to chlorine-containing choking or blood agents such as chlorine gas, phosgene or cyanogen chloride. Specifically, the rapid onset of heavy buccal and nasal frothing in many victims, as well as the colour of the secretions, is not indicative of intoxication from such chemicals.”

    “The large number of decedents in the one location (allegedly 40 to 45), most of whom were seen in videos and photos strewn on the floor of the apartments away from open windows, and within a few meters of an escape to un-poisoned or less toxic air, is at odds with intoxication by chlorine-based choking or blood agents, even at high concentrations.”

    “The inconsistency between the presence of a putative chlorine-containing toxic chocking or blood agent on the one hand and the testimonies of alleged witnesses and symptoms observed from video footage and photographs, on the other, cannot be rationalised. The team considered two possible explanations for the incongruity:
    a. The victims were exposed to another highly toxic chemical agent that gave rise to the symptoms observed and has so far gone undetected.
    b. The fatalities resulted from a non-chemical-related incident.”

    5. A doctor in Douma told journalist Robert Fisk that there was no gas poisoning.

    Shortly after the Douma incident a video was circulated online and redistributed on news media around the world featuring people being hosed down with water in a hospital and an infant receiving a respiratory treatment. A doctor who worked in the hospital Assim Rahaibani gave the following account to journalist Robert Fisk days after the incident, saying those in the video were actually just suffering from hypoxia due to dust inhaled after a conventional bombing:

    “I was with my family in the basement of my home three hundred metres from here on the night but all the doctors know what happened. There was a lot of shelling [by government forces] and aircraft were always over Douma at night — but on this night, there was wind and huge dust clouds began to come into the basements and cellars where people lived. People began to arrive here suffering from hypoxia, oxygen loss. Then someone at the door, a ‘White Helmet’, shouted ‘Gas!’, and a panic began. People started throwing water over each other. Yes, the video was filmed here, it is genuine, but what you see are people suffering from hypoxia — not gas poisoning.”

    Lest anyone accuse Fisk of having any special loyalties to the Syrian government, in this same report he says it “is indeed a ruthless dictatorship.”

    6. A BBC reporter said he has proof that the hospital scene was staged.

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    The BBC, another establishment that can hardly be accused of Assad loyalism, saw its Syria producer Riam Dalati claiming earlier this year that he had proof beyond a doubt the aforementioned hospital scene was staged. While holding to the establishment line that the attack did happen, Dalati expressed uncertainty as to what if any chemical would have been used and said “everything else around the attack was manufactured for maximum effect.” Emphases mine:

    “The ATTACK DID HAPPEN, Sarin wasn’t used, but we’ll have to wait for OPCW to prove Chlorine or otherwise,” Dalati tweeted. However, everything else around the attack was manufactured for maximum effect. After almost 6 months of investigations, i can prove without a doubt that the Douma Hospital scene was staged.”

    “No fatalities occurred in the hospital,” Dalati continued. “All the White Helmets, activists and people i spoke to are either in Idlib or Euphrates Shield areas. Only one person was in Damascus. Russia and at least one NATO country knew about what happened in the hospital. Documents were sent. However, no one knew what really happened at the flats apart from activists manipulating the scene there. This is why Russia focused solely on discrediting the hospital scene.”

    In other words, Russia knew that these “activists” were staging the scene for the news media, and understandably focused on discrediting their work.

    “I can tell you that Jaysh al-Islam ruled Douma with an iron fist,” Dalati added. “They coopted activists, doctors and humanitarians with fear and intimidation.”

    Dalati set his account to private for an extended period after these extremely controversial statements got him a flood of attention, but the thread is up on Twitter as of this writing (here’s an archive in case they vanish again).

    7. More evidence the Douma scene was knowingly staged for media.

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    Riam Dalati also tweeted evidence after the attack that people had staged the corpses of two children to make it appear as though they died hugging each other for the purpose of emotional manipulation. If you’ve got a strong stomach (seriously think hard about whether this is something you want in your head before diving in), Stephen McIntyre also compiled some disturbing proof of dead infants being physically placed on top of other corpses in between video shoots of the Douma incident’s aftermath.

    Whoever was positioning these bodies for the cameras clearly had a goal of generating an emotional response from the outside world. Which would be precisely the goal of staging a false chemical weapons attack.

    8. Witness testimony at The Hague.

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    Seventeen Syrian civilians, including medical personnel and some of the “victims” seen in the aforementioned hospital footage, spoke at the OPCW headquarters in The Hague saying that no chemical weapons attack took place. RT reports:

    “There were people unknown to us who were filming the emergency care, they were filming the chaos taking place inside, and were filming people being doused with water. The instruments they used to douse them with water were originally used to clean the floors actually,” Ahmad Kashoi, an administrator of the emergency ward, recalled. “That happened for about an hour, we provided help to them and sent them home. No one has died. No one suffered from chemical exposure.”

    The briefing was boycotted by the US and 16 of its allies and was smeared as an unconscionable Russian hoax by media outlets ranging from Sky News to Al Jazeera to The Guardian to The Intercept, apparently for no other reason than that what these Syrians were saying didn’t match the unsubstantiated claims being promoted by the political/media class of the US-centralized empire. If you want to just listen to what the Syrians themselves say and make up your own mind, RT has an English translation video here:

    9. The first OPCW Director General finds the glaring irregularities and omissions from the OPCW’s Douma report “very disturbing”.

    After the aforementioned Courage Foundation presentation given by Alex this past October, the aforementioned former OPCW Director General Jose Bustani (the one whose kids John Bolton threatened) had this to say:

    “The convincing evidence of irregular behaviour in the OPCW investigation of the alleged Douma chemical attack confirms doubts and suspicions I already had. I could make no sense of what I was reading in the international press. Even official reports of investigations seemed incoherent at best. The picture is certainly clearer now, although very disturbing”

    “I have always expected the OPCW to be a true paradigm of multilateralism. My hope is that the concerns expressed publicly by the Panel, in its joint consensus statement, will catalyse a process by which the Organisation can be resurrected to become the independent and non-discriminatory body it used to be.”

    10. This OAN reporter literally just walking around asking people in Douma what they saw.

    11. MIT Professor Emeritus Theodore Postol speaking about the plot holes and irregularities in scientific protocol with the Douma investigation.

    12. Common sense: Assad stood nothing to gain from launching a chemical attack, while Jaysh al-Islam fighters stood everything to gain by faking one.

    This is the initial reason why critical thinkers were so skeptical of the establishment Douma narrative: from the very beginning, it made no sense at all.

    Click this hyperlink to read a BBC article dated five days before the Douma incident, describing how the Syrian government “appears poised to regain control” of the town and how Jaysh al-Islam fighters were already evacuating. The battle was won. Assad would have stood absolutely nothing to gain from tempting a retaliation from western powers (which could have been far more severe than it ended up being) all to drop a couple of cylinders of chlorine gas, which incidentally is a highly ineffective weapon that ordinarily takes a very long time to kill.

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    Jaysh al-Islam (and whoever else they may have been working with), on the other hand, would have stood everything to gain by murdering a few of the civilians they had been holding captive in the town they’d invaded in the hopes that western forces would become their airforce for a bit and hold off the Syrian Arab Army from reclaiming Douma.

    “Why would Assad use chemical weapons at this time? He’s won the war,” Major General Jonathan Shaw told The Mail on Sunday at the time. “That’s not just my opinion, it is shared by senior commanders in the US military. There is no rationale behind Assad’s involvement whatsoever. He’s convinced the rebels to leave occupied areas in buses. He’s gained their territory. So why would he be bothering gassing them?”

    “The jihadists and the various opposition groups who’ve been fighting against Assad have much greater motivation to launch a chemical weapons attack and make it look like Assad was responsible,” the ex-SAS and Parachute Regiment commander added. “Their motivation being that they want to keep the Americans involved in the war — following Trump saying the US was going to leave Syria for other people to sort out.”

    Admiral Lord West made similar comments on the BBC around the same time, prompting BBC host Annita McVeigh to flip into frantic narrative management mode suggesting that he’s “muddying the waters” during an “information war with Russia”.

    “President Assad is in the process of winning this civil war, and he was about to take over Douma, all that area,” West said. “He’d had a long, long, long slog slowly capturing that area of the city, and there just before he goes in and takes it all over, apparently he decides to have a chemical attack. It just doesn’t ring true. It seems extraordinary, because clearly he would know that there’s likely to be a response from the allies. What benefit is there for his military? Most of the rebel fighters, this disparate group of Islamists, had withdrawn, there were a few women and children left around. What benefit was there militarily in doing what he did? I find that extraordinary.”

    “Whereas we know that in the past some of the Islamo groups have used chemicals, and of course there’d be huge benefit in them labeling an attack as coming from Assad, because they would guess quite rightly that there would be a response from the US as there was last time, and possibly from the UK and France,” West added.

    “If I were advising some of the Islamist groups, many of whom are worse than Daesh,” West said, “I would say look, we’ve got to wait until there’s another attack by Assad’s forces, particularly if they’ve got a helicopter overhead or something like that and they’re dropping barrel bombs, and we set off some chlorine. Because we’ll get the next attack from the allies. And there’s no doubt that if we believe he’s done a chemical attack we should do that. And those attacks will get bigger, and it’s the only way they’ve got, actually, of stopping the inevitable victory of Assad.”

    These are not Assad sympathizers or Kremlin assets saying this. These are not a bunch of hippie dippie anti-imperialists. These are lifelong military men, thinking in military terms, describing what they were seeing. And what they were seeing is the thing that a false flag is.

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    This isn’t just some idle philosophical question. People died. A massive war crime occurred and the more minutes tick by before a legitimate investigation is launched — with full transparency and accountability this time — the less available evidence there will be. Which is why establishment narrative managers on Syria go full dead-weight when asked if they support a full criminal investigation into what happened. They don’t actually believe it will go their way, and rightly so.

    Meanwhile the illegal occupation of Syria drags on, perhaps until Trump can be replaced with a more compliant puppet, and we’re all basically just sitting around waiting to be deceived again.

    This cannot continue. This must not continue.

    *  *  *

    Thanks for reading! The best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for my website, which will get you an email notification for everything I publish. My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics on Twitter, checking out my podcast on either YoutubesoundcloudApple podcasts or Spotify, following me on Steemit, throwing some money into my hat on Patreon or Paypalpurchasing some of my sweet merchandise, buying my new book Rogue Nation: Psychonautical Adventures With Caitlin Johnstone, or my previous book Woke: A Field Guide for Utopia Preppers. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. Everyone, racist platforms excluded, has my permission to republish or use any part of this work (or anything else I’ve written) in any way they like free of charge.

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    Tyler Durden

    Sat, 12/21/2019 – 22:30

  • Secretive California Military Base Rattled By Five Earthquakes In One Day
    Secretive California Military Base Rattled By Five Earthquakes In One Day

    Five months after the biggest earthquake in two decades, a swarm of smaller quakes rattled a secretive Navy base in the Mojave Desert Thursday afternoon and before dawn on Friday, according to the US Geological Survey.

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    Five quakes magnitudes over 2.5 struck Naval Air Weapons Station China Lake between 3 p.m. Thursday and 3.30 a.m. Friday in Ridgecrest, CA, according to the Fresno Bee.

    The base, deep in the California desert near Death Valley National Park, is where the Navy develops and tests its newest weapons.

    A massive 7.1 magnitude earthquake on July 6 was also centered on the base and forced the evacuation of the massive installation, according to KLTA.

    That was the biggest earthquake in the area in two decades, according to the USGS. –Fresno Bee

    In July, a series of back-to-back earthquakes in the Mojave Desert stoked fears over ‘the big one’ hitting the area.

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    Tyler Durden

    Sat, 12/21/2019 – 22:00

  • Against Silicon Valley
    Against Silicon Valley

    Authored by Ian Miles Cheong via HumanEvents.com,

    Big Tech amplified the culture war: now it is putting its thumb on the scale.

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    The early days of the internet were rife with optimism about the future of the technological society. Techno-utopians naively hoped that a society running on the so-called “Information SuperHighway” would be armed with facts, and civic life would evolve past the tired dialectic of partisan politics.

    Of course what they predicted, and what ended up happening, are two very different things. Far from enlightenment, we’re confronting a world of conspiracy theories and alternative narratives produced within echo chambers and widely disseminated through social media—some of which are downright dangerous.

    Before we can understand why things are the way they are, it is necessary to recall what happened in the first two decades of the 21st century. That’s likely what motivated Joe Bernstein’s recent retrospective on BuzzFeed. For all the utopianism and hope that defined the end of the 20th century, we still haven’t ended starvation and inequality, accomplished world peace, or established a colony on Mars. Instead, we have the culture war and a myriad of trivialities that threaten to ensconce the human race in low-stakes concerns like preferred pronouns and microaggressions.

    Bernstein, who’s very much a “normie,” laments the ways in which the new age of enlightenment, driven by technological progress, failed to deliver. But the utopia he grieves for is very much a product of Big Tech’s monocultural hegemony. Big Tech, which has engineered the current state of political discourse, has been subsumed by leftist beliefs—both from within and without.\

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    Mark Zuckerberg.

    THE TWIN HISTORY OF SILICON VALLEY LIBERALISM AND MAGA-NET

    Remember Usenet? You probably don’t. In the ‘90s, Usenet was a series of message boards that existed on an alternate network before the dominance of the “world wide web.” Usenet and other disparate networks existed alongside the web—and continue to do so. Usenet was something anyone with a client could access, the same way you can access the world wide web through browsers like Google Chrome, Safari, or Firefox today. This decentralized network of message boards—“newsgroups”—served as sounding boards for people to have conversations. They were run very much like forums are these days, dedicated usually to singular topics or fields of interest.

    Many of the terms used these days by the LGBT+ or social justice community first emerged or took on prominence through these Usenet communities, including the term “cisgender” (the opposite of transgender). The concept was never really a thing until the denizens of these newsgroups made their way to proto-social media sites like LiveJournal, and eventually dominated social media platforms. Now these concepts, which were incubated in echo chambers, have proliferated mainstream political discourse. Democratic politicians announce their pronouns. It’s kind of crazy to think about.

    But just as radical left-wing ideas began to trickle out of the insular Usenet intelligentsia, so too did the counter-establishment on imageboards—the first of which was 4chan. This counter-establishment aligned itself around conservatism.

    True, it’s a mode of conservatism that’s no doubt different from what the Founding Fathers and the classical liberals of the Age of Enlightenment would have identified with. “Reject modernity. Embrace tradition,” or so the slogan goes. It is a shibboleth often spoken and then regurgitated ad nauseam by disconnected self-declared conservatives who regard the present state of conservatism as “progressivism in slow motion.” Unhappy with the way things are, the disenfranchised turn towards a form of cultural neo-fundamentalism, laden with a sense of nostalgia for things that never were.

    The “manosphere” exists in tandem with social justice activists who also imagine the world is against them—and that is the shared history that the soft-critics of Big Tech like Bernstein conveniently ignore. It’s easier for them to blame GamerGate and individual actors for expressing their “toxicity” on the internet than blame the internet for capturing our expressive life the way that it has.

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    Video games.

    GAMERGATE: SILICON VALLEY LIBERALISM’S WHIPPING BOY

    Bernstein blames Big Tech for disempowering people, but he understands this disempowerment through the problem of harassment. Harassment, he says, is a significant issue in today’s social media landscape. If you’re being shouted down by a racist who’s making fun of your IQ, and you can’t punch him through the monitor, it’s understandable why you’d feel actively disempowered.

    “Try to imagine every woman and every nonwhite, non-Christian and LGBTQ human who has been threatened with death, torture, rape, or worse, on a major social platform. Add up all of those feelings of anger and powerlessness, against the backdrop of a $24 billion company that wouldn’t take it seriously for the longest time.”

    And, as if on cue, Bernstein blames a singular event—GamerGate in 2014—for the current cultural climate:

    “I first reported on the jilted 24-year-old who started an unlikely social movement with a seething blog post about the behavior of his ex-girlfriend, an obscure game developer. Gamergate! It was so stupid and about nothing and quickly became so scary and about everything. An entire culture of alienated posters and clever scammers cohered around it, around the impulse that something needed to be protected and some people needed to be attacked. What you think doesn’t count very much anymore. Some of these young men were trolls, others neo-Nazis.”

    The fact of the matter is that GamerGate was a symptom of the cultural hegemony permeating out of Silicon Valley. It was a counter-establishment reaction.

    That’s not to justify the behavior of people who behave badly online, or even to demonize those who behave badly online as necessarily wrong-thinkers. We are all entitled to our opinions, and how we behave in the real world is usually, if not always, based on how others react to our actions. On the internet, you can be as antisocial as you want to be, and invite other antisocial people to form a sort of antisocial collective with you, ritualistically throwing fuel on the rest of society.

    But the existence of a counter-establishment demonstrates something that Bernstein and his peers are quick to ignore.

    Today, leftist thought permeates throughout the mainstream, in part because of the vast amount of cultural capital that technologists have amassed alongside their wealth and have been able to export globally. Many of these technoliberal ideas are distinctively anti-male, and to an extent, anti-white.

    For example, look to transgender feminist Coraline Ada Ehmke’s Contributor Covenant—a legally codified set of do’s and don’ts for an inclusive (read: “woke”) workplace. It has seen widespread adoption in Silicon Valley. The author of the Covenant also co-authored the Post-Meritocracy Manifesto, a pledge to repeal principles that “mainly benefit those with privilege, to the exclusion of underrepresented people in technology.” The fight against “white supremacy,” while valid perhaps in the 1940s up to the 1990s, is an older, now obsolete paradigm that only serves to inflict damage on the fabric of society in the present day. Silicon Valley’s brand of liberalism, however, is obsessed with immutable characteristics like race, gender, and sexual orientation. And through that political orientation, Big Tech chooses to disenfranchise white men.

    This rhetoric—ironically promoted by white men within Big Tech who want to prove their allyship—promotes a system that values identity over merit. This, in turn, has led to young men coming together around their identity, trying to find empowerment in all the wrong places—in movements like the alt-right and incel forums, where they find mutual solace in their sense of shared victimhood. It’s hard to blame them when the media and Big Tech bombards them with messaging that extol the evils of their demographic.

    As difficult as it is to swallow, it’s not entirely the fault of these arguably disempowered men who seek to regain their place in society (some of whom do want supremacy, as opposed to equality—if only out of revenge). Nor is it explicitly the fault of leftists or social justice activists that anyone is feeling disempowered. And it’s just not productive to lay the blame entirely at their feet.

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    Social media.

    BIG TECH WANTS BIG EXPRESSION—BUT ONLY FOR A SMALL MINORITY

    There is a culture war that’s happening beneath the shadow of Big Tech, which, for all its pandering to “free speech” or to “diversity,” refused to take a side until it affects its bottom line. And, given how its stakeholders and investors come from the same coastal wealth as the engineers who design these platforms are, it’s no surprise that it takes the side against counter-establishment values.

    Beyond spectacles like the Damore incident, we have to be mindful of how Big Tech, which remains poised to spread its tentacles throughout every aspect of our lives, governs our interactions with others on social media. While condemning all forms of bigotry, and bragging about its ability to empower people to express their right to free speech, it surreptitiously concentrates the governance of where and how this speech occurs in the hands of a few coastal elites. And they love it—they make money off of it. Platforms weaponize our very human desire to express—making small gestures to make people feel personally empowered (the report tool, for instance), and thriving off of the viral potential of cancel culture and mean-spirited “debate.” But ultimately, efforts are merely an illusion to keep us distracted in our rage towards our political and ideological opponents.

    For all its virtue signaling, Big Tech still takes investments from the Chinese totalitarian state, and sells user data to governments all over the world. We are asleep, naive, and unaware of the creep of Big Tech. People like Bernstein want us to focus our rage on disenfranchised white men or expressions of counter-culture—meanwhile, we’re being strangled by Silicon Valley’s myriad tentacles, slaves to the technological society.


    Tyler Durden

    Sat, 12/21/2019 – 21:30

  • "I Find It Very Troubling" – Most Americans Lack Savings
    “I Find It Very Troubling” – Most Americans Lack Savings

    The economy might be strong in the U.S., but, as Statista’s Maria Vultaggio details below, nearly 70 percent of Americans have less than $1,000 stashed away, according to GOBankingRates’ 2019 savings survey. The poll, released December 16, revealed 45 percent have nothing saved. The survey questioned 846 respondents November 25 to 26.

    Infographic: Most Americans Lack Savings | Statista

    You will find more infographics at Statista

    The discovery baffled Bruce McClary, the spokesman for the National Foundation for Credit Counseling.

    “It’s puzzling to me that if the economy is doing so well and that we’re so close to full employment, that consumer confidence is up … that we haven’t seen the numbers move much in people’s ability to save,” McClary told Yahoo Finance.

    “I find it very troubling that people can’t come up with $1,000 in a savings account to cover expenses without borrowing money.”

    As he faces impeachment, President Donald Trump has lauded the strong U.S. economy, saying the American people care more about the economy than the impeachment inquiry.

    “The Stock Market hit another Record High yesterday, number 133 in less than three years as your all time favorite President, and the Radical Left, Do Nothing Democrats, want to impeach me. Don’t worry, I have done nothing wrong. Actually, they have!” he tweeted December 17.

    “The new USA Today Poll, just out, has me leading all of the Democrat contenders. That’s hard to believe since the Fake News & 3 year Scams and Witch Hunts, as phony as they are, just never seem to end. The American people are smart. They see the great economy, & everything else!”


    Tyler Durden

    Sat, 12/21/2019 – 21:00

  • We Live In Hysteric Times: What Trump's Impeachment Really Means
    We Live In Hysteric Times: What Trump’s Impeachment Really Means

    Authored by James George Jatras via The Strategic Culture Foundation,

    “America is a corpse being consumed by maggots. Liberals are rooting for the maggots. Conservatives are rooting for the corpse.”

    @Vendee_Rising

    For a century and a half American political life has been the exclusive preserve of the duopoly of Democrats and Republicans, also known as the Evil Party and the Stupid Party. (If something is both Evil and Stupid, we call that “Bipartisan.”) But the familiar Evil-Stupid dichotomy doesn’t even begin to describe the descent into national dysfunction and galloping irrationality that characterizes the Trump impeachment hysteria.

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    Media chatter now centers on the nuts-and-bolts questions of “what’s next?” Will House Speaker Nancy Pelosi send the articles of impeachment over to the Senate? (Yes. Even one of the legal “scholars” enrolled in the impeachment lynch mob avers that Trump isn’t actually impeached until the Senate receives the articles.) Who will be the trial managers? (Who cares.) Will there be a “real trial,” with witnesses? (It hardly matters.) Will Trump be removed? (Unlikely unless some bolt from the blue flips 20 GOP Senators.) Will impeachment be the Democrats’ albatross going into November 2020? (Most polls show independents are turned off, but there’s still almost a year to go.)

    None of these questions, which are meaningful only in a mental universe of the Evils and the Stupids shadowboxing over a partisan allocation of political spoils, touch upon the grim – and occasionally sardonic – symptoms of America’s seemingly unstoppable terminal slide.

    With Trump’s impeachment it’s time to say goodbye to yesteryear’s Team Evil and Team Stupid. Say hello in 2020 to Team Maggot and Team Corpse!

    Even though Trump has not turned out to be the transformative and restorative president that many of his supporters might have hoped for, he certainly will be (assuming he survives impeachment, which he probably will) the lesser of evils in November 2020 compared to whoever ends up as the Maggot Party nominee. Worse from his opponents’ point of view, he remains a toxic avatar of the old America they thought would be well and truly laid to rest for ever and ever, amen, when Hillary Clinton came into her kingdom. That having misfired in 2016, partisans of that legacy America’s marginalization, displacement, and eventual extinction can’t breathe easy while Trump remains in office lest he, however unlikely in view of his failures of performance, serve as a catalyst for revival of the historic American nation facing loss of its birthright: an organic, uncontrived, living ethnos characterized by European, mainly British origin (a/k/a, “white”); Christian, mainly Protestant; and English-speaking, as augmented by members of other groups who have totally or partially assimilated to it. The certified victim classes standing on the threshold of the permanent, total power that eluded them three years ago are haunted by the knowledge that there’s still lots of them Muricans in red MAGA hats rallying to Trump out there in Flyover Country ….

    In short, Democrats hate Trump not so much for what he’s done (which, contrary to what his passionate supporters think based on his Tweets, isn’t much) but as an expression of an amorphous dread that by some mysterious populist alchemy he might still breathe life back into the Corpse Party’s deplorable base.

    With that in mind, here are a few things to note as we cruise on into Bizarro World:

    What do you mean ‘we,’ white man? 

    As the impeachment spectacle unfolded in the House, one could not fail to be touched by the hushed, heartfelt reverence with which Democrat after Democrat cited the sage words of the Founding Fathers: Madison especially, but also Jefferson and Washington. No doubt they can hardly wait for this spectacle to be over so they can go back to denouncing the Founders as dead, racist, Christian, patriarchal, “Anglo,” and (presumably) heterosexual slaveholders in wigs and knee-breeches whose memory should be expunged from the historical record. It’s instructive to glance at the members of the House Judiciary Committee who – solemnly, reluctantly, and prayerfully, they assure us! – voted out articles of impeachment in the name of “the American people.” But which “people” might that be? Of the 23 Democrats who voted, only four even arguably fit the heritage American, male profile of the Founding Fathers. The “gender balance” (as it’s ungrammatically called nowadays) on the voting majority side of the Committee is 12-11. That’s not quite up to Barack Obama’s exhortation that “every nation on earth” should be “run by women,” but it’s progress in that direction! (Just imagine how much more serene the world would be if all countries were ruled by peaceniks like Hillary Clinton, Madeleine Albright, Condi Rice, Susan Rice, Samantha Power, Anne-Marie Slaughter, Michèle Flournoy, Evelyn Farkas, etc., plus a bevy of Deep State Democrats now installed in Congress.) By contrast, the 17 Republicans on the Committee have approximately the same demographic composition they’d have had in 1950 – and aside from the inclusion of two women, that of the First Congress seated in 1789.

    In short, in the Congressional Maggot Caucus the approaching Dictatorship of Victims defined by race, sex, ethnicity, sexual orientation, language, religion, migratory status, etc., is already becoming a reality, and they voted to get rid of Trump. Members of the Corpse Caucus defending him still belong demographically and morally to the declining legacy America, though they’d never, ever admit it. Impeachment is thus more than just the latest iteration of the years-long anti-constitutional coup to overturn a presidential election, though it is that too. Even more fundamentally, it’s a coup against the people whose identity, traditions, and values the Constitution was intended to ensure for themselves and their posterity.

    Foreign interference in our deMOCKracy.

     Even more absurd than Democrats’ presumption in lip-synching the venerable principles of an American constitutional tradition they despise almost as much as they loathe the ethnos that ordained and established it is their feigned horror – horror! – that Trump’s phone chat with Ukraine’s Volodymyr Zelensky realized the Founders’ worst fears of foreign influence over American domestic politics. Leaving aside the fact that Ukraine under Zelensky’s predecessor, Petro Poroshenko, did try to queer the 2016 election in favor of Hillary, and that Hunter and Joe Biden are crooks, the Maggoteers’ ability to maintain a straight face of shocked indignation smack in the middle of a souk, a flea market, a bazaar where both domestic and foreign interests buy, sell, and trade favors like vintage baseball cards is nothing less than heroic.

    While the bipartisan leadership has not yet taken up the helpful suggestion that barcodes be affixed to legislators’ foreheads so that interested persons and organizations can conveniently scan prices and self-checkout, they have provided a helpful guide to what are called “Congressional Member Organizations (CMOs),” also called coalitions, study groups, task forces, or working groups. Memberships in many but not all CMOs serve as virtual barcodes for potential (mostly legal) campaign donors, including, in the case of “friends of” this or that foreign country, contributions from ethnic compatriots who are US citizens, or at least are supposed to be. Here’s a partial selection:

    Argentina Caucus, Armenian Issues Caucus, Azerbaijan Caucus, Bangladesh Caucus, Bosnia Caucus, Brazil Caucus, Cambodia Caucus, Central America Caucus, Colombia Caucus, Congressional Caucus on Bulgaria, Croatian Caucus, Czech Caucus, Ethiopian-American Caucus, Ethnic and Religious Freedom in Sri Lanka, EU Caucus, Friends of Australia Caucus, Friends of Denmark Caucus, Friends of Egypt Caucus, Friends of Finland Caucus, Friends of Ireland Caucus, Friends of Liechtenstein Caucus, Friends of New Zealand Caucus, Friends of Norway Caucus, Friends of Scotland Caucus, Friends of Spain Caucus, Friends of Sweden Caucus, Friends of the Dominican Republic Caucus, Friends of Wales Caucus, Georgia Caucus, Hellenic Caucus, Hellenic Israel Alliance Caucus, House Baltic Caucus, Hungarian Caucus, India and Indian Americans Caucus, Iraq Caucus, Israel Allies Caucus, Israel Victory Caucus, Kingdom of Netherlands Caucus, Korea Caucus, Kyrgyzstan Caucus, Macedonia and Macedonian-American Caucus, Moldova Caucus, Mongolia Caucus, Montenegro Caucus, Morocco Caucus, Nigeria Caucus, Pakistan Caucus, Peru Caucus, Poland Caucus, Portuguese Caucus, Qatari-American Strategic Relationships Caucus, Republican Israel Caucus, Romania Caucus, Serbian Caucus, Slovak Caucus, Sri Lanka Caucus, Taiwan Caucus, UK Caucus, Ukraine Caucus, U.S.-Bermuda Friendship Caucus, U.S.-China Working Group, U.S.-Japan Caucus, U.S.-Kazakhstan Caucus, U.S.-Lebanon Friendship Caucus, U.S.-Philippines Friendship Caucus, U.S.-Turkey Relations and Turkish American, Uzbekistan Caucus, Venezuela Democracy Caucus

    Recalling Your Working Boy’s years at the State Department – where there still exists no “American Interests Section” – the reader can search the above in vain for anything that looks remotely like “Friends of the United States of America.”

    Russia! Russia! Russia!

     In fact, the Democrats’ core impeachment narrative – Russia bad, Ukraine good – is itself an example to which American policy is in the grip of foreign antipathies and attachments against which the Father of Our Country warned us in his 1796 farewell address:

    “[N]othing is more essential than that permanent, inveterate antipathies against particular nations, and passionate attachments for others, should be excluded; and that, in place of them, just and amicable feelings towards all should be cultivated. The nation which indulges towards another a habitual hatred or a habitual fondness is in some degree a slave. It is a slave to its animosity or to its affection, either of which is sufficient to lead it astray from its duty and its interest.”

    In his closing statement before the impeachment vote House Judiciary Chairmaggot Adam “Captain Ahab” Schiff, in his frenzied hunt for the Great Orange Whale, provided a textbook example of what Washington feared:

    “[W]e should care about our allies. We should care about Ukraine. We should care about a country struggling to be free and a Democracy. We used to care about Democracy. We used to care about our allies. We used to stand up to Putin and Russia. We used to. I know the party of Ronald Reagan used to. ‘Why should we care about Ukraine?’ But of course it’s about more than Ukraine. It’s about us. It’s about our national security. Their fight is our fight. Their defense is our defense. When Russia remakes the map of Europe for the first time since World War II by dint of military force [JGJ: Well, there was Kosovo, but never mind …] and Ukraine fights back, it is our fight too.”

    Indeed, one wonders how hysterical Democrats missed accusing Trump outright of treason, which actually is specified as grounds for impeachment in Article II, Section 4. After all, as described by Schiff, didn’t Trump’s actions constitute (under Article III, Section 3) “adhering” to our evil enemies the Russians, and “giving them aid and comfort”? It’s an open and shut case of a capital crime – and the House Majority Whip is ready to get the rope! (Really, how did the Democrats miss this? Maybe GOP stupidity has migrated to the other side of the aisle…)

    It is noteworthy that not a single House Republican dared or even cared to question Schiff’s framing of the issue, which was bolstered by witnesses from the permanent military, intelligence, and diplomatic establishment, including Trump’s appointees. Nor is any Republican Senator likely to point out the inconvenient truth that we have no defense treaty with Ukraine, which thus is not really our “ally.” Partisanship is the variable; Russophobia is the constant. The sole retort from Trump’s establishment defendersHe released the aid to Ukraine, including the Javelin missiles Obama denied them! He’s every bit the warmonger you want him to be! So there!

    Thus, even with Trump’s almost (at this point) certain survival of a Senate impeachment trial, the relevant foreign inveterate antipathies and passionate attachments will remain entrenched. (Not just in the case of Ukraine/Russia but with respect to the rest of the world our habitual hatreds and fondnesses remain firmly in place and are unlikely to change for the balance of Trump’s presidency, if ever. Trump’s Korea initiative is on life support. Israel/Iran is a flashpoint that could explode at any time: “Israel, even less than the US, cannot take casualties. A couple of bull’s eyes, a lot of Israelis go back to Brooklyn. The 82 million people in Iran have no place else to go.”)

    Senate Demaggotic Leader Chuck Schumer gave the game away when he demanded that the World Greatest Deliberative Body receive testimony from cashiered National Security Adviser John Bolton and acting White House Chief of Staff Mick Mulvaney but not from the man at the center of the whole Ukraine “drug deal” (as Bolton described it): Rudy Giuliani. Why wouldn’t the assembled Maggotrats jump at the chance to grill him under oath? Because he’d dole out the real dirt on Ukraine and its legendary corruption that would make a Nigerian prince blush. For the same reason, Corpsublicans won’t want to hear from him either, any more than they’re interested in whether the “sub-sources” of the Steele Dossier – whose identity the US Justice Department knows and who were available to the IG’s investigators – really had anything to do with the Russian government. We wouldn’t want to debunk all that yammering about “fake Kremlin dirt,” would we.

    Meanwhile, back in what remains of America, regardless of how impeachment turns out, the lines of irreconcilable division deepen. Whether or not Trump is reelected (the politics look good for him, the demographics don’t) he will eventually be gone, whether in 2020, 2021, or 2025. He will almost certainly be the last Republican president, depending on when Texas goes the way of Virginia. One way or the other, we’ll soon see whether the corpse has any fight left in it.


    Tyler Durden

    Sat, 12/21/2019 – 20:30

  • $3 Billion, 300-Acre MegaCity Envisioned For California's Record Homeless… But There's A Twist
    $3 Billion, 300-Acre MegaCity Envisioned For California’s Record Homeless… But There’s A Twist

    Ask any San Franciscan what the state of California has an excess of and the most likely answer will be homeless people (and their excrement, especially with the liberal mecca recording as many as 16,000 “feces complaints” in one week ). Actually, ask just about anyone and the answer will be the same: after all with 130,000 homeless, California is now home to more than a quarter of the nation’s homeless population.

    That all may soon change, however, if a new crowdfunding effort succeeds in its effort to solve the US homeless crisis by building a 300-acre city open exclusively for those without a home. Daune Nason, founder of the Folsom-based Citizens Again, released details Thursday of his plans for an estimated $3 billion private city equipped with amenities and services for a 150,000 “high-needs” population, CBS LA reports.

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    Artist’s impression of the Citizens Again “Homeless City

    “Qualified citizens” – those who meet as-yet undisclosed criteria – will be allowed to live in the city and are free to leave whenever they wish, says Nason, who adds, “Some might want to stay forever.”

    According to a press release, the all-inclusive city which hopes to overtake San Francisco as the mecca of America’s homeless, will offer high-density housing in dormitories consisting of sleeping quarters and communal bathrooms with private showers. Additionally, residents would be provided RFID-enabled wristbands to be tracked constantly gain access to their dorm rooms as well as perform tasks such as job check-in, purchasing items with credits, medicine consumption, and more.

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    In describing his vision, Nason says that each of the four neighborhoods will have their own cafeteria and kitchen and multiple scheduled eating times to accommodate a 150,000-person population. And since the homeless are probably not best known for their ironclad work ethic, the neighborhoods will also be fitted with tiered seating for residents to watch TV in “a community setting” within their neighborhood.

    According to the Citizens Again website, other aspects of the homeless city will include:

    • Hospitals
    • Dental and Vision Services
    • Mental Health
    • Movie Theatres
    • Bowling Alleys
    • Sports Courts
    • Hotels for visiting family
    • Dog parks and kennels
    • Perimeter staff housing
    • Job Training
    • GED certificates
    • Housing & Job Placement

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    TV Pods are semi-enclosed rooms with tiered seating for citizens to watch TV in a community environment within their neighborhood. Each TV Pod will play a unique channel, giving the entire 1-acre floor many viewing options.

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    Citizens will scan their Wristbands through Access Turnstiles to gain entry to their residential building, their dorm rooms, and venues, as well as perform tasks such as job check-in, purchase items with credits, check their daily schedule, account for meals, log medicine consumption, and more.

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    Dorm rooms are similar concepts to college dorm rooms and sleeping rooms in long-distance passenger trains: they’re a safe, comfortable place to sleep and rest.

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    Tunnels under the City will be used to minimize disruption of Citizen life. Deliveries and logistics can be performed without clogging city streets; city workers can quickly get to job sites; and infrastructure maintenance and upgrades can be performed without tearing up paved city streets

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    Citizens live in the dorms, which consist of sleeping rooms, and communal bathrooms with private showers. Each building consists of 16 floors, 5 wings per floor, with 40 rooms per wing. That equates to 3,200 rooms per building.

    As part of his plans for the homeless mecca, Nason also envisions building underground tunnels by which deliveries can be made and city workers can commute to job sites in order to “minimize disruption of citizen life.” And when those living in the city are prepared to leave, they’ll be provided with job and life skills training along with counseling and therapy, Nason said although it was unclear if the tree will also be growing Magic Money Trees that fund all these lofty civic goals.

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    Proposed city map

    “It will be a city they’ll want to live in, a community they’ll want to be part of, and for those that desire, an opportunity to gain life skills to integrate back into society,” according to the Citizens Again website.

    Or maybe it won’t be, and the whole homeless city “vision” is just a giant online fundraising scam.

    Consider this woke, noble mission statement that Nason has proudly penned on his $50,000 gofundme campaign:

    A new and unique solution for every chronic homeless adult is coming.

    For decades, our government has been building small shelters all across America to house our chronic homeless. But at the current placement rate, it will take about 200 years to house them all.

    It’s time to think differently: instead of building 4,000 more shelters, Citizens Again will build 1 city, catering towards America’s entire chronic adult homeless population. It will cost billions less than current efforts; be built in about 11 years; and the homeless will want to live there.

    … and yet just a few lines below we read:

    Launching a crowdfunding campaign during the holidays is not ideal, but I have no choice. By not taking a salary for the last few years, I have exhausted all financial means to get this project launched, and I am now many months behind on my mortgage payment and all bills, with no cash or credit left. Every donation – and clicking the share button – truly matters for this project, myself, my family, and eventually for the people I’m trying to help

    How appropriate that one man’s noble “vision” for a homeless city is nothing more than a giant online pandhandling campaign, one which has so far raised $570 of the $50,000 goal to make Nason’s life more palatable.

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    Tyler Durden

    Sat, 12/21/2019 – 20:00

  • The Hidden Military Use Of 5G Technology
    The Hidden Military Use Of 5G Technology

    Submitted by Manlio Dinucci, of Global Research,

    At the London Summit, the 29 member countries of NATO agreed to “guarantee the security of our communications, including 5G”. Why is this fifth generation of mobile data transmission so important for NATO?

    While the earlier technologies were perfected to create ever more advanced smartphones, 5G is designed not only to improve their performance, but mainly to link digital systems which need enormous quantities of data in order to work automatically. The most important 5G applications will not be intended for civil use, but for the military domain.

    The possibilities offered by this new technology are explained by the Defense Applications of 5G Network Technology, published by the Defense Science Board, a federal committee which provides scientific advice for the Pentagon –

    “The emergence of 5G technology, now commercially available, offers the Department of Defense the opportunity to take advantage, at minimal cost, of the benefits of this system for its own operational requirements”.

    In other words, the 5G commercial network, built and activated by private companies, will be used by the US armed forces at a much lower expenditure than that necessary if the network were to be set up with an exclusively military goal. Military experts foresee that the 5G system will play an essential role for the use of hypersonic weapons – missiles, including those bearing nuclear warheads, which travel at a speed superior to Mach 5 (five times the speed of sound). In order to guide them on variable trajectories, changing direction in a fraction of a second to avoid interceptor missiles, it is necessary to gather, elaborate and transmit enormous quantities of data in a very short time. The same thing is necessary to activate defences in case of an attack with this type of weapon – since there is not enough time to take such decisions, the only possibility is to rely on 5G automatic systems.

    This new technology will also play a key role in the battle network. With the capability of simultaneously linking millions of transceivers within a defined area, it will enable military personnel – departments and individuals – to transmit to one another, almost in real time, maps, photos and other information about the operation under way.

    5G will also be extremely important for the secret services and special forces. It will enable control and espionnage systems which are far more efficient than those we use today. It will improve the lethality of killer drones and war robots by giving them the capacity of identifying, following and targeting people on the basis of facial recognition and other characteristics. The 5G network, as a weapon of high-tech capacity, will also become the target for cyber-attacks and war actions carried out with new generation weapons.

    As well as the United States, this technology is under development by China and other countries. The international disagreement concerning 5G is therefore not only commercial. The military implications of 5G are almost entirely ignored, because the critics of this technology, including many scientists, are concentrating their attention on its toxic affects for health and the environement, due to exposure to very low-frequency electromagnetic fields. This engagement is of course of the greatest importance, but must be linked to research on the military use of this  technology, financed indirectly by ordinary users. One of its greatest attractions, which favors the dissemination of 5G smartphones, will be the possibility of participating, by subscription, in war games of impressive realism in direct contact with players from all over the world. In this way, without realising it, the players will be financing the preparation for war – but this time it will be a real war.


    Tyler Durden

    Sat, 12/21/2019 – 19:30

  • Sorry Dems, US Employees Are The World's Happiest
    Sorry Dems, US Employees Are The World’s Happiest

    Despite the likes of Elizabeth Warren and AOC constantly complaining about the desperate state of American workers, and how miserable they are under the ‘monarchic’ rule of President Trump, Statista’s Maria Vultaggio points out that, according to a new poll by Mindspace, workers in the U.S. are the happiest in the world.

    Infographic: U.S. Employees Are The Happiest | Statista

    You will find more infographics at Statista

    More than 5,000 employees worldwide were questioned, with 1,000 people from the U.S. being surveyed. While assessing workplace culture, respondents were asked about wellness, overall happiness at work and engagement.

    Less happy, 73 percent of U.K. workers said they were happy in the workplace, falling at the bottom of the list, which surveyed five other countries, including the Netherlands, Poland, Romania, Germany and Israel.

    Happiness at work among Americans is seemingly congruent with job growth. In November, the unemployment rate dipped to 3.5 percent from 3.6 percent, CNBC reported on December 6. More, over 266,000 jobs were created, besting the prediction of 187,000, as originally projected by economists questioned by Dow Jones.


    Tyler Durden

    Sat, 12/21/2019 – 19:00

    Tags

  • 2019 – The Year Of Manufactured Hysteria
    2019 – The Year Of Manufactured Hysteria

    Authored (satirically) by CJ Hopkins via OffGuardian.org,

    Well, it looks like we’ve somehow managed to survive another year of diabolical Putin-Nazi attacks on democracy.

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    It was touch-and-go there for a while, especially coming down the home stretch, what with Jeremy Corbyn’s desperate attempt to overthrow the UK government, construct a British version of Auschwitz, and start rounding up and mass-murdering the Jews.

    That was certainly pretty scary… but then, the whole year was pretty scary.

    The horror began promptly in early January, when Rachel Maddow revealed that Putin was projecting words out of Trump’s mouth in real-time, i.e., literally using Trump’s head like a puppet, or one of those Mission Impossible masks. And that was just the tip of the iceberg, as, despite the best efforts of Integrity InitiativeBellingcat, and other such establishment psyops, Internet-censoring sites like NewsGuard, and an army of mass hysteria generators, Putin’s legion of Russian “influencers” was continuing to maliciously influence Americans, who were probably also still under attack by brain-eating Russian-Cubano crickets!

    While Resistance members were still wrapping their heads in anti-cricket aluminum foil, Putin (i.e., Russian Hitler) ordered Trump (i.e., Russian-asset Hitler) to launch a coup in Venezuela (i.e., Russian Hitler’s South American ally), probably to distract us from “Smirkboy Hitler” and his acne-faced gang of MAGA cap-wearing Catholic high-school Hitler Youth, who were trying to invade and Hitlerize the capital. Or maybe the coup was meant to distract us from the un-American activities of Bernie Sanders, who had also been deemed a Russian asset, or a devious “Kremlin-Trump operation,” or was working with Tulsi Gabbard to build an army of blood-drinking Hindu nationalists, genocidal Assadists, and American fascists to help the Iranians (and the Russians, of course, and presumably also Jeremy Corbyn) frontally assault the State of Israel and drive the Jews into the sea.

    As if all that wasn’t horrifying enough (and ridiculous and confusing enough), by early Spring there was mounting evidence that Putin had somehow gotten to Mueller, possibly with one of those FSB pee-tapes, and was sabotaging the “Russiagate” coup the Intelligence Community, the Democratic Party, the corporate media, and the rest of the Resistance had been methodically preparing since 2016. Liberals’ anuses began puckering and unpuckering as it gradually became clear that the “Mueller Report” was not going to prove that Donald Trump had colluded with Putin and Julian Assange to steal the presidency from Hillary Clinton and transform the United States of America into a genocidal Putin-Nazi Reich.

    Meanwhile, the anti-Semitism pandemic that had mysteriously erupted in 2016 (i.e., right around the time Trump won the nomination) was raging unchecked throughout the West. Jews in Great Britain were on the brink of panic because approximately 0.08 percent of Labour Party members were anti-Semitic, as opposed to the rest of the British public, who have never shown any signs of anti-Semitism (or any other kind of racism or bigotry), and are practically a nation of Shabbos goys. Clearly, Corbyn had turned the party into his personal neo-Nazi death cult and was planning to carry out a second Holocaust just as soon as he renationalized the British railways!

    And it wasn’t just the United Kingdom. According to corporate media virologists, idiopathic anti-Semitism was breaking out everywhere. In France, the “Yellow Vests” were also anti-Semites. In the U.S.A., Jews were facing “a perfect storm of anti-Semitism,” some of it stemming from the neo-fascist fringe (which has been a part of the American landscape forever, but which the corporate media has elevated into an international Nazi movement), but much of it whipped up by Ilhan Omar, who had apparently entered into a “Red-Brown” pact with Richard Spencer, or Gavin McInnes, or some other formerly insignificant idiot.

    Things got very confusing for a while, as Republicans united with Democrats to denounce Ilhan Omar as an anti-Semite (and possibly a full-fledged Islamic terrorist) and to condemn the existence of “hate,” or whatever. The corporate media, Facebook, and Twitter were suddenly swarming with hordes of angry anti-Semites accusing other anti-Semites of anti-Semitism. Meghan McCain couldn’t take it anymore, and she broke down on the Joy Behar Show and begged to be converted to Judaism, or Zionism, right there on the air. This unseemly display of anti-anti-Semitism was savagely skewered by Eli Valley, an “anti-Semitic” Jewish cartoonist, according to McCain and other morons.

    Then it happened … perhaps the loudest popcorn fart in political history. The Mueller Report was finally delivered. And just like that, Russiagate was over. After three long years of manufactured mass hysteria, corporate media propaganda, books, T-shirts, marches, etc., Robert Mueller had come up with squat. Zip. Zero. Nichts. Nada. No collusion. No pee-tape. No secret servers. No Russian contacts. Nothing. Zilch.

    Cognitive dissonance gripped the nation. There was beaucoup wailing and gnashing of teeth. Resistance members doubled their anti-depressant dosages and went into mourning. Shell-shocked liberals did their best to pretend they hadn’t been duped, again, by authoritative sources like The Washington PostThe New York TimesThe Guardian, CNN, MSNBC, et al., which had disseminated completely fabricated stories about secret meetings which never took placepower grid hackings that never happenedRussian servers that never existedimaginary Russian propaganda peddlers, and the list goes on, and on, and on … and hadn’t otherwise behaved like a bunch of mindless, shrieking neo-McCarthyites.

    Except that Russiagate wasn’t over. It immediately morphed into “Obstructiongate.” As the corporate media spooks explained, Mueller’s investigation of Trump was never about collusion with Russia. No, it was always about Trump obstructing the investigation of the collusion with Russia that the investigation was not about, and that everyone knew had never happened. In other words, Mueller’s investigation was launched in order to investigate the obstruction of his investigation.

    Or whatever…

    It didn’t really matter, because, by this time, Assange had been arrested for treason, or for jumping bail, or for smearing poo all over the walls of the Ecuadorean embassy, and The New York Times was reporting that a veritable “constellation” of social media accounts “linked to Russia and far-right groups” was disseminating extremist “disinformation,” and Putin had unleashed the Russian spywhale, and “Jews were not safe in Germany again,” because the Putin-Nazis had formed an alliance with the Iranian Nazis and the Syrian Nazis, who were backing the Palestinian Nazis that Antifa was fighting on behalf of Israel, and Jews were not safe in the UK either, because of Jeremy Corbyn, who Donald Trump (who, let’s all remember, is literally Hitler) was conspiring with a group of “unnamed Jewish leaders” to prevent from becoming prime minister, and Iran was conspiring with Hezbollah and al Qaeda to amass an arsenal of WMDs to launch at Israel and Saudi Arabia, and other peaceful Middle Eastern democracies, and Trump was finally going to go full-Hitler and declare martial law on the Fourth of July, and he was operating literal “concentration camps” where immigrants were being forced to drink out of toilets, which looked almost exactly the same as the “detention facilities” Obama had operated, except for … well, you know, the “fascism.”

    So who had time to worry about the corporate media colluding with an attempted Intelligence Community coup?

    Then, in August, right on cue, some racist whack job murdered a bunch of people, and so now, as if the mass hysteria hadn’t already been jacked up to the max, America had “a white nationalist terrorist problem,” or was in the throes of a “white nationalist terrorism crisis.” Trump was now officially our “Nihilist-in-Chief,” and “a white supremacist who inspires terrorism” and was basically no different than Anwar al-Awlaki. It was time to take some extraordinary measures along the lines of the Patriot Act, except focused on potential white supremacist terrorists, or anyone the Editorial Board of The New York Times might deem a “threat.”

    This sudden outbreak of “Trump-inspired terrorism” and the manufactured “fascism” hysteria that followed got the Resistance through end of the Summer and into the Autumn, which was always when the main event was scheduled to begin. See, these last three years have basically been a warm-up for what is about to happen … the impeachment, sure, but that’s only one part of it.

    If you thought the global capitalist ruling classes and the corporate media’s methodical crushing of Jeremy Corbyn was depressing to watch … well, prepare yourself for 2020.

    The Year of Manufactured Mass Hysteria was not just the Intelligence Community and the corporate media getting their kicks by whipping the public up into an endless series of baseless panics over imaginary Russians and Nazis. It was the final phase of cementing the official “Putin-Nazi” narrative in people’s minds.

    For the sake of anyone new to my columns, here’s how the Putin-Nazi narrative works …

    The Putin-Nazi narrative has two basic parts, or messages, which are constantly repeated:

    1. “Russia is attacking our democracy!; and

    2. “fascism is spreading like wildfire!,”

    …both of which parts are essentially fictions.

    This official Putin-Nazi narrative was introduced in the Summer of 2016, and replaced the official “War on Terrorism” narrative, which had run for fifteen years, and which was just as fictional.

    It has been methodically reinforced and repeated by the neoliberal establishment, the corporate media (and, more recently, the alternative media, and even by extremely intelligent anarchist anthropologists like David Graeber) for the last three years on a daily basis.

    At this point it has become our “reality,” just as the War on Terror became our “reality” … as the Cold War had previously been our “reality.”

    When I say that this narrative has become our “reality,” I mean that it is now virtually impossible to refute it in any mainstream forum without being dismissed as a “conspiracy theorist,” or an “anti-Semite,” or a “Russian asset.” It has become axiomatic and is taken for granted that we are experiencing an explosion of anti-Semitism, and fascism, and that Russia is out to get us (so axiomatic that someone like Graeber falls into the trap of defending Corbyn by relying on, and thus reifying, the very “fascism” hysteria that was used to destroy him).

    Never mind that the entire planet continues to be ruled by global capitalism, transnational corporations, and supra-governmental bodies, and that most of it is occupied by the U.S. military, NATO, and other GloboCap allies, and assorted corporate military contractors. Never mind that Russia isn’t “attacking” anyone, and that the “Nazis” haven’t taken over anything, and that no one is rounding up and murdering the Jews, or the Mexicans, or anyone else for that matter … because when have facts had anything to do with maintaining an official narrative?

    The answer, in case you were wondering, is “never.” We are, all of us, living in a fiction. A fiction authored by those in power to serve the interests of those in power. That’s what an official narrative is. It makes no difference whether we believe it or not. It functions as “reality” regardless. If you doubt that … well, just ask Jeremy Corbyn. Or watch as the Labour “anti-Semitism crisis” evaporates into thin air, as the War on Terror did in 2016, once it no longer served a useful purpose.

    As for 2020, I’m afraid the manufactured mass hysteria is only going to get worse. The global capitalist ruling classes are determined to snuff out this populist rebellion, and to make sure it never happens again, or at the very least not on this scale. Anyone who gets in the way is going to be branded an “anti-Semite,” or a “fascist,” or a “Russian asset.” Politicians who do not toe the line are going to have their political careers and personal reputations destroyed. (Did you notice how it took less than two days after the crushing of Jeremy Corbyn for the smearing of Sanders as an anti-Semite or “soft on anti-Semitism” to begin?)

    Mainstream journalists who dare to question the official Putin-Nazi narrative, even in the most respectful way, are going to come under increasing pressure to tone it down or suffer the consequences. Putin-Nazi paranoia will metastasize. Dissident websites will be deplatformed and demonitized. The Internet will be increasingly monitored for any and all forms of non-conformity. Dissent will be increasingly stigmatized. “Reality” will be increasingly policed. It’s all going to get extremely unpleasant, and that’s assuming that civil war doesn’t break out.

    And as for me, I’m just a political satirist with a barely respectable cult-sized following, so they’ll probably let me get away with continuing to cover the whole ugly show (as long as no one starts to take me seriously). I’ll try to find the humor in it, but honestly, just between you and me, what’s coming may not be all that funny.


    Tyler Durden

    Sat, 12/21/2019 – 18:30

    Tags

  • China Faces "Systemic Risk" From Debt Cross-Default "Chain Reaction", Top Central Bank Advisor Warns
    China Faces “Systemic Risk” From Debt Cross-Default “Chain Reaction”, Top Central Bank Advisor Warns

    Just days after China’s “moment of reckoning” in the dollar bond market arrived, when China was rocked by not only the biggest dollar bond default in two decades but also the first default by a massive state-owned commodities trader and Global 500 company, when Tianjin’s Tewoo Group announced the results of its “unprecedented” debt restructuring which saw a majority of its bondholders accepting heavy losses, and which according to rating agencies qualified as an event of default, last week a top adviser to China’s central bank warned of a possible “chain reaction” of defaults among the country’s thousands of local government financing vehicles after one of these entities nearly missed a payment this month.

    As the FT reported, Ma Jun, an external adviser to the People’s Bank of China, called on the government to introduce “intervention mechanisms” to contain the risk associated with LGFVs — special entities used in the country to fund billions of dollars of roads, bridges and other infrastructure.

    “Among the tens of thousands of platform-style institutions nationwide, if only a few publicly breach their contracts it may lead to a chain reaction,” Ma said in an interview published on Wednesday in the state-controlled Securities Times newspaper, adding that “measures should be created as soon as possible to prevent and resolve local hidden debt risks to effectively prevent the systemic risks of platform default and closure.”

    Ever since Beijing allowed local corporations to fail, China has seen a surge in corporate defaults in local currency and US dollar bonds as economic growth grinds to a 30-year low. As we reported recently, China is set to hit another dismal milestone in 2019 when a record amount of onshore bonds are set to default, confirming that something is indeed cracking in China’s financial system and testing the government’s ability to keep financial markets stable as the economy slows and companies struggle to cope with unprecedented levels of debt.

    After a brief lull in the third quarter, a burst of at least 20 new defaults since the start of November have sent the year’s total to 131 billion yuan ($18.7 billion), eclipsing the 121.9 billion yuan annual record in 2018.

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    While this still represents a tiny fraction of China’s $4.4 trillion onshore corporate bond market, the bad news is that the rapidly rising number is approaching a tipping point that could unleash a default cascade, and in the process fueling concerns of potential contagion as investors struggle to gauge which companies have Beijing’s support. As Bloomberg notes, policy makers have been walking a tightrope as they try to roll back the implicit guarantees that have long distorted Chinese debt markets, without dragging down an economy already weakened by the trade war and tepid global growth.

    Meanwhile, that “tipping point” could arrive much faster if a surge in government-linked defaults creates a crisis of confidence in China debt markets, which have long been protected by implicit state guarantees.

    Besides the record number of default in the local bond market and the recent groundbreaking default of the dollar bonds issued by the state-owned Tewoo, concern has grown in recent months over the vast accumulation of debt in LGFVs, especially after the near default of one such financing platform, Hohhot Economic and Technological Development Zone Investment Development Group, in the Chinese autonomous region of Inner Mongolia earlier this month.

    To avoid a cascading collapse in confidence among China’s creditors, Ma proposed one potential measure to allow for distressed LGFVs to be taken over by healthier one, very much similar to how a record number of China’s small and medium banks were “resolved” in 2019, despite at least two bank runs being triggered last month as previously reported.

    The comments by Ma, a former Deutsche Bank economist, come as concerns grow in China’s central government about rising systemic risk. At a high-level planning session in Beijing earlier this month, at which many of the next year’s economic challenges are discussed among senior officials, the avoidance of systemic risk was listed as a priority.

    “At the meeting, China’s top policymakers stressed stable macro policy with flexible fine-tuning, and pledged to prevent systematic financial risks,” Mizuho Securities economist Serena Zhou said in a report to investors this month, noting that “such a pledge came the same day as Hohhot Economic and Technological Development Zone Investment Development Group, a LGFV 100 per cent owned by the Hohhot local government, reportedly missed its bond payment.”

    And while the Hohhot group’s repayment deadline was eventually extended after the group failed to repay a 1 billion yuan ($142 million) privately placed bond earlier this month, the situation grabbed the attention of both creditors in other similar LGFV situations as well as analysts.

    As the FT notes, China’s LGFVs have been key drivers of economic growth in China since the mid-1990s, backing many of the local infrastructure projects that have boosted growth rates in recent years. But they are also closely connected to China’s shadow banking sector, making it difficult for central authorities to fully assess the risk connected to the groups.

    Meanwhile, adding to Beijing’s list of “default domino” default woes, in addition to rising fears about the stability of LGFVs, Bloomberg points out that the rising default tide is now impacting even one of China’s wealthiest provinces, namely Shandong, where six privately owned companies have defaulted on their debt or come close to doing so in the last three months. With 68.1 billion yuan ($9.7 billion) in outstanding debt among those six companies alone, “the distress in Shandong has rattled even seasoned investors.”

    Of course, the problem isn’t the defaults themselves, as many other provinces have seen more and worse – just last month we showed how cash-strapped Tianjin could soon be ground zero for a Chinese default quake in 2020. The far greater risk as Bloomberg notes, is the practice common among Shandong companies of guaranteeing each others’ debts. As firms don’t have to make public such “off balance sheet” liabilities, investors are left in the dark who’s on the hook and for how much. And with China’s once-strong industrial economy flagging, the murky ties between the province’s private companies threaten to drag them all down together.

    And with a sharp rise in defaults in both the local and dollar bond markets, and LGFVs teetering, it’s still unclear how the government will intervene in Shandong and elsewhere. Policy makers have been increasingly willing to let weak companies fail, but they’re also under pressure to keep the economy growing and the markets stable.

    As of now, Shandong’s city and local governments have stepped in with piecemeal relief. It’s uncertain whether the provincial government will do the same. As a result, the province’s firms risk entering a vicious cycle that “spreads solvency risks to the entire region, swamping the good credits along with the bad,” according to an October report from S&P Global Ratings.

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    While the default rate for bonds issued by non-state companies across China jumped to a record 4.5% in the first 10 months of 2019, Fitch Ratings warned in a Dec. 3 report that the figure might understate the true level of defaults given that some borrowers settle with bondholders privately rather than through clearing houses. The rate for state-owned companies was just 0.2% thanks to financial support from the government and better access to funding from banks, Fitch said, but even that is set to surge in 2020 following the closely-followed Tewoo bankruptcy.

    As Bloomberg notes, Shandong is one of China’s oldest economic centers, built first on trade, then agriculture, mining and oil drilling. Not long ago, the economy was still booming, credit was cheap and private firms were on a spending spree, restrained only by limited access to capital. In communist-run China, state-owned banks tend to favor state-owned companies for loans.

    So city governments encouraged the private sector to support itself. Cross-guarantees were one solution. They also concentrated the financial risks, says S&P analyst Cindy Huang.

    “Cross-guarantees tend to be clustered around certain cities and regions rather than across the province,” she said. “They’re often between private, unlisted companies from either the same city, same sector or where CEOs know one another.”

    So to loosely paraphrase Ernest Hemingway, “How did you go bankrupt? Two ways: Gradually and then suddenly… and when you do, you take down all your friends down with you.”

    That’s precisely what China has in store for bondholders of its massive $40 trillion financial sector in the coming years.

     


    Tyler Durden

    Sat, 12/21/2019 – 18:00

  • Gundlach On The Biggest Risk Facing Bond Investors And The Likely Next President
    Gundlach On The Biggest Risk Facing Bond Investors And The Likely Next President

    Authored by Robert Huebscher via AdvisorPerspectives.com,

    Fear among bond investors is focused on rising rates, but Jeffrey Gundlach says you should worry about something more sinister. In his webcast this week, he also offered his updated 2020 presidential election prediction.

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    Gundlach is the founder and chief investment officer of Los Angeles-based DoubleLine Capital. He spoke via a webcast with investors on December 10. His talk was titled, “A Rolling Loan Gathers No Moss,” and the focus was on his firm’s flagship mutual fund, the DoubleLine Total Return Fund (DBLTX). The slides from his presentation are at the bottom of this note.

    His talk’s title is a play on the phrase, “A rolling stone gathers no moss.” Gundlach said his title was originally coined by the hedge fund investor, Kyle Bass, to signify that investors will continue to be paid on the bonds they own as long as issuers can keep rolling over their debt.

    The credit worthiness of corporate debt is the number one risk that should concern bond investors. Gundlach issued his strongest warnings ever over the leverage taken on by U.S. corporations and the unrealistically favorable ratings that debt has been given.

    Based on Morgan Stanley research, he said that 39% of the bond universe should be rated “junk” and 10% of it rated single-B or lower.

    “There is a lot of potential for downgrades,” he said, which would be amplified if foreigners start selling the debt they own and the dollar weakens.

    “This is the biggest risk facing bond investors,” Gundlach said.

    As for U.S. politics, Gundlach said the field of Democratic nominees is in such disarray that Trump will likely win reelection. Readers may recall that Gundlach was among the few who predicted Trump’s victory in 2016. But Gundlach did not endorse Trump or any other candidate.

    I’ll come back his comment on bonds and politics, but let’s start with what he said about the September 17 incident when repo rates spiked to abnormally high levels.

    The great repo fiasco revisited

    Gundlach called that incident the “overnight funding dust up,” but that characterization belies his concerns. He said there is growing sentiment over whether “we will ever get back to whatever we think was normal,” specifically a global bond market free of negative interest rates. Excluding the U.S., 34% of the Barclay’s global aggregate index is negative-yielding debt. It was more than half earlier this year, he said.

    “It is clear that sustained negative rates have changed attitudes and behavior in Europe,” Gundlach said. “People are wondering whether bonds should be excluded from asset-allocation decisions,” because of their negative yields. On his recent trip to Europe, Gundlach told investors not to own them.

    Fed Chair Jay Powell understands that negative rates in the U.S. would be “devastating for the global financial system,” Gundlach said. “The system could not survive very long.”

    He said the repo crisis was blamed on a “timing need” to cover tax payments. But that need was known before September 17. He said the crisis was a “very bad sign,” showing lack of liquidity to accommodate the repo market.

    “This overnight repo thing is a harbinger of lack of liquidity,” Gundlach said.

    The addition of repo reserves to address the problem reversed 40% of the quantitative tightening (QT) the Fed hoped to achieve.

    The dollar and global “yield starvation”

    The U.S. is not planning on fighting its next economic downturn with negative interest rates, according to comments by Powell that Gundlach cited. But Gundlach criticized other Fed actions, such as the stopping of QT and starting a form of quantitative easing (QE), after promising four rate hikes at the beginning of the year. Gundlach said the Fed plans large-scale asset purchases in the event of a downturn, which could create a buying opportunity for investors prior to that move.

    In the next downturn, he said rates will be higher on the long end. He based that on the history of the three-month to 10-year yield spread. It steepened during QE1 when the Fed was buying bonds and stimulating the economy. In QE2 and QE3 the spread behaved the same way. During QT, he said, the yield curve flattened. With the repo facility expansion, he said the yield curve is steepening again.

    The dollar is putting a “significant top,” Gundlach said. Its last top was in January 2017. The dollar has been “incredibly stable” this year, he said. “I expect the dollar to weaken, since the Fed is easing.” It was strong because of “yield starvation” across the globe. Foreigners need to buy U.S. bonds because of their yields, but can’t hedge their exposure back to local currencies, because it will drive their effective yields back below zero. Those investors must buy U.S. bonds “naked,” he said, driving the dollar up.

    But emerging market debt has been a good investment this year, with a 12% overall return, despite a -70% return in Argentinean bonds. High-yield bonds are up 12.6% and investment-grade bonds have done even better, with a return of 14.2%. Treasury bonds returned 7.2%.

    Gundlach showed historical data that illustrated that dollar weakness has been correlated to current account and budget deficits. When the two combined grow as a percent of GDP, he said, the dollar weakens. “As deficits continue to widen,” he said, the dollar will get “in sync” and weaken further. But, he said, it may take economic weakness in the U.S. to initiate a strong move down in the dollar.

    Retuning to a common theme in his webcasts, he said U.S. debt outstanding has “exploded” since the 1940s. Corporate debt has been “put on turbochargers” and is accelerating faster than ever. He warned about similar fiscal deficit expansion at the federal level. There is no hope that the Democratic Party will produce a nominee who would curb deficits, he said.

    Gundlach thinks the deficit will go to 13% of GDP in the next recession. That is why, he said, there will be a greater supply of bonds and higher yields.

    In previous webcasts, Gundlach has said there was 65% chance of a recession by end of 2020. But now, based on consumer confidence and the leading economic indicators (LEIs), which are above zero (and heading up), the odds are 35% by the end of 2020. Those odds, he said, are the same as the consensus.

    Germany is running a current account surplus and rest of Europe has small deficits, which led Gundlach to wonder whether positive rates in the U.S. are a result of our need to issue debt to fund our deficits.

    He noted that Greek 10-year yields are lower than those in the U.S. In 2011, they were 20% and as recently as 2016 those yields were 12%.

    The problem in corporate bonds

    In the near term, he said the long end of the curve is “heading up” and the yield curve will steepen, until the Fed decides to implement large-scale asset purchases.

    The copper-gold ratio suggests that the 10-year should be approximately 2%, according to Gundlach. Based on nominal 10-year GDP and the German bund yield, an indicator he has found to be highly reliable, the projected 10-year yield is 1.76% to 1.9%, depending on the next release of nominal GDP.

    At the end of October, Powell said that he needs to see a significant spike in inflation before raising rates. “The Fed is basically telling you it wants sustained real inflation before it would consider raising rates,” Gundlach said. “Maybe they will cut rates, but they won’t raise them. I am surprised the long end of the market isn’t weaker.”

    Foreigners have been buying U.S. assets, he said, but that is unstable. If the economy weakens, those investors will want to “get out.” A lot of “potential selling” could happen, Gundlach said. Broker dealers outside the U.S. are not regulated with the same type of circuit breakers in the U.S. that prevent rapid declines, according to Gundlach.

    In the U.S. corporate bond market, dealer inventories are “nonexistent,” Gundlach said, despite continued issuance over the last 20 years. The quality has collapsed in the last 30 years. Bonds rated single-A and above were 68% of the market in 1998, but are now only 40%. The lowest tier of investment grade (BBB) has filled the gap, according to Gundlach.

    “That’s a real problem when the next recession comes,” Gundlach said. “Those bonds are close to junk status.”

    Corporate debt as a percent of GDP went from 40% to 47% over the last decade. That ratio historically collapses in recessions, Gundlach said. “When that happens it will be very difficult to get out in the middle of it.”

    He reminded listeners that in past recessions bond downgrades outnumbered upgrades by two-to-one.

    He said that corporate leverage, based on the ratio of investment-grade and high-yield (ex-commodities) bonds to corporate EBITDA, is “very high” on a historical basis. If one were to include commodities in that ratio, “it would be much worse,” he said.

    The political outlook

    Assessing the potential Democratic nominees, Gundlach said that Joe Biden has “no chance.” Nobody will vote for him who watched what he was doing, Gundlach said, particularly that he can’t formulate sentences.

    Elizabeth Warren has completely “petered out,” he said, citing data from the betting markets (predictit). Wall Street has completely discounted the possibility that she might win and implement policies that would threaten economic growth. Gundlach said the market “foresaw her demise and got it right.”

    Pete Buttigieg is “really impressive,” he said, and the best candidate on his feet since Ronald Reagan. But he is 37 years old and “looks 21, which can’t be overcome.”

    Bernie Sanders could emerge as a nominee if he gets Warren’s support, Gundlach said, but otherwise has a small chance of getting the nomination.

    He doesn’t see Michael Bloomberg winning either.

    The strongest candidate among the Democrats is Hillary Clinton, Gundlach said. She is at 10% in the betting markets, tied with Bloomberg. But he doubts she will enter the race.

    “The base case is that Trump will win,” Gundlach said, “because the Democrats are a mess.” He added that Trump will not be removed through the impeachment process.

    *  *  *


    Tyler Durden

    Sat, 12/21/2019 – 17:30

  • De Niro Fantasizes About Forcing Trump To Huff 'Bag Of Sh*t'
    De Niro Fantasizes About Forcing Trump To Huff ‘Bag Of Sh*t’

    Robert De Niro has a dream.

    While sitting down with producer Michael Moore for his new podcast Rumble with Michael Moore, the 76-year-old actor who’s currently battling a $12 million sexual harassment lawsuit by a longtime aide over a “hostile work environment” and “gratuitous unwanted physical contact,” says that while he was totally joking about punching Donald Trump in the face, he’d love to force the Commander-in-Chief to inhale a bag of weaponized poo, then broadcast Trump’s reaction to humiliate him.

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    I’d like to see a bag of shit right in his face. Hit him right in the face like that, and let the picture go all over the world,” said De Niro, who Trump has referred to as a “very low IQ individual.”

    He needs to be humiliated,” continued the actor. “He needs to be confronted and humiliated by whoever his opponent is… They have to stand up to him, they don’t have to do it in an obvious physical way, but they have to have the formidability to confront him and to put him in his place, because the people have to see that, to see him be humiliated.”

    Listen to the entire interview below: 


    Tyler Durden

    Sat, 12/21/2019 – 17:00

  • Study: Obesity Worsens Carbon Emissions
    Study: Obesity Worsens Carbon Emissions

    Authored by Irina Slav via OilPrice.com,

    The growing human population and an increasing average body size is interfering with attempts to arrest and reduce carbon emissions, a new study has suggested – with obesity the latest carbon emissions contributor to be uncovered.

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    According to the study, published in the journal of The Obesity Society, people with higher body mass produce more carbon dioxide, which is a product of metabolism for all oxygen-consuming living organisms.

    “Also,” the authors of the research said, “maintenance of greater body weights requires more food and drinks to be produced and transported to the consumers. Similarly, transportation of heavier people is associated with increased consumption of fossil fuels.”

    As a result, obesity was estimated to generate some 700 megatons of carbon dioxide annually, which is equal to about 1.6 percent of all anthropogenic carbon emissions.

    “This study makes it clear that we pay a steep price for making it difficult to access care for obesity. Not only does obesity affect the health of the individuals who have it, untreated obesity might also contribute to environmental issues,” said Ted Kyle, founder of health organization ConscienHealth, which focuses on tackling obesity as quoted by Eurekalert.

    Incidentally, ConscientHealth recently carried a report on a study published in the New England Journal of Medicine that warned obesity rates in the United States are rising. By the end of the 2020s, the research said, half of Americans would be obese, with severe obesity now seen in as much as 25 percent of people in the U.S.

    The authors have made a point of noting, however, that their findings should not serve as a reason to stigmatize obese people. As another commentator on the study said, physical exercise also leads to higher carbon emissions—physical exertion increases the metabolic rate—but nobody is shaming actively exercising people.

    Even so, obesity is a serious problem that needs, it seems, greater attention, and its effect on emissions could become additional motivation for both sufferers and researchers in this respect.

    “Our analysis suggests that, in addition to beneficial effects on morbidity, mortality, and healthcare costs, managing obesity can favorably affect the environment as well,” said Faidon Magkos, nutritional scientist at the University of Copenhagen and corresponding author of the study. “This has important implications for all those involved in the management of obesity.”


    Tyler Durden

    Sat, 12/21/2019 – 16:30

  • Why China's CFA Applicants Call The Test "Pleasant" As Pass Rates Rise Significantly
    Why China’s CFA Applicants Call The Test “Pleasant” As Pass Rates Rise Significantly

    Everybody on Wall Street knows that the CFA is one of the most grueling tests on the street. The CFA designation after a person’s name bestows upon them an assumption of a fluent understanding of economics, derivatives, complex valuations and ethics.

    The CFA Institute warns that each of the three levels of the exam takes about 300 hours of studying to pass, according to Bloomberg. Many who seek out the CFA designation spend years studying, taking and retaking the tests. 

    The test’s difficulty is why the CFA pass rate, despite ticking up slightly over the past few years, still remains below 50%. 

    But in recent years, a curious trend has appeared. Test takers from China have seen their pass rate rise significantly, despite the language barrier. Applicants from Asia, and especially China, have been “flooding” into the exams, overtaking interest from all other regions. 

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    One of the reasons for this is that many people in China consider the CFA a cool-down exercise after taking the Gaokao, China’s infamous college entrance exam. A work ethic bar had already been set, and many applicants did not mind spending “much more” than 300 hours studying for the CFA. 

    Ranger Yu, who described the CFA test as “pleasant” after studying 18 hour days for the Gaokao, says that “diligence is key” to getting ahead in China’s financial industry. He made time to study before and after work and spent weekends in the library or in all-day class at Golden Education, one of the country’s largest CFA prep schools. Many of these schools tout pass rates of 70% or 80%, far exceeding the average global pass rate of about 45%. 

    Golden Education charges about $1,500 for its program and it starts with a “crash course” on financial English. 

    Niu Jia, a senior lecturer for the school’s CFA program said: “We have the language barrier. But there are also other challenges for Chinese test-takers. The exam relies on accounting principles and valuation models that sometimes differ than those most often taught in universities.”

    The school assigns every customer an “inspector” to track their progress (and who even prepares a lunch on exam day). ZBG Education, another school that’s based on Guangzhou, offers 15 day camps with weekend classes and online courses. They claim a 70% pass rate and recommend 400 hours of studying, instead of the normal 300.

    Jason Pi, a senior lecturer at ZBG said: “Most of the CFA takers are top students in China. For most of my students, a few hundred hours is really not a big commitment. It’s nothing compared with the efforts you need to make to squeeze in a top university in China.”

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    Nick Pollard, Asia-Pacific managing director for the CFA institute, said: “We encourage candidates to use approved prep-providers, and we provide information about how to select and research a prep-provider to meet a candidate’s learning needs on our website. CFA Institute publishes average passing rates every year, and candidates should use this information as their best guide to what is generally achievable.”

    China’s Gaokao test, formerly called the National College Entrance Examination, has been the subject of documentaries on the suffering it causes its test takers, with some students suffering from mental breakdowns, or even suicide.

    The test is administered over several days and spans a “broad range of subjects”. A sample question from the test published in 2015 asked students about the currents and wind direction if they were sailing from Fujian province to Venice, and then to Mumbai. 

    Priscilla Wang, who works at a credit rating agency in Hong Kong, said: “I had no time for fun. I had to say ‘no’ to a lot of socializing opportunities. Even when I did relax a bit, my heart was always heavy. I thought I should be studying.”


    Tyler Durden

    Sat, 12/21/2019 – 16:00

    Tags

  • 2020: The Futility Of Predictions & Understanding The Risk
    2020: The Futility Of Predictions & Understanding The Risk

    Authored by Lance Roberts via RealInvestmentAdvice.com,

    “Predictions Are Difficult… Especially When They Are About The Future” – Niels Bohr

    We can’t predict the future. If we could, fortune tellers would win all of the lotteries. They don’t, we can’t, and we are not going to try to.

    However, we can analyze what has happened in the past, weed through the noise of the present, and discern the possible outcomes of the future. The biggest problem with Wall Street, both today and in the past, is the consistent disregard of the unexpected and random events they inevitability occur.

    There was once a study done of the accuracy of “predictions.” The study took predictions from a broad range of professions from psychics to weathermen. The study came to two conclusions. The first was that “weathermen” are the MOST accurate predictors of the future. The second conclusion was that the predictive ability was only accurate out to 3-days. Beyond 3-days, and the predictive ability was no better than a coin flip.

    When it comes to trying to predict what will happen in the financial markets over the next year, which is an annual event, it is essentially an act of futility. Given the markets are affected by a broad spectrum of inputs from economics, to geopolitics, monetary policy, rates, and financial events, any prediction should be taken with a very high degree of skepticism.

    So, with that said, here is how we are preparing for 2020.

    Odds Have It

    In our portfolio management practice, we begin with the basic assumption there is a 69% chance the market will finish the coming year at a level greater than where it started. That 69% probability comes from the fact that over the last 120-years, the market has (on a total real return basis) finished the year in positive territory 83 times, and negative only 37 times.

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    Therefore, from an “odds” perspective, markets are more likely to finish positive on any given year, than not. By starting our forecast with this basic assumption, it removes all the “guess work” of what has to go “right,” leaving us with only having to focus on the things which could potentially “go wrong.” 

    At the core of our portfolio management process is a risk management thesis. That philosophy was well defined by Robert Rubin, former Secretary of the Treasury, when he said;

    “As I think back over the years, I have been guided by four principles for decision making.  First, the only certainty is that there is no certainty.  Second, every decision, as a consequence, is a matter of weighing probabilities.  Third, despite uncertainty we must decide and we must act.  And lastly, we need to judge decisions not only on the results, but on how they were made.

    Most people are in denial about uncertainty. They assume they’re lucky, and that the unpredictable can be reliably forecast. This keeps business brisk for palm readers, psychics, and stockbrokers, but it’s a terrible way to deal with uncertainty. If there are no absolutes, then all decisions become matters of judging the probability of different outcomes, and the costs and benefits of each. Then, on that basis, you can make a good decision.”

    It should be obvious that an honest assessment of uncertainty leads to better decisions, but the benefits of Rubin’s approach, and mine, goes beyond that. For starters, although it may seem contradictory, embracing uncertainty reduces risk while denial increases it. Another benefit of acknowledged uncertainty is it keeps you honest.

    “A healthy respect for uncertainty and focus on probability drives you never to be satisfied with your conclusions.  It keeps you moving forward to seek out more information, to question conventional thinking and to continually refine your judgments and understanding that difference between certainty and likelihood can make all the difference.”

    The reality is that we can’t control outcomes. The most we can do is influence the probability of certain outcomes through the management of risks, and investing based on probabilities, rather than possibilities, which is important to capital preservation and investment success over time.

    So, as we head into 2020, here is a short-list of the things we are either currently hedging portfolios against, or will potentially need to:

    1. China fails to comply with the terms of the “Phase One” trade deal which reignites the trade war.

    2. Earnings growth fails to recover, and valuations finally become a concern for the markets.

    3. Corporate profits, which have been essentially flat since 2014, deteriorate due to slower economic growth both domestically and globally.

    4. Excessively high consumer confidence converges with low levels of CEO Confidence as employment begins to weaken.

    5. Interest rates rise which trips up heavily leveraged consumers and corporations.

    6. Investors become concerned about excess valuations.

    7. A credit-related event causes a market liquidity crunch. (Convent-Lite, Leveraged Loans, BBB-rated downgrades all pose a potential threat)

    8. The Fed’s “repo-crisis” continues to grow and turns out to be something much more significant.

    9. Similar to 2016, a shocking election result.

    While I am not going to address all of these concerns, I do want to touch a few that we feel are significant risks heading into the first half of the decade.

    Valuations

    While valuations are a terrible market timing device, they do impact long-term returns and investment outcomes. Currently, at 30x earnings, valuations are elevated, which suggests that the next decade of returns will be significantly lower than the last. Statistically, returns in the very low single digits should be expected.

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    However, it isn’t just PE ratios which are extended, but both Price-to-Sales and Enterprise Value to EBITDA (Earnings Before Interest Taxes Depreciation Amortization) are at or near all time highs.

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    Record highs in stocks, near-record lows in bond yields, and historically tight credit spreads present significant challenges for investors. Economic data has improved, but many fundamental economic gauges remain soft relative to pre-crisis averages, and are inconsistent with current asset price levels and valuations.

    Importantly, it is worth noting that negative returns tend to cluster during periods of declining valuations. These “clusters” of negative returns are what define “secular bear markets.” 

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    Most investors do not seem at all concerned as money continues to move into risky asset classes, a classic sign of a bubble. While a defensive posture seems prudent, the technical picture remains supportive of further gains. One should respect the momentum behind these moves for the foreseeable future, but be mindful that liquidity can evaporate quickly.

    The Debt Risk

    One of the common misconceptions in the market currently, is that the “subprime mortgage” issue was vastly larger than what we are talking about currently.

    Not by a long shot. 

    Combined, there is about $1.15 trillion in outstanding U.S. leveraged loans — a record that is double the level five years ago — and, as noted, these loans increasingly are being made with less protection for lenders and investors.

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    Just to put this into some context, the amount of sub-prime mortgages peaked slightly above $600 billion or about 50% less than the current leveraged loan market.

    Of course, that didn’t end so well.

    Currently, the same explosion in low-quality debt is happening in another corner of the US debt market as well.

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    As noted by John Mauldin:

    “In just the last 10 years, the triple-B bond market has exploded from $686 billion to $2.5 trillion—an all-time high. To put that in perspective, 50% of the investment-grade bond market now sits on the lowest rung of the quality ladder.

    And there’s a reason BBB-rated debt is so plentiful. Ultra-low interest rates have seduced companies to pile into the bond market and corporate debt has surged to heights not seen since the global financial crisis.”

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    The biggest risk currently is refinancing the debt as over the next 5-years, more than 50% of the debt is maturing. A weaker economy, recession risk, falling asset prices, or rising interest rates could well lock many corporations out of refinancing their share of this $5 trillion debt. Defaults will move significantly higher, and much of this debt will be downgraded to junk.

    This is a problem the Fed can not fix with more liquidity.

    Technically Troubling

    In last week’s Technically Speaking we discussed the more extreme deviations in the market. To wit:

    The first chart shows the monthly buy/sell signals stretched back to 1995 (25 Years). As shown, these monthly ‘buy’ and ‘sell’ indications are fairly rare over that stretch. What is interesting is that since 2015 there have been two-major sell signals, both of which were arrested by Central Bank interventions.”

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    With these “buy signals” in place, and the market pushing higher on conclusions of “trade deals” and the election of the conservative party in the U.K. (which clears the way for Brexit), the markets rallied further toward our target of 3300.

    In the short-term it is entirely feasible, particularly with the Federal Reserving pushing billions of dollars into the financial system currently, the bull market could easily eclipse our target of 3300. However, in the longer-term, virtually all of our primarily technical measures are stretched to levels normally seen near market tops rather than at the beginning of a new stretch of gains.

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    There are several measures used to justify current valuations, but they sound similar to those used in the dot-com Tech bubble. The relationships between valuation and fundamentals, on which cash flows are ultimately based, are grossly dislocated. Markets may well move higher, but to advocate a full allocation to equities under current circumstances ignores warnings of bubbles past.

    Stock market cap-to-GDP, price-to-sales, margin balances, cyclically-adjusted price-to-earnings ratios, and others argue convincingly that the stock market is either near historic valuations, or well through them. Owning well-selected, single-name companies because they are fundamentally cheap, not relatively cheap, makes sense. Otherwise, limiting general equity allocation exposures is prudent until reasonable opportunities return. We suggest setting stop losses, and/or options strategies to help limit downside risk and retain any additional upside.

    Sentiment Is Excessively Bullish

    This past summer everyone was convinced a recession was near, now there is no such concern and investors are literally as “bullish” as they can get.

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    From a contrarian point of view, this is a fairly obvious warning to reduce risk in the market. However, the “Fear Of Missing Out,” is overriding investor logic at the moment. The recent market surge, which started coincidentally with the Fed’s restart of “QE, Not QE,” is very reminiscent of the surge in asset prices we saw at the end of 1999 as the Fed flooded the system with liquidity in advance of the potential “Y2K” issues.

    As noted in our RIAPRO Daily Market Commentary:

    “Today’s ‘Chart of the Day’ shows the surge in the NASDAQ index, which occurred during the last few months of 1999. Most people attribute the massive gain to the feverish pitch in the dot com bubble. We believe the real culprit was the Fed which added substantial amounts of repo liquidity to the banking sector due to concerns of Y2K and the potential for mass computer malfunctioning. Those repo funds gravitated to the financial markets.

    For more, please read the following WSJ article from 1999- Federal Reserve Clears Loan Facility Linked To Y2K Computer Problems.

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    “The graph below shows the 10x surge in repo during late 1999 and its quick removal shortly after the New Year. Note the recent surge, on the right side of the graph, dwarfs the 1999 experience and that is before an expected $500 billion spike in repo financing over the next week or two.”

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    Unlike 1999, we have our doubts as to how quickly the graph normalizes, as the Fed continues to underestimate the scope of the growing overnight funding issues.

    To quote Yogi Berra “it’s deja vu, all over again.”

    Conclusion

    Statistically speaking, the odds suggest that the market could indeed be higher in 2020. However, there are numerous risks which could derail the markets which should not be dismissed.

    This is not a “bearish forecast.” It is just an assessment of trends, statistics, and probabilities given the current monetary, financial and economic backdrop.

    If we are wrong, and stocks do post gains in the coming year, being more conservative will only mean a small relative under-performance in your portfolio next year.

    If we are right, the preservation of capital will be far more beneficial. As we have stated previously, participating in the bull market over the last decade is only one-half of the job. The other half is keeping those gains during the second half of the full market cycle.

    One of my favorite quotes is by Howard Marks and is a principle that we live by in our little shop;

    “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.”

    As we enter into 2020 it may pay to be a little more cautious after such a large rise in the financial markets.

    Let me leave you with Bob Farrell’s 10 Rules:

    1. Markets tend to return to the mean over time

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

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

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

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

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

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

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

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

    10. Bull markets are more fun than bear markets

    Our job is managing risk to conserve principle and create absolute returns over time. What matters most to us is that we provide a disciplined management process suitable for our clients who seek long-term performance as measured by annualized and risk-adjusted returns, and conservation of investment principle.

    We wish you a prosperous 2020.


    Tyler Durden

    Sat, 12/21/2019 – 15:30

  • NYC'S Billionaire's Row Beats Out Hong Kong For Title Of World's Top Luxury Street
    NYC’S Billionaire’s Row Beats Out Hong Kong For Title Of World’s Top Luxury Street

    They call it Billionaire’s Row for a reason.

    This year, that reason was clear: 57th street in New York City saw more houses bought for $25 million or more than any other road in the world, according to Bloomberg.  

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    The area just south of Central Park beat out Mount Nicholson Road in Hong Kong’s Peak District for the title of most “ultra-prime” home sales. However, the Hong Kong area far trumped the average sale price on Billionaire’s Row, by a score of $81.8 million to New York’s $38.5 million. 

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    Meanwhile, New York is still dealing with a glut of super-luxury apartments that we have highlighted numerous times.

    Recall, in early September, we noted that 1 in 4 luxury NYC apartments remained unsold over the past 5 years. We hadbeen documenting this trend for a few years now, and according to a new report by the website StreetEasy that was cited by the New York Times a couple months ago, there were more than 16,200 condo units across 682 new buildings completed in New York City that have appeared since 2013, and 25% remain unsold, roughly 4,050, most of them in luxury buildings.

     

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    In a city where brokers are accustomed to selling condos months, and even years, before construction is finished, this sudden freeze has left many confused as to the cause.

    What’s worse, a growing share of condos sold in recent years have been quietly re-listed as rentals by the investors who bought them, the NYT reports. Just how reluctant are buyers to try their hand at flipping? Of the 12,133 new condos sold in NYC between January 2013 and August 2019, 38% have appeared on StreetEasy as rentals.

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    Regardless, developers continue to take advantage of new technology that allows “pencil-thin” towers to pop up on smaller lots. Areas with new luxury developments topped the global rankings as the wealthiest people in the world flocked to buildings with the most modern facilities.

    But the supply glut is still causing price concessions. Developers have increased the amount of concessions they are offering to entice buyers into the backlog of high priced inventory spread across the city. The glut in NYC echoes the same issue in London, where tax hikes and political uncertainty have stifled the real estate market. 

     


    Tyler Durden

    Sat, 12/21/2019 – 15:00

  • Should Research Analysts Start Learning To Code?
    Should Research Analysts Start Learning To Code?

    Submitted by Market Crumbs,

    “25 analysts started coverage of Uber. None of them think the stock is a sell.”

    “Just one day after a short seller slammed SmileDirectClub, all 10 banks on its IPO rate it a buy.”

    These are some examples of headlines from earlier this year, showcasing the groupthink among Wall Street analysts. Of course, both stocks have since plummeted. Uber has declined 36% from its high. SmileDirectClub has declined 59% from its high.

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    Given the lack of value this profession notoriously adds, this news may not cause everyone to feel sorry. Equity research headcount across 12 major banks has declined by 8% to approximately 3,500, according to research firm Coalition Development. Coalition Development’s analysis of every major bank shows this year is on track for the largest decline since they began studying the headcount data in 2012.

    As of December 31, 2012, equity research headcount at the 12 banks was approximately 4,400. As of June 30, 2019, headcount stood at approximately 3,500. That equates to roughly 1 in 5 equity research analysts losing their job over the period.

    This news isn’t completely surprising, though. Market Crumbs recently wrote at the end of 2018 New York City had 4% fewer banking, insurance, securities and real estate employees than in 2008. Not surprisingly, technology and regulations are causing the profession to shrink.

    Technology is eating away at the need for equity research analysts as passive investing continues to eat away at active investing’s market share. Passive investing is now pushing nearly 50% of all assets for U.S. stock-based funds—up from 25% a decade ago, according to Morning Star. Last December, when the market got slammed before Treasury Secretary Steve Mnuchin infamously called the PPT, investors pulled nearly $143 billion from active funds while passive funds pulled in nearly $60 billion.

    Regulations, specifically the European regulation MiFID, are also causing banks to cut back on equity research headcount. MiFID, which stands for Markets in Financial Instruments Directive, required research costs to be separated from trading fees. U.K regulators said earlier this year that buyside research spending has fallen between 20% and 30% since MiFID went into effect. While the U.S. Securities and Exchange Commission hasn’t implemented a similar rule in the U.S., some banks are paying for research costs out of pocket instead of pushing the cost on to clients.

    About half of U.S. fund managers still bundle fees, but some larger firms are beginning to unbundle them. U.S. equities commissions have declined approximately 42% since 2015, according to a Tabb Group. With banks and managers focused on winning client’s assets, they have to compete on price and equity research headcount appears to be an expense they’re not willing to pay for as they have in the past.

    With the market having evolved into an algo-driven, low volume melt-up on the heels of fake trade war news, buybacks and an accommodative Fed, the need for equity research analysts is likely to only diminish further as time goes on. After all, a recent guest on CNBC explained the current environment best, saying markets have “nothing to do with fundamentals anymore.”


    Tyler Durden

    Sat, 12/21/2019 – 14:30

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Today’s News 21st December 2019

  • The Economic Consequences Of The Peace: 100 Years Later
    The Economic Consequences Of The Peace: 100 Years Later

    Authored by Edward Fuller via The Mises Institute,

    Introduction

    This week is the hundred-year anniversary of The Economic Consequences of the Peace by John Maynard Keynes. This work has been described as “one of the most influential books of the twentieth century.” It made Keynes the most famous economist in the world, and it was the basis of his massive influence on twentieth-century economics. Many of Keynes’s harshest critics view it as his one good book. However, the case can be made that The Economic Consequences of the Peace is his worst book. On its centenary, it is proper to reassess the work and its influence.

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    Britain’s War-Debt Problem

    To truly understand The Economic Consequences of the Peace, it must be realized that the First World War devastated Britain financially. Britain was the world’s financial superpower prior to 1914, but the war changed this. During the war, Britain assisted her European allies by making massive war loans. At the end of the war, France, Russia, Italy, Belgium, and Serbia were deeply indebted to Britain.

    Given the scope of the Great War, however, Britain did not have the financial capacity to finance the Allied war effort by herself. Consequently, the British became totally dependent on the United States for financing. In effect, the British borrowed from the United States and re-lent the money to her riskier allies. According to Keynes, “Almost the whole of England’s indebtedness to the United States was incurred, not on her own account, but to enable her to assist the rest of her Allies.”

    At the end of the war, the Allies were heavily indebted to Britain, while Britain was heavily indebted to the United Stated. As Keynes wrote, “the war ended with everyone owing everyone else immense sums of money. … The Allies owe a large sum to Great Britain; and Great Britain owes a large sum to the United States.” In The Economic Consequences of the Peace, Keynes estimated the net debt position of the Allies using official Treasury figures.

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    As the table above shows, the British were in a perilous financial position at the close of the war. Britain had to repay the United States, but the shattered Allies could not repay Britain. This debt-vice is the key to The Economic Consequences of the Peace.

    Keynes’s defenders neglect a vital question: who was responsible for orchestrating Britain’s war-debt problem? The answer is Keynes. He started work at the British Treasury in January 1915, and he was transferred to the First Finance Division in May of that year. In May 1917, he became chief of the A Division, newly created to manage all of Britain’s inter-allied lending and borrowing. By the end of the war, he was the third-highest-ranking official in the British Treasury. 

    Keynes boasted, “I was in the Treasury throughout the war and all the money we lent or borrowed passed through my hands.” He reported, “I happen to have been during the war the Treasury official most directly concerned with the borrowing and the spending of the money.”  Roy Harrod, an unabashed defender of Keynes, admits: “He occupied the key position at what was without challenge the centre of the inter-allied economic effort, he thought out the policy, and in effect bore the ultimate responsibility for the decisions.”

    Keynes was the British Treasury’s chief representative at the Paris Peace Conference of 1919. His overarching goal at the conference was to solve the war-debt problem he had masterminded. As will become clear, his main solution was war-debt cancellation. On November 29, 1918, he submitted an official memorandum called “The Treatment of Inter-Ally Debt Arising out of the War.” Unfortunately, this crucial document was not published in Keynes’s collected writings. The document is reproduced in the appendix below. We read,

    At the opening of the Peace Conference, this country should propose to the United States that all debts incurred between the Governments of the Associated countries prior to January 1st, 1919, should be cancelled. … Failing such a settlement the war will end with a net-work of heavy tributes payable from one Ally to another. A certain amount of indemnity will be recoverable from the enemy, but this is likely to be of a less amount than the indemnities which the Allies will be paying to one another. This is an improper conclusion to such a war as the present one. … Indeed, failing a readjustment, the financial sacrifice of the United States will have been disproportionately small, and Germany will be the only Power free from the financial grip of the U.S.

    Keynes was obsessed with war-debt cancellation at the conference. His American counterpart, Thomas W. Lamont, reported: “The question [of cancelling war-debts] in one form or another constantly arose. It was always ‘stepped on’ by the American delegates.” Naturally, the Americans violently opposed war-debt cancellation, for it would shift the financial burden of the war from Europe to America. Austen Chamberlain, the Chancellor of the Exchequer, wrote to Keynes:

    No doubt it would be a very good thing if the United States would propose or support a universal cancellation of debt, but my information from Paris is that they show no inclination to do anything of the kind. … To propose the mere cancellation of debt looks as if we were trying to shift the whole burden on to America.

    Keynes left Paris in June 1919 and published The Economic Consequences of the Peace in December. Again, his main policy was war-debt cancellation. He described the “Settlement of inter-Ally indebtedness” as “an indispensable preliminary.” He wrote,

    If all the above Inter-Ally indebtedness were mutually forgiven, the net result on paper (i.e. assuming all the loans to be good) would be a surrender by the United States of about $10,000,000,000 and by the United Kingdom of about $4,500,000,000. France would gain about $3,500,000,000 and Italy about $4,000,000,000. But these figures overstate the loss of the United Kingdom and understate the gain to France. … [T]he relief in anxiety which such a liquidation of the position would carry with it would be very great. It is from the United States, therefore, that the proposal asks generosity.

    Keynes was desperate to cancel war debts throughout the 1920s and early 1930s. However, his cancellation scheme was doomed to repeated rejection. The Americans were afraid that the massive losses from cancellation would devastate the US financial system. But Keynes was incapable of seeing the problem from the American perspective. To his insular mind, anything that was good for Britain must be good for the world.  

    German Reparations

    According to the conventional wisdom, Keynes was a great opponent of German reparations. In reality, he was the single most important reparations planner at the Paris Peace Conference.

    Before the conference, Keynes split the reparations liability into two parts: (1) an upfront payment and (2) a series of long-term payments made over a period of decades. First, Keynes demanded a large upfront reparations payment from the Germans. His main concern was to obtain Germany’s gold reserves, merchant marine, and imperial possessions. He wrote,

    Germany is liable up to the full extent of the injury she has caused to the Allied and Associated Nations. … The Allied and Associated Governments demand accordingly that Germany render payment for the injury which she has caused up to the full limit of her capacity. … Germany shall hand over immediately (a) the whole of her mercantile marine, (b) the whole of her gold and silver coin and bullion in the Reichsbank and all other banks; (c) the whole of the foreign property of her nationals situated outside Germany, including all foreign securities, foreign properties and business and concessions.

    On top of the large upfront payment, Keynes recommended imposing a long-term liability. In fact, the evidence shows that Keynes originated the idea of imposing long-term reparations on Germany. He first recommended a long-term liability in a joint memorandum with William J. Ashley dated January 2, 1916 and entitled “Memorandum on the Effect of an Indemnity.” Lloyd George confirmed, “Professor Ashley and Mr. Keynes are thus the joint authors of the long-term indemnity which was incorporated in the Treaty.”

    Keynes conceived the plan to impose long-term reparations on the Germans, and he started estimating Germany’s capacity to pay long before the end of the war. But at the conference, he concluded that it was impossible to estimate Germany’s capacity to pay each year. His solution was to leave the amount of reparations unfixed in the treaty. Instead, he called for the establishment of a committee to set the annual reparations bill year by year. In short, it was Keynes’s disastrous idea to not fix the amount of reparations in the treaty.

    In the armistice, the Germans agreed to restore the territory they had invaded. Since the entire war on the Western front was fought in France and Belgium, the armistice gave these nations a legal basis for imposing reparations on Germany. By contrast, the Armistice did not entitle Britain to German reparations. Thus, at the conference, the British contrived the notorious war-guilt clause, Article 231 of the Treaty of Versailles, to provide a legal basis for British claims to reparations. Along with John Foster Dulles, Keynes was the author of Article 231.

    As noted, Keynes recommended war-debt cancellation in The Economic Consequences of the Peace. This would solve the war-debt problem. But he also advocated imposing short- and long-term reparations on the Germans. This means the reparations he advocated in The Economic Consequences of the Peace were not designed to alleviate Europe’s financial problems. Instead, the reparations were punitive: 

    (1) The amount of payment to be made by Germany in respect of Reparation and the costs of the Armies of Occupation might be fixed at $10,000,000,000

    (2) The surrender of merchant ships … war material … State property … public debt, and Germany’s claims against her former Allies, should be reckoned as worth the lump sum of $2,500,000,000

    (3) The balance of $7,500,000,000 should not carry interest pending its repayment, and should be paid by Germany in thirty annual installments of $250,000,000, beginning in 1923.

    The Transfer Problem

    Clearly, it is absurd to claim that Keynes opposed German reparations; he was the single most important architect of the reparations settlement. Beyond that, he continued advocating German reparations after the treaty. So why is he so commonly considered an opponent of German reparations? The answer is the transfer problem.

    Advocates of the transfer problem argued that Germany’s annual reparations payments would stimulate her exports. In this view, Germany could only raise the money needed to pay reparations by exporting her goods abroad. But Britain was Germany’s chief competitor in export markets. To those who believed in the transfer problem, a large annual reparations liability posed a threat to British export industries. Keynes wrote,

    Two eventualities have to be sharply distinguished; the first, in which the usual course of trade is not gravely disturbed by the payment. … The second, in which the amount involved is so large that it cannot be paid without a drastic disturbance of the course of trade and a far-reaching stimulation of the exports of the paying country. … An indemnity high enough to absorb the whole of Germany’s normal surplus, for investment abroad and for building up foreign business and connections must certainly be advantageous to this country and correspondingly injurious to the enemy.

    Keynes’s belief in the transfer problem led him to play a balancing act. On one hand, he wanted the British to receive enough from Germany each year to cover Britain’s annual debt payments to the United States. On the other, he did not want the annual payments to be too large, for this would to stimulate German exports at Britain’s expense. To Keynes, the best strategy was

    to obtain all the property which can be transferred immediately or over a period of three years, levying this contribution as ruthlessly and completely, so as to ruin entirely for many years to come Germany’s overseas development and her international credit; but having done this … to ask only a small tribute over a term of years.

    He wrote later,

    We can secure from her moderate [annual] payments, on the sort of scale, for example, on which she might have been building up new foreign investments, without stimulating her exports as a whole to a greater activity than they would enjoy otherwise. This is the correct course for Great Britain from the standpoint of her own self-interest only.

    Superficially, it looks like Keynes recommended modest annual payments out of humanitarian concern for the Germans. But once the transfer problem is considered, it is clear that he recommended modest payments to stifle Germany’s international development. Paradoxically, for a believer in the transfer problem, large annual reparations payments would have helped Germany recover from the war. This was not Keynes’s goal, however. Instead, his goal was to prevent Germany from reemerging as an economic rival to the British Empire. He wrote,

    We, who are imperialists … think that British rule brings with it an increase of justice, liberty, and prosperity; and we administer our Empire not with a view to our pecuniary aggrandizement. … Germany’s aims are not such. … [S]he looks rather to definite material gains. … [W]e distrust her diplomacy, we distrust her international honesty, we resent her calumnious attitude towards us. She envies our possessions; she would observe no scruple if there was any prospect of depriving us of them. She considers us her natural antagonist. She fears the preponderance of the Anglo Saxon race.

    The transfer problem was the economic theory underlying all of Keynes’s work on reparations before, during, and after the Paris Peace Conference. But Keynes’s theory of the transfer problem is a fallacy; the transfer problem does not exist. Even Robert Skidelsky, a zealous Keynesian, confesses, “If we stick to the pure theory of the matter, Keynes was wrong.” Ludwig von Mises explains,

    An excess of exports is not a prerequisite for the payment of reparations. The causation, rather, is the other way round. The fact that a nation makes such payments has the tendency to create such an excess of exports. There is no such thing as a “transfer” problem. If the German Government collects the amount needed for the payments (in Reichsmarks) by taxing its citizens, every German taxpayer must correspondingly reduce his consumption either of German or of imported products. In the second case the amount of foreign exchange which otherwise would have been used for the purchase of these imported goods becomes available. In the first case the prices of domestic products drop, and this tends to increase exports and thereby the amount of foreign exchange available. Thus collecting at home the amount of Reichsmarks required for the payment automatically provides the quantity of foreign exchange needed for the transfer. … The inflow of Germany’s payments necessarily rendered the receiving countries’ balance of trade “unfavorable.” Their imports exceeded their exports because they collected the reparations. From the viewpoint of mercantilist fallacies this effect seemed alarming.

    The transfer problem is the economic theory on which The Economic Consequences of the Peace is based. However, Keynes’s mercantilist theory of the transfer problem is incorrect. In the end, The Economic Consequences of the Peace was rooted in a tissue of mercantilist fallacies.   

    Reassessing the Mythology

    According to the conventional wisdom, Keynes valiantly resigned from the British delegation in protest against the severe reparations imposed on the German underdogs. As Skidelsky claims, “He resigned in June 1919, just before the Versailles peace treaty was signed, in protest against the allied determination to extract huge reparations from Germany.”27 This rosy interpretation is pure mythology.

    Keynes’s significant role in planning for reparations dispels any notion that he resigned over reparations. He recommended imposing a large upfront payment on the Germans; he originated the idea of a long-term indemnity; it was his idea to leave the amount of reparations unfixed in the treaty; and he drafted Article 231. Keynes did not oppose the reparations settlement; he was its chief architect.

    More fundamentally, those who assert that Keynes resigned out of concern for Germany seriously misconstrue the man. He was a die-hard British “nationalist.” His overriding concern was to protect and advance the British Empire’s position in the postwar world. It is absurd to argue that Keynes resigned over German problems. Surely, British problems led to his resignation.

    So why did Keynes resign? He devised the system of inter-allied war loans, and he understood that his system had passed financial hegemony from Britain to the United States. He wrote in October 1916, “The American executive and the American public will be in a position to dictate to this country.” By 1917, President Wilson recognized that Britain was “financially in our hands” and “when the war is over we can force them to our way of thinking.” Keynes acknowledged that Britain was in the “financial grip of the U.S.” just before the conference:   

    The sum we ourselves owe to the United States must undoubtedly be regarded as very real debts. … Such a burden will cripple our foreign development in other parts of the world, and will lay us open to future pressure by the United States of a most objectionable description.

    Keynes went to the Paris Peace Conference to reclaim Britain’s financial supremacy from the United States. Of course, this meant the Americans were his great opponents at the conference. As Skidelsky admits, “What has not been sufficiently appreciated is the extent to which Keynes was anti-American. … He wanted to keep America out of Europe”. The Paris Peace Conference was just the beginning of Keynes’s failed lifelong crusade to win back Britain’s financial hegemony.

    Keynes played the key role in creating Britain’s “difficult and embarrassing” war-debt problem. He went to the conference to solve the problem, but he failed. He resigned in protest against American opposition to war-debt cancellation. In other words, Keynes resigned because he could not solve the war-debt problem he had masterminded.

    The Consequences of Keynes

    The economic consequences of Keynes’s war-debt problem were significant. Britain’s war-debt plagued her after the war and, in the early 1930s, Keynes advised the British government to default. The government obliged after 1933. The result was the Johnson Act of 1934, which prohibited the United States from making loans to any country in default.

    When the Second World War broke out, the Johnson Act prohibited the United States from assisting Britain with war loans. Consequently, Britain became totally dependent on the Lend-Lease Program, and “During World War II, Keynes, from the British Treasury, spearheaded the United Kingdom’s lend-lease financing.” Throughout the war, the United States used the Lend-Lease Program to dismantle the British Empire. Given his central role in the war-debt problem and Lend-Lease, Keynes deserves much credit for the demise of his beloved empire.

    Also, the war-debt problem had significant economic consequences internationally. It was a major factor in the trade and currency wars of the 1920s and 1930s. This economic warfare contributed to the Great Depression of the 1930s, and it played a neglected role in the outbreak of Second World War. Although many of today’s financial problems are traced to the 1930s and 1940s, they have their ultimate origins in the financial pandemonium created by the First War World. And Keynes was at the center of the chaos.

    Like the economic consequences, the political consequences of Keynes were disastrous. As Thomas Lamont put it, Keynes “paved the way for Hitler’s rise.”

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    Of course, Keynes did not make Hitler inevitable. But he played a significant role in creating the political conditions that made Hitler possible.

    German resentment of the Treaty of Versailles was the major cause of Hitler’s rise to power. It was Keynes’s idea to not fix the amount of reparations in the treaty. This gave the Germans an unlimited theoretical liability, and they felt condemned to indefinite slave labor. Keynes’s idea of a “blank check” enraged the Germans, and it was a serious source of German opposition to the treaty.

    More importantly, Keynes was a lead author of Article 231 of the treaty, and this clause became the focus of German opposition to the treaty. Article 231 was one of Hitler’s most important propaganda weapons during his rise to power. Given his central role in drafting Article 231, Keynes certainly contributed to the rise of Hitler.

    The Economic Consequences of the Peace only incited the Germans after the war. In hindsight, his attack on the treaty was fatally flawed. Regardless, The Economic Consequences of the Peace greatly amplified German opposition to the treaty. By stimulating German opposition to the treaty, Keynes helped launch Hitler into power.

    The Economic Consequences of the Peace is not Keynes’s one good book, his saving grace. Rather, it must be considered his most tragic book. No doubt, Keynes knew that he helped set the stage for Hitler. In 1933, he admitted his remorse to the German-born Cambridge historian Elizabeth Wiskemann. Keynes regretted The Economic Consequences of the Peace, and so should we.

    On the morning after the German election, I travelled to Basle; it was an exquisite liberation to reach Switzerland. It must have been only a little later that I met Maynard Keynes at some gathering in London. I do wish you had not written that book, I found myself saying (meaning The Economic Consequences, which the Germans never ceased to quote) and then longed for the ground to swallow me up. But he said, simply and gently, So do I.


    Tyler Durden

    Fri, 12/20/2019 – 23:45

  • China's Diplomatic Ties Surge In 2019, Overtaking US
    China's Diplomatic Ties Surge In 2019, Overtaking US

    With a growing number of nations in the world of the belief that China is now the world’s foremost superpower, America’s hegemonic hold on the world is slipping further as Statista’s Katharina Buchholz details that in 2019, China was the country with the most diplomatic missions, overtaking the U.S..

    Infographic: China Has Most Diplomatic Ties, Overtaking U.S. | Statista

    You will find more infographics at Statista

    China can now count 276 posts abroad, including 169 embassies, compared with the U.S.’ 273 foreign diplomatic posts, according to the Lowy Institute.

    China has built a far-reaching network of diplomatic missions with some located in isolated places like pacific island nations Vanuatu, Micronesia and French Polynesia – the Chinese mission being the only one in the French overseas territory. Other diplomatic posts have recently opened in Burkina Faso, the Dominican Republic and El Salvador – all places China wanted to strengthen its ties with because they were doing a lot of business with Taiwan, according to the BBC.

    As recently as 2016, China had been in rank 3, with the U.S. and France ahead. In 2019, there were a total of 3,944 embassies, 1,588 consulates and 414 other diplomatic posts in the world, bringing the total count close to 6,000.


    Tyler Durden

    Fri, 12/20/2019 – 23:25

  • The Real Lesson Of Afghanistan Is That Regime-Change Does Not Work
    The Real Lesson Of Afghanistan Is That Regime-Change Does Not Work

    Authored by Medea Benjamin and Nicolas Davies via Counterpunch.org,

    The trove of U.S. “Lessons Learned” documents on Afghanistan published by the Washington Post portrays, in excruciating detail, the anatomy of a failed policy, scandalously hidden from the public for 18 years. The “Lessons Learned” papers, however, are based on the premise that the U.S. and its allies will keep intervening militarily in other countries, and that they must therefore learn the lessons of Afghanistan to avoid making the same mistakes in future military occupations.

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    This premise misses the obvious lesson that Washington insiders refuse to learn: the underlying fault is not in how the U.S. tries and fails to reconstruct societies destroyed by its “regime changes,” but in the fundamental illegitimacy of regime change itself. As former Nuremberg prosecutor Ben Ferencz told NPR just eight days after 9/11, “It is never a legitimate response to punish people who are not responsible for the wrong done. If you simply retaliate en masse by bombing Afghanistan, let us say, or the Taliban, you will kill many people who don’t approve of what has happened.”

    The “Lessons Learned” documents reveal the persistent efforts of three administrations to hide their colossal failures behind a wall of propaganda in order to avoid admitting defeat and to keep “muddling along,” as General McChrystal has described it. In Afghanistan, muddling along has meant dropping over 80,000 bombs and missiles, nearly all on people who had nothing to do with the crimes of September 11th, exactly as Ben Ferencz predicted.

    How many people have been killed in Afghanistan is contested and essentially unknown. The UN has published minimum confirmed numbers of civilians killed since 2007, but as Fiona Frazer, the UN human rights chief in Kabul, admitted to the BBC in August 2019, “more civilians are killed or injured in Afghanistan due to armed conflict than anywhere else on Earth” (but) due to rigorous methods of verification, the published figures almost certainly do not reflect the true scale of harm.” The UN only counts civilian deaths in incidents where it has completed human rights investigations, and it has little or no access to the remote Taliban-held areas where most U.S. air strikes and “kill or capture” raids take place. So, as Fiona Frazer suggested, the UN’s published figures can be only a fraction of the true numbers of people killed.

    It shouldn’t take 18 years for U.S. officials to publicly admit that there is no military solution to a murderous and unwinnable war for which the U.S. is politically and legally responsible. But the debacle in Afghanistan is only one case in a fundamentally flawed U.S. policy with worldwide consequences. New quasi-governments installed by U.S. “regime changes” in country after country have proven more corrupt, less legitimate and less able to control their nation’s territory than the ones the U.S. has destroyed, leaving their people mired in endless violence and chaos that no form of continued U.S. occupation can repair.

    “Regime change” is a process of coercion designed to impose the political will of the U.S. government on countries around the world, violating their sovereignty and self-determination with an arsenal of military, economic and political weapons:

    1. Delegitimization. The first step in targeting a country for regime change is to delegitimize its existing government in the eyes of U.S. and allied publics, with targeted propaganda or “information warfare” to demonize its president or prime minister. Painting foreign leaders as villains in a personalized Manichean drama psychologically prepares the American public for U.S. coercion to remove them from power. One lesson for those of us opposed to regime change operations is that we must challenge these campaigns at this first stage if we want to prevent their escalation. For example, Russia and China today both have strong defenses, including nuclear weapons, making a U.S. war with either of them predictably catastrophic, or even suicidal. So why is the U.S. stoking a new Cold War against them? Is the military-industrial complex threatening us with extinction only to justify record military budgets? Why is serious diplomacy to negotiate peaceful coexistence and disarmament “off the table,” when it should be an existential priority?

    2. Sanctions. Using economic sanctions as a tool to force political change in other countries is deadly and illegal. Sanctions kill people by denying them food, medicine and other basic necessities. UN sanctions killed hundreds of thousands of Iraqis in the 1990s. Today, unilateral U.S. sanctions are killing tens of thousands in Iran and Venezuela. This is illegal under international law, and has been vigorously condemned by UN special rapporteurs. Professor Robert Pape’s research shows that economic sanctions have only achieved political change in 4% of cases. So their main purpose in U.S. policy is to fuel deadly economic and humanitarian crises that can then serve as pretexts for other forms of U.S. intervention.

    3. Coups and proxy wars. Coups and proxy wars have long been the weapons of choice when U.S. officials want to overthrow foreign governments. Recent U.S.-backed coups in Honduras, Ukraine and now Bolivia have removed elected governments and installed right-wing U.S.-backed regimes. The U.S. has relied more heavily on coups and proxy wars in the wake of its military disasters in Korea, Vietnam, and now Afghanistan and Iraq, to attempt regime change without the political liability of heavy U.S. military casualties. Under Obama’s doctrine of covert and proxy war, the U.S. worked with Qatari ground forces in Libya, Al Qaeda-linked groups in Syria and militaryleaders in Honduras. But outsourcing regime change to local coup leaders and proxy forces adds even more uncertainty to the outcome, making proxy wars like the one in Syria predictably bloody, chaotic and intractable.

    4. Bombing campaigns. U.S. bombing campaigns minimize U.S. casualties but wreak untold and uncounted death and destruction on both enemies and innocents. Like “regime change,” “precision weapons” is a euphemism designed to obscure the horror of war. Rob Hewson, the editor of the arms trade journal Jane’s Air-Launched Weapons, told the AP during the “Shock and Awe” bombing of Iraq in 2003 that the accuracy of U.S. precision weapons was only 75-80%, meaning that thousands of bombs and missiles predictably missed their targets and killed random civilians. As Rob Hewson said. “… you can’t drop bombs and not kill people. There’s a real dichotomy in all of this.” After Mosul and Raqqa were destroyed in the U.S.-led anti-IS campaign that has dropped over 100,000 bombs and missiles on Iraq and Syria since 2014, journalist Patrick Cockburn described Raqqa as “bombed to oblivion,” and revealed that Iraqi Kurdish intelligence reports had counted at least 40,000 civilians killed in Mosul.

    5. Invasion and hostile military occupation. The infamous “last resort” of full-scale war is predicated on the idea that, if nothing else works, the U.S.’s trillion-dollar military can surely get the job done. This dangerous presumption led the U.S. into military quagmires in Iraq and Afghanistan despite its previous “lessons learned” in Vietnam, underlining the central unlearned lesson that war itself is a catastrophe. In Iraq, journalist Nir Rosen described the U.S. occupation force as “lost in Iraq…unable to wield any power except on the immediate street corner where it’s located.” Today, about 6,000 U.S. troops remain in Iraq, confined to their bases, under frequent missile attack, while a new generation of Iraqis rises up to reclaim their country from the corrupt former exiles the U.S. flew in with its invasion forces 17 years ago.

    Any responsible government Americans elect in 2020 must learn from the well-documented failure and catastrophic human cost of U.S. regime change efforts in Afghanistan, Iraq, Haiti, Somalia, Honduras, Libya, Syria, Ukraine, Yemen, Venezuela, Iran and now Bolivia.

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    These “lessons learned” should lead to U.S. withdrawal from the countries we have wrecked, opening the way for the UN and other legitimate mediators to come in and help their people to form sovereign, independent governments and to resolve the intractable secondary conflicts that U.S. wars and covert operations have unleashed.

    Secondly, the U.S. must conduct global diplomatic outreach to make peace with our enemies, end our illegal sanctions and threats, and reassure the people of the world that they need no longer fear and arm themselves against the threat of U.S. aggression. The most potent signals that we have really turned over a new leaf would be serious cuts in the U.S. military budget — we currently outspend the next seven or eight militaries combined, despite our endless military failures; a reduction in U.S. conventional forces and weapons to the level needed to meet our country’s legitimate defense needs; and the closure of most of the hundreds of U.S. military bases on the territories of other nations, which amount to a global military occupation.

    Maybe most vitally, the U.S. should reduce the threat of the most catastrophic of all wars, nuclear war, by finally complying with its obligations under the 1970 Non-Proliferation Treaty, which requires the U.S. and other nuclear-armed countries to move towards “full and complete nuclear disarmament.”

    In 2019, the Bulletin of the Atomic Scientists kept the hands of its Doomsday clock at two minutes to midnight, symbolizing that we are as close to self-destruction as we have ever been. Its 2019 statement cited the double danger of climate change and nuclear war:

    “Humanity now faces two simultaneous existential threats, either of which would be cause for extreme concern and immediate attention.”

    So it is a matter of survival for the U.S. to cooperate with the rest of the world to achieve major breakthroughs on both these fronts.

    If this seems far-fetched or overly ambitious, that is a measure of how far we have strayed from the sanity, humanity and peaceful cooperation we will need to survive this century. A world in which war is normal and peace is out of reach is no more survivable or sustainable than a world where the atmosphere gets hotter every year. Permanently ending this entire U.S. policy of coercive regime change is therefore a political, moral and existential imperative.


    Tyler Durden

    Fri, 12/20/2019 – 23:05

  • De Beers Diamond Sales Sump Again In Rough Year
    De Beers Diamond Sales Sump Again In Rough Year

    De Beers, the world’s largest diamond miner, has been rocked this year with declining sales as the diamond crisis deepens in 2019 and set to worsen in 2020, reported Bloomberg.

    The Anglo American Plc unit reported sales this year fell by $1.4 billion, ending a year that has been filled with concerns of oversupplied markets, plunging consumer demand, and price cutting. 

    De Beers sold $425 million of diamonds this month at its latest sale. That brought the total to about $4 billion for the year.

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    De Beers has spent the back half of the year slashing diamond prices as global markets remained oversupplied into the holiday season, mostly reflecting demand woes for top markets in the US, Europe, and China.

    Macroeconomic headwinds have primarily been the reason for waning diamond demand as a global trade recession continues to throw the global economy into a desynchronized formation. 

    As a result of oversupplied markets for rough diamonds and falling prices for polished stones, De Beers will mine one million carats less than previously thought in both 2020 and 2021. That equates to about 1% of the global diamond output and outlines how the world’s largest miner is slowing its expansion amid uncertain times. 

    To address oversupplied conditions, De Beers has lowered prices of rough stones, which has cut into profits. 

    The diamond midstream, the link between African mines and jewelry stores in Hong Kong, London, and New York, has too much inventory as spot prices continue to sink, and banks are starting to pull back on lines of credit. Many traders have been left unprofitable in 2019. 

    De Beers, which sets the price of diamonds to traders, slashed prices by 5% last month in hopes to stimulate demand. The company has ramped up digital, print, and television advertisements to persuade consumers on why they need a diamond. 

    Glancing at a composite of spot diamond prices, the IDEX Diamond Index shows how oversupplied conditions have weighed down prices in the last 12 months.

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    Tyler Durden

    Fri, 12/20/2019 – 22:45

  • Dystopian Toilet Adds Raging Quad Pain For Employees Taking 'Netflix And Poo' Breaks
    Dystopian Toilet Adds Raging Quad Pain For Employees Taking 'Netflix And Poo' Breaks

    For those who deal with the occasional stubborn poop, a new startup’s toilet design will add a new level of difficulty to that prize-fight; your quads will be on fire.

    Designed by UK-based StandardToilet, the new ‘throne’, tilted at a 13-degree angle, supposedly provides a myriad of health benefits – while encouraging employees to abandon the occasional ‘Netflix and poo’ break do to the fact that it becomes uncomfortable to sit on after just five minutes of use.

    https://platform.twitter.com/widgets.js

    The dystopian toilet, approved by the British Toilet Association (BTA), was inspired by “a series of annoyances,” according to StandardToilet founder Mahabir Gill – who says he discovered that over four decades as a consulting engineer, he became increasingly annoyed by long waits to use the toilet – discovering that some co-workers were sleeping on the pot, according to Wired.

    “Its main benefit is to the employers, not the employees,” Gill told the outlet, adding “It saves the employer money.”

    The fight to clampdown on toilet time has begun, it seems. After all, the alternative toilet market is booming. Japanese-style toilets are finally breaking into Western markets, and products like the Squatty Potty are offering us revolutionary new ways to sit on the toilet. Waterless compost toilets are catering to eco-conscious poopers, while others believe the future is rimless. But, is policing your pooing a step too far?

    The StandardToilet was given public backing by BTA in November and retails between £150 and £500, and Gill is already in talks with several local councils and major motorway service stations to distribute his product, and believes their market extends to train stations, pubs, shopping malls and offices. –Wired

    That said, according to the report a July survey realized that London workers spend nearly 30 minutes taking a shit.


    Tyler Durden

    Fri, 12/20/2019 – 22:44

  • Pro-Trump Activist Returns To Clean Baltimore Streets For Fourth Time
    Pro-Trump Activist Returns To Clean Baltimore Streets For Fourth Time

    Authored by Peter Svab via The Epoch Times,

    Conservative activist Scott Presler has put together yet another group of volunteers to pick up trash from the streets of Baltimore.

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    It was the fourth time that Presler has embarked on the sanitation quest, sparked by President Donald Trump’s criticism of the city’s maintenance record.

    “We’re officially the trash brigade,” Presler wrote in a Dec. 14 post on Twitter, posting a video from the cleanup that day.

    “Whether rain, nor sleet, nor snow, we’re on a mission to bring love into urban areas across America.”

    The city has struggled with trash on its streets for years, and its shrinking population has left more than 16,000 uninhabitable empty houses. Many of the homes are in an unsafe condition—the city owns many of them, but only comes once a year to clean up the alleys, Presler was previously told.

    Some of the most squalid neighborhoods are in West Baltimore, where Presler focused his efforts.

    Presler pulled off the first cleanup on Aug. 5, removing over 12 tons of trash with the help of some 200 volunteers.

    He said in a prior interview with The Epoch Times that he was tired of people talking about what should be done and wanted to do something about the problem in Baltimore, “even if it’s just me on a street corner picking up trash.”

    Since August 2019, we’ve removed 29 tons of trash from the city of Baltimore. We made a promise to 81-year-old, 4-foot-10 Miss Louise that we would keep coming back,” states the web page Presler set up for volunteers to register for the last cleanup.

    “In addition to picking up waste, we are asking volunteers to bring gifts that we can donate to Toys For Tots in Baltimore. The best way to show love is through actions, not words.”

    Presler also helped organize similar cleanups in other cities, including Chicago, Los Angeles, Houston, and Newark, New Jersey. Altogether, over 105 tons of trash have been removed from the streets as a part of these initiatives, he wrote in a Dec. 11 post on Twitter.

    The largest cleanup was in a homeless camp in Los Angeles, where the volunteers picked up more than 50 tons of trash. They had to wear “hazmat suits,” he wrote in a Dec. 3 post on Twitter, because the city has “dangerous bacteria.”

    “I want to make it very clear. This is not Baltimore, this is worse than Baltimore,” he said in a video attached to the post.

    #ThePersistence

    Presler, a dedicated Trump supporter, has a major presence on social media, with more than 300,000 followers on Twitter, where he posts prolifically under the nickname #ThePersistence.

    In his latest initiative, he plans a voter registration drive for 2020, starting in Greensboro, North Carolina, on Jan. 11, and going through Florida, Virginia, Oregon, Texas, California, Tennessee, Washington, and Pennsylvania, before finishing in Massachusetts on Mar. 7.

    “I started off as a dog walker. Then, spent 2 years of my life working to defeat Hillary Clinton. Now, I travel to America’s dirtiest cities to pick up trash & register voters,” he wrote in a Dec. 12 post on Twitter.

    “I started in the dog house, pick up trash by the outhouse, & want Trump to stay in the White House.”


    Tyler Durden

    Fri, 12/20/2019 – 22:25

  • Class 8 Market Continues Collapse As Navistar Cuts 1,300 More Jobs
    Class 8 Market Continues Collapse As Navistar Cuts 1,300 More Jobs

    Job cuts and bankruptcies in the world of heavy duty trucking have been a way of life over the last 18 months, as we have documented, with the industry steeped in recession as it reflects a larger, global slowdown in manufacturing. 

    That trend looks to be well in tact, with major transportation company Navistar reporting this week that it was going to be eliminating more than 1,300 jobs in North American production. 

    The company reported lower net income and revenue during Q4 as the industry’s falling demand for trucks continued. Net income also fell for the year. The maker of international trucks said it would lay off 10% of its workforce and slashed its forecast for 2020 revenue to below the lowest estimate among analysts, which sent its share down more than 10%.

    It was the biggest drop for the company’s shares since October 2018.

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    Troy Clarke, Navistar chairman, president and CEO, said: “We are taking actions to adjust our business to current market conditions, including reducing production rates and selling, general and administrative expenses while restructuring our global and export operations. Building on the strong gains achieved over the last several years, Navistar has a clear roadmap in place for sustained growth that will set it apart from the industry.”

    Profits in the company’s truck segment fell to $86 million in the fourth quarter, down from $197 million a year earlier. For the year, it posted net income of $221 million, down 58% from the $340 million it posted last year. 

    Recall, we noted at the beginning of the month that November’s Class 8 order numbers across the industry were collapsing. 

    November culminated a dismal year that some thought had seen a reprive with October’s improved bookings. But data from FreightWaves showed that the collapse had continued its trend, indicating that the sluggish economy is to blame for lackluster replacement demand. 

    Orders totaled 17,300 units for November, which marked the slowest November since 2015 and a 39% collapse from November 2018. The slowdown in orders is also prompting layoffs by companies like Daimler Trucks North America, Volvo Trucks North America and Paccar Inc.

    Other names in the Class 8 supply chain are also dealing with these negative trends. For instance, engine manufacturer Cummins Inc. is “laying off 2,000 white-collar employees globally in the first quarter of 2020”.

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    Meanwhile, November used to be a month when fleets would be busy placing orders for the upcoming year. After October’s slight tick up in orders, many analysts thought November could follow suit. That didn’t happen, and sequentially November’s order book was down 21% from October. 

    Don Ake, FTR vice president of commercial vehicles commented: “The stalling of freight growth is causing fleets to exercise caution in placing orders for 2020. There will still be plenty of freight to haul, so we expect fleets will continue to be profitable and to replace older equipment. However, there won’t be a need for much additional equipment on the roads.”

    “The industry thrives on stability, but we are now on a rocky road,” Ake concluded.


    Tyler Durden

    Fri, 12/20/2019 – 22:05

  • 'Global Mega Trends To 2030' Forecasts Matrix-Like Automated Future
    'Global Mega Trends To 2030' Forecasts Matrix-Like Automated Future

    Authored by Daniel Taylor via OldThinkerNews.com,

    Global Mega Trends to 2030, a recent report from the business consulting firm Frost & Sullivan, paints a picture of an automated transhuman world.

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    The top trend is transhumanism, which will drive “technology-driven evolution at an unprecedented speed of change, propelling deeper questions into what it is to be human”.

    Other trends identified in the report include an overall move to automation, virtual reality leading to a matrix-like “total reality-virtuality continuum, a rollout of 6G, and “ubiquitous connectivity anytime and anywhere by 2030”.

    Here is a summary of the report:

    1. Transhumanism: Humanity is entering the rise of technology-driven evolution at an unprecedented speed of change, propelling deeper questions into what it is to be human.

    2. Autonomous World: Autonomous applications could extend beyond warehouses to outside logistics with the industrial, aerospace, smart home infrastructure, and automotive industries becoming fully automated and intelligent.

    3. Connected Living: Seamless integration of video, voice, and data services will provide access and ubiquitous connectivity anytime and anywhere by 2030.

    4. Industry 5.0: With collaborative human-machine interaction, Industry 4.0 will begin to move towards Industry 5.0 in an iconic transition towards mass customization and extreme personalization.

    5. Digital Reality as Frontier Technology: Augmented and virtual reality technology will begin evolving towards a total reality-virtuality continuum.

    6. Complex Needs of a Heterogenous Society: A heterogeneous society will transform business models across a diverse set of industries.

    7. Data as 21st Century Oil: Data will become as important as oil, reaching into previously unserved customer segments that help in opening up new revenue streams.

    8. Era of Intelligent Digital Assistants: Intelligent assistants will optimize and personalize daily experiences across all activities and environments.

    9. ‘Uberization’ of Industries: Peer-to-peer (P2P) services are expected to transform and penetrate several non-traditional applications.

    10. Concept of ‘Zero’ World: A Mega Vision of a Zero concept world, which will urge companies to shift focus and develop products and technologies that innovate to zero.

    11. Rise of Platform Economy: Digital leaders will consolidate efforts to build a diverse ecosystem, comprising of infrastructure on which platforms are built.

    12. Zero Latency World: A world with no latency will emerge from ongoing advancements in 5G and the introduction of 6G by 2030, wherein millions of connected devices will interact in real-time at microsecond latency.

    A pro-human renaissance could disrupt these trends and provide humanity with a chance to break free from technocratic tyranny.


    Tyler Durden

    Fri, 12/20/2019 – 21:45

  • Wall Street Analyst Jobs Vanish As Banks Take An Axe To Research With Market At Record Highs
    Wall Street Analyst Jobs Vanish As Banks Take An Axe To Research With Market At Record Highs

    Is the death of Wall Street equity research finally at hand? Because who needs an expensive team of analysts when clients can easily reap double-digit returns by dumping their money into passive funds?

    The fact that sell-side research departments have been shedding analysts this year is hardly a surprise. MiFID II regulations made it clear from the beginning that banks would soon lose a valuable revenue stream used to support research by forcing the sell side to “unbundle” research & trading costs.

    A study by McKinsey published in 2017 anticipated that the headcount at Wall Street research departments would shrink by 30% in the coming years because of MiFID.

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    But as Bloomberg reminds us, 2019 was the year that the heads really started to roll. Across Wall Street, equity analysts were told to clean out their desks. Even fresh all-time market highs weren’t enough to save them.

    Data shared by consultant Coalition with several financial media organizations, including Bloomberg, claimed that the total head count of sell-side equity analysts fell to roughly 3,500 this year, its lowest level in decades.

    The relentless decline of brokerage research is accelerating. Its ranks shrank 8% to 3,500 across 12 major banks, data showed earlier this year, on pace for the sharpest annual decrease since research firm Coalition Development started collating the numbers in 2012.

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    One veteran Citigroup analyst who spoke with Bloomberg for its story said he left his job after 18 years and now works for a non-profit. Many other analysts have made similar career moves this year.

    A Citigroup Inc. analyst for almost 18 years, Andrew Howell knows very well what to expect when you’re pitching a service that fewer and fewer customers need or want. So he found another line of work.

    Howell now toils in a co-working space in Manhattan’s East Village doing research for a non-profit organization, part of the legion of Wall Street analysts reinventing themselves as demand for their skills fades.

    MiFID isn’t the only factor impacting Wall Street analysts. Their field lies at the intersection of several trends reshaping the financial services industry, including the advent of automation and AI.

    But for now, while these tools have changed things, they haven’t totally supplanted human analysts, or obviated the need for real human scrutiny.

    According to BBG’s data, large American asset managers are currently leading the trend of unbundling their trading business and research.

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    The rules that have led banks to cut down their research staff were supposed to help the buy side by reducing the cost of research. But interestingly enough, a consulting firm teamed up with Evercore to study how research spending impacts asset-management firms’ performance.

    They found that firms who skimped on the research spend routinely underperformed those that spent more.

    It’s not all doom and gloom. Some banks are taking advantage of the retrenchment. Goldman Sachs Group Inc. hired new analysts this year to “get a bigger piece of what is overall a smaller pie,” said Jim Covello, Goldman’s global co-head of single-stock research.

    Dwindling sell-side research may finally settle the question of its value. U.S. managers spend between three to six times more on research than their European peers, Neil Scarth at Frost Consulting estimates. An analysis by Evercore ISI and Frost argued that firms paying for analysis out of their own pockets generally underperformed last year, suggesting they’re being penny-wise and pound-foolish.

    But the biggest boon for firms looking to take advantage of this trend will probably be found among boutique firms. As banks are forced to cut back there coverage, inevitably, even more will slip through the cracks.

    This should create opportunities for smaller activist firms like this one willing to think creatively and invest more in research.

    On the other hand, companies who know they are facing less scrutiny from Wall Street and the media might be emboldened to try and cover up or bury information that might hurt their stock.


    Tyler Durden

    Fri, 12/20/2019 – 21:25

  • Protest Pandimonium: A Look At The Most-Ridiculous Campus Demonstrations Of 2019
    Protest Pandimonium: A Look At The Most-Ridiculous Campus Demonstrations Of 2019

    Authored by Addison Smith via CampusReform.org,

    This year, conservative students had their beliefs silenced and beaten down by their leftist classmates and professors. A survey discovered that nearly half of college students have personally experienced their own professors verbally protest President Donald Trump in class. 

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    Campus Reform has put together some of the wildest instances of protests on college campuses. 

    1. Students call on university to ban ICE contractor from campus

    After increasing demand to “abolish ICE” from leftists around the country, students at Carnegie Mellon University took it upon themselves to insist that the tech company Palantir be banned from doing business with the school because of its contract with ICE. 

    This #NoTechForICE demonstration included a petition signed by more than 300 people demanding that Palantir discontinue business relations with ICE, and demanding that the school do the same with Palantir.

    2. EXCLUSIVE VIDEO: Leftist students call Charlie Kirk, conservatives ‘racist,’ can’t give any evidence

    Hundreds of students at North Carolina State University gathered inside the university’s Talley Student Union to protest Charlie Kirk and Lara Trump’s speech on campus. Allegations of “racism” and “fascism” overflowed from the students, but they were not able to pinpoint any instances of either. 

    After one student was asked for evidence of claims that Kirk, Trump, and Turning Point USA embodied these allegations, she told Campus Reform Correspondent Addison Smith to “go fuck yourself.” When another student bluntly exclaimed, “Fuck Charlie Kirk,” he provided reasons for saying so such as “I don’t know. Seems like a dick” and “I just don’t vibe with the guy.”

    WATCH:

    3. Students hold ‘die-in’ to protest fossil fuels — ‘stuff that literally kills people’

    A group known as DIVEST BING at Binghamton University held a “die-in” protest by playing dead and laying gravestones out on campus. This came in light of the school’s investment in “stuff that literally kills people” – fossil fuels. 

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    Photo credit: Pipe Dream

    Students suggested that the school was “adamant on keeping as much of this as quiet as possible,” even though Executive Director of the BU Foundation Sheila Doyle said that she met with the group and explained the situation, adding that the financial statements are online for the public to see.

    4. Berkeley FEMALE profs wear BEARDS to protest alleged gender bias

    Female paleontologists at the University of California-Berkeley decided to wear fake beards to shed light on”‘gender bias” in their field.  

    The Bearded Lady Project aimed to promote the idea that women can contribute to science just as much as men can. To prove this, they were “challenging the face of science,” “one beard at a time.” Photos of these women wearing artificial facial hair were on display at the college. 

    “We came in expecting there would be some degree of discrimination, and that we would have to adapt to a male-dominated academic setting,” paleontologist Patricia Holroyd said. 

    5. VIDEO: Harvard vs. Yale game DELAYED after climate protesters storm field

    During a football game between Harvard and Yale,  a play was suspended as dozens of climate activists rushed onto the field to object to both schools allegedly being “complicit in climate injustice.”

    This stunt delayed the game for almost 40 minutes. Protesters were asked numerous times beforehand to clear the field, but the number grew increasingly larger throughout its duration. 

    WATCH:


    Tyler Durden

    Fri, 12/20/2019 – 21:05

    Tags

  • Brazil's Oprah-Endorsed 'Psychic Surgeon' Rapist Gets 19 Years In Prison
    Brazil's Oprah-Endorsed 'Psychic Surgeon' Rapist Gets 19 Years In Prison

    A Brazilian faith healer known as João de Deus, or John of God (real name Joao Teixeira de Faria), was sentenced to 19 years and four months in his first prison sentence stemming from a spate of sex abuse allegations uncovered by a journalist whose son says she was murdered.

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    Joao Teixeira de Faria a.k.a. “John of God”

    According to ABC News, the 77-year-old de Faria was convicted of raping four women, reads a statement from the court. His lawyers say he will appeal the decision, while he faces additional cases related to 10 more alleged sex crimes. He has also been accused, though not charged, of running sex-slave farms for child trafficking, allegedly killing mothers after 10 years of birthing.

    Faria, whose high-profile clients were  rumored to include supermodel Naomi Campbell, former President Bill Clinton and singer Paul Simon, rose to international fame after Oprah Winfrey sat down with him in a 2010 interview – calling him “inspiring.”

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    Since then, hundreds of women – including his daughter – have accused him of all types of sexual abuse ranging from groping to rape.

    As we noted in February, de Faria started his “spiritual hospital” in 1978, the Casa de Dom Inácio de Loyola – named after Saint Ignatius, one of the 37 spirits Faria claimed would inhibit his body during psychic healing sessions, according to The Sun. In 1979, a benefactor secured land for him in a small town of Abadiânia, Brazil, where he received over 10,000 visitors a month

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    John of God’s “spiritual surgeries” would often involve scraping people’s eyeballs without anesthetics, or inserting scissors of forceps inside people’s noses to cure various conditions. His accusers say he took it much further – instructing them to face away from them before performing sexual acts to “cure” them, allegations Faria denies. 

    Last December, four women appeared on Brazilian television to accuse Faria of molesting them during sessions, including Dutch choreographer Zahira Lienke Mous, who says she learned of Faria from Oprah Winfrey’s interview.

    Speaking on TV Globo, three of the women described their encounters with Faria to host Pedro Bial on condition of anonymity. Dutch choreographer Zahira Lieneke Mous decided to be named, and said that during one of her trips to see the healer to be cured of the trauma of previous sexual assault, he took her into a back room and had her masturbate him. He then had her pick out a gemstone from a set and granted special treatment. She has also accused him of raping her during another session.

    São Paolo businesswoman Aline Salih told local newspaper Folha de São Paulo in an article that published on Monday that a similar incident had happened to her. –BuzzFeed News

    Following the broadcast, Brazilian prosecutors announced that more than 200 women had come forward with similar claims, leading for prosecutors for the state of Goias to call for his arrest.

    The rapist faith-healer withdrew 35 million reais ($8.9m US) from various bank accounts, causing authorities to respond with an arrest warrant over concerns he would flee the country or hide money from those who might sue. De Faria surrendered himself to police in Abadiania, and was transported to police headquarters in Goiania, the capital of the state of Goias.

    De Faria’s daughter, Dalva Tiexeira, says that her father abused and raped her between the ages of 10 and 14, and that he only stopped after she became pregnant by one of his employees. The subsequent beating she received from “John of God” caused her to miscarry, she says. 

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    Dalva Teixeira, de Faria’s daughter

    “My father is a monster,” stated Teixeira. 

    Suspicious suicide

    Another highly disturbing aspect of the case is that of 38-yeaer-old Brazilian activist, Sabrina Bittencourt, who mysteriously “committed suicide” in Lebanon in February while she was on the road and “living under protection.”

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    Sabrina Bittencourt

    As we noted at the time:

    Bittencourt said she had received reports of Faria’s sex slave operation in which newborns were sold for up to £40,000 ($51,000 USD) in the United States, Europe and Australia. 

    She claimed Faria would offer money to poor girls aged 14 to 18 to go and live in mineral mines or farms he owns in the Brazilian states of Goias and Minas Gerais.

    There they would become sex slaves and be forced to get pregnant, then their babies would be sold to the highest bidder.

    “In exchange for food, they were impregnated and their babies sold on the black market,” she said.

    Hundreds of girls were enslaved over years, living on farms in Goias, and served as wombs to get pregnant, for their babies to be sold.

    “These girls were murdered after 10 years of giving birth. We have got a number of testimonies.” –The Sun

    Bittencourt’s eldest son, Gabriel Baum, confirmed her death on Facebook with a note that read: “She took the last step so that we could live. They killed my mother.

    “We said goodbye in Paris, she traveled to Barcelona for a few days to create the protection network for Brazilians of exile and returned to Lebanon with her girlfriend. It was one of the countries she loved!” Gabriel posted to Facebook.


    Tyler Durden

    Fri, 12/20/2019 – 20:45

  • There Are More Than 300 US Military Bases With Possible "Toxic Forever" Chemical Contamination
    There Are More Than 300 US Military Bases With Possible "Toxic Forever" Chemical Contamination

    Authored by Meghann Myers via MilitaryTimes.com,

    Hundreds of military installations have either known or likely water contamination caused by runoff from firefighting foam used in response to vehicle and aircraft accidents, according to the Environmental Working Group.

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    Using Defense Department data, the organization built an interactive map of 305 sites, which are found in all 50 states. Each map dot opens up to information and links on perfluorooctane sulfonate or perfluorooctanoic acid, known as PFAS.

    “Of these sites, 138 have not been previously identified on EWG’s map of known PFAS contamination at military bases, civilian airports and industrial sites,” according to a Tuesday new release.

    “In addition, 42 of these sites were not included on a list of 401 locations the Pentagon gave to Congress of active and former installations where PFAS contamination was known or suspected.”

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    An interactive Environmental Working Group map lays out PFAS contamination across 305 military sites. (EWG)

    The map went live the day after the House and Senate armed services committees finalized a compromise defense authorization bill for 2020, which includes provisions to approaching the PFAS issue going forward.

    Expected to see a vote in the House on Wednesday, the law would prohibit the use of PFAS-laden firefighting foam after Oct. 1, 2024, and immediately ban any use of the foam outside of emergency situations.

    While the bill dropped a provision that would have brought PFAS-contaminated bases under the federal Superfund law, providing funding and a requirement to clean them up, the NDAA pushes the Pentagon to work with state governments to start clean up using funds from the Defense Environmental Remediation Account.

    It would also require that military firefighters are testing for PFAS levels in their blood, as the chemicals do not break down over time and are known to build up in the human body.

    In the mean time, the Air Force has been testing a system that might be able to remove PFAS from ground water, and DoD is funding research into a new firefighting foam.


    Tyler Durden

    Fri, 12/20/2019 – 20:25

  • Paul Volcker: The Man Who Vanquished Gold
    Paul Volcker: The Man Who Vanquished Gold

    Authored by Joseph Salerno via The Mises Institute,

    The flood of obituaries that noted the passing of Paul Volcker (1927-2019) last week have almost all lauded his achievement as Fed chair (1979-1987) in reining in the double-digit inflation that ravaged the U.S. economy during the 1970s.

     Volcker was referred to as the “former Fed chairman who fought inflation” (here);  “inflation tamer” and “a full-fledged inflation warrior” (here); and the “Fed chairman who waged war on inflation” and led “the Federal Reserve’s brute-force campaign to subdue inflation” (here).  Mr. Volcker certainly deserves credit for curbing the Great Inflation of the 1970s.  However, he also merits a lion’s share of the blame for unleashing the Great Inflation on the U.S. and the world economy in the first place

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    For it was Mr. Volcker who masterminded the program that President Nixon announced on August 15, 1971, which  unilaterally suspended gold convertibility of U.S. dollars held by foreign governments and central banks, imposed a fascist wage-price freeze on the U.S. economy, and slapped a 10 percent surcharge on foreign imports.

    Tragically, by severing the last link between the dollar and gold, Volcker’s program scuttled the last chance of restoring a genuine gold standard. 

    More than two years before Nixon slammed down the “gold window,” Volcker, the recently appointed undersecretary of the treasury for monetary affairs, gave an oral presentation to Nixon and his closest advisors on US balance-of-payments problems. The presentation was based on a memo that the secret “Volcker group,” initiated by Henry Kissinger, spent five months preparing.  

    Among other things, Volcker recommended a continuation of capital controls to prop up the inflated dollar’s overvalued exchange rate and a massive appreciation or “revaluation” of the currencies of less inflationary countries such as West Germany, placing the burden of adjustment to unrestrained US inflation on these countries.  Volcker then planted the time bomb that would eventually detonate and seal the fate of the gold standard.  He suggested to Nixon that if these measures did not work to sustain the pseudo–gold standard of the Bretton Woods System, a run on the US gold stock could only be avoided by unilaterally repudiating the postwar US pledge to convert foreign official dollar holdings into gold. Unfortunately, the Volcker Group report summarily dismissed the alternative of raising — possibly doubling — the dollar price of gold, i.e., “devaluing the dollar,” which would have increased the value of the US gold stock and facilitated the restoration of a genuine gold standard. 

    Only a real gold standard could have halted and reversed the slow-motion collapse that the international monetary system had been undergoing since the mid-1960s due to large and persistent US payments deficits driven by profligate dollar creation.

    Volcker, however, hated and wanted to get rid of the last vestiges of the gold standard and replace it with a fixed exchange-rate system dominated by the US fiat dollar to further enhance the power and prestige of the U.S. in international affairs.

    According to Volcker, “the stability and strength of our currency was important to sustaining the broad role of the United States in the world.” 

    Years later, Volcker revealed, “I have never been able to shake the feeling that a strong currency is generally a good thing, and that it is typically a sign of vigor and strength and competitiveness.”

    One of his biographers intimated that Volcker’s longstanding regret at having been rejected for military service during World War II because of his height was at the root of his single-minded determination to maintain “the supremacy of the American dollar as the world’s premier currency.”

    Indeed, Volcker struggled mightily to make the dollar appear strong, even while rampant money printing to finance Great Society welfare programs and the Vietnam War inexorably weakened it.  But Volcker bitterly opposed raising the price of gold, because he feared that open devaluation of the inflated dollar would not only diminish the status and reputation of the US, but also reward people and countries he detested, namely, speculators in gold and gold-producing countries such as the Soviet Union and South Africa. He especially loathed and wanted to punish President Charles de Gaulle and the French for embarrassing and discrediting the US by withdrawing from NATO and exposing the weakness of the dollar by insisting on converting their dollars into gold in the face of US threats to remove military protection against the Soviet Union. (To add insult to injury, de Gaulle had sent naval ships to retrieve French gold.)

    When a full-blown run on U.S. gold stock appeared imminent in early 1971, Volcker prepared a memorandum for the new treasury secretary, former Texas governor and master political operative John Connally.  The memo contained three main proposals. First, countries with less inflationary monetary policies, and therefore balance-of-payments surpluses, such as West Germany and Japan, would be imposed upon to substantially appreciate the value of their currencies, thereby encouraging US exports and stifling its imports while sparing the it the embarrassment of openly devaluing the dollar.  Second, Volcker recommended a preemptive strike against gold in the form of a “cold-blooded suspension” of gold convertibility. Volcker’s final proposal was a temporary wage-price freeze.

    As one of Volcker’s biographers characterized his motivation, “[H]e wanted America to act preemptively, to avoid appearance of defeat at the hands of currency speculators.” (Emphasis added.)

    Secretary Connally bought into Volcker’s program. When a severe dollar crisis struck a few months later, he used all his substantial political wiles to persuade Nixon of the merits of the Volcker plan. Then Fed Chairman and Nixon advisor Arthur Burns, for all his erroneous monetary ideas and policy failures, was convinced that gold should play — at least nominally — a central role in the international monetary system. In fact, “[a]fter Nixon took office, Burns proposed to end the balance-of-payments problem by increasing the official price of gold,” which would have “effectively devalue[d] the dollar.”

    In Burns’s view, this would maintain gold as the anchor of a fixed exchange-rate system, an outcome that Volcker would have detested.  Not surprisingly, Burns was “troubled” by Volcker, who he thought had given “a stupid reply” to Nixon about raising the price of gold. Burns also recognized and bemoaned Volcker’s influence over Connally: “Somehow, poor and wretched Volcker — never knowing where he stood on any issue — had succeeded in instilling an irrational fear of gold in his tyrannical master whom he tried constantly to please by catering to his hatred of foreigners (particularly the French).”

    Unfortunately, Burns had badly underestimated Volcker, and had mistaken his tact and strategic compromising for vacillation and indecisiveness. As his biographer noted, Volcker

    admired John Connally’s social skills and had learned much from  the master politician. … He preferred to equivocate, qualify, and risk being branded a poor communicator, rather than feign certainty.

    In the end, the wily Connally-Volcker axis prevailed over the politically naïve Burns.  Burns’s biographer clearly recognized Volcker’s political cunning in winning over Nixon:

    The President decided against Burns. Paul Volcker convinced him that suspension [of gold convertibility] was inevitable and that delay would only create financial chaos. Perhaps more important, Nixon realized if he announced the move as part of a new economic package, he would appear to be acting decisively to take charge of the crisis, making, as Volcker put it, “the devaluation of the dollar into a political triumph, which was no mean feat.”

    Thus it was that Volcker’s memo was used as the basis of the New Economic Policy that was hammered out by Nixon and his advisors, including Volcker, at Camp David and announced in Nixon’s fateful Sunday address to the nation.    

    One obituarist listed Volcker’s “great public accomplishments” thusly:

    He was the point man at the Treasury Department in 1971 who managed the dollar’s untethering from gold; he quelled the double-digit inflation that took root in the U.S. in the late 1970s; he helped guide the country’s response to the 2008 financial crisis.

    Unfortunately, this list grossly overstates Volcker’s public accomplishments, because it does not reveal the causal connection between his vanquishing the last remnants of the gold standard and the ensuing inflation of the fiat dollar whose supply was then subject solely to the decisions of bureaucrats eagerly seeking to please their political masters. 


    Tyler Durden

    Fri, 12/20/2019 – 19:45

  • Former NSA Director Rogers "Very Cooperative" With Durham Russia Probe
    Former NSA Director Rogers "Very Cooperative" With Durham Russia Probe

    The man who some consider the first ‘whistleblower’, after taking what Joe DiGenova called “immense risks” briefing the Trump team on the Obama’s administration’s surveillance, has been cooperating with the Justice Department’s probe into the origins of the counterintelligence investigation of the Trump presidential campaign’s alleged ties to Russia, according to four people familiar with Rogers’s participation.

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    The Intercept’s Matthew Cole reports that retired Admiral Michael Rogers, the former Director of the National Security Agency, has met with John Durham on multiple occasions, according to two people familiar with Rogers’s cooperation. While the substance of those meetings is not clear, Rogers has cooperated voluntarily, several people with knowledge of the matter said.

    While Durham has reportedly recently sought former CIA Director John Brennan’s emails, call logs, and other documents from the C.I.A., Cole notes that Rogers’s voluntary participation, which has not been previously reported, makes him the first former intelligence director known to have been interviewed for the probe.

    “He’s been very cooperative,” one former intelligence officer who has knowledge of Rogers’s meetings with the Justice Department said.

    In addition to Brennan, and now Rogers, Politico and NBC News have previously reported that Durham intends to interview former Director of National Intelligence James Clapper.

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    As Cole concludes, the Mueller probe, the recent inspector general’s report, and now the Durham investigation have done little to bridge the yawning political divide between Trump (and his supporters), who continue to see him as the victim of a politically motivated “witch hunt,” and career intelligence and national security officials, who view the Durham investigation as an effort to punish those who led U.S. efforts to investigate Russia’s election meddling. In May, Trump gave Barr the unprecedented authority to review and declassify intelligence related to the Russia investigation, further inflaming national security veterans.

    Durham’s investigation has also sought information from foreign governments. 

    Although AG Barr said there is likely many months before Durham’s report is complete, it would appear, by the leaks of his contacts, that the federal prosecutor is narrowing in his scope on those who were really responsible for all the “mistakes” that were made.

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    Tyler Durden

    Fri, 12/20/2019 – 19:25

  • Reason Is The Greatest Weapon In The Fight Against Tyranny
    Reason Is The Greatest Weapon In The Fight Against Tyranny

    Authored by Daisy Luther via The Organic Prepper,

    The importance of logic and accurate information in stressful times cannot be overstated.

    With the gun control mess occurring in Virginia right now, there have been a lot of rumors, a lot of interpretations, and a lot of allegations from anonymous sources.

    I haven’t written this to call anyone out. I’m certain that the people covering this story have honorable intentions. I’ve written this because I want to remind everyone that reason is our greatest weapon in the battle against tyranny.

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    What we know vs. what some guy said

    I cannot confirm whether any of these current rumors circulating right now are true or not. Neither can I predict if they’ll come to pass. I try to provide balanced information based on provable sources.

    Sometimes readers get angry about this and accuse me of passing on “misinformation.” It’s unfortunate they feel that it is misinformation, but I only publish what I have a source to corroborate. I might speculate but then I make sure that I’ve pointed out my thoughts are mere speculation and that there’s no evidence of this.

    At times like this, more than ever, we have to work in the realm of what we know versus what the gossip is. What we know is the wording of the bills on the table, the statements from elected officials, and the statements from the National Guard.

    This doesn’t mean to completely rule out the rumors. It’s not beyond the realm of possibility that communications could be taken down in a “rebel” area. It’s important to plan for all the possibilities. But I don’t think me running a story full of suppositions and anonymous sources is actually helpful at all. I don’t want to fan the flames of an already volatile situation with things that I cannot prove.

    It’s irresponsible. I won’t do it.

    My goal is to help you get prepared for the things which are most likely. To do that, I have to focus on what we know.

    Logic, not hysteria, will win the day.

    Like the rest of you, I’m good and mad about this. However, I’m trying to go about this from a place of reason. I’m trying to go about my reporting using old-school journalism – remember back in the days when we were supposed to be unbiased?

    Cooler heads are needed in situations such as these. Practical information and advice are necessary.

    If you get hysterical and get all worked up about the boundless possibilities of a tyrannical state, you’re not thinking logically and that will get you nowhere good. Humans can only function at a high level of adrenaline for a certain amount of time. You’re going to crash if you keep yourself completely worked up all the time.

    I’m not suggesting you underestimate the possibilities. Let me be perfectly clear when I tell you that I would not rule anything out. This is a move that has been strategically planned, as I wrote before. We must be strategic in our responses. Get organized with your family, friends, and neighbors and make sure that lacking another, yours is the voice of reason.

    Work with what you know, first.

    Work with the things you know, first. Then move on to other scenarios.

    I urge you to sit down and make reasonable plans. Obviously you want to cover possibilities like loss of comms or loss of power, but you don’t need to go out and spend thousands of dollars on generators for this.

    If you’re buying anything, focus on alternative communications that cannot be taken down as easily as cellphone towers and phone lines. Alternate communications devices much better options than going out and blowing the bank account on a generator that would only be valuable for a week or two, depending on how much fuel you can store. We bloggers all need to make a living and cover our costs, of course, and there’s nothing wrong with an affiliate link here and there. But be wary of any breathless story that urges you to spend thousands of dollars based on hearsay.

    Think about the things that are most likely, and plan for those first. If you’ve been prepping for a while you’ll probably find you are ready for a lot of it but that you may need to fill some holes.

    If you lost power, isn’t this one of the major reasons you prep? Sure, it would be inconvenient and even unpleasant, but ask anyone from California if it’s absolutely the end of the world. Check your preps and make sure you have what you need on hand. (If you feel unprepared for a lengthy power outage, this PDF guide can help and I marked it down to $5.)

    Communication is likely to be one of those holes. Satellite phones are painfully expensive, but CB radiosham radio, and even walkie talkies for nearby neighbors are all affordable investments that could be used in a variety of circumstances, not just this one.

    Remember, we are resilient enough that a few days of inconveniences will not take us down.

    You have the power here.

    Should a worst-case-scenario occur, it’s only as powerful as you allow it to be.

    Let’s imagine, for example, the rumor about the Governor wiping out power and comms is true. If you move flawlessly over to your backup plan, the state government has made themselves seem like tyrants in front of the country and the world and you are minimally affected.

    Qualify your responses first based on what you know, then based on the possibilities. But understand that the possibilities are as of yet unknown. You can predict what will happen in a pandemic far more easily than you can predict what will happen in a fight against tyranny.

    Regardless of the situation, reacting calmly and methodically is always going to be better than losing your ever-lovin’ mind and rushing around in a panic. Panic kills, whether the situation is slow-moving like this one or fast-moving, like an immediate life-and-death scenario.

    This is a prime example of prepping versus survival. You have time – this law will not go through (if it does pass) until January. Meanwhile, don’t spend the next month in a blind frenzy based on what you see on websites or forums. Take it all into consideration but for cryin’ out loud, keep your s**t together.

    Did you ever think these scare tactics might be leaked deliberately?

    Has it crossed your mind that rooting these seeds of fear might be deliberate? Of course, an enemy would want to see you discombobulated – this is classic Art of War stuff. If you feel under attack already, you’re going to have worn yourself out by the time things have actually come to fruition.

    By no means am I suggesting that you do not take the treasonous threats against the Second Amendment seriously. I’m not suggesting you overlook the potential ramifications of the anti-paramilitary bill and its vague wording. It would be bad for militias but in its current incarnation, I don’t think it’s as far-reaching as banning instruction on the use of guns or self-defense. This isn’t to say that it couldn’t be one day used for that, but at this point, I think the purpose of that bill is to strike down opposition to the gun bill.

    Think about it: If you were in a position of power and you wanted to have your “enemy” scrambling, wouldn’t a deliberate “leak” of an extreme scenario be a good tool for this purpose?

    Again, this isn’t to say it couldn’t happen or won’t happen. I’m saying, think it through entirely. What is practical and likely? What is so extreme it would cause censure from the rest of the nation?

    The government absolutely did a lot of bad stuff in Waco and Ruby Ridge, but that was small-scale, comparatively. We’re talking about nearly an entire state here. That would be an encroachment on such a massive scale that there’d be an outcry. The President could – and probably would – take over the National Guard in a situation like this.

    I don’t know if you’ve ever dealt with a narcissist, but they glory in getting a response from people. They feed off it. If they aren’t getting the response they need, they will strive to unsettle and scare their victims until they do.

    Don’t let people get in your head. Reason is the enemy of tyranny. A panicking person cannot strategize effectively. The decision-making part of your brain literally shuts down when you panic.

    Be calm and methodical.

    This stuff is huge and it could be the start of a dark era for our country. This has the potential to change everything our Republic has stood for since it existed.

    But fear and hysteria have no place in your preparations. Please consider your sources and don’t base your actions on “maybes” and “this guy said” scenarios. Preparing for the possibilities in a calm and methodical way will help you through whatever may come far more than preparing in a state of panic.


    Tyler Durden

    Fri, 12/20/2019 – 19:05

  • Can Goldman's Former Top Mortgage Bond Salesman Revive Connecticut's Moribund Economy?
    Can Goldman's Former Top Mortgage Bond Salesman Revive Connecticut's Moribund Economy?

    Nutmeggers unleashed a collective groan last November when longtime telecommunications executive Ned Lamont defeated his Republican challenger to secure another four years of Democratic rule in Hartford.

    His predecessor, Gov. Dannel Malloy, may have helped replenish the state’s rainy-day fund and improve some other aspects of the state’s finances, but he presided over a period where several major corporations moved their headquarters out of the state (including GE, which left Fairfield County for Boston, and Aetna, which nearly left Hartford before CVS decided otherwise at the last minute).

    Over the past decade, economic growth in Connecticut has been stagnant, ranking among the worst-performing states (only Alaska and Wyoming were worse). The state’s population has shrunk by roughly 22,000 since 2014 as young educated workers left for more trendy urban enclaves like New York City and Boston, which also featured stronger employment prospects.

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    Now, Lamont is trying to apply his ‘business background’ to try and fix the state’s biggest problems – i.e. the fact that it’s not a very attractive destination for businesses. In the past, the state has relied on promises of preferential tax treatment in exchange for promises to create X number of high-paying jobs. Often, companies’ fell short, but were never made to pay the state back.

    So, Lamont is trying a new tack: He’s surrounding himself with prominent figures from corporate America, including former PepsiCo CEO Indra Nooyi, who is leading the state’s effort to recruit more businesses.

    Among those recruited by Lamont is David Lehman, a former Goldman Sachs partner who played an interesting role in the run-up to the financial crisis. As the head of Goldman’s mortgage finance group, he instructed his people to clear all of the toxic CDOs off the bank’s books just before the bottom fell out of the market.

    Lamont recently appointed Lehman to lead Connecticut’s Department of Economic and Community Development, and also named him a senior economic advisor.

    Though we doubt the character was based on him, there are definitely some eerie similarities between Lehman’s crisis-era exploits at Goldman and the story arch of Kevin Spacey’s character in “Margin Call.”

    After the crisis, Lehman was dragged in front of a Congressional committee to try and explain his involvement in the sale of one specific tranche of CDOs called “Timberwolf.”

    The issue became notorious after one former Goldman executive described it as “a shitty deal” in an email uncovered by Congressional investigators. The Senate Permanent Subcommittee on Investigation’s 2011 report on the financial crisis found that Lehman instructed his people not to give clients any written insights into how Goldman was valuing its securities.

    Though he was never accused of wrongdoing, Lehman was grilled at a committee hearing back in 2011, and lawmakers in Connecticut raised the issue again during his confirmation hearing in Hartford.

    To this day, Lehman insists that he didn’t know the product was worthless when he sold it to the bank’s clients.

    “Any suggestion that I knew a product was going to be worthless and subsequently sold it to a client is completely and wholly untrue,” he said at the hearing. Reducing Goldman’s exposure to subprime mortgages was prudent risk management, he said. And, he said in an interview, that Goldman provided as much information as it had on prices in a volatile market.

    “I’ve always conducted myself honestly and transparently and acted in good faith with all my dealings at Goldman Sachs,” Lehman said.

    He was confirmed by a vote of 28 to 8.

    However, nearly everything we have learned about Goldman’s corporate culture in the years since the crisis would suggest otherwise.

    Still, Lamont and his friends in Hartford insist Lehman is “the perfect guy” to look after the interests of the people of Connecticut.

    Lehman, known at Goldman as a convener and connector, is the “perfect guy” to bring Democrats and Republicans, business and labor together and sell the governor’s vision, said Susie Scher, global head of Goldman Sachs Financing Group.

    “He’s a guy who can sit in the middle of disparate folks with differing objectives and bring them together because they all like and respect him,” she said.

    Lehman’s approach to economic development centers around attracting more young people and businesses to Connecticut’s main urban centers: Hartford, New Haven, Bridgeport and Stamford.

    And, as it so happens, his strategy for pulling this off relies heavily on the “Opportunity Zones” initiative that was included in the Republican tax plan (and which liberals have criticized as a hand-out to wealthy developers wrapped in the guise of helping the poor).

    Twenty nine of the state’s 72 opportunity zones are in its four largest cities (mentioned above).

    Lehman has lived in Greenwich for a decade, and thus believes he understands the state’s problems and how to fix them.

    But one economist quoted by Bloomberg criticized Lehman’s tax-incentive plan as “pretty myopic,” arguing that companies prefer to receive tax breaks before they create jobs, and that instead of accepting the state’s deal, can easily just relocate somewhere more favorable.

    The bottom line is this: As most Connecticut residents probably understand, all of Lehman’s (and the state’s) efforts will likely be worthless if they fail to accomplish one critical goal: Improve travel time to NYC on MetroNorth.

    Lamont has supposedly made this a priority, and has set a lofty goal of cutting travel time to Manhattan in half. But if Connecticut wants to burnish the reputations of its cities as practical places for young people and companies to live and work, it will need to drastically improve commute times to Boston and New York.

    If Lehman can’t offer companies access to more of the New York metropolitan area’s vibrant workforce, then companies won’t have a reason to come to Connecticut, no matter how many handouts you offer.


    Tyler Durden

    Fri, 12/20/2019 – 18:45

  • Why Western Media Ignore OPCW Scandal
    Why Western Media Ignore OPCW Scandal

    Via The Strategic Culture Foundation,

    The credibility of the Organization for the Prohibition of Chemical Weapons is on the line after a series of devastating leaks from whistleblowers has shown that the UN body distorted an alleged CW incident in Syria in 2018. The distortion by the OPCW of the incident suggests that senior directors at the organization were pressured into doing so by Western governments.

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    This has grave implications because the United States, Britain and France launched over 100 air strikes against Syria following the CW incident near Damascus in April 2018. The Western powers rushed to blame the Syrian government forces, alleging the use of banned weapons against civilians. This was in spite of objections by Russia at the time and in spite of evidence from independent investigators that the CW incident was a provocation staged by anti-government militants.

    Subsequent reports by the OPCW later in 2018 and 2019 distort the incident in such a way as to indict the Syrian government and retrospectively exculpate the Western powers over their “retaliatory” strikes.

    However, the whistleblower site Wikileaks has released more internal communications provided by 20 OPCW experts who protest that senior officials at the organization’s headquarters in The Hague engaged in “doctoring” their field reports from Syria.

    Copies of the doctored OPCW reports are seen to have suppressed important evidence casting doubt on the official Western narrative claiming that the Syrian government was to blame. That indicates the OPCW was engaged in a cover-up to retrospectively “justify” the air strikes by Western powers. This is a colossal scandal which implies the US, Britain and France wrongly attacked Syria and are therefore guilty of aggression. Yet, despite the gravity of the scandal, Western media have, by and large, ignored it. Indicating that these media are subordinated by their governments’ agenda on Syria, rather than exposing the truth as independent journalistic services.

    An honorable exception is Fox News anchor Tucker Carlson who has given prominence to the scandal on US national TV. So too has veteran British journalist Peter Hitchens who has helped expose the debacle in the Mail on Sunday newspaper.

    Apart from those sources, the mainstream Western media have looked away. This is an astounding dereliction of journalistic duty to serve the public interest and to hold governments to account for abusing power.

    Major American news outlets have been engrossed in the Trump impeachment case over his alleged abuse of power. But these same media have ignored an arguably far more serious abuse of power with regard to launching missiles on Syria over a falsehood. That says a lot about the warped priorities of such media.

    However, their indifference to the OPCW scandal also reflects their culpability in fomenting the narrative blaming the Assad government, and thereby setting up the country for military strikes. In short, the corporate media are complicit in a deception and potentially a war crime against Syria. Therefore they ignore the OPCW scandal.

    That illustrates how Western news media are not “independent” as they pompously claim but rather serve as propaganda channels to facilitate their governments’ agenda.

    An enlightening case study was published by Tareq Haddad who quit from Newsweek recently because the editors censored his reports on the unfolding OPCW scandal. Haddad explained that he had important details to further expose the OPCW cover-up, but despite careful deliberation on the story he was inexplicably knocked back by senior editors at Newsweek who told him to drop it. There is more than a hint in Haddad’s insider-telling that senior staff at the publication are working as assets for Western intelligence agencies, and thus able to spike stories that make trouble for their governments.

    Given the eerie silence among US, British and European media towards the OPCW scandal it is reasonable to posit that there is a systematic control over editorial policies about which stories to cover or not to. What else explains the blanket silence?

    The scandal comes as Western powers are attempting to widen the powers of the OPCW for attributing blame in such incidents. Russia has objected to this move, saying it undermines the authority of the UN Security Council. Given the scandal over Syria, Russia is correct to challenge the credibility of the OPCW. The organization has become a tool for Western powers.

    Russian envoy to the OPCW and ambassador to the Netherlands Alexander Shulgin says that Moscow categorically objects to expanding the OPCW’s functions and its powers of attributing blame. The extension of powers is being recommended by the US, Britain and France – the three countries implicated in abusing the OPCW in Syria to justify air strikes against that country.

    The Russian envoy added:

    “The OPCW’s attribution mechanism is a mandate imposed by the US and its allies, which has nothing to do with international law and the Chemical Weapons Convention’s provisions. Any steps in this direction are nothing more than meddling in the UN Security Council’s exclusive domain. We cannot accept this flagrant violation of international law.”

    Thus, the OPCW – a UN body – is being turned into a rubber-stamp mechanism by Western powers to legalize their acts of aggression. And yet despite the mounting evidence of corruption and malfeasance, Western corporate media studiously ignore the matter. Is it any wonder these media are losing credibility? And, ironically, they have the gall to disdain other countries’ media as “controlled” or “influence operations”.


    Tyler Durden

    Fri, 12/20/2019 – 18:25

    Tags

  • Iowa Man Gets 16 Years For Burning LGBTQ Flag; Gay Rights Group Says Excessive
    Iowa Man Gets 16 Years For Burning LGBTQ Flag; Gay Rights Group Says Excessive

    A 30-year-old Iowa man has been sentenced to 16 years behind bars after tearing down a gay pride rainbow flag from the front of a church and burning it – a sentence one prominent gay rights group thinks is excessive.

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    Adolfo Martinez was found guilty of a felony hate crime and third-degree harassment after he ripped the flag off the front of the United Church of Christ in Ames, Iowa – before walking over to the Dangerous Curves Gentleman’s Club, where he was reportedly a regular.

    Martinez received the maximum sentence due to his status as a habitual offender with two prior felonies. He told KCCI in June that he destroyed the flag because he despises homosexuality, according to the Washington Examiner.

    It was an honor to do that. It was a blessing from the Lord,” said Martinez. “It is a judgment, and it is written to execute vengeance on the heathen and punishments upon the people,” he added. “I burned down their pride. Plain and simple.”

    Martinez pleaded not guilty despite saying he had no plans to fight the charges and claiming, “I’m guilty. Guilty as charged.”

    The senior minister at the United Church of Christ, Rev. Eileen Gebbie – who is gay, said “It doesn’t feel good. However, it’s not going to slow us down. We won’t change.”

    She told the Des Moines Register that she’s happy Martinez was found guilty, though she told NBC that 16 years was excessive.

    I often experienced Ames as not being as progressive as many people believe it is, and there still is a very large closeted queer community here,” Gebbie explained. “But 12 people that I don’t know, who have no investment in me or this congregation, said this man committed a crime, and it was crime born of bigotry and hatred.”

    “Hate crimes against the LGBTQ community are a serious matter as they inflict distinct emotional harms on their victims, and strike fear into the communities they target,” Reyes told NBC News. “That said, true justice should always strive to be about rehabilitation, reconciliation, and healing communities. It is difficult to see how a 16-year prison sentence accomplishes any of those goals.”

    “He is our neighbor, and I would be glad to know him and to welcome him here to this space,” as he approaches 50 years of age upon his release.

    Excessive…

    According to NBC News, the director of gay advocacy group One Iowa, Courtney Reyes, thinks that the sentence is excessive, and says that while her organization appreciates how quickly the incident was handled, the sentence was excessive.

    “Hate crimes against the LGBTQ community are a serious matter as they inflict distinct emotional harms on their victims, and strike fear into the communities they target,” Reyes told NBC News. “That said, true justice should always strive to be about rehabilitation, reconciliation, and healing communities. It is difficult to see how a 16-year prison sentence accomplishes any of those goals.


    Tyler Durden

    Fri, 12/20/2019 – 18:05

  • A Plot To Make Pelosi President? Now Adam Schiff Wants To Go After VP Mike Pence…
    A Plot To Make Pelosi President? Now Adam Schiff Wants To Go After VP Mike Pence…

    Authored by Michael Snyder via TheMostImportantNews.com,

    I was really hoping that this wouldn’t happen.

    Within hours of President Trump being impeached by the House, the mainstream media was reporting that Adam Schiff “has declared war” on Mike Pence. At this time of the year, most Americans are celebrating holidays and spending time with their families, but Adam Schiff continues to be deeply focused on his twisted obsession to take down the Trump administration. When Rachel Maddow asked him if he was “actively looking at Vice President Mike Pence and his role in this scandal”, Schiff made it quite clear that he has targeted Pence.

    Is Schiff doing this because he wants “justice”, or is there some deeper plot afoot?

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    Before we get into the specifics, let’s talk about a hypothetical scenario in which Nancy Pelosi could actually become the President. If President Trump is removed from office by the Senate, Vice-President Mike Pence would move into the Oval Office and a replacement for Pence would be nominated. But if Trump and Pence were both impeached and removed from office before a new Vice-President could be nominated and confirmed, then the next in line for the presidency would be Speaker of the House Nancy Pelosi.

    In other words, if Trump and Pence were both suddenly out of the picture, Nancy Pelosi would become the President of the United States.

    We have never actually seen the speaker of the House become the president in such a manner, and such a scenario would appear to be exceedingly unlikely, but it could hypothetically happen.

    Up to now, the efforts by the Democrats to get rid of Trump have not gone well. According to a brand new survey that was just released, only 42 percent of all Americans support removing Trump from office at this point. And it is likely that support for removing Vice-President Pence from office would be even lower.

    So why would the Democrats even bother trying?

    I certainly can’t explain why Schiff suddenly has such a desire to go after Pence, because it doesn’t seem to be rational. According to the Daily Mail, Schiff has made the decision to declare “war” on Pence…

    House Intelligence Committee chairman Adam Schiff has declared war on Vice President Mike Pence, barely a week after his panel finished its hearings on the impeachment of President Donald Trump.

    As an impeachment vote loomed Wednesday, Schiff demanded Pence’s office declassify documents that he claims could show the vice president knee-deep in the Ukraine scandal that has brought Trump to the brink.

    What Schiff is particularly obsessed about is a phone call between Vice-President Pence and Ukrainian President Volodymyr Zelensky on September 18th.

    Pence’s adviser Jennifer Williams listened in on that call, and she testified about it behind closed doors to Schiff’s committee. Her testimony was later classified, and Schiff has been badgering Pence to have it declassified. The following comes from the National Review

    Pence’s Russia adviser Jennifer Williams testified last month about the vice president’s September 18 phone call with Ukranian President Volodymyr Zelensky. Schiff requested ten days later that Pence declassify her testimony, contained in a November 26 letter from her lawyer, but Pence last week declined to do so in a letter to Schiff.

    On Tuesday, Schiff sent a letter to Pence alleging that the testimony given by Williams “raises profound questions about your knowledge of the President’s scheme to solicit Ukraine’s interference in the 2020 U.S. presidential election”.

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    In other words, Schiff is inferring that Vice-President Pence “abused his power” just like Trump supposedly did.

    During a subsequent appearance on the Rachel Maddow Show, Schiff was specifically asked if he was “actively looking” at Vice-President Pence…

    Are you actively looking at Vice President Mike Pence and his role in this scandal? And should we expect further revelations either related to the vice president or related to the other core parts of these allegations that have resulted in this impeachment tonight?

    In response, he gave an answer that was classic Schiff …

    Well, we have acquired a piece of evidence, classified submission by Jennifer Williams, something that she alluded to in her open testimony that in going back and looking through her records, she found other information that was pertinent to that phone call that we asked her about and made that submission. There is nothing that should be classified in that submission but yet, the vice president’s office has said they’re going to assert classification, or it’s classified.

    It is not proper to classify something because it would be embarrassing or incriminating, and that summation does shed light on the vice president’s knowledge, and we think the American people should see it. Certainly, any senators in the trial should have access to it.

    Schiff has got to realize that his actions are deeply dividing America, and the drama currently unfolding in Washington could set in motion a series of events that could tear this nation apart.

    So why is he doing it?

    Well, there is always the possibility that he could be so deluded that he actually believes that he is doing the right thing. And if he truly believes that he is seeking to have justice done, then that would help to explain why he just won’t let this thing go.

    But the truth is that Schiff’s sick obsession with taking down the Trump administration goes back long before this Ukraine scandal first broke wide open.

    Like so many other Democrats, he just can’t stand to see Donald Trump in the White House, and he won’t rest until he is gone for good.

    If the Democrats could find a way to get Trump removed from office early next year, that would throw the Republican Party into a state of utter chaos and would give Democrats a massive edge heading into November 2020. And if they could get Mike Pence removed from office early next year as well, that would make it even tougher for the Republican Party.

    In the end, maybe that is what all of this is primarily about. Yes, getting Nancy Pelosi into the White House would be a nice side benefit, but maybe what the Democrats really want to do is to keep Trump from winning again in 2020 by any means necessary.

    Unfortunately for the Democrats, nothing they are doing is working.

    It looks like Trump is going to be acquitted by the Senate, public approval for impeachment has been falling, and Trump now has a lead against all potential Democratic contenders.

    If the Democrats had never attempted to remove Trump, they would have had a great chance of winning the White House next November.

    But they just couldn’t resist, and so they have set the stage for a major political disaster for the Democratic Party less than a year from now.


    Tyler Durden

    Fri, 12/20/2019 – 17:45

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  • A Desperate ECB Wants To Eliminate The Eurozone's "Only Saving Grace"
    A Desperate ECB Wants To Eliminate The Eurozone’s “Only Saving Grace”

    Authored by Claudio Grass via The Mises Institute,

    Economists, conservative investors, and market observers have been issuing stern warnings for years regarding the severe impact of the current monetary policy direction.

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    The ECB’s Poblems

    In a recent statement, European Central Bank (ECB) Vice President Luis de Guindos warned of potential side effects and risks to the economy resulting directly from the central bank’s policies. He outlined how a decade of extremely aggressive monetary interventions have resulted in an erosion of financial stability and now pose a threat to the eurozone’s economic outlook. While he defended the bank’s negative interest rate strategy as “supportive” of the overall economy, he did admit that, because of it, “we also note an increase in risk-taking which could, in the medium term, create financial-stability challenges”.

    This is a point that was also highlighted in the ECB’s latest financial stability review, which found that the ultra-low interest rates have triggered excessive risk-taking, mainly by investment funds, insurers, and in certain real estate markets, thereby creating considerable stability concerns going forward. The report identified four main threats to financial stability for the block: asset mispricing, which sets the stage for a correction, corporate overindebtedness, which raises debt sustainability concerns, dangerously weak banking sector profitability, leading to increased risk-taking, and excessive risks taken in the non-bank financial sector, which could be facing “profitability and solvency challenges.”

    Although none of this is news to the responsible investor and to the reader who understands monetary history and the inevitable consequences of trying to forcibly twist basic economic laws, it still remains surprising that the ECB would publicly acknowledge it. The timing is even more striking, as the report, outlining the risks associated with the current monetary policy direction, came out very soon after the bank announced its decision to double down on it, cutting rates even lower and launching a new round of quantitative easing (QE).

    Lagarde’s “Solution”

    As the ECB appears to be finally acknowledging the limitations and terrible side effects of its own monetary “cures,” and as the eurozone economy continues to struggle, the central planners’ focus seems to be shifting to other measures and tools in hopes of a growth revival. Their “solution” is for governments to deploy fiscal measures and to try to stimulate the sluggish euro area economy through spending. 

    A great example of this “refocusing” was given by Christine Lagarde in late November. In her first major speech since becoming ECB president, she made no substantive comments on or references to the role of the central bank itself, or to an actual policy revision to help support the ailing eurozone economy. Instead, she concentrated on what member states can do and on the part that increased public investment should play going forward. She highlighted that that monetary policy “cannot and should not be the only game in town,” and she urged European governments to boost spending. She also argued what the EU needs in order to increase productivity is more integration in various areas including capital markets and the banking sector.

    It can be argued that the only saving grace of the eurozone’s deeply problematic economic and monetary structure is the fact that at least some of the member states, through the budgetary leeway the system affords, did manage their finances in a comparatively responsible way. Now, it is those states that are in the crosshairs of the ECB, as President Lagarde demonstrated when she singled out “countries with chronic budget surpluses like the Netherlands and Germany” and criticized them for not spending enough. There’s a lot of support for this position, as many are eyeing those surpluses as a way out of the economic glut that the bloc is currently in. As French Minister of the Economy and Finance Bruno Le Maire clearly put it in September, “What’s the point of having public accounts perfectly in order … if your European neighbors can’t benefit from your growth and economic dynamism?”

    Of course, the sound investor can immediately see the many dangers that lie in this direction. On top of monetary excesses, the road is now being paved for fiscal ones too. Absurd as it might sound, the central bankers’ solution for their concerns of overindebtedness and financial instability — which they’ve admitted their own policies gave rise to — is to encourage the very few member states with stable budgets to destabilize themselves. At a time like this, when the next recession is around the corner and when the ECB has little to no ammunition left to fight it, it seems clear that the individual states that “kept their powder dry” fiscally would be better positioned to take action against the effects of the slowdown. Criticizing budget discipline and surpluses and promoting spending and further integration is a strategy that is bound to seriously backfire, and one that will only serve to exacerbate the impact of the economic slowdown. 

    This approach also highlights the institutional myopia at the very top of the eurozone. Having learned nothing from the mistakes of the last recession, the “cures” that are being prescribed for the next one are very likely to come with even worse side effects. It is thus clear that it is up to the individual investor and saver to prepare and to protect their wealth from the risks that lie ahead. 


    Tyler Durden

    Fri, 12/20/2019 – 02:00

  • "You Should Not Get Closer To Our Borders" – Russia Deploys Hypersonic Missile Fighters To Arctic
    “You Should Not Get Closer To Our Borders” – Russia Deploys Hypersonic Missile Fighters To Arctic

    Russia has deployed hypersonic missile fighters along the Arctic and Pacific coasts to protect its maritime borders, reported Izvestia.

    Mikoyan MiG-31 supersonic interceptor jets have been outfitted with the Kh-47M2 Kinzhal (“Dagger”), a nuclear-capable air-launched ballistic missile, and deployed to the Kola Peninsula and Kamchatka regions of the country, a powerful move that will send shockwaves through Washington as Russia is now prepared to take control of the Arctic. 

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    The air-launched hypersonic missile is one of the most advanced weapons in the world, even sophisticated air defense systems have difficulty defending against its Mach 10 to Mach 12 speed. 

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    The range of the missile is about 1,200 miles and could extend Russia’s air defense capabilities not just throughout the Arctic region, but also could challenge the US in the Pacific.

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    With the deployment of the hypersonic missile fighters, one fleet in the Arctic and another in the Pacific, Russia will be able to deploy a rapid response countermeasure or even defensive maneuver across the Arctic and the North Pacific. 

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    Test pilot Colonel Igor Malikov told Izvestia that “It must be clearly stated: you should not get closer to our borders and make aggressive plans…the MiG-31 with the “Dagger” is a defensive weapon. In the event of an attack on Russia, it can hit the airbases from which enemy planes take off in the direction of our territories, as well as ships and marine infrastructure.” 

    As we’ve explained before, the Arctic is becoming a highly contested region for control between the US, Russia, and China. That’s because more than $35 trillion worth of natural resources could be hiding underneath the ocean floor. 

    “Now, there are several points of intersection of the interests of a number of powers,” Malikov told Izvestia. “There were questions – who will develop minerals on the ocean shelves. Moreover, not only the countries of the region, but also the USA participate in these discussions. And MiG regiments with Daggers are going to be placed at key points in the region.”

    The battle for the Arctic has already begun — Russia could be in the lead to take control of the Arctic considering its latest deployment of military hardware to the region. 


    Tyler Durden

    Fri, 12/20/2019 – 01:00

    Tags

  • The Final Act
    The Final Act

    Authored by Dmitry Orlov via ClubOrlov.com,

    In processing the flow of information about the goings on in the US, it is impossible to get rid of a most unsettling sense of unreality – of a population trapped in a dark cave filled with little glowing screens, all displaying different images yet all broadcasting essentially the same message. That message is that everything is fine, same as ever, and can go on and on. But whatever it is that’s going on can’t go on forever, and therefore it won’t. More specifically, a certain coal mine canary has recently died, and I want to tell you about it.

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    It’s easy to see why that particular message is stuck on replay even as the situation changes irrevocably. As of 2019, 90% of the media in the United States is controlled by four media conglomerates: Comcast (via NBCUniversal), Disney, ViacomCBS (controlled by National Amusements), and AT&T (via WarnerMedia). Together they have formed a corporate media monoculture designed to most effectively maximize shareholder value.

    As I wrote in Reinventing Collapse in 2008,

    “…In a consumer society, anything that puts people off their shopping is dangerously disruptive, and all consumers sense this. Any expression of the truth about our lack of prospects for continued existence as a highly developed, prosperous industrial society is disruptive to the consumerist collective unconscious. There is a herd instinct to reject it, and therefore it fails, not through any overt action, but by failing to turn a profit because it is unpopular.”

    Two years earlier, in a slideshow optimistically titled “Closing the Collapse Gap” (between the USSR and the USA), I wrote: “…It seems that there is a fair chance that the US economy will collapse sometime within the foreseeable future. It also would seem that we won’t be particularly well-prepared for it. As things stand, the US economy is poised to perform something like a disappearing act.” And now, 12 years later, I believe I am finally watching what amounts to preparations for that act’s final rehearsal; the ballet troupe is doing stretching exercises and the fat lady is singing arpegios to warm up…

    Clearly, this final act is yet to be performed. The media replay loop continues to play, keeping the populace convinced that the future will resemble the past (except, perhaps, it will have more wind generators, solar panels and electric cars). The populace continues to be persuaded to go out and shop for (or, more frequently now, order online) things it doesn’t need, to be paid for by money it doesn’t have.

    Of course, there have been changes. The populace in the US has been doing progressively worse. Drug addiction and suicide rates have skyrocketed while rates of childbirth have plummeted. The purchase of a home is now out of reach for the vast majority of young couples. Artificially rosy unemployment statistics hide the 100 million or so people who are considered “not in labor force” (because they lost their jobs some time ago and haven’t been able to find another one). Uniquely among developed nations, life expectancy among white males—historically the most economically active and prosperous part of the population—has been dropping. These are all negatives, but neither any one of them nor any combination of them adds up to anything that could cause the US economy to undergo a spontaneous existence failure.

    Nevertheless, it is possible to build a convincing case that Rome is, to put it figuratively, burning. To continue with the metaphor, evidence that there is some fiddling going on is particularly compelling. Overall, there is a steady backing away from addressing the substance of any problem and a concerted effort to maintain appearances at all cost.

    Take the trade war with China, which has been going on since early 2018. Trump has recently declared a major victory in it, but upon examination signs victory are impossible to discern. In 2017 the US ran a $750 billion trade deficit with China on $3.3 trillion of trade (22.7%). In 2018 it has jumped to $930 billion on $3.8 trillion of trade (24.4%). China has found ways to parry each of Trump’s thrusts by imposing countertariffs. After two years of this sort of World War I-style trench warfare, in which the US has been slowly losing ground, it became clear that the US doesn’t have any means to put pressure on China.

    And so Trump suddenly declares victory; not a full victory (that will have to wait until after Trump is reelected for his second term) but a victory nonetheless, because the Chinese have supposedly agreed to buy an extra $200 billion worth of US exports, $50 billion of them of agricultural exports from states that voted for Trump in 2016. But Trump is lying to his supporters. Over the past two years the Chinese have imported roughly $24 billion of agricultural commodities from the US, and sources close to the trade talks have said that the Chinese have agreed to increase these imports by just $16 billion, putting the total $10 billion short of the $50 billion mark. Even then, the US agricultural sector would have to rapidly scale up production by a factor of 1.6—and this is not at all likely.

    The farmers will discover this only after they vote to reelect Trump, but that’s not Trump’s problem. Nor was it Trump’s problem when in 2017 the Chinese promised to buy $120 billion of US liquified natural gas exports and then the US wasn’t able to provide anywhere near that volume. And now that Russia’s Power of Siberia pipeline is operational and ramping up volumes, while US fracking companies are going bankrupt left and right, the question has become largely moot. The AG promise is just a replay of the LNG promise at a smaller scale. Appearances are all that matter, and appearances are what Trump delivers every time. And if his voters want to believe—who’s to stop them? Even though it is clearly heading toward a defeat for the US as a whole, the trade war with China is definitely a huge positive for Trump: all he has to do to win personally is periodically deliver promises that others won’t keep—but that’s not his problem.

    Another net benefit for Trump is the never-ending impeachment saga. It has kept him in the media limelight and has allowed him to pretend that he is prevailing heroically against great odds while making his opposition look ridiculous in the eyes of his supporters. After the “Russian meddling” fable unraveled, an even more preposterous rationale for impeachment has taken its place. An attempt to impeach Trump for refusing to cooperate with a congressional investigation is in the process of failing, since anyone with more intelligence than a bucket of California penis fish should know that it is up to the courts, not up to the legislature, to resolve disputes between the legislature and the executive. All that remains now is an alleged abuse of power by Trump. Apparently, it is a no-no for a US president to ask a foreign leader to investigate a US presidential candidate for a variety of crimes such as corruption, bribery and money-laundering. This may all seem quite ridiculous, but it serves a purpose: it allows Trump to clean up on free publicity and to continue fiddling (tweeting, in his case) as Rome burns.

    But what has set fire under Rome is not the decrepitating state of US society, or the permanent and permanently worsening trade imbalance with China, or the never-ending impeachment farce. It is the incipient failure of the US dollar. For those who have been paying careful attention, the surreal nature of the procedings, and the fact that results no longer matter—only appearances do—have become perfectly obvious, but they are a tiny minority. What has allowed the politicians and the media to exploit the general public’s innate normalcy bias and to keep the media replay loop going without too many people catching on to what’s really happening was (note the past tense!) the ability of the US government (with the assistance of the Federal Reserve, which is a government-linked but essentially private entity) to paper over the gaping chasm in the nation’s finances by issuing debt, in the form of US Treasury paper.

    The US Treasury has been able to exploit its “exorbitant privilege” to issue internationally recognized and traded debt instruments denominated in its own currency—the US dollar—which has been the world’s main reserve currency for many decades. The reserve currency status has conveyed a certain aura of security and reliability (paper money is, after all, pretty much just a confidence game) and has supported the world’s largest and most liquid financial market. Anybody anywhere could put up US Treasury paper as collateral for a loan and get a low interest rate because that paper was considered as good as “real money” (whatever that means). And then that scheme suddenly broke.

    It is difficult to say what caused the confidence game to fail. It could be just the inexorable and ever-accelerating increase in US government debt. It could be the blatant decoupling between the growth rate of the US economy and the rate of increase of its indebtedness. It could also be the fact that much of the world is making a concerted effort to walk away from the US dollar as a reserve currency and as a means of exchange in international trade (Russia has sold off almost all of its US debt; China’s hoard is much larger but it is also gradually selling it off). It is unclear what was the ultimate cause, but what is clear is that in August of 2019 something finally snapped, and USTs went from “good as real money” to “stuff nobody wants to hold.”

    I first wrote about this in September when it became clear that real trouble was brewing in the market for US debt. Now, three months later, the situation has gone from bad to worse, and it would appear that the market for USTs definitively broke. I will try to sketch out what that means for the US economy and society later on (spoiler alert: nothing good) but for now I just want to lay out some of what has happened. In the meantime please take your normalcy bias and put it some place safe (in case you need it later, although I have no idea what for).

    Previously, when it was clear that an overburden of bad debt could trigger financial collapse at any moment, the Federal Reserve (which is in charge of printing money) engaged in something it euphemistically called “quantitative easing” (“QE”). It printed lots of US dollars in exchange for various bits of USTs, along with other financial garbage, with the goal of later selling the USTs while hiding the garbage, thereby preserving the appearance that USTs are sovereign debt supported by the full faith and credit of the US government rather than just some waste paper clogging up its vaults. But when it declared “quantitative easing” to be over and tried selling the USTs, all hell immediately broke loose and it was forced to go right back to buying them up, in a scheme that has been sarcastically referred to as “not QE.” Euphemisms aside, what is happening is properly called “debt monetization”: it’s when a government “borrows” money not by selling its debt in exchange for money that already exists but simply printing the money using paper and ink, or magic digits inside a very secure computer.

    Let’s go over some of the relevant details. “Not QE” actually started well before it was announced and proceeded in stealth mode. Over six weeks starting in September 2019, the Fed monetized an average of $20.5 billion per week. This rate is compatible with the extent of its previous efforts at “quantitative easing” at their height. It was forced to do so because the REPO rate on USTs spiked to 10 times the rate set by the Fed. (REPO stands for “repurchase agreement”; it is where one party borrows short-term from another party, using USTs (and other supposedly very safe debt instruments) as collateral, much as a pawn shop will give you money for a watch and then allow you to buy it back.) The huge spike in interest rates signaled that USTs were no longer seen as particularly safe collateral and the Fed had to step in and start throwing freshly minted dollars at the problem. And it never stopped. In fact, the problem grew larger; so large, that now, at the year’s end, the Fed has committed $500 billion of printing press output to making sure that nobody runs out of cash.

    It is commonly thought that the Fed’s action has to do with short-term debt, and is therefore a short-term problem, but that’s simply not the case. Since early August (the start of stealth-mode “not QE”) the Fed has vacuumed up $179 billion with of USTs, of which USTs with terms longer than a year made up $108 billion, or 60%. Compare these numbers to the total borrowing by the US government over the same period, which amounted to $659 billion, of which $368 billion was short-term debt and $291 billion long-term. Thus, over this period the Fed has monetized 29.4% of new long-term debt and 24.4% of short-term debt. This should help put your mind at ease if you suspected that this isn’t a short-term problem but weren’t sure. It’s a long-term, structural problem.

    Next, let’s consider whether the problem is being solved or is getting worse. Rest assured, it is getting worse. Looking at the numbers for October and November, the Fed monetized over half (50.7%) of new US government debt. A straight-line projection is that if it took the Fed to go from 0% to 50% in four months, then it will go from 50% to 100% in another four—by April Fool’s 2020. But who’s to say that the increase will be linear rather than exponential? Whichever it is, the trend is unmistakable: the market in US government debt—once the deepest and most liquid market in the world—is dead. The only thing propping up the value of USTs is the Fed’s printing press. And the only thing propping up the value of the output of the Fed’s printing press is… what is it, exactly? Exactly!

    Let’s add one more salient detail. Over the course of 2020, $4.665 trillion of USTs will mature and will need to be rolled over into new USTs. This is an all-time record, and this is on top of new debt that will have to be issued in order for the US government to be able to stay open. Over the past year the US budget deficit has amounted to $1.022 trillion, which is a 15.8% increase over the previous year. If this trend continues, the new deficit will be around $1.183 trillion. In order to keep the wheels of finance from grinding to a halt, over 2020 the Fed will have to monetize, or print, close to $6 trillion.

    It appears likely that at some point over the coming months Fed chairman Jerome Powell will have to announce “not not QE,” and then “not not not QE,” and then “Milk-milk-lemonade, ’round the corner fudge is made!” and run for the unigender restroom sobbing inconsolably. And then Donald Trump will be forced to channel Boris Yeltsin, who, on August 14, 1998, summoned all the presidential gravitas he could muster and spoke the following sage words:

    «Девальвации рубля не будет. Это твердо и четко. Мое утверждение — не просто моя фантазия, и не потому, что я не хотел бы девальвации. Мое утверждение базируется на том, что все просчитано. Работа по отслеживанию положения проводится каждые сутки. Положение полностью контролируется».

    There will be no ruble devaluation. This is my firm and clear position. My assertion is not just a product of my fantasy, and not because I don’t want devaluation to happen. My assertion is based on the fact that everything is taken into account. The work on reassessing the situation is being conducted daily. The situation is entirely under control.” (My translation.)

    And then three days later the Russian government declared sovereign default. The ruble dropped by 2/3 against the US dollar and the Russian economy, which was at that time extremely import-dependent, crashed hard. In a similar scenario, the US economy will crash much harder. Like Russia in 1998, the US is extremely import-dependent. But here the US government is not the only large borrower: most of US corporations are zombified corpses bloated with debt. For many years they have been borrowing at artificially low interest rates in order to buy up their own shares and prop up their value in a ridiculous effort to maximize shareholder value in the face of stalling economic growth. If they become unable to roll over their debt at artificially low interest rates (which will go away once the Fed definitively loses control of the situation) then they will automatically be forced to declare bankruptcy and liquidate.

    *  *  *

    If you want to maintain an optimistic outlook in spite of all of this, here is a book you might want to read.


    Tyler Durden

    Fri, 12/20/2019 – 00:05

  • Chinese Pork Billionaires Squealing All The Way To The Bank
    Chinese Pork Billionaires Squealing All The Way To The Bank

    With wholesale pork prices more than doubling in 2019 due to a deadly epidemic of African swine fever, a handful of Chinese pork peddlers are bringing home the bacon ham over fist, according to Bloomberg.

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    Qin Yinglin

    China’s top hog-hawker of late is Muyuan Foodstuff chairman Qin Yinglin, whose net worth has more than quadrupled this year to $8.6 billion thanks to his 60% stake in the company – making him the fastest growing individual on the Bloomberg Billionaires Index. Forbes has pegged Qin’s net worth at $16.6 billion. He holds the shares directly and with his wife through Muyuan Industrial Group.

    After graduating from Henan Agricultural University with a degree in animal husbandry, Qin launched a hog breeding company with just 22 pigs – and now slaughters roughly 5 million per year as one of China’s premiere meat mavens.

    Muyuan’s profit soard 260% in Q3 vs. the same period in 2018, due to the deaths of millions of pigs (some at the hands of criminal meat schemers) which caused the country’s pig herd to collapse 41% YoY, sending prices skyrocketing.

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    In order to avoid swine fever, for which there is no approved vaccine but doesn’t affect human health, Muyuan has been sterilizing animal feed with heat, filtering the air inside of their facilities, and disinfecting trucks, Qin told the South China Morning Post in March.

    Some companies are very much in difficulty because they are unable to reproduce their hog herd,” according to Fitch analyst Li Chen, “But some companies are seeing great profitability.”

    Other pork profiteers include WH Group – the world’s largest pork producer, as well as pig breeder and animal-feed company New Hope Group – whose Chairman, Liu Yonghao, has seen his net worth balloon to $11 billion – nearly double what it was at the end of 2018.

    “Swine fever brings both benefit and harm,” Qin told SCMP. “We need to ride this violent hurricane out and turn it into a superb opportunity for our development.”

    As we noted in July, the rise in pork comes as prices for other meats – particularly chicken and duck – have risen substantially, as consumers turn to alternate proteins.

    “The market prospects are very good now because of African swine fever,” said Shenghe Chairman Wang Shuhong, whose firm sells about 300,000 ducklings a day for fattening and slaughter.

    Soaring duck prices, in turn, have pushed the price of chicken up more than 20% – affecting companies such as Yum China – the other of China’s dominant fast food brand KFC, according to SCMP.

    “Poultry price has gone up because of African swine fever and the substitution away from pork to chicken. So the cost has gone up,” said Fred Hu, founder of Beijing-based global investment firm Primavera Capital Group, and non-executive chairman of Yum China.

    The impact on the company that buys a billion chickens a year in China has been significant and “has definitely put up the pressures,” said Hu. He did not say how much the price hike had cost Yum China, which also runs China’s Pizza Hut.

    In 2016, the brand spun off from global business Yum Brands and listed on the New York Stock Exchange. It was backed by Hu’s Primavera Capital Group, who invested US$410 million, and fintech company Ant Financial Services Group, who put in US$50 million. SCMP

    After 32 years in China, there are more than 6,000 KFC stores across more than 1,000 cities in China, employing more than 400,000 people.


    Tyler Durden

    Thu, 12/19/2019 – 23:45

  • Dysfunction In The Olympic Movement
    Dysfunction In The Olympic Movement

    Authored by Michael Averko via The Strategic Culture Foundation,

    Alan Dershowitz, the acclaimed US legal academic, is fond of noting the proverbial if the shoe is on other foot test – to see who is and isn’t sincere in their convictions. This matter relates to the call to have Russia formally banned from the next Summer and Winter Olympics. The same is even more applicable to those who don’t favor any Russians competing under the Olympic flag as authorized neutral athletes.

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    The British head of World Athletics, Sebastian Coe, brazenly supports a ban on all Russian track and field athletes, until it can be firmly established (in his view) that they’re clean. Coe’s take has been widely reported in Western mass media, with little, if any second guessing of the hypocrisy he exhibits.

    Despite missing three consecutive drug tests, American sprinter Christian Coleman, was allowed to compete at this past World Athletics Championships. It’s quite doubtful that any Russian would be allowed the benefit given to Coleman. As is true with a number of other sports, there’re credible reports indicating that World Athletics has an inconsistent worldwide drug testing regimen.

    A few years ago, an ESPN “Outside the Lines” segment (aired at an early Sunday morning low ratings time slot), noted that some top Jamaican track and field athletes have regularly missed drug tests, as a Jamaican whistleblower on this issue has been castigated in her country. (Pardon me for not having a transcript of that show.)

    Regarding non-Russian Olympians, Coleman’s situation is by no means an isolated one.

    Numerous Norwegian cross country skiers, along with prominent US Olympians Serena Williams, Simone Biles and Justin Gatlin, are among a non-Russian grouping that fall in the category of either missing drug tests, failing them, or getting an exemption for using an otherwise banned substance.

    The ban against Russia competing as a country at the 2018 Winter Olympics didn’t see a noticeable banning of top Russian Olympians for suspected drug use. (Under the Olympic flag and anthem, these Russians competed as the “Olympic Athletes from Russia”) Hence, that prohibition was essentially a form of collective punishment against an entire nation and its people. At the recommendation of the World Anti-Doping Agency (WADA), Russia now faces a banning for the next Summer and Winter Olympics.

    On the reportedly altered Russian database of drug test results, how many other countries have been asked to forward as complete an accounting of their respective athletes? As of now and as reported, this particular pertaining to Russia looks shady. Verifiable specifics on the database editing haven’t been released. Regardless, when it comes to drug testing over the past several years, Russia’s top Olympic caliber athletes are probably the most carefully scrutinized in the world. These individuals spend time outside Russia (training and/or competing), where they can and have been suddenly tested. Unless my information is wrong (which I doubt), they also get tested in Russia, with samples going to the WADA and/or a WADA affiliated vender.

    The British WADA member Jonathan Taylor, said that a lengthy appeal process at the Court of Arbitration for Sport (CAS), could allow for Russia to formally participate at the 2020 Summer Olympics. Taylor is against this scenario – instead favoring for Russia to be excluded from the next Summer and Winter Olympics. He emphasized that a CAS ruling against Russia after the 2020 Summer Olympics, would result in that country getting banned from the 2024 Summer Olympics.

    I suspect that most Russians don’t see Taylor as a fair reviewer, who is truly concerned about Russia’s best interests. If Russia can’t achieve a relatively quick CAS appeal in its favor, it’s arguably in Russia’s best interests to have a delayed decision, allowing for a formal Russian 2020 Summer Olympics representation.

    As time passes, there’s a chance that a growing number will see how unfair Russia has been treated, in conjunction with organizations like World Athletics and WADA possibly getting an overhaul, to better prevent any unfair treatment against a given nation and its people.


    Tyler Durden

    Thu, 12/19/2019 – 23:25

    Tags

  • Alarming NYT Op-Ed Reveals "Disturbing" Secretive Surveillance State Powered By Your Phone's Location Services
    Alarming NYT Op-Ed Reveals “Disturbing” Secretive Surveillance State Powered By Your Phone’s Location Services

    Millions of Americans are walking around with phones that have, unknowingly, created one of the most disturbing and unintentional “surveillance states” to ever exist. 

    A explosive new opinion piece in the NY Times aims to demonstrate that detailed smartphone tracking is far more ubiquitous than many think, despite the ongoing claims by companies that people’s data is “anonymous”. 

    Paul Ohm, a law professor and privacy researcher at the Georgetown University Law Center, said that describing location data as anonymous is “a completely false claim that has been debunked in multiple studies.”

    He added: “Really precise, longitudinal geolocation information is absolutely impossible to anonymize. D.N.A. is probably the only thing that’s harder to anonymize than precise geolocation information.”

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    The op-ed looked at trying to identify people in positions of power. It identified and tracked “scores” of notable people, like military officials with security clearances, as they drove home at night. They also tracked law enforcement officials and high powered lawyers. Though they didn’t name any of the people, they followed them on private jets, vacations and taking their kids to school. 

    Despite some of the data pointing to “scandal and crime”, the purpose of tracking them was to document the risk of under-regulated surveillance.

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    One person identified was Mary Millben, a singer based in Virginia who has performed for three Presidents. When told her phone was putting her “on the map” for everyone to see, she said: “To know that you have a list of places I have been, and my phone is connected to that, that’s scary. What’s the business of a company benefiting off of knowing where I am? That seems a little dangerous to me.”

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    She couldn’t name the app that shared her location, despite saying she was “careful” about which apps she allowed to share her location.

    “That makes me uncomfortable. I’m sure that makes every other person uncomfortable, to know that companies can have free rein to take your data, locations, whatever else they’re using. It is disturbing,” she continued. 

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    On inauguration weekend, the authors were able to track “elite attendees at presidential ceremonies, religious observers at church services, supporters assembling across the National Mall”, as well as protesters. They even spotted a senior official at the DOD walking through the Women’s March, along with his wife. 

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    Yet companies that take your location data collect “orders of magnitude” more that what the Times opinion writers had access to. 

    There are dozens of companies out there that profit from this data. Many use “technical and nuanced language that may be confusing to average smartphone users.” Many company names would likely be unfamiliar to most Americans. 

    These companies downplay the risks of collecting such revealing data at scale. Brian Czarny, chief marketing officer at Factual, one such company, said: “No, it doesn’t really keep us up at night. Factual does not resell detailed data like the information [The Times] reviewed. We don’t feel like anybody should be doing that because it’s a risk to the whole business.”

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    But without federal privacy laws, the industry has largely been self-regulated. Several groups have offered ethical guidelines and groups like the Mobile Marketing Association are drafting pledges to improve this self-regulation. 

    But states are starting to respond. For instance, the California Consumer Protection Act takes effect next year and allows residents to ask companies to delete their data or prevent its sale. But legally, the law could leave the industry free to do whatever it wants. 

    Calli Schroeder, a lawyer for the privacy and data protection company VeraSafe said: “If a private company is legally collecting location data, they’re free to spread it or share it however they want.”

    Companies are required to disclose “very little” about data collection, but rather are only required to describe their practices in their privacy policies. 

    Location data, gathered by latitude and longitude, coupled with time spent in an area, feed a lucrative secondary business of analyzing, licensing and transferring that information to third parties. Here’s what that data looks like:

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    The data provides intelligence for big businesses, as well:

    The Weather Channel app’s parent company, for example, analyzed users’ location data for hedge funds, according to a lawsuit filed in Los Angeles this year that was triggered by Times reporting. And Foursquare received much attention in 2016 after using its data trove to predict that after an E. coli crisis, Chipotle’s sales would drop by 30 percent in the coming months. Its same-store sales ultimately fell 29.7 percent.

    Companies like Verizon and AT&T have been selling the data for years. Last year, Vice found that data being sold was being used by bounty hunters to find specific cell phones in real time. Telecom companies pledged, after the scandal, to stop selling the data. But there is still no law that prevents it.

    Additionally, the piece notes “everything can be hacked”. That means that any server that houses this data is susceptible to having it wind up in the wrong hands. 

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    Broili/NYT

    For most Americans, the distribution of this information could result in embarrassment or inconvenience. But for people like survivors of abuse, it could come with substantially more risks. 

    And the ability to identify individuals was stunning:

    In one case, we observed a change in the regular movements of a Microsoft engineer. He made a visit one Tuesday afternoon to the main Seattle campus of a Microsoft competitor, Amazon. The following month, he started a new job at Amazon. It took minutes to identify him as Ben Broili, a manager now for Amazon Prime Air, a drone delivery service.

    Broili commented: “I can’t say I’m surprised. But knowing that you all can get ahold of it and comb through and place me to see where I work and live — that’s weird.”

    He continued: “It’s an awful lot of data. And I really still don’t understand how it’s being used. I’d have to see how the other companies were weaponizing or monetizing it to make that call.”

    You can read the full long form op-ed here


    Tyler Durden

    Thu, 12/19/2019 – 23:05

  • Earth's Magnetic North Pole Is Moving Faster Than Ever, Leaving Scientists Baffled
    Earth’s Magnetic North Pole Is Moving Faster Than Ever, Leaving Scientists Baffled

    Authored by Elias Marat via TheMindUnleashed.com,

    Earth’s magnetic north pole is moving at unprecedented speeds and scientists are still unsure of why this is the case.

    What makes these recent changes so interesting is the sheer speed at which they are occurring.

    Some fear that the rapid movement of the magnetic north pole could cause problems for Global Positioning Systems (GPS), military operations, airliners, and other navigation systems that rely on pinpointing where precisely the pole is located.

    Migratory animals such as birds, butterflies, and whales also use the magnetic field for directions.

    The latest report from NOAA, the “World Magnetic Model” for 2020, shows the pole rapidly speeding in the direction of Siberia. However, the trajectory of the pole will likely change.

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    This isn’t the first time that this has happened—polar wandering has been constant since the North Pole was first discovered, according to the National Oceanic and Atmospheric Administration (NOAA).

    NOAA’s National Centres for Environmental Information explained:

    “Since its first formal discovery in 1831, the north magnetic pole has travelled around 1,400 miles (2,250 km).

    This wandering has been generally quite slow, allowing scientists to keep track of its position fairly easily.”

    As recently as 2000, the magnetic North Pole was clocked at moving 6.2 miles per year toward Northern Russia, but data for the next two decades shows the average rate suddenly increasing to roughly 34 miles per year in the same direction, while the latest readings in 2019 show it slightly decreasing to about 31 miles per year.

    The World Magnetic Model predicts the average speed will slow down to roughly 25 miles per year from 2020 to 2025.

    “The WMM2020 forecasts that the northern magnetic pole will continue drifting toward Russia, although at a slowly decreasing speed—down to about 40 km per year compared to the average speed of 55 km over the past twenty years.”

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    For the first time in recorded history, the pole has even passed by the Greenwich meridian—the imaginary line used to indicate 0° longitude and determine time zones.

    Geomagnetic specialist Ciaran Beggan from the British Geological Survey (BGS) told the Financial Times:

    “The movement since the 1990s is much faster than at any time for at least four centuries.

    We really don’t know much about the changes in the core that’s driving it.”

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    The new model also confirms that Earth’s magnetic field is weakening. If this continues, scientists say the field could collapse entirely and flip polarity—changing magnetic north to south and vice versa—and the consequences could be dire for the planet.

    But before we begin to panic, we should remember that the Earth’s magnetic poles have already flipped up to 100 times in the past 20 million years, the last reversal occurring roughly 773,000 years ago.

    Earlier this year, the rapid movement of the North Pole garnered headlines when scientists revealed that the north was moving so fast that they had to update their model of the planet’s magnetic field much earlier than expected.

    At the time, the Mind Unleashed reported:

    “The drift is the result of processes deep in the center of the planet, where the liquid outer core comprised of iron and nickel spins and flows like water, serving as a conductor for Earth’s magnetic field.

    The recent change in the flow of the fluid is believed to be similar to the formation of a jet stream in the atmosphere, leading to changes in the planet’s magnetic field.

    … these changes are all part and parcel of the natural behavior of the Earth and have not been caused by human activity. Rock samples reveal that the Earth’s magnetic field has been in perpetual motion for millions of years.”

    University of Wisconsin-Madison geologist and NOAA study author Brad Singer told CNN that while the shifts in the pole could, in the long term, lead to impacts on satellites, communication, and navigation, researchers will likely have generations to deal with any major instability in the magnetic field.

    “The decrease in geomagnetic field is much more important and dramatic than the reversal,” said Dr. Nicolas Thouveny from the European Centre for Research and Teaching of Environmental Geosciences (CEREGE) in Aix-en-Provence, France.

    “It is very important to understand if the present field will decay to zero in the next century, because we will have to prepare.”


    Tyler Durden

    Thu, 12/19/2019 – 22:45

  • Durham Reportedly Seeking Ex-CIA Director Brennan's Emails, Call Logs Over Russian Probe
    Durham Reportedly Seeking Ex-CIA Director Brennan’s Emails, Call Logs Over Russian Probe

    Attorney General William Barr told “The Story with Martha MacCallum” that by the time Trump was inaugurated in January 2017, it had become clear that allegations raised by the FBI against a former Trump campaign aide George Papadopoulos were largely baseless, and that pursuing George Papadopoulos’ “had very little probative value.”

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    Additionally, Barr admitted, in a very candid (for him) moment, that federal prosecutor John Durham (who is scrutinizing the Russia investigation) “isn’t just looking at the FBI, he’s looking at other agencies, departments, and private actors,” but  that the other agencies are cooperating very well.”

    Which is all the more intriguing as, at the same time as his interview aired, The New York Times dropped a bombshell, reporting that, according to three people briefed on the inquiry, Durham’s investigation has begun examining the role of the former C.I.A. director John O. Brennan in how the intelligence community assessed Russia’s 2016 election interference.

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    Specifically, Durham has requested Brennan’s emails, call logs, and other documents from the C.I.A. (and judging by Barr’s statement that “other agencies are cooperating very well,” we suspect Durham will get what he wants.

    Additionally, NYT reports that Durham is also examining whether Mr. Brennan privately contradicted his public comments, including May 2017 testimony to Congress, about both the dossier and about any debate among the intelligence agencies over their conclusions on Russia’s interference.

    Of course, NYT is quick to ‘warn’ readers that Durham’s decision to probe Brennan’s actions deeper will “add to accusations that Mr. Trump is using the Justice Department to go after his perceived enemies.” But we ask, just as with Ukraine and the Bidens, is it only ‘not allowed’ to root out corruption if the corrupt is a representative of ‘the other’?

    We will let AG Barr respond to that implied problem:

    “The president bore the burden of probably one of the greatest conspiracy theories – baseless conspiracy theories – in American political history.”

    Noting that he has long expressed skepticism that the F.B.I. had enough information to begin its inquiry in 2016, publicly criticizing IG Horowitz’s report released last week that affirmed that the bureau did.

    Finally, while Brennan, Clapper, and Comey have rushed to their friends in the liberal media (and their social media echo chambers) to frame their own narratives as to just how much blame, bias, and bad behavior they each undertook…

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    We suspect that if Durham cracks Brennan, he will take everyone else down with him. Maybe Nancy will hand the impeachment articles over at that moment… as a distraction from the real threat to America’s democracy, constitution, and common man.


    Tyler Durden

    Thu, 12/19/2019 – 22:25

    Tags

  • "The UN's 'Woke' Climate Change Propaganda Is An Insult To Science"
    “The UN’s ‘Woke’ Climate Change Propaganda Is An Insult To Science”

    Authored by Sherelle Jacobs, Daily Telegraph columnist

    I was always a ‘middle-grounder’, rather than a ‘denier’ – until I discovered the extent of the dishonesty

    The climate change “emergency” is fake news. Many will roll their eyes in exasperation at the conspiratorial bombastry of yet another “denier”. But for years I have been a plastic recycling, polar bear cooing middle-grounder. In fact, Aristotle would probably turn in his grave at the logical fallaciousness of my long-held presumption that the truth must lie somewhere between those two mutually loathing opposites – Scepticism and Armageddon.

    But as the doom-mongering acquires the rubber-stamped smell of instutionalised illness, it is impossible to ignore that the “woke” are the new “slept” – too deep in their sugar coma of confected hysteria to realise they are being duped by disinformation.

    Before I explain why the climate “emergency” is the most electrifyingly effective propaganda exercise of the 21st century, two clarifications. I have no fight to pick with glaring evidential realities: surface records clearly show the planet is getting warmer. Nor do I have a culture war-bloodied axe to grind with the fundamental chemistry: carbon dioxide indisputably contributes to the greenhouse effect. But I do take issue with how the mainstream debate has become an insult to both the public’s intelligence and basic science. 

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    This was clearer than ever two weeks ago, as bureaucratic catastrophists kicked up dystopian dust-clouds on their way into the UN Madrid climate change summit. As Greta Thunberg arrived by yacht (after her British skipper likely clocked up 3 tonnes of carbon emissions flying to the US to pick her up), UN Secretary General António Guterres rumbled that, over the horizon, he could see “the point of no return”. Delegates waved the UN’s latest Emissions Gap Report as if it were both a millenarian death oracle and a methodologically indisputable text; in it, the recommendation to cut emissions by at least 7.6 per cent per year for the next decade.

    One can’t help but feel that we have heard such curiously precise warnings before. Last year the UN warned that we had just 12 years to save the planet. Scientists have since revised this to approximately 18 months. Or perhaps it is already too late. The experts don’t seem quite sure.

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    Indeed, the distinction between present and future seems to be fading to discardable subtlety. Take the study which has gone viral in recent days for claiming that parts of the world have either already reached – or are inching towards –“tipping point”, whereby the planet becomes caught in destructive feedback loops. Are we already doomed, or nearly doomed, or nearly already doomed? More is the mystery.

    Claims such as these are projections, but they are routinely presented to the public as unquestionable facts. This effectively reduces them to fake news. Even more so, given that the accuracy of the climate modelling upon which these figures and scenarios rely is contested, and the climate does not change in a straight line. 

    To take one example, the UN’s international climate change body, the IPCC, said in 2007 that temperatures had risen by 0.2C per decade between 1990-2005 and used that figure for its 20-year projection. Inconveniently, warming turned out to have been just 0.05C per decade over the 15 years to 2012.

    The IPCC acknowledges the uncertainty of the computations it champions; hence the disclaimer squirreled away on its website stating that it does not guarantee the accuracy of the information it contains. A caveat lost in translation at the resplendently funereal press conferences.

    This post-truth scam is having a chilling effect on science. Experts are locked in a race to the bottom to make detailed and disastrous premonitions. And despite the fact that disciplined debate is the motor of scientific discovery, eco-extremists are shutting down discussions that dissent from the Apocalypse narrative. CO2 emissions may not be the only reason for warming. So sidelining studies that have, for example, found the natural climate system can suddenly shift, and ridiculing researchers who explore other possible variables – from solar changes to volcanoes – could be driving us further from the truth.

    Laymen like me sense that something is amiss, because we grew up assuming science is more about possibility than limitations. But so it goes that, in this messed-up world, the optimists have become sceptics; and those unradicalised by global warming delirium, the extremists.


    Tyler Durden

    Thu, 12/19/2019 – 22:05

  • "Where's The Beef?": Missouri Church Leader Tries To Pay For Gay Sex With Arby's Gift Card
    “Where’s The Beef?”: Missouri Church Leader Tries To Pay For Gay Sex With Arby’s Gift Card

    And on the third day, God created fast food restaurant gift cards and gay dating apps.

    That was the recent gospel according to the leader of a Missouri church, who allegedly tried to pay for sex on Grindr, a gay hookup app, using an Arby’s card, according to the New York Post

    Barry Cole Poyner attempted to “bed college age guys” by offering to pay for their gas, clothes – and roast beef sandwiches – according to local authorities. He used the online handle “DILF” while communicating. 

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    Poyner, 57, is a Church of Christ elder and professor at nearby Truman State University. He was busted after a student reported him and a cop went undercover on the app. Poyner then sent the officer a message saying he would “love to have a sugar daddy relationship”. He offered to fill up his gas tank (honestly, no pun intended – honestly) in exchange for sexual favors on December 3.

    Poyner said if the younger guy was willing he “might throw in an Arby’s card LOL.”

    But the joke was on Poyner.

    When he showed up as the gas station for the meetup, he was met by officers and tried to flee. He was then pulled over several blocks away. He told police he was “not doing anything with a minor” and was “only trying to help”. He was charged with patronizing prostitution and faces up to six months in jail. 

    He has since been suspended from Truman State, though it is unclear whether or not he is still in a leadership role at the Church of Christ. 


    Tyler Durden

    Thu, 12/19/2019 – 21:45

  • "Pig Ebola" Is Now Running Wild In Indonesia, And Has Already Killed A Quarter Of The World's Swine
    “Pig Ebola” Is Now Running Wild In Indonesia, And Has Already Killed A Quarter Of The World’s Swine

    Authored by Michael Snyder via The End of The American Dream blog,

    The global pig population is being absolutely decimated by a disease that does not have a cure.  African Swine Fever, also commonly referred to as “Pig Ebola”, is raging out of control in dozens of countries all over the globe.  It has a mortality rate of close to 100 percent, and once it hits an area even the pigs that are able to survive the disease are killed off in order to prevent it from spreading elsewhere.  Unfortunately, African Swine Fever just continues to pop up in more locations.  As you will see below, it is now sweeping through the heavily-populated nation of Indonesia. 

    Nearly 270 million people live in Indonesia, and they are heavily dependent on pork as a source of protein.  But of course the same thing could be said about almost all of the countries where African Swine Fever is currently raging.

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    The mainstream media in the U.S. hasn’t been properly reporting on this crisis, and that is likely because this disease has not spread to our nation yet.

    But let there be no doubt – this is truly a crisis of Biblical proportions.  In fact, it has been estimated that this epidemic has already killed about one-fourth of the world’s pigs.  The following comes from an Australian news source

    Experts say the disease has wiped out an estimated 25 per cent of the world’s pig population.

    The fever has been reported in around 50 countries, including China, Belgium, Slovakia, Cambodia, North Korea, South Korea, Vietnam and the Philippines.

    And this same figure is being quoted by the New York Daily News

    African swine fever has been reported in nearly 50 nations — including China, South Korea, the Philippines and Belgium — and it’s causing an incredible crisis on a global scale. Alarmingly, more than one-quarter of Earth’s pigs have been wiped out by the virulent disease.

    This should be front page news all across America, but of course the big news networks really don’t want to talk about anything other than the impeachment of Donald Trump these days.

    Unfortunately, everyone on the entire planet is going to feel the pain of this crisis as it continues to intensify.  We are potentially facing a serious global pork shortage, and this disease continues to pop up in new areas.  When it recently began spreading in Indonesia, it made headlines all over the globe.  The following comes from Reuters

    Nearly 30,000 pigs have died from African swine fever (ASF) in Indonesia’s North Sumatra province as of Dec. 15, causing millions of dollars of economic losses as authorities try to quarantine the areas affected, officials said on Wednesday.

    The Agriculture Ministry has declared an outbreak of the highly contagious virus in the country and said it is contained only in some parts of North Sumatra, minister Syahrul Yasin Limpo told reporters.

    Asian countries rely very heavily on pork to feed their populations, and the severe losses that we are witnessing are not going to be easy to replace.  At this point, Indonesia has become the 11th Asian nation where African Swine Fever is spreading…

    To date, 11 Asian countries have reported outbreaks since August 2018, including Indonesia, Mongolia, North Korea, South Korea, China, the Philippines, Vietnam, Laos, Cambodia, Myanmar and Timor-Leste.

    The epicenter for this crisis is in China.  The Chinese produce and eat more pork than anyone else in the world, and it was recently projected that their hog herd “will likely shrink by 55% by the end of the year” due to this disease…

    China’s hog herd fell by half in the first eight months of 2019 due to a devastating outbreak of African swine fever and will likely shrink by 55% by the end of the year, analysts at Rabobank said on Wednesday.

    As I detailed in a previous article, it has been estimated that 150 million pigs have already died in China.

    To put that in perspective, there are only about 70 million pigs in the United States right now.

    So you could kill every pig in the United States twice and you would still not get to the total that have already died in China because of this epidemic.

    Needless to say, pork prices are absolutely soaring in China.  They have more than doubled since this time last year, and in November we saw another huge jump in Chinese food inflation.  The following comes from Zero Hedge

    As has been the case for the past year, the culprit behind the headline CPI surge was food inflation, which accelerated further to a record +19.1% in November from +15.5% in October, primarily on higher inflation in fresh vegetable and pork prices.

    So what is the bottom line?

    The bottom line is that this is an extremely serious threat to the global food supply.

    Beef, chicken, fish and pork are the four main global sources of protein, and right now pork is already in very short supply in some parts of the world.

    And of course this comes at a time when global weather patterns are going absolutely nuts and we have seen disastrous harvest seasons all over the planet.

    We are entering the time of “the perfect storm”, and most people have absolutely no idea what is ahead of us.

    Even if you don’t eat pork, this is a story that you need to keep a very close eye on, because this is going to push up food prices everywhere.  Demand for beef, chicken and fish will increase as pork becomes more expensive and consumers turn to other options.  And in some of the poorer places around the world, some impoverished families may have to start cutting meat out of their diets entirely.

    We have never seen a crisis quite like this in any of our lifetimes.  Despite all of our advanced technology, we are still dependent on farmers to produce the food that we eat, and this is truly an existential crisis for the entire global pork industry.

    There is no way to spin this to make it sound nicer.  Many are hoping that this outbreak will subside eventually, but right now it doesn’t look like that will happen.

    And once this disease reaches the United States, we will start to experience the same panic that is already sweeping through nearly 50 other nations around the globe.


    Tyler Durden

    Thu, 12/19/2019 – 21:25

  • China Premier Warns Of Economic Turmoil In 2020, Continued Deceleration Means Global Rebound Unlikely
    China Premier Warns Of Economic Turmoil In 2020, Continued Deceleration Means Global Rebound Unlikely

    Chinese premier Li Keqiang was quoted on state television by Reuters on Thursday as saying the economy could face tremendous downward pressure in 2020.

    Li said the downward pressures could be even greater than what was seen in 2019; he made no mention of the possible trade resolution with the US would correct economic growth. 

    He said the government would implement monetary and fiscal policies to keep the economic expansion within a consistent range throughout 2020. This could be the latest confirmation that China’s GDP could slip underneath 6%.

    A similar warning was echoed by an advisor to the People’s Bank of China (PBoC) last week, who said China’s economy might not recover for the next five years.

    Liu Shijin, a policy adviser to the PBoC, said the country’s GDP will decelerate through 2025 and could print in a range of 5 to 6%. 

    Shijin warned that excessive monetary policy is failing to stimulate the economy and could cause it to decelerate in the year ahead. 

    Last month, we noted that China’s credit growth plunged to the weakest pace since 2017 as a continued collapse in shadow banking, weak corporate demand for credit, and seasonal effects all signaled that China’s economy, nevertheless, the global economy, will continue to slow in 2020. 

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    A further deceleration in China’s economy could ruin the party for equity bulls, who have already priced in a massive 2016-style rebound in the global economy for 1Q20. A slowing China means the world could fail to rebound, though we don’t discount the stabilization narrative.

    With China’s economy unlikely to sharply rebound early next year, global investors could find themselves repricing growth in the near term as global equities are at all-time highs thanks to massive money printing by central banks. 

    To gain more color on China’s extended slowdown, Fathom Consulting’s China Momentum Indicator (CMI) provides a more in-depth view of China’s economic activity than the official Chinese GDP statistics. 

    CMI is based on ten alternative indicators for economic activity; some of those indicators include railway freight, electricity consumption, and the issuance of bank loans.

    Fathom has stated that in CMI, the calculation of the index avoids measuring construction activity, and instead focuses on shadow measures of economic activity. The consulting group says this allows the index to be “less prone to manipulation than the headline GDP figures.”

    “In 2014, when China’s traditional growth model was running out of steam and vulnerabilities were rising, authorities toyed with credit tightening and an enforced rebalancing. But at the end of 2015, when growth slowed too sharply, they quickly threw in the towel, resorting to the old growth model of credit-fuelled growth. With growth once again slowing, and past precedent suggesting credit has neared its limit, China finds itself at a crossroad,” Fathom recently said.

    China’s failure to stimulate its economy suggests CMI will continue a downward trajectory that has been underway for the last decade.

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    We’ve recently outlined the bust of the global auto industry has weighed down the Chinese economy. With no signs of an upswing in the auto market, China’s economy will remain depressed in the years ahead.

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    As China’s economy slows, global commodity prices are stuck in a deflationary spiral. 

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    China’s slowing economy warns that global equities have mispriced growth for early 1Q20. 

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    Looking for signs of life in the Chinese economy — there aren’t any at the moment.

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    Société Générale’s latest report shows employment in China contracting across manufacturing and non-manufacturing, outlining how the slowdown is broad-based.

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    Bloomberg has compiled a list of long-time China watchers that are warning about an extended slowdown. 

    George Magnus, a research associate at Oxford University’s China Centre and author of “Red Flags: Why Xi’s China is in Jeopardy:” 

    In the spirit of self-criticism, I’d say my best call on the economy was an early spot of the huge demographic shift that kicked off in earnest in 2012, an abiding assertion that China’s elevated growth rates could not be sustained, and anticipation of a financial crisis that turned up in 2015-16. Worst call was thinking that crisis might turn into a ‘Minsky Moment’ for China, as per 2007-08, and failing to integrate properly the tools the state has to prevent catastrophic failure.

    I expect China to flirt with officially recorded growth of around 6%, but the reality is that the tempo of growth is ratcheting down to somewhere between 3% and 4%. In 2020, perhaps 5.8% to 6%, officially, not least because the economic news has to remain upbeat ahead of the CCP centenary in 2021. The consequences of over-indebtedness, demographic change, inadequate wealth transfer and income redistribution policies, and stagnant total factor productivity growth associated with institutional flaws are the main drags on growth. The 2020s will be a challenging time for China.

    Jim O’Neill, the former Goldman Sachs Group chief economist who coined the term BRIC: 

    The BRICs path assumed China would grow 5% a year in the decade 2020-29 and I have no reason for changing this. If it does, and so long as the renminbi doesn’t decline a lot in value, then by the end of the decade, China will be very close to being as big in current dollar terms as the US.

    As this decade nears its end, China has major problems positioning itself in the world. As evidenced by the Uighur situation, China’s approach to life now gets much more global attention than when it was smaller. In the coming decade, China has to somehow develop a more subtle and sophisticated stance on many of these issues, and I am not sure Beijing fully realizes this yet.

    Edward Yardeni, president and chief investment strategist at Yardeni Research: 

    Demography is starting to really weigh on China’s growth. China is rapidly evolving into the world’s largest nursing home.

    They are going to have to provide a social safety net for these folks who are going to get older and need health care. If they don’t do that, they are going to depress their consumers. When you want to be a superpower, there are a lot of factors that matter, and demography is certainly one of them.

    The biggest takeaway is China produced 60% of the world’s debt over the last ten years and is the biggest driver in global economic growth. A slowing China means the global economy will likely remain stagnate in 2020. 


    Tyler Durden

    Thu, 12/19/2019 – 21:05

  • "Their Obsession With Weapons Is Crazy" – Gorbachev Warns US Is Bent On "Absolute Military Supremacy"
    “Their Obsession With Weapons Is Crazy” – Gorbachev Warns US Is Bent On “Absolute Military Supremacy”

    Authored by David Brennan via Newsweek.com,

    Former Soviet premier Mikhail Gorbachev has urged President Donald Trump’s administration to re-engage with Russia on landmark arms control treaties, warning that the collapse of Cold War-era nuclear weapon limits threatens global catastrophe.

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    Speaking with Japanese newspaper The Asahi Shimbun, Gorbachev lamented America’s withdrawal from two key arms control treaties signed during the Cold War—the Anti-Ballistic Missile Treaty (ABMT) during President Geroge W. Bush’s tenure, and the more recent withdrawal from the Intermediate-Range Nuclear Forces (INF) Treaty.

    Russia has also since suspended participation in the INF Treaty, prompting concerns of a new arms race. The infographic below, provided by Statista, shows the estimated global nuclear weapons arsenals as of December 2017.

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    STATISTA

    Gorbachev is a prominent advocate of nuclear disarmament. He told the Asahi he is “still praying for” the destruction of all nuclear weapons, noting that the number of warheads in Russia and the U.S. has reduced by more than 80 percent since the peak years of the Cold War.

    Ads by scrollerads.com

    But he warned that this “peace dividend” is now at risk with the collapse of the ABMT and INF Treaty. It is also unclear whether New START (Strategic Arms Reduction Treaty)—the successor to START I that Gorbachev helped craft—will be renewed when it expires in 2021.

    The Trump administration said last year that it would ditch the 1987 INF Treaty, which banned ground-launched nuclear and conventional missiles with ranges from 310 miles 3,417 miles. The White House accused Russia of violating the deal by developing the SSC-8 missile.

    But Gorbachev blamed Washington for the development. “The decision by the United States to withdraw from the INF threatens to unleash a sequence of events that would move to undo” the post-Cold War peace dividend, he said.

    “Out of the three principal pillars of global strategic stability—the ABMT, INF and START—only one is left,” he added, noting that the future of New START is far from certain.

    Russia has said it is willing to renew the agreement, but the Trump administration is yet to make a decision.

    “What’s behind the United States’ decision to withdraw from the INF is their striving to free themselves of any obligations with respect to weapons and obtain absolute military supremacy,” Gorbachev said.

    That is an illusory aim, an unfulfilled hope. Hegemony by one single country is not possible in today’s world. The result would be destabilization of the global strategic situation, a new arms race and all the randomness and unpredictability of global politics. The security of every country, including the United States, will suffer as a result.”

    Russia is responsible for the termination of the INF Treaty. The United States engaged Russia since 2013 to return it to compliance with the treaty but Russia chose to retain and deploy its non-compliant missile system rather than eliminate it and preserve the treaty.

    A State Department spokesperson told Newsweek that the U.S. “remains committed to effective arms control that advances U.S., allied, and partner security, is verifiable and enforceable, and includes partners that comply responsibly with their obligations.”

    The spokesperson explained that Trump has “directed us to think more broadly than New START and include both China and Russia in our next steps. We stand ready to engage with both Russia and China on arms control negotiations that meet our criteria.”

    “The Administration is evaluating the possibility of an extension of the New START Treaty, taking into account the threats we face today, the changing security environment, and Russia’s statement that it has no preconditions to extension.”

    Gorbachev said the U.S. must bear responsibility for nuclear proliferation, given it was the first nation to harness the technology.

    “They told our leaders in talks that they had developed the bomb. They said this to intimidate us, so we would bow down to America,” he told the newspaper.

    “Their obsession with weapons is crazy.”

    Gorbachev called on both the U.S. and Russia to “restore the movement toward a world without nuclear weapons.”

    Both nations have signalled additional investment in their nuclear arsenals, including a fresh focus on low-yield, tactical nuclear weapons. Such warheads have a more local impact, reducing the danger of escalation and subsequent mutually assured destruction (MAD).

    Though MAD has kept nuclear states at peace for decades, Gorbachev said it offers no guarantee for the future.

    “Nuclear deterrence will not protect the world from a nuclear accident or from nuclear terrorism, but would keep it under a constant threat,” he told the Asahi.

    “The key to resolving security issues lies not in weapons, but in politics,” he added, bemoaning the freeze in bilateral relations between Washington and Moscow. “Despite everything, I believe that this is still within our capabilities,” he added.

    As for Trump, the Cold War leader said, “I hear from the current president of the United States that they are the richest country, that they have more money than anybody else, so there is going to be a new arms race. Who is America planning to fight, however? The first country to come to mind, of course, is Russia.”

    “We should never let ourselves embark on a course of developing nuclear weapons again and of a new arms race,” Gorbachev warned.

    “We have to stop working on pipe dreams, and engage with realpolitik. We don’t need an apocalypse! We need peace!”


    Tyler Durden

    Thu, 12/19/2019 – 20:45

  • House-Senate Impeachment Impasse Would Mean Trump Wasn't Impeached At All: Harvard Law Prof
    House-Senate Impeachment Impasse Would Mean Trump Wasn’t Impeached At All: Harvard Law Prof

    While Nancy Pelosi threatens to withhold articles of impeachment passed Wednesday night by the House, Harvard Law Professor Noah Feldman says that President Trump isn’t technically impeached until the House actually transmits the articles to the Senate.

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    Feldman, who testified in front of the House Judiciary Committee’s impeachment proceedings earlier this month, argues in a Bloomberg Op-Ed that the framers’ definition of impeachment “assumed that impeachment was a process, not just a House vote,” and that “Strictly speaking, “impeachment” occurred – and occurs — when the articles of impeachment are presented to the Senate for trial. And at that point, the Senate is obliged by the Constitution to hold a trial.”

    If the House does not communicate its impeachment to the Senate, it hasn’t actually impeached the president. If the articles are not transmitted, Trump could legitimately say that he wasn’t truly impeached at all.

    That’s because “impeachment” under the Constitution means the House sending its approved articles of to the Senate, with House managers standing up in the Senate and saying the president is impeached.

    As for the headlines we saw after the House vote saying, “TRUMP IMPEACHED,” those are a media shorthand, not a technically correct legal statement. So far, the House has voted to impeach (future tense) Trump. He isn’t impeached (past tense) until the articles go to the Senate and the House members deliver the message. -Noah Feldman

    Pelosi, meanwhile, won’t transmit the articles until the Senate holds what she considers a “fair” trial.

    Roughly modeled after England’s impeachment procedures, the framers in Article I of the constitution gave the House “the sole power of impeachment,” while giving the Senate “the sole power to try all impeachments.”

    Article II outlines says the president “shall be removed from office on impeachment for, and conviction of, treason, bribery, or other high Crimes and Misdemeanors.”

    There’s more:

    But we can say with some confidence that only the Senate is empowered to judge the fairness of its own trial – that’s what the “sole power to try all impeachments” means.

    If the House votes to “impeach” but doesn’t send the articles to the Senate or send impeachment managers there to carry its message, it hasn’t directly violated the text of the Constitution. But the House would be acting against the implicit logic of the Constitution’s description of impeachment.

    A president who has been genuinely impeached must constitutionally have the opportunity to defend himself before the Senate. That’s built into the constitutional logic of impeachment, which demands a trial before removal.

    To be sure, if the House just never sends its articles of impeachment to the Senate, there can be no trial there. That’s what the “sole power to impeach” means.

    In closing, Feldman says “if the House never sends the articles, then Trump could say with strong justification that he was never actually impeached,” adding “And that’s probably not the message Congressional Democrats are hoping to send.”


    Tyler Durden

    Thu, 12/19/2019 – 20:25

    Tags

  • Iran Wants To Create Muslim Crypto To Confront America's "Economic Hegemony"
    Iran Wants To Create Muslim Crypto To Confront America’s “Economic Hegemony”

    Authored by Helen Partz via CoinTelegraph.com,

    Iran’s President has proposed to create a Muslim cryptocurrency as one of a number of means to confront the economic dominance of the United States.

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    image courtesy of CoinTelegraph

    Speaking at an Islamic conference in Malaysia on Dec. 19, Iranian President Hassan Rouhani called Muslim nations to strengthen financial and trade cooperation and to cut their reliance on U.S. dollar, according to a report by The Associated Press (AP).

    New Muslim cryptocurrency to confront “U.S. economic hegemony”

    As Rouhani argued that U.S. economic sanctions are the “main tools of domineering hegemony and bullying” of other nations. Rouhani put forward the establishment of a special banking and financial system among Muslim nations that use local currencies for trade. Local reports confirm that Rouhani proposed the creation of a cryptocurrency as part of the effort.

    As reported by the AP, Rouhani said:

    “The Muslim world should be designing measures to save themselves from the domination of the United States dollar and the American financial regime.”

    Malaysia supports Iranian President’s idea to create an alternative to the U.S. dollar

    The conference was also attended by leaders of major Muslim countries including Turkey, Qatar and host Malaysia, while Saudi Arabia and Pakistan withdrew from the conference.

    The idea of the Iranian President has reportedly met with support from Malaysia alone to date, as the country’s Prime Minister, Mahathir Mohamad, endorsed the initiative, as reported by local publication Free Malaysia Today. The official noted that this was the first time that Iran and Turkey are considering the opportunity of creating an alternative to the U.S. dollar. He said:

    “We can use our own currencies or have a common currency.”

    Meanwhile, Turkish President Recep Tayyip Erdogan apparently criticized the Organisation of Islamic Cooperation, arguing that the platform that connects the Muslim world together demonstrated a “lack of implementation.” Erdogan also outlined that Muslim countries needed to focus on Islamic financing, suggesting the establishment of a special working group.

    Other countries trying to bypass U.S. sanctions with crypto

    A number of global jurisdictions have been considering the creation of a cryptocurrency to dodge sanctions by the U.S. to date. As reported by Cointelegraph in late September, authorities in North Korea announced their intention to issue a digital currency, with experts believing that the initiative aims to help the country to bypass sanctions by the U.S..

    Meanwhile, Venezuela is apparently one of the most popular examples of countries trying to circumvent U.S. sanctions using their own crypto. Launched in February 2018, the Petro became the world’s first national oil-baked cryptocurrency.


    Tyler Durden

    Thu, 12/19/2019 – 20:05

    Tags

  • Watch Live: The Final Democratic Debate Of 2019
    Watch Live: The Final Democratic Debate Of 2019

    Tonight’s Democratic debate – the final one of 2019 – features seven candidates; the four leading candidates Biden, Buttigieg, Sanders and Warren, as well as Andrew Yang, Amy Klobuchar and Tom Steyer.

    Of the remaining candidates, who won’t be there? Cory Booker, Julián Castro, Tulsi Gabbard, Michael Bloomberg, Deval Patrick, Michael Benne, and Marianne Williamson.

    The pressure on the candidates to manufacture drama will be considerable,” notes Politico, which is hosting the event along with PBS NewsHour.

    With less than two month until the Iowa caucuses, and some candidates having seen their polls (and odds) collapse, tonight’s anti-Trump get-together will be their last chance for redemption before the news cycle calms a little.

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    Source: Bloomberg

    Here are the topics that The Hill thinks will come up.

    Impeachment

    The debate comes exactly one day after the House voted to impeach President Trump. The issue will now go to the Senate where a trial will be held. Three of the candidates on stage, Warren, Sanders, and Klobuchar, will be called back to Washington for the trial. Expect them to field questions about the topic. Biden could also face questions given Trump’s call for Ukraine to investigate him and his son, which kicked off the impeachment inquiry.

    Diversity

    While he did not make the debate stage, Sen. Cory Booker (D-N.J.) has led the charge in calling for more diversity on the debate stage. Booker and former Housing and Urban Development Secretary Julián Castro were joined by all of the candidates appearing on Thursday’s debate in requesting the Democratic National Committee lower the qualification standards for debates in January and February. The topic could come up, given the attention it’s gotten in the run-up to the forum.

    Labor rights

    The Democratic Party has long maintained strong connections to the labor movement in the U.S., and those ties were on display earlier this week when all of the candidates pledged not to cross the picket line if Sodexo and Unite Here Local 11 did not come to an agreement. The candidates could receive some questions on how they would work with labor groups as president.

    Environment

    The issue of combatting climate change could also come up, given California’s struggle this year with wildfires. Environment advocate Greta Thunberg has also been in the news recently after being named Time’s Person of the Year. President Trump attacked her on Twitter after she received the award, saying she needed to work on anger management issues. Biden jumped to Thunberg’s defense, saying “What kind of president bullies a teenager?”

    Health Care

    The topic has played a role in most of the primary debates, with the progressive candidates pushing for a “Medicare for All” plan, while centrist candidates have advocated for building upon the Affordable Care Act, also known as ObamaCare. Expect this topic to come up as one of the party’s currently most hotly contested issues.

    *  *  *

    Watch live (due to start at 2000ET):


    Tyler Durden

    Thu, 12/19/2019 – 19:55

    Tags

  • Farmers "Deeply Worried" As Argentina's Fernandez Aims To Hike Export Taxes Twice In Three Days
    Farmers “Deeply Worried” As Argentina’s Fernandez Aims To Hike Export Taxes Twice In Three Days

    Farmers in Argentina are finding out the wonderful benefits of taxation and government micromanagement first hand. Just three days after the government hiked export taxes for farmers, it is considering doing it again, causing outrage on the Pampas crop belt.

    A bill sent to lawmakers proposes that taxes on soybean shipments could hike to 33%, according to Bloomberg. That compares to 30% currently and 24.7% last week. Corn and wheat would rise to 15%, from 12% currently and just 6.7% last week.

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    President Alberto Fernandez will need opposition votes to get the legislation through congress, despite holding a majority in the senate. Approval could come by the end of the month, should he get the votes he needs. The bill also contains a provision to reduce rates for exports with “added value”, meaning that soy meal and oil may be charged less than 33% “in a boon to crushers that have lost competitiveness and seen idle capacity rise after the differential with raw beans was scrapped last year.”

    Argentina is a top exporter of soy meal, used as animal feed, and soy cooking oil. So far, it is unknown whether or not beef, the nation’s other major export, will be considered a value added product. 

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    This move comes after Fernandez raised taxes on Saturday, which was just days after he took office. The hikes caused outrage among rural farmers and leaders who claimed they weren’t told it was coming. They also warned that output could suffer as a result. 

    One of Argentina’s biggest farm associations, CRA, said: “We are deeply worried about the latest measures.” 

    Farmers are concerned that, despite Fernandez’s intentions to revive the economy, that he’s instead creating a hostile attitude toward farmers. Profit margins will suffer as a result of corn and wheat shipments being charged 15% – this could force farmers out of crop rotation strategies that came about in recent years to plant cheaper soybeans instead. 

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    The effects of the tax hikes will be most prevalent next year, as this season’s wheat is already being harvested. It’s also too late to change plans for soybeans and corn. According to Jacob Christy, a trader at Andersons Inc., farmer selling could slow “considerably” and there could be an impact on global markets, despite some commodity traders already anticipating the increase. 


    Tyler Durden

    Thu, 12/19/2019 – 19:45

  • How The FBI (Or Congress) Can Use Warrant Surveilling One American To Spy On Many More
    How The FBI (Or Congress) Can Use Warrant Surveilling One American To Spy On Many More

    Authored by Sharyl Attkisson Via sharylattkisson.com

    If you’ve watched the current impeachment proceedings with something beyond a passing interest, you might have heard the controversy over Rep. Adam Schiff (D-Calif.) secretly obtaining and then releasing phone records of political rival Rep. Devin Nunes (R-Calif.) and journalist John Solomon.

    Critics say such an alleged invasion of citizens’ privacy and rights for political purposes is beyond the pale.

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    But Democrats argue that Schiff didn’t really target Nunes or Solomon in his information dragnet. He says their calls were merely picked up incidentally because they spoke to two people who are targets: the president’s lawyer Rudy Giuliani or Lev Parnas, a figure charged with violating campaign finance violations.

    However, Schiff’s controversial release of information naming Nunes and Solomon provides a window into how the FBI secretly operates to obtain information on Americans for whom they have no explicit permission to wiretap or monitor.

    Believe it or now, intelligence agencies can use one legal wiretap to monitor as many as 25,000 people for which there was no wiretap justification.

    The following is an excerpt from my reporting on Full Measure with Sharyl Attkisson that explains this phenomenon.

    Through a single warrant, government agents can capture phone calls, texts, emails and bank records from people “two hops” away. That means all of the suspected spy’s direct contacts— “one hop” —and everybody who contacts those people or even visits their Facebook pages or websites—two hops. 

    In this way, one analysis found intel agencies can use one legal wiretap to access to 25,000 people’s phones. Consider at least a half dozen Trump officials were caught in the FBI surveillance dragnet, according to news reports: campaign chair Manafort, multiple “transition officials” including Lt. General Michael Flynn and Jared Kushner, and adviser Carter Page— who was wiretapped over and over though never charged with anything.

    Sidney Powell (former prosecutor and Lt. Gen. Michael Flynn’s attorney): And what most people don’t understand is, they don’t just get everything they want against Carter Page, they get everything they want against every person who communicated with Carter Page, and against every person who communicated with that person. So it goes out what’s called two hops. 

    Sharyl: And that would allow them to find intelligence from someone nowhere near the original center that they went to the FISA Court about? 

    Sidney Powell: Exactly. They could have all kinds of banking records and personal information on tens of thousands of people by virtue of those FISA applications. 

    Sharyl: —including Trump who was known to be one or two hops away from surveilled targets. 

    On top of that, at least four key anti-Trump figures have admitted in testimony and interviews accessing sensitive, protected intelligence of US citizens—including Trump associates—under the Obama administration. All say they were guarding national security, had no political motives, and didn’t leak the information. As the 2016 campaign peaked, Obama official Samantha Power’s name was on hundreds of attempts to reveal the identities of Americans caught up in secretly-gathered intelligence. Obama adviser Susan Rice also took part. And Obama officials Sally Yates and James Clapper admit having reviewed intel gathered on US political figures. 

    Sen. Charles Grassley (R-Iowa) : Did either of you ever review classified documents in which Mr. Trump, his associates or members of Congress had been unmasked? 

    Clapper: Well, yes. 

    Sharyl: Do you think Democrats and Republicans alike have, in your view, abdicated responsibility when it comes to oversight of our intelligence community? 

    Liz Hempowicz: Yeah, yeah, I think so. I don’t think this is a problem with one party. 

    Liz Hempowicz is director of public policy at the watchdog Project on Government Oversight. She blames Congress for doing a poor job watching over the work of the government’s spies. 

    Liz Hempowicz: I think as a body, Congress has kind of been very comfortable giving the intelligence community a wide deference, and I don’t think the intelligence community has earned that.

    Sharyl: In short, why do you think it is that Congress, members of both parties, wouldn’t be taking a harder look at the alleged surveillance abuses? 

    Liz Hempowicz: Well I think it’s a difficult issue to conduct oversight over, and I think once you get pushback from the intelligence communities and they wave around words like “national security” and “security threat,” I think it becomes a more difficult area for members of Congress to kind of use some of their political capital. 

    Hempowicz adds that alleged surveillance abuses aren’t new. Long before the Trump era, with special counsel Mueller heading up the FBI, US political figures were swept up in wiretaps, the contents improperly leaked to the media California Congresswoman Jane Harman in 2009and Ohio Congressman Dennis Kucinich in 2011. 

    In 2013, Director of National Intelligence Clapper denied mass spying on Americans. 

    Sen. Ron Wyden (D-Oregon): Does the NSA collect any type of data at all on millions or hundreds of millions of Americans?

    Clapper: No sir. 

    But when NSA whistleblower Edward Snowden revealed the opposite, Clapper apologized and said he’d been confused by the question. In 2014, the CIA got caught spying on Senate staffers, though CIA Director John Brennan had explicitly denied it. He—too— then apologized. 

    And the government has spied on journalists: James Rosen, then of Fox News—now with Sinclair, The Associated Press, and, as I allege in a federal lawsuit, on my work as an investigative correspondent at CBS News. 

    Finally, in 2016, there was a striking election year uptick in government agents combing through a sensitive NSA database of intel on innocent US citizens.

    In 2013, there were 9,500 searches involving 198 Americans. By 2016, that number escalated to 30,355 searches of 5,288 Americans. 

    Which brings us back to the Foreign Intelligence Surveillance Court or FISA admonishment in October 2016. Judge Collyer also slammed the FBI for a major violation: giving raw intelligence about Americans to unnamed third party contractors. 

    Sharyl: And the names of these three contractors are blacked out?

    Sidney Powell: They’re blacked out. You cannot tell from the decision who they are. But the American people need to be jumping up and down, demanding to know the answers to that.

    Sharyl: Because it would tell us what? 

    Sidney Powell: Well it’s going to tell us who was given special privileges by James Comey to go in and get all this information. It will tell us who’s behind the unmaskings. 

    The court said the FBI’s failures had been “the focus ofconcerns since 2014.” All of that contradicts assurances from FBI Director Comey “Nobody gets to see FISA information of any kind unless they’ve had the appropriate training and have the appropriate oversight.”

    Former FBI Director Comey’s successor Christopher Wray has made similar claims. 

    Wray: No evidence of any kind of abuse. 

    In the end, Powell argues that neither the FBI nor Special Counsel Mueller— as ex-FBI Director —can fairly investigate matters that intersect with allegations about their own agencies and colleagues. 

    Sharyl: Assuming for the sake of argument that what you say is correct, I think people might say, “But maybe there was no premise for the Russia investigation. But so many people surrounding Trump, and so many people who’ve been looked at have either pled guilty or been found to have done something else in the past. Doesn’t that validify the investigation that was done?” 

    Sidney Powell: Absolutely not. Not unless we’re going to revert to the practice of Russia itself, and the KGB agent who said, “Find me the man and I’ll find the crime to pin on him.” 

    Hempowicz has a slightly different take— that Mueller’s probe is important and so far has proven fair. But she agrees that someone should also be unraveling any surveillance abuses.

    Sharyl: How would you describe, in a nutshell, why this is important? 

    Liz Hempowicz: I don’t think the intelligence community has accurately shown that there are benefits of this pervasive surveillance of American citizens. I just haven’t seen them kind of show their work like a fourth grader would have to do in math to prove that they’ve gotten the right answer.

    After issuing her blistering comments in 2016, the Foreign Intelligence Surveillance Court judge required the Justice Department to devise new rules to better protect Americans’ privacy rights. The court approved a proposal made by the Trump Justice Department in March 2017.

    Watch the full Full Measure report by clicking the link below:

    http://fullmeasure.news/news/politics/russia-probe-02-11-2019

    Support Attkisson v. DOJ and FBI


    Tyler Durden

    Thu, 12/19/2019 – 19:25

    Tags

  • Cash-Strapped Chinese Banks Are Offering Pork To Lure New Depositors
    Cash-Strapped Chinese Banks Are Offering Pork To Lure New Depositors

    In the peak days of the European financial crisis, when Spanish banks were on the verge of collapse and were desperate for depositor funding as the ECB scrambled to come up with a viable rescue scheme, one bank – the soon to be insolvent Bankia – had a “clever” idea: offer a Spiderman Beach Towel in exchange for a €300 deposit.

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    Fast forward 7 years when the cash-strapped banks of another country have come up with a similar trick to entice depositors: a growing number of small local banks across China have conceived of a “brilliant” scheme to lure new depositors: handing out servings of expensive pork as a reward for opening an account, the SCMP reports.

    As we discussed in recent months, China’s smaller banks were hit by a perfect storm of falling rates and declining state support, which culminated in bank runs and the nationalization of several small and medium banks. And since there is little hope that the status quo will change any time soon, Chinese banks – which on top of everything are facing a $400 billion liquidity shortfall in January  – are forced to go to greater lengths to attract new deposits, since they generally earn less money from lending and have fewer funding options than their larger peers.

    Unlike Spain, Chinese banks are offering a product which is in great demand for the nation that is reeling as a result of “pig ebola”: pork. Indeed, as SCMP adds, the fact that pork could be seen as a desirable reward for opening a bank account also speaks to the country’s massive shortage of its favorite staple meat.

    Who knew the intersection of the supply and demand curves would be marked by a pound of pork.

    On Monday, clients who deposited 10,000 yuan (US$1,430) or more in a three-month time deposit at the Linhai Rural Commercial Bank in Duqiao in Zhejiang province were then eligible to enter a lottery to win a portion of pork ranging from 500 grams (18 ounces) to several kilograms.

    “The money is still my own, and the interest is good. I’m happy to receive a piece of pork in addition,” one female client, who deposited around 20,000 yuan (US$2,900), was quoted as saying by the Metropolitan Express. Unfortunately for said client, she failed to grasp that any bank that is resorting to such ham-headed measures to boost depositor interest will likely not be around for long, and her entire deposit will likely vaporize in the coming weeks.

    In any case, the gimmick is working: according to the Express, the bank distributed 1,097 deposit rewards on Monday after scores of mostly elderly clients queued up in front of the bank from early that morning.

    “It was quite a good idea and very popular among locals, especially the elderly,” said a bank staff member, who did not offer his name. He also refused to comment on how much money the bank had received in new deposits due to the promotion.

    In retrospect, it is a brilliant solution: instead of offering higher rates which only accelerate the banks insolvency as these require higher payouts on deposits, the bank is instead making a one-time payment, and the novelty of the “handout” is enough to get substantial new deposits.

    Other rural commercial banks in northern China’s Hebei province and western China’s Guizhou province have also launched similar pork rewards programs. Dushan Rural Commercial Bank, located in the remote mountainous county in Guizhou, offered a coupon for 10 yuan (US$1.4) worth of pork for every 10,000 yuan of new deposits.

    The reason behind China’s infatuation with pork is familiar: the outbreak of African swine fever, which is reported to have killed over 100 million pigs in China, has sent the price of pork skyrocketing, with November’s consumer price index rising 4.5 per cent from a year earlier, up from a 3.8 per cent gain in October, in large part due to a 110.2 per cent increase in the price of pork.

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    There were some signs of improvement: China’s pig population actually expanded in November for the first time in a year, while the price of pork price has fallen in recent weeks. The pig population in 400 counties monitored by China’s Ministry of Agriculture and Rural Affairs grew 2% in November from October, the first monthly rise since November 2018, while the number of breeding sows rose 4% from a month earlier. Wholesale pork prices last week fell back 0.8 per cent from the previous week, the fourth straight weekly decline, according to the latest data released by the Ministry of Commerce on Wednesday.

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    Wholesale pork prices last week fell back 0.8 per cent from the previous week, the fourth straight weekly decline

    China’s pig population, though, is around 40% smaller than it was a year ago, according to data from China’s agriculture ministry.

    Still, despite recent signs of improvement, experts said the crisis may worsen further next year before it improves.

    “It depends on what you mean on whether the worst is over because it’s already killed most of [China’s pigs]. There aren’t as many pigs to kill as there were before,” said E. Wayne Johnson, a veterinarian consultant at Enable AgTech Consulting in Beijing.

    “We expect that there will be outbreaks in the wintertime because it’s very difficult to clean the trucks, particularly in the north of China, and the virus is preserved by cold weather. Plus, you have the fact that the infected pigs are continuing to go into the slaughterhouses, and everybody sends their trucks to the slaughterhouse. So the disease is being spread on the highways just as it was a year ago. There’s no reason to think that it’s over with.”

    With peak seasons for pork consumption just around the corner – with celebrations for the winter solstice this week, the new year holiday on January 1 and the week-long Lunar New Year holiday starting on January 25 – the pressure on the price of pork is set to increase due to limited supplies. To alleviate the coming demand surge, on Tuesday, the government announced that it would release an additional 40,000 tonnes of frozen pork reserves on Thursday, on top of the previous round of 40,000 tonnes released a week ago.

    China also announced earlier this month that it would waive import tariffs on some pork shipments from the United States. In total, China will purchase over 3 million tonnes of pork this year, more than twice as much as last year, confirmed Commerce Ministry spokesman Gao Feng at the end of last month.

    Beijing has also called for a relaxation of restrictions on pig farming on land normally reserved for forests, with the land only returning to forestry production after the pork supply crisis
    has been resolved, according to a document from the National Forestry and Grassland Administration dated Monday and seen by the South China Morning Post.

    “These [recently announced] measures are very positive and effective moves,” said Wang Zuli, a research fellow with the Chinese Academy of Agriculture Sciences. “But pork reserves have been unable to fully resolve the supply problem, so it is hard to say whether the measures are sufficient.”


    Tyler Durden

    Thu, 12/19/2019 – 19:05

Digest powered by RSS Digest

Today’s News 19th December 2019

  • Former NSA Tech Chief Says Mueller Report Was Based On CIA-Fabricated "Evidence"
    Former NSA Tech Chief Says Mueller Report Was Based On CIA-Fabricated "Evidence"

    Authored by Eric Zuesse via The Duran,

    On December 12th, the retired NSA whistleblower and former Technical Director of the NSA, Bill Binney asserted, at 39:00-44:00 in this audio interview of him:

    BILL BINNEY: I basically have always been saying that all of this Russian hack never happened, but we have some more evidence coming out recently.

    We haven’t published it yet, but what we have seen is that there are at least five items that we’ve found that were produced by Guccifer 2.0 back on June 15th, where they had the Russian fingerprints in them, suggesting the Russians made the hack. Well, we found the same five items published by Wikileaks in the Podesta emails. Those items do not have the Russian fingerprints, which directly implies that Guccifer 2.0 was inserting these into the files to make it look like the Russians did this hack.

    Taking that into account with all the other evidence we have; like the download speeds from Guccifer 2.0 were too fast, and they couldn’t be managed by the web; and that the files he was putting together and saying that he actually hacked, the two files he said he had were really one file, and he was playing with the data; moving it to two different files to claim two hacks. Taking that into account with the fabrication of the Russian fingerprints, it leads us back to inferring that in fact the marble framework out of the Vault 7 compromise of CIA hacking routines was a possible user in this case.

    In other words, it looked like the CIA did this, and that it was a matter of the CIA making it look like the Russians were doing the hack. So, when you look at that and also look at the DNC emails that were published by Wikileaks that have this FAT-file format in them, all 35,813 of these emails have rounded off times to the nearest even second. That’s a FAT-file format property; that argues that those files were, in fact, downloaded to a thumb drive or CD-rom and physically transported before Wikileaks posted them.

    Which again argues that it wasn’t a hack.

    So, all of the evidence we’re finding is clearly evidence that the Russians were not in fact hacking; it was probably our own people.

    It’s very hard for us to get this kind of information out. The mainstream media won’t cover it; none of them will. It’s very hard. We get some bloggers to do that and some radio shows.

    Also, I put all of this into a sworn affidavit in the Roger Stone case.

    I did that because all of the attack on him was predicated on him being connected with this Russian hack which was false to being with. All the evidence we’re accumulating clearly says and implies, the US government — namely the FBI, CIA, the DOJ, and of course State Department — all these people involved in this hack, bought a dossier and all of the information going forward to the FISA court.

    All of them knew that this was a fake from the very beginning, because this Guccifer 2.0 character was fabricating it. They were using him plus the Internet Research Agency [IRA] as “supposed trolls of the Russian government”. Well, when they sent their lawyers over to challenge that in a court of law, the government failed to prove they had any connection with the Russian government. They basically were chastised by the judge for fabricating a charge against this company. So, if you take the IRA and the trolls away from that argument, and Guccifer 2.0, then the entire Mueller report is a provable fabrication; because it’s based on Guccifer 2.0 and the IRA. Then the entire Rosenstein indictment is also a fabrication and a fake and a fraud for the same reasons. The judges seem to be involved in trying to keep this information out of the public domain.

    So, we have a really extensive shadow government here at work, trying to keep the understanding and knowledge of what’s really happening away from the public of the United States. That’s the really bad part. And the mainstream media is a participant in this; they’re culpable.

    *  *  *

    The CIA-edited and written Wikipedia, in its article about Binney, accuses him by saying — while providing no footnote or linked-to source for their allegation against him — “His dissent from the consensus view that Russia interfered with the 2016 US election appears to be based on Russian disinformation.” Ever since Binney went public criticizing U.S. intelligence agencies, they have been trying to discredit him. Thus far, however, their efforts have been nothing more than insinuations against his person, without any specific allegation of counter-evidence that discredits any of his actual assertions.

    *  *  *

    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.


    Tyler Durden

    Thu, 12/19/2019 – 00:05

  • After Five Years, Sweden Is About To Wave Goodbye To Negative Rates
    After Five Years, Sweden Is About To Wave Goodbye To Negative Rates

    In a few hours, at 10am GMT, Sweden is about to wave goodbye to the land of negative rates, if only for a little while.

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    After the Swedish Riksbank cut rates as low as -0.5%, where it kept them for nearly three years, from 2016 until the start of 2019, when it hiked by 25bps on January, the Swedish Central bank is almost unanimously expected to hike rates by 25bps to 0.0% according almost all analysts polled by Reuters, putting its experiment with NIRP in the rearview mirror, at least until the next cut by the ECB drags it right back under.

    As RanSquawk previews, if the Riksbank does hike as expected, focus will turn to if this is as their October repo path indicates a one-and-done increase to move out of negative rates, as well as the magnitude of opposition to the hike. This meeting includes a press conference which will begin at 10:00GMT.

    Previous Meeting

    In October, the Riksbank left rates unchanged at -0.25% but clearly signaled that the rate would ‘most probably’ be hiked to 0.0% in December’s meeting. Additionally, their forecast for the repo rate was downgraded, and now indicates that the rate will ‘be unchanged for a prolonged period after the expected rise in December’. In the post-meeting press conference,  Governor Ingves said that negative rates were an exceptional measure and it is appropriate to gradually exit from negative rates.

    Minutes & Rhetoric

    While the October meeting and conference illustrated a desire to hike, the minutes were less in-fitting with this and highlighted a split amongst the board. Most notably, Skingsley said it is justifiable to ask whether it is appropriate to increase rates at all and one member expressed hesitance at hiking around year-end; instead, argued for such a move to be further down the forecast period.

    Aside from the minutes, remarks out of the Riksbank has been fairly light; the most pertinent of comments, which question the December move, arising from Jansson stating that if the rate was to increase around year-end it may be perceived as the Bank deviating from its mandate. While not rhetoric in the traditional sense, the Central Bank Financial Market Survey indicated that several participants believe a less expansionary policy would improve the function of FX and Fixed income markets. Overall, while the pushback from the more Dovish members of the Riksbank is unlikely to be sufficient to alter the flagged hike it does open-up the potential for dissenters.

    Data

    The most pertinent release has been November’s CPIF which beat market expectation printing at 1.7% which is crucially in-line with the Riksbanks November forecast (1.71%); which according to Nordea emphasizes the likelihood of a December hike. Other metrics have been more downbeat, and do not support the planned hike, such as PMIs, Q3 GDP and November’s unemployment rate which rose from 6.0% to 6.8%. That said, Swedish labor market data has been affected by errors recently which ING suggests may lead to the Riksbank treating this with some skepticism. Overall, the domestic data front is not conducive to an interest rate increase, as such consensus is for any hike to be a one-off move, as the October forecast path suggested.

    Deputy Governor Breman

    Since the previous meeting Anna Breman has been appointed as Deputy Governor to replace af Jochnick, Breman will be partaking in the December policy meeting. Breman has previously expressed concern regarding a weak SEK and believes the Riksbank, with negative rate policy, has a limited tool-kit in the scenario of an economic downturn. For reference, Nordea highlight that her monetary policy stance is difficult to categorise and she is likely to follow the majority initially which, overall, makes the board more hawkish. 


    Tyler Durden

    Wed, 12/18/2019 – 23:45

  • "We Can't Wait To See This Bird Fly!": NASA's X-59 Quiet SuperSonic Jet Cleared For Final Assembly
    "We Can't Wait To See This Bird Fly!": NASA's X-59 Quiet SuperSonic Jet Cleared For Final Assembly

    NASA’s X-59 Quiet SuperSonic Technology (QueSST) plane has been cleared for large scale assembly, said a NASA press release, dated Dec. 12.  

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    NASA will build the X-59 in partnership with Lockheed Martin and start test flights in 2021. The goal of the flights is to reduce the noise a sonic boom makes to a sonic thump, or basically as loud as a car door.

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    Tests are expected to occur over major US metro areas as the X-59 cruises at 940 mph at 55,000 feet.

    The X-59’s long, slender design will allow it to reduce the loudness of a sonic boom to that of a gentle thump.

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    “This aircraft has the potential to transform aviation in the United States and around the world by making faster-than-sound air travel overland possible for everyone,” NASA Administrator Jim Bridenstine recently said.

    “We can’t wait to see this bird fly!”

    The X-59 will cost about $250 million to construct, Lockheed Martin’s Skunk Works factory in Palmdale, California, will be responsible for the build. 

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    Skunk Works has also been responsible for developing some of the most secretive aircraft in the world, including the Lockheed U-2, Lockheed F-117 Nighthawk, and Lockheed SR-71 Blackbird. 

    NASA’s decision to approve the X-59 for assembly is the first experimental plane to be cleared in more than three decades.

    The Key Decision Point-D (KDP-D) was the last obstacle for the X-59 before officials reconvene in 4Q20 before the plane’s flight in 2021. 

    “With the completion of KDP-D we’ve shown the project is on schedule, it’s well planned and on track. We have everything in place to continue this historic research mission for the nation’s air-traveling public,” said Bob Pearce, NASA’s associate administrator for Aeronautics.

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    With the construction of the X-59 already underway at Skunk Works, by late 2021, the world will know if the technology can actually reduce the noise of a sonic boom. If so, then this could pave the way for the reintroduction of supersonic flight for commercial airliners by 2030. 


    Tyler Durden

    Wed, 12/18/2019 – 23:25

  • Camera Footage Of Epstein's First Suicide Attempt Has Disappeared, And Nobody Knows Why
    Camera Footage Of Epstein's First Suicide Attempt Has Disappeared, And Nobody Knows Why

    Authored by Paul Joseph Watson via Summit News,

    Surveillance footage showing Jeffrey Epstein’s first alleged suicide attempt has “gone missing.”

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    On July 23, Epstein was sharing a cell with Nick Tartaglione when the disgraced sex trafficker apparently tried to hang himself. Epstein subsequently claimed that Tartaglione, a former cop accused of killing four people in a botched drug deal, had tried to kill him.

    However, when Bruce Barket, Tartaglione’s lawyer, requested surveillance footage from the cell at the Metropolitan Correctional Center (which he had formally requested be preserved two days after the suicide attempt), he was told it had disappeared…

    “We asked for all the video and photographic evidence to be preserved, specifically this surveillance video. Now it’s gone,” said Attorney Bruce Barket.

    “I don’t know the details of how it was lost or destroyed or why it wasn’t retained when it should have been.”

    The video footage was relevant to Tartaglione’s defense because it is potentially evidence of the ex-cop’s good character.

    “It is on the surface troubling,” Barket added.

    “I’ll reserve judgement until I’ve found out more details.”

    According to TMZ, the feds had no explanation for why the footage has gone missing, they said they simply can’t find it.

    More “mistakes”?

    The judge, helpfully, told prosecutors to look further into what happened to it.

    Finally, remember: There are no conspiracies and you can trust the authorities and the mainstream media… and, also, Epstein didn’t kill himself.

    *  *  *

    My voice is being silenced by free speech-hating Silicon Valley behemoths who want me disappeared forever. It is CRUCIAL that you support me. Please sign up for the free newsletter here. Donate to me on SubscribeStar here. Support my sponsor – Turbo Force – a supercharged boost of clean energy without the comedown.


    Tyler Durden

    Wed, 12/18/2019 – 23:05

  • Australian Government Created Bizarre Horoscope To Scare Illegal Aliens
    Australian Government Created Bizarre Horoscope To Scare Illegal Aliens

    The Australian government has created a bizarre horoscope to spook illegal immigrants from Sri Lanka – threatening bad omens if they make an unauthorized trek in to the land down under, according to BuzzFeed News.

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    Sagittarius? “If you illegally travel to Australia by boat you will be returned. Everything you risked to get there will be in vain and you will end up owing everyone,” reads the horoscope.

    Gemini? “You will lose your wife’s jewellery…

    Taurus? “If you illegally travel to Australia by boat, expect to be returned home where you will face the humiliation of failure in your community.

    The horoscope poster was released under a freedom of information application for copies of printed advertising material in English to dissuade people smugglers and asylum seekers trying to reach Australia between 2013 and 2019.

    The Department of Home Affairs did not respond to questions about when and where the horoscope poster was displayed.

    However, the poster itself gives a few clues, suggesting it was distributed in Sri Lanka within the last few years.

    “It is almost four years since any Sri Lankan person reached Australia on an illegal boat voyage,” the poster says. “During this period, Australian authorities have stopped and returned more than 160 Sri Lankans who tried to go to Australia illegally by boat.”

    As part of the Operation Sovereign Borders policy, Australian immigration officers turn back any boats with asylum seekers on board to its country of origin without hearing their refugee claims. –BuzzFeed

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    Here are the horoscopes in full (via BuzzFeed).

    ARIES: Criminals will rip you off

    If you attempt to illegally travel to Australia by boat, expect people smugglers to take advantage of you. These criminals will take your money and you will be returned to Sri Lanka with nothing.

    AQUARIUS: You and your family will lose everything

    If you risk everything you and your family have built together to pay for an illegal boat voyage to Australia, you will be stopped and returned to Sri Lanka. You will suffer hardship and have nothing but bad luck.

    SAGITTARIUS: You will be in debt forever

    If you illegally travel to Australia by boat you will be returned. Everything you risked to get there will be in vain and you will end up owing everyone.

    TAURUS: You will be ashamed of your actions

    If you illegally travel to Australia by boat, expect to be returned home where you will face the humiliation of failure in your community. Bad luck will strike you if you try to perform this illegal deed.

    VIRGO: You will have legal problems

    If you illegally travel to Australia by boat you will be stopped and returned to face the legal consequences. Going through with this illegal act will bring you nothing but bad luck and regret for your actions.

    CAPRICORN: You will put your life at risk

    Deciding to risk your life on dangerous seas and unpredictable weather will be in vain. If you travel illegally to Australia, you will be returned to Sri Lanka and encounter a storm of bad luck.

    GEMINI: You will lose your wife’s jewellery

    Bad luck will come your way if you travel illegally to Australia by boat. Expect to lose everything you’ve pawned to pay for this pointless enterprise.

    LIBRA: You will flush your money down the drain

    Your luck is bad. You cannot illegally travel to Australia by boat as you will be stopped and returned, and all the money you spent getting there will be wasted.

    CANCER: Family problems will occur

    Luck is not in the cards for you. Do not try to travel illegally to Australia by boat, as you will be stopped and returned. You will lose everything your family owes to debt, and face family problems.

    SCORPIO: You will waste your money

    If you naively trust people smugglers’ lies and attempt illegal travel to Australia by boat, you will be returned to Sri Lanka and lose everything you put on the line to get there.

    LEO: You will be filled with regret

    If you attempt illegal travel to Australia by boat, you will be returned to face legal consequences for your illegal travel. Commit such a crime and expect nothing but bad luck.

    PISCES: You will lose your family’s land

    If you travel illegally to Australia by boat you will be returned. The money you got from mortgaging your family’s land will be wasted right before your eyes.


    Tyler Durden

    Wed, 12/18/2019 – 22:45

  • Russian Uran-9 Combat Robot Deployment In Syria: Results, Issues And Prospects
    Russian Uran-9 Combat Robot Deployment In Syria: Results, Issues And Prospects

    Submitted by SouthFront,

    In late 2019, photos and footage showing Russia’s Uran-9 combat robot deployed in Syria appeared online. They became a rare visual evidence of the Uran-9 combat deployment in the war-torn country, which, according to official sources, took place in 2018.

    The Uran-9 multipurpose unmanned ground combat vehicle was officially unveiled by Russian military equipment manufacturer JSC 766 UPTK during the Army-2016 International Military-Technical Forum in Russia in September 2016. The vehicle is designed to provide remote reconnaissance and fire support to a variety of tasks conducted by the counter-terrorism, reconnaissance and military units in urban environments.

    The Uran-9 can be used fully autonomously on a predefined road or manually operated by one man from a truck control station or via a small backpack control station.

    Back in 2016, the Uran-9 was armed with a 30mm Shipunov 2A72 automatic cannon, four ready-to-launch 9M120-1 Ataka (NATO reporting name: Spiral-2) anti-tank guided missiles (ATGM), six ready-to-launch Shmel-M reactive flamethrowers. and a 7.62mm Kalashnikov PKT/PKTM coaxial machine gun mounted to the left side of the main armament. The Uran-9 can be also armed with four Igla surface-to-air missiles.

    There are two Ataka missile launchers and three Shmel-M on each side of the turret. The Ataka missile has an operational range from 400 m to 6 km, and is capable of penetrating armour to a depth of 800mm behind explosive reactive armour (ERA).

    The Uran-9 unmanned ground combat vehicle has the ability to resist firing of small arms ammunition and shell splinters. The steel armour plates of the hull offer protection for the vehicle suspension.

    The robotic system is equipped with various remote-controlled sensor modules such as laser warning system, and electro-optic and thermal imaging cameras. It has an onboard fire control system, comprised of automatic target detection, identification and tracking devices, as well as a ballistic computer. The systems are able to detect and track targets at a distance of up to 6 km during the day and 3 km during the night.

    The Uran-9 has two operation modes – autonomous and manual. In autonomous it can automatically identify, detect, track and defeat enemy targets based on the pre-programmed path set by the operator. The Uran-9 robot is manually controlled by a single operator from a mobile command and control station mounted on a 6×6 tactical truck from a safe distance of 3km.

    The Uran-9 is powered by a diesel-electric power source, which provides a maximum speed of 35 km/h on a highway, and a max speed of 25 km/h cross-country. In off-road conditions it moves slow, at only 10 km/h. The robot’s tracked chassis offers increased cross-country mobility. The average specific ground pressure is 0.6kg/sq.

    The Uran-9 was commissioned in the Russian Armed Forces in January 2019, whereas it was tested in Syria in 2018. It furthermore was used during the Vostok-2018 military exercise.

    In June 2018, RIA Novosti reported that some shortcomings in the combat capability of the Uran-9 were established, while it was being used in Syria.

    Military experts discovered flaws in the control, mobility, firepower, intelligence and surveillance functions of the robot. In addition, with the independent movement of Uran-9, a low reliability of the running gear – track rollers and guide rollers, as well as suspension springs were discovered.

    The robot also showed the unstable operation of a 30-mm automatic gun, untimely triggering of the start circuits, and the failure of the thermal imaging channel of the optical sighting station.

    In April 2019, Interfax cited the Deputy Chief of the General Staff of the RF Armed Forces, Chairman of the Military Scientific Committee of the Armed Forces, Lieutenant General Igor Makushev who said that the deficiencies in the robot were all removed by the development team.

    In 2019, there were more issues with the Uran-9, it allegedly had problems with losing connection to the command post. Unlike flying drones, the control signal of a radio-controlled machine can be lost when passing through mountains, buildings and other objects. During tests in Syria, this led to a loss of the signal approximately 17 times for 1 minute, and twice the connection with the combat robot was lost for an hour and a half.

    Reportedly, problems with rollers and suspension springs may occur in the Uran-9’s undercarriage, which is why the robot needs frequent repairs and cannot be used for a long time. But the biggest problem remains that the remote-control system reportedly works at a distance of no more than 300-400 meters instead of the promised 3 kilometers.

    Upwards of 20 units of the Uran-9 have been constructed as of December 2019, and the deployment in Syria was generally regarded as positive and successful. Even if the reports of the issues were true, they could be rectified in short-term development.

    There is no breakthrough in the development and deployment of unmanned systems. Nonetheless, the approach demonstrated by the Russian Armed Forces is interesting because the Russian side works on the development and deployment of not separate robotic systems, but rather groups of robotic systems controlled by a unified control system within a single intelligent network. The composition of these groups can be adapted depending on tasks that they had to achieve on the battlefield. Furthermore, significant efforts were and some successes was already achieved in the task of allowing these robotic systems to operate autonomously within the group to fulfill the assigned task. This is the first step on a long road of creating a swarm of fully autonomous robotic systems that can perform assigned tasks without a direct involvement of operators. The Kungas robotic complex and the Okhotnik heavy unmanned aerial vehicle are the most vocal examples of this approach.

    Another point is the functionalism of the Russian projects. Instead of pushing ahead military robot dogs or tiny combat drones (all these directions have apparent issues taking into account the current technological progress), the Russian military chose straightforward and effective decisions employing relatively large tracked platforms that do not require non-existing engineering solutions. This allowed Moscow to focus on what really matters: the employment of robotic systems in combat conditions and the development of their fully autonomous solutions.


    Tyler Durden

    Wed, 12/18/2019 – 22:25

  • Trump Called Boeing CEO To Discuss 737 Max Production Halt
    Trump Called Boeing CEO To Discuss 737 Max Production Halt

    Until know, we knew there were White House whistleblowers leakers when Trump spoke to world leaders. It now appears there are also leakers – at least three of them – when the president speaks to CEO of US companies.

    According to the NYT, on Sunday the US president called Boeing’s embattled CEO “to discuss the company’s plans to halt production of the 737 Max” according to “three people with knowledge of the matter who spoke on the condition of anonymity to talk about a private call”, which it appears would not remain private for too long.

    Trump told the executive, Dennis Muilenburg, that he had heard that Boeing was planning to permanently shut down the Max production line, to which the Boeing CEO assured the president that any pause to production would be temporary, and that there would be no layoffs as a result of the move. On the roughly 10 minute call, Trump also expressed concern about the health of the company more broadly, and asked whether Muilenburg was doing O.K.

    Trump reportedly also asked about the status of the fix for software that Boeing developed for the Max and which was found to have played a role in both crashes. Muilenburg said that the company had a fix ready, but that American and international regulators still had to test it and approve it.

    Ironically, just one day later Boeing announced it was “temporarily” halting production of the 737 Max, which had been grounded for nine months after two crashes that killed 346 people, sending its stock sliding.

    While it is unclear just how long the production halt will last, certainly until Boeing gets FAA clearance to fly the 737 MAX again, we reported last night that even a brief production halt will shave off about 0.5% from Q1 GDP as a result of a $20BN decline in the pace of inventory accumulation, which would push it to approximately 1%, which would result in the worst quarter for US GDP in years, and would leave the US economy precariously close to a recession.

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    The risk that the 737 MAX closure would potentially impair the US economy may explain Trump’s concern; sure enough, the decision to temporarily shut down the Max factory in Renton has already sent shockwaves across the economy and the aviation industry, and underscored just how deeply the Max crisis has rattled one of America’s most influential companies.

    Separately, the NYT also reports that Boeing’s board gathered in Chicago for a scheduled meeting and, with company executives, deliberated either further reducing production of the Max or temporarily shutting the factory down. The company decided to halt production of the plane, a drastic move that signals just how uncertain the return of the plane remains. Ironically, Boeing’s decision to shut down production came just a month after Boeing reports dismal earnings but sent the stock soaring when the company said it expected the FAA to allow the plane to return to services as soon as December.

    In response to the Boeing announcement, on Tuesday, Southwest Airlines, the biggest Max customer, said it would further postpone Max flights until April, while suppliers around the world are bracing for a prolonged disruption as a result of the shutdown.

    The NYT also pointed out that the call on Sunday was not his first conversation with the president.

    Before the Max was grounded, Mr. Muilenburg and Mr. Trump negotiated about Boeing’s contract to build Air Force One planes at the president’s Mar-a-Lago resort in Florida. Mr. Trump joined Mr. Muilenburg for a tour of Boeing’s 787 Dreamliner factory in North Charleston, S.C.

    Then, two days after the second accident, in Ethiopia on March 10, Mr. Muilenburg called Mr. Trump and insisted the Max was safe. The United States grounded the plane the next day, however, after most other regulators around the world had already done so.

    To be sure, Trump has been following the 737 MAX crisis closely from the start. In April, Trump tweeted: “If I were Boeing, I would FIX the Boeing 737 MAX, add some additional great features, & REBRAND the plane with a new name,” he wrote on Twitter in April. “No product has suffered like this one. But again, what the hell do I know?”

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    Considering the devastating hit to Boeing’s reputation, and the fact that two thirds of Americans have responded they would not feel comfortable flying on a 737 MAX, it appears that Trump was right again.

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    Tyler Durden

    Wed, 12/18/2019 – 22:05

  • Ron Paul – Afghanistan War Is "Crime Of The Century"
    Ron Paul – Afghanistan War Is "Crime Of The Century"

    Authored by Ron Paul via The Ron Paul Institute for Peace & Prosperity,

    “We were devoid of a fundamental understanding of Afghanistan. We didn’t know what we were doing.”

    So said Gen. Douglas Lute, who oversaw the US war on Afghanistan under Presidents Bush and Obama. Eighteen years into the longest war in US history, we are finally finding out, thanks to thousands of pages of classified interviews on the war published by the Washington Post last week, that General Lute’s cluelessness was shared by virtually everyone involved in the war.

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    What we learned in what is rightly being called the “Pentagon Papers” of our time, is that hundreds of US Administration officials – including three US Presidents – knowingly lied to the American people about the Afghanistan war for years. This wasn’t just a matter of omitting some unflattering facts. This was about bald-faced lying about a war they knew was a disaster from almost day one.

    Remember President Bush’s Defense Secretary Donald Rumsfeld? Remember how supremely confident he was at those press conferences, acting like the master of the universe? Here’s what he told the Pentagon’s special inspector general who compiled these thousands of interviews on Afghanistan: “I have no visibility into who the bad guys are.”

    It is not only members of the Bush, Obama, and Trump Administrations who are guilty of this massive fraud. Falsely selling the Afghanistan war as a great success was a bipartisan activity on Capitol Hill. In the dozens of hearings I attended in the House International Relations Committee, I do not recall a single “expert” witness called who told us the truth. Instead, both Republican and Democrat-controlled Congresses called a steady stream of neocon war cheerleaders to lie to us about how wonderfully the war was going. Victory was just around the corner, they all promised. Just a few more massive appropriations and we’d be celebrating the end of the war.

    Congress and especially Congressional leadership of both parties are all as guilty as the three lying Administrations. They were part of the big lie, falsely presenting to the American people as “expert” witnesses only those bought-and-paid-for Beltway neocon think tankers.

    What is even more shocking than the release of this “smoking gun” evidence that the US government wasted two trillion dollars and killed more than three thousand Americans and more than 150,000 Afghans while lying through its teeth about the war is that you could hear a pin drop in the mainstream media about it. Aside from the initial publication in the Washington Post, which has itself been a major cheerleader for the war in Afghanistan, the mainstream media has shown literally no interest in what should be the story of the century.

    We’ve wasted at least half a year on the Donald Trump impeachment charade – a conviction desperately in search of a crime. Meanwhile one of the greatest crimes in US history will go unpunished. Not one of the liars in the “Afghanistan Papers” will ever be brought to justice for their crimes. None of the three presidents involved will be brought to trial for these actual high crimes. Rumsfeld and Lute and the others will never have to fear justice. Because both parties are in on it. There is no justice.

    Just days after the “Afghanistan Papers” were published, only 48 Members of Congress voted against the massive military spending of the 2020 National Defense Authorization Act. They continue as if nothing happened. They will continue lying to us and ripping us off if we let them.


    Tyler Durden

    Wed, 12/18/2019 – 21:45

    Tags

  • Even Goldman Bristles As Junk Bond Rally Smashes All Records
    Even Goldman Bristles As Junk Bond Rally Smashes All Records

    Something remarkable has happened in the bond market over the past 12 months: investment grade and junk bonds yields have tumbled, spreads have collapsed, the differential between junk and IG bonds have vaporized and the spread per turn of net bond leverage is the lowest on record.

    In short: despite corporate gross and net leverage hitting all time highs as profitability declined, the investing public has unleashed an unprecedented buying spree across the US corporate bond sector, in the process smashing virtually all records.

    Nowhere is this dynamic more evident than the case study of AA and BB rated bonds. As Bloomberg first pointed out, earlier this week the average BB rated bond yielded just 3.51%, an all time low, sporting a spread of just 164bps to Treasurys.  Now go back just 12 months ago to last December when the average AA rated corporate bond, such as those issued by Berkshire, Apple and Exxon, was yielding 3.58%, more than the yield one now gets for bonds whose rating is some 9 notches lower, in deep junk territory.

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    There’s more: as shown in the chart below, the scramble for anything with a yield, which these days tends to mean junk bonds, has meant that the spread between BBB and BB credits has collapsed to just shy of all time lows, as shown in the chart below.

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    And speaking of junk bonds, the YTW on the Bloomberg Barclays sector is now down to the lowest level since 2014.

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    There are many factors behind this renewed euphoria for everything junk, including declining tail risks, supportive new issue technicals and improving funding conditions following the Fed’s sizable temporary open market operations. But most of all, it is the dramatic reversal by the world’s central banks who have sent global yields tumbling – just a few months ago, there was no less than $17 trillion in negative yielding debt – as a result of some 51 rate cuts in 2019: the most since the 2008 financial crisis, in fact as BofA said tongue-in-cheek, “central banks cutting like it’s a crisis.”

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    There are several remarkable observations about all of this. The first is that as we showed about a year ago, a majority, or 55% of BBB-rated investment grade bonds, would have a junk rating based on leverage alone.

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    Second, with such a tiny difference in spread between the lowest IG rating and the highest junk bond (and recall that junk bonds are that for a very fundamental reason: based on their financials, they are more likely to default in the next 10 years than to remain viable), is virtually non-existant. According to Bloomberg, investors now have a “golden opportunity” to upgrade double-B bonds to triple-B for the record-low trade-off of just 38 basis points. To upgrade to single-A, it’s just 91 basis points, and to double-A, it’s 113 basis points, both near the all-time lows set in June 2007.

    But what is perhaps most remarkable about this literally flood to junk, is that none other than Goldman Sachs is warning it is unsustainable. In a report from Goldman’s chief credit strategist, Lotfi Karoui, he writes that since the local wides reached in early October, USD IG and HY spreads have tightened by over 21bp and 70bp to 99bp and 338bp, respectively, moving well below their first quartiles when benchmarked to the history of the past two decades.

    As such, Karoui reiterates his bearish spread forecasts, which now imply 16bp and 82bp of widening in IG and HY spreads through the end of the first half of next year, respectively. As he explains, “the scope for additional spread tightening is quite limited, going forward. In addition to eroded valuations, fading support from monetary policy and potential resurfacing of policy uncertainty skew risks to the wider side from current levels.”

    But the biggest challenge the ongoing rush into junk faces, according to Goldman, is the bank’s expectation of rising idiosyncratic risk in 2020, given the disappointing trajectory of balance sheet fundamentals in 2019 and the increased challenges faced by over-leveraged companies in their debt reduction plans. As Exhibit 1 shows, data through the end of
    the third quarter suggest that net leverage ratios for the median IG and HY non-financial issuer have resumed their upward trajectories, making new highs in HY and approaching the peak reached in the late 1990s in IG. This meaningful uptick in net leverage ratios coupled with the significant spread compression in 4Q has pushed the level of spread per turn of leverage, a popular valuation metric among credit investors, to two-decade lows, in both the IG and HY markets.

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    Said otherwise, the collapse in yields (and spreads) has emboldened management teams (especially of financial companies) to lever further into record territory, with much of the debt issuance proceeds used to repurchase record amounts of stock…

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    … which threatens the viability of corporations should a secular move higher in yields emerge, while a recession could be absolutely devastating as it would result in far lower cash flows, which would immediately threaten the ability of corporations to service their debt, especially those zombie companies which can barely cover their interest expense currently.

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    Even Goldman admits that this is a particularly ominous challenge. As Karoui warns, this year’s balance sheet re-leveraging has been largely driven by weak profitability across most sectors, and “has also occurred against a backdrop of a rather conservative mindset among managements. As we discussed recently, many acquisitive and over-leveraged BBB-rated non-financial firms continue to highlight progress on gross debt pay-down, mostly via asset sales and leverage-neutral liability management exercises (i.e., replacement of short-term with new longer-dated and cheaper debt), as a top priority.” But, as we showed before, this (alleged) continued focus on gross debt reduction among lower-rated IG-rated issuers has not translated into concrete balance sheet deleveraging, in fact quite the opposite.

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    As shown above, a review of 48 of the largest BBB-rated non-financial firms, which have a combined amount of index-eligible bonds outstanding of over $900 billion, suggests the average net debt to EBITDA ratio in the most recent 12-month period (2019) is actually 0.53x higher relative to year-end 2017, when the 2017 Tax Cut and Jobs Act (TCJA) passed. Further, only two issuers deleveraged by more than 1.0x turn, and only seven reduced leverage by more than 0.50x turn, since year-end 2017.

    Here, the silver lining is that analysts are generally optimistic on both the economy, and corporate profitability into 2020. But here too Goldman has a caveat:  “the forward earnings growth trajectory will be much flatter by post-crisis norms as profits adjust to a new reality where growth in unit labor costs outpaces price inflation”, in other words, rising wages will further erode corporate profitability and debt service capabilities. As such “for credit investors, this will likely mean more challenges in the debt reduction plans, particularly for issuers with weak pricing power, and thus more dispersion in returns.”

    One final risk is political. As Goldman cautions, a potential headwind for sentiment is the narrative around a potential rollback of the Trump tax cuts. The main Democratic front-runners have proposed at least a partial repeal of the TCJA. Barring a unified government led by Democrats, US tax policy would likely remain unchanged at least through 2023. But if Democrats gain even a slim majority in the Senate, Goldman’s economists would expect an increase in the corporate tax rate, not to mention a collapse in the S&P to 2,600 as discussed previously.

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    On Goldman’s estimates, the median effective tax rate for US-domiciled issuers in the iBoxx IG bond index fell from 23.4% in 2017 to 18.7% in 2018. In addition to weighing on sentiment, if this legislation were reversed and marginal tax rates increased, the potential negative earnings shock would likely make debt reduction plans even more difficult to achieve.

    Whether Goldman’s gloomy forecast materializes, remains to be seen, but as even Bloomberg admits, few Wall Street professionals believe this junk-bond bonanza can last. Bloomberg News’s Gowri Gurumurthy reported that Wall Street analysts are forecasting gains of between 1% and 7.5% for U.S. high-yield bonds, down from the 13.5% gain so far this year. Others, like Mohamed El-Erian, are advocating that investors get out of riskier securities while the market is strong.
    “What I fear is that this is the prelude to something which is not going to be very comfortable for those investing in the lowest-quality segments of the credit market,” El-Erian said in a Bloomberg TV interview.

    Joe Davis, head of the investment strategy group at Vanguard Group Inc., put it like this: “For savvy investors, the tighter credit spreads become, the more guarded they have to be in their strategy,” he said. “When the next recession hits, the downturn in the financial markets could be worse than the economic effects.”

    In other words, the cascade of catastrophic consequences when the next recession hits, will once again be all the central banks’ doing – after all it is their monetary policies that pushed rates to such low levels, that the only place investors can find even remotely attractive yields, is junk bonds which offer a 3.5% yield, making a total joke of what was once called “high” yield.


    Tyler Durden

    Wed, 12/18/2019 – 21:25

  • Banning Guns Will Not Make Schools Safe
    Banning Guns Will Not Make Schools Safe

    Authored by James Bovard via The Future of Freedom Foundation,

    School shootings have become the latest pretext for politicians to destroy the Second Amendment.

    Mayor Pete Buttigieg of South Bend, Indiana, declared in a Democratic presidential candidates’ debate,

    “I was part of the first generation that saw routine school shootings. We have now produced the second school-shooting generation in this country. We dare not allow there to be a third.”

    Another Democratic presidential candidate, Rep. Eric Swalwell (D-Cal.), invoked school shootings to justify confiscating millions of firearms across the nation:

    “It’s not just the violence that they’ve caused; it’s the fear, the immeasurable fear that our children live in because they are still on our streets. I want to get rid of that fear.”

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    In reality, despite a tidal wave of misleading propaganda, the number of school shootings has fallen sharply over the past 30 years.

    But anti-gun activists in government and the media have done their best to persuade people otherwise.

    Last year, the federal Education Department reported that “nearly 240 schools … reported at least 1 incident involving a school-related shooting” in the 2015-16 school year. National Public Radio investigated and found that the feds had exaggerated school shootings by twentyfold; NPR could confirm only 11 incidents. Cleveland was credited with 37 shooting incidents, when in reality it was simply a report of 37 schools that noted “possession of a knife or a firearm.” In DeKalb County, Georgia, “a toy cap gun fired on a school bus” counted as a school shooting. One school system was listed as a shooting locale for an incident involving a pair of scissors. NPR noted,

    Most of the school leaders NPR reached had little idea of how shootings got recorded for their schools. For example, the [federal Civil Rights Data Collection] reports 26 shootings within the Ventura Unified School District in Southern California. “I think someone pushed the wrong button,” said Jeff Davis, an assistant superintendent there. The outgoing superintendent, Joe Richards, “has been here for almost 30 years and he doesn’t remember any shooting,” Davis added.

    Even the leftist news site Vox noted, “The risk of a child getting killed by someone else at school in 2011, the last year for which there’s final data, was about 1 in 5 million.” Vox again: The rate of “serious violent victimization” among students — rape, sexual assault, robbery, or aggravated assault — was about 1 in 1,000 in 2011, down from 1 in 100 in 1995. In 1995, 10 percent of students were victims of some kind of crime at school; in 2011, just 4 percent were.” Northeastern University criminologist James Alan Fox observed, “We over-obsess about school shootings. Surveys show the majority of students are afraid there will be a mass shooting at their school. These are rare events — scary though they may be, tragic though they may — and we shouldn’t over-respond.”

    Imitation shootings

    But hard facts have proven no match for sustained hype for antigun activists.

    Police and schools have responded to the new paranoia with an array of drills that have been lame-brained even by government standards.

    Last January, numerous Indiana elementary school teachers were shot as part of a “safe schools” training program. According to the Indiana State Teachers Association, sheriffs’ deputies ordered teachers “into a room four at a time, told them to crouch down and then shot them execution-style with pellets in rapid succession,” leaving several of them bloodied and many of them screaming. The union complained, “The teachers were terrified, but were told not to tell anyone what happened. Teachers waiting outside that heard the screaming were brought into the room four at a time and the shooting process was repeated.” The union is “is lobbying lawmakers to add [legislative] language prohibiting teachers from being shot with any sort of ammunition” during school-safety drills, according to the Indianapolis News.

    Schools are “increasingly turning their hallways into an imitation of a real mass shooting, complete with police officers firing BB guns and drama students enlisted to play victims, made up with fake blood and bullet holes. Occasionally, the drills are sprung on teachers and students without warning,” as a student newspaper in Great Neck, New York, observed. A Pennsylvania teacher commented that she was “more traumatized than trained” after teachers were shot with airsoft guns by a fake active shooter. “We had colleagues shooting colleagues, we had people getting hit with [plastic] pellets.… People were screaming, trying to run. People were tripping over each other. It was just horrendous,” Elizabeth Yanelli recalled.

    One of the primary beneficiaries of such nonsense is pharmaceutical companies that hustle anti-anxiety drugs to children. Former policeman Raeford Davis commented on lockdown/active shooter drills, “These simulated execution rituals are conducted for fear-based mass social control purposes to traumatize, instill fear, hopelessness, personal dis-empowerment, reliance on authority figures to save and protect you.” A 2018 Pew Research Center survey found that most “American teen-agers worry about a shooting at their school. This comes at a time when children are already suffering from sharply rising rates of anxiety, self-mutilation, and suicide. According to a landmark study funded by the National Institute of Mental Health, 32 percent of 13-to-18-year-olds have anxiety disorders, and 22 percent suffer from mental disorders that cause severe impairment or distress. Among those suffering from anxiety, the median age of onset is 6,” the Atlantic reported last year.

    Exploiting dead children

    School-shooting paranoia first became widespread after the Columbine High School killings in 1999. Twelve students and one teacher died in a shooting spree by two students that helped inspire other subsequent school shootings, especially a Newtown, Connecticut, attack in 2012.

    The Columbine killings set the precedent of maximum political exploitation of dead children. Attorney General Janet Reno praised the local police response as “extraordinary” and “a textbook” example of “how to do it the right way.” Bill Clinton declared that “we look with admiration at the … police officers who rushed to the scene to save lives.” Clinton invoked the Columbine killings almost every day from April 20 through mid June 1999, when the House of Representatives narrowly defeated Clinton-championed gun-control legislation.

    In reality, “No efforts were made to stop the assault,” concluded William Erickson, a former Colorado Supreme Court justice who headed a commission that issued a damning 2001 report on the Columbine killings. Instead, hundreds of police waited outside until long after the two perpetrators had committed suicide. Instead of going after the two killers, law enforcement set up a perimeter outside the school and waited “for the assault to end,” the report concluded.

    Appalling police failures turned a multiple homicide into a historic massacre. A SWAT team had entered the building early on but Jefferson County Sheriff John Stone ordered it to withdraw. Police spokesmen said most of the SWAT teams were not sent in, “for fear that they might set off a new gunfight,” the New York Times reported. SWAT teams did not enter the room where the killers lay until hours after the shooting stopped. A badly wounded schoolteacher, Dave Sanders, bled to death because the SWAT team took four hours to reach the room he was in — even though students placed a large sign announcing “1 Bleeding to Death” in the window.

    Fears for “officer safety” paralyzed the Colorado response. Steve Davis, spokesman for the Jefferson County Sheriff’s Department, said, “We had no idea who was a victim and who was a suspect. And a dead police officer would not be able to help anyone.” Evan Todd, a Columbine student who was wounded in the initial attack, escaped outside and then explained to a dozen policemen exactly what was happening inside: “They told me to calm down and take my frustrations elsewhere.”

    Unfortunately, law enforcement learned little or nothing from the Columbine killings. At the Parkland high school in Florida in 2018, eight sheriff’s deputies lingered cowered outside while the shooting rampage by one ex-student continued, leaving 17 dead. A local cop who arrived during the shooting was urged not to enter the building: “Hey, be careful. The guy’s got a rifle,” a deputy told him. After the killings, the local sheriff’s department put out a deluge of false exculpatory claims that were shot to pieces by later revelations.

    The killer, Nikolas Cruz, should have been arrested numerous times because of violence and threats at school and elsewhere. But school authorities avoided charging him, in part because of an Obama administration school-grant program that sought to curb the “school-to-prison” pipeline for minority students such as Cruz. Paul Sperry of RealClearInvestigations reported that the Parkland school was “in the vanguard of a strategy, adopted by more than 50 other major school districts nationwide, allowing thousands of troubled, often violent, students to commit crimes without legal consequence.” Thanks to such policies, as the Federalist noted, “Students charged with various misdemeanors, including assault, would now be disciplined through participation in ‘healing circles,’ obstacle courses and other ‘self-esteem building’ exercises.” But if schools expelled too many students, they would forfeit federal grants.

    But the astounding failures of the schools and the police are irrelevant to activists determined to invoke the Parkland killings to forcibly disarm the American people. In August, March for Our Lives — an anti-gun group created after the Parkland shootings — issued “A Peace Plan for a Safer America.” Rather than focusing on the failures of officialdom, the activists called for forcibly reducing the number of firearms owned by Americans by a third — which could require government seizures of a hundred million guns. The group also proposed to put any would-be gun buyer through bureaucratic hell, including a “multi-step approval process, overseen by a law enforcement agency, that requires background checks, in-person interviews, personal references, rigorous gun safety training, and a waiting period of 10 days for each gun purchase.” Any permit to possess a firearm would have to be renewed annually — involving running another bureaucratic gauntlet. The group also called for the appointment of a federal anti-gun czar. The “National Director of Gun Violence Prevention” would also be responsible for propagandizing about the grave dangers of possessing a firearm in one’s home.

    And then we would all be safe, right? March for Our Lives did not propose any solutions to the lack of police spines or the automatic coverups and lies that follow shooting debacles. New gun-control laws will do nothing to boost either the competence or courage of the police when every second counts. Unfortunately, there also appears to be no cure for the political exploitation of tragedies spurred or worsened by government debacles.


    Tyler Durden

    Wed, 12/18/2019 – 21:05

  • Is Xi About To Make Macau The Next Financial Powerhouse?  
    Is Xi About To Make Macau The Next Financial Powerhouse?  

    China’s President Xi Jinping arrived in Macau, an autonomous region on the south coast of China, on Wednesday amid socio-economic turmoil in Hong Kong. Xi is expected to announce new economic packages for the area as a reward for its stability and support of the communist party, reported Bloomberg.

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    Xi will celebrate the 20th anniversary of Macau’s handover to China and had a straightforward message to the 670,000 people of the region, roughly half the size of Manhattan: obey our laws, and we’ll make you wealthy.

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    Xi spoke at Macau International Airport on Wednesday afternoon and applauded Macau’s “earnest implementation” of the “one country, two systems” framework — the same structure that governs Hong Kong.

    “The achievements and progress Macau has made in the past two decades since its return to the motherland are a source of pride,” Xi said. “The beautiful blueprint for Macau’s future development needs our joint efforts.”

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    Bloomberg notes that Xi could unveil several economic policies that could transform Macau into a financial powerhouse. One of those policies could be the establishment of a yuan-denominated financial market. 

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    In the last six months, Macau has experienced little unrest, while Hong Kong, 30 miles away, has seen violent protests that have shocked the economy into a recession.  

    “While Hong Kong people can be mobilized by fighting for abstract value as democracy and freedom, Macau is ‘interest-oriented,'” said Ieong Meng U, an assistant professor at the University of Macau’s Department of Government and Public Administration. “Only very few government policies can trigger widespread social grievances.”

    Macau’s stability is derived from its monopoly over the casino industry in China and close ties with the communist regime. 

    Even though Macau’s charter closely resembles Hong Kong’s, residents in the city cannot choose their leader. The new Macau Chief Executive Ho Iat-Seng will be sworn in on Friday by Xi. A 400-member election committee recently chose Iat-Seng.

    Steve Tsang, director of the University of London’s SOAS China, told Bloomberg that “the messaging is clear to Hong Kong and the rest of the world, but primarily to Hong Kong — there is a way out, there is an easy and good way out, and it’s called Macau…But what they completely and utterly fail to see, is that if Macau is the future, most people in Hong Kong will say, thank you very much, you can keep it for yourself.”

    Macau has tightened up immigration checks and beefed up security forces to thwart any spillovers from Hong Kong. 

    China’s next move could transform Macau into a financial mecca that could put Hong Kong out of business. 

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    Tyler Durden

    Wed, 12/18/2019 – 20:45

  • Elderly In Japan Are Wearing Exoskeletons To Continue Working Into Old Age
    Elderly In Japan Are Wearing Exoskeletons To Continue Working Into Old Age

    Authored by Elias Marat via TheMindUnleashed.com,

    While powered exoskeletons may seem like something out of the movies – think AlienAvatarElysium, and how could we forget Iron Man – the concept has increasingly found favor in various applications, ranging from the battlefield to the assembly line and even to restore function to paralyzed people’s body.

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    But now, elderly citizens in Japan are preparing to potentially step into powered exoskeletons so that they can continue laboring into their old age and stall retirement for as long as possible, New Scientist reports.

    To put into perspective how dystopian that prospect is, just consider that Japan has one of the largest populations over the age of 65 out of any country, comprising about 26 percent of the total population, per 2015 census data. Japan has both the world’s highest life expectancy and the lowest birthrate.

    And as Japan’s workforce continues to decline, the right-wing government of Shinzo Abe has sought to grapple with labor shortages and increased public spending on the senior citizen population by raising the retirement age from 60 to anywhere between 65 and 71.

    But now, Japanese tech companies hope to use these exoskeleton suits to allow them to continue their labor well into their advanced age, with some suits costing only $1,300 and allowing people to lift up to 55 pounds. The suit can be charged through a hand pump that fills the “muscles” with pressurized air.

    Innophys spokesperson Daigo Orihara said:

    One client is a family-owned company which makes and sells pickled radish and uses heavy weights in the process of production.

    The father is in his 70s and was supposed to retire but is still working with our muscle suit.

    Automotive giant Toyota has also poured funds into its motorized exoskeleton research division, in part out of hopes to support the aging workforce. Panasonic, too, has created the popular Atoun Model Y, a $5,500 suit that adds 22 pounds of lifting force to wearers.

    No doubt, many senior citizens with their faltering and fragile bodies would prefer a bit of mechanical assistance to allow them to lift heavy loads and physically function as they did when they were younger.

    However, Japan also has a horrible reputation for working its people to the point of utter exhaustion, if not a total mental breakdown. With a shrinking population that only continues to rapidly age, powered exoskeletons may be the only means by which industry can continue squeezing the last bit of labor from the Japanese people.


    Tyler Durden

    Wed, 12/18/2019 – 20:25

  • House Impeaches Trump For Abuse Of Power & Obstruction Of Congress
    House Impeaches Trump For Abuse Of Power & Obstruction Of Congress

    As was 100% expected, the House has voted to impeach President Trump (for abuse of power), who joins Andrew Johnson and Bill Clinton as the only presidents to be impeached since the adoption of the Constitution in 1788.

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    It all began just after midday with the following…

     “Today, as speaker of the House, I solemnly and sadly open the debate on the impeachment of the president of the United States,”  Speaker Nancy Pelosi said from the House floor shortly after noon.

    “It is tragic that the president’s reckless actions make impeachment necessary. He gave us no choice.”

    And ended just over eight hours later

    House Minority Leader Kevin McCarthy closes: “He is president today, he’ll be president tomorrow and he will be president when this impeachment over.”

    Rep. Steny Hoyer (D-MD) closes: “All of us feel a sense of loyalty to party. It’s what makes our two-party system function. But party loyalty must have its limits…it has become increasingly clear that the limits of partisanship have been reached and passed.”

    And the result after 219 speakers from both sides of the aisle today, as most expected, all Republicans voted against impeachment, all Democrats except three voted for the first article of impeachment…

    Article 1 – Abuse Of Power – vote 230 in favor, 197 opposed, 1 present:

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    All Republicans voted against impeachment, all Democrats except four voted for the second article of impeachment…

    Article 2 – Obstruction – vote:

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    Tulsi Gabbard voted “present” while New Jersey Rep. Jeff Van Drew, who’s in the process of becoming a Republican; and Minnesota Rep. Collin Peterson, who represents what’s considered the country’s most conservative Democratic district, both broke ranks and voted against impeachment.

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    …and Michigan Rep. Justin Amash (the sole Independent member of the House) voted for impeachment.

    The question now is simple – will Pelosi keep the articles to herself (to avoid the spectacle of utter defeat in the Senate)? Or pass them on for what McConnell has called a quick decision.

    What the Constitution says about what happens next

    A president who has been impeached by the House can still serve as president. It’s up to the Senate to hold a trial to decide whether to remove him from office. The two other presidents impeached by the House, Bill Clinton and Andrew Johnson, were both acquitted by the Senate.

    The Constitution only says that the Senate has to hold a trial, with the senators sitting as jurors, House lawmakers serving as prosecutors known as managers and the chief justice of the United States presiding over it. They must take a public vote, and two-thirds of senators present must agree on whether to convict the president and thus remove him from office. But the Constitution doesn’t lay out exactly how to hold a trial.

    But, as WaPo reports, a group of House Democrats is pushing Speaker Nancy Pelosi and other leaders to withhold the articles of impeachment against President Trump that are expected to emerge on Wednesday, potentially delaying a Senate trial for months.

    The notion of impeaching Trump but holding the articles in the House has gained traction among some on the political left as a way of potentially forcing Senate Majority Leader Mitch McConnell (R-Ky.) to conduct a trial on more favorable terms for Democrats.

    And if no agreement is reached, some have argued, the trial could be delayed indefinitely, denying Trump an expected acquittal.

    But, remember, the public is now against impeachment broadly…

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    Some high/lowlights from the multi-hour debacle include:

    Here is what the Democrats believed…Cicilline said if they do not hold Trump accountable, then “we will live in a dictatorship.”

    Democrats were, in their own words, “sad” to impeach the president… “I’m saddened, but I’m not shocked,” Democratic Rep. Barbara Lee of California said.

    Serial impeacher Rep. Al Green decided to use a fake, debunked photo of an immigrant child crying as an example of why Trump should be impeached… “In the name of democracy, on behalf of the republic, and for the sake of many who are suffering,” Green said as he pointed directly of the photo, “I will vote to impeach and I encourage my colleagues to do so as well. No one is beyond justice in this country.”

    Texas Republican Rep. Louie Gohmert passionately warned that the end of America was in sight… “This is a travesty and we’re in big trouble because Schumer was right… This country’s end is now in sight… I hope I don’t live to see it. This is an outrage.”

    And finally, Louisiana Republican Rep. Clay Higgins delivered the darkest, most ominous speech of the day.

    “I have descended into the belly of the beast. I have witnessed the terror within, and I rise committed to oppose the insidious forces which threaten our Republic,” Higgins opened.

    “America’s being severely injured by this betrayal, by this unjust and weaponized impeachment, brought upon us by the same socialists who threaten unborn life in the womb, who threaten First Amendment rights of Conservatives, who threaten Second Amendment protections of every American patriot, and who have long ago determined that they would organize and conspire to overthrow President Trump.”

    We don’t face this horror because the Democrats have all of a sudden become constitutionalists. We are not being devoured from within because of some surreal assertion of the socialists’ newfound love for the very flag that they trod upon.”

    They are deep established D.C.,” he continued.

    “They call this Republican map flyover country. They call us deplorables. They fear our faith. They fear our strength. They fear our unity. They fear our vote, and they fear our president.

    “We will never surrender our nation to career establishment D.C. politicians and bureaucrats,” Higgins closed. “Our republic shall survive this threat from within. American patriots shall prevail.”

    Meanwhile, in Michigan…

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    *  *  *

    Update 4: Just as we expected, President Trump has taken to Twitter to bash the Democrats as the House passed a critical procedural vote for the articles of impeachment.

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    It looks like he’s just getting started.

    Meanwhile, the House Dems are getting pumped up for their big day.

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    Finally, right around noon on Wednesday, the House voted to begin debate on the articles of impeachment, clearing a key procedural vote that paved the way for six hours of debate, according to the New York Times.

    Pelosi kicked off the debate by urging lawmakers to honor their oaths to protect the Constitution while criticizing the president’s supposedly reckless actions that brought them to this point.

    “Our founder’s vision of a republic is under threat from actions from the White House,” she said somberly, adding, “If we do not act now, we would be derelict in our duty. It is tragic that the president’s reckless actions make impeachment necessary. He gave us no choice.”

    When she finished, her fellow Dems rose from their seats for a standing ovation.

    On the Republican side, Rep. Doug Collins, the ranking member of the Judiciary Committee, was the first Republican to respond, accusing the Dems of running an unfair and deeply partisan impeachment inquiry…

    “This is an impeachment based on presumption,” Mr. Collins said. “This is a poll-tested impeachment about what actually sells to the American people. Today is going to be a lot of things. What it is not is fair. What it is not is about the truth.”

    …While failing to prove their case against Trump.

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    Update 3: And so it begins…

    The House is first expected to pass a resolution to kick off six hours of floor debate on the articles. The time will be split equally between Republicans and Democrats.

    The chamber’s 197 Republicans are expected to vote against impeachment, along with two Democrats: Rep. Collin Peterson  of Minnesota and Rep. Jeff Van Drew of New Jersey, who has said he plans to switch parties.

    Almost all of the remaining 231 Democrats have said they will vote for impeachment, along with Michigan Independent Justin Amash, who quit the GOP over his opposition to Trump.

    * * *

    Update 2: As we expected, the tweet below has been reissued, with a few edits. It’s classic Trump, as the president exhorts his followers to “SAY A PRAYER” on impeachment day, while raging at “Do Nothing Democrats” and the “Radical Left.”

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    Update: We 100% President Trump to go on a full-fledged Twitter rampage lasting until the last impeachment vote is cast on Wednesday, and so far, the president hasn’t disappointed…although his first impeachment-focused tweet of the day has already been deleted for what we imagine are copy-editing-related reasons.

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    * * *

    The rules have been established, objections have been lodged and today, Wednesday, Dec. 18, with most of the US preparing for next week’s holiday break, Speaker Nancy Pelosi is angling to finish the job, and finally impeach President Trump.

    Though it means nothing to most of his supporters, as well as many Americans who simply haven’t been convinced by The Democrats’ arguments about how Trump supposedly violated the constitution, President Trump will almost certainly become the third American president to be impeached (and first since Bill Clinton) when lawmakers gather in the Well of the House for Wednesday’s historic proceedings, according to Bloomberg.

    Here’s what to expect: After the House is gaveled in at about 9 am, lawmakers will debate for six hours before two votes are held: One on each article of impeachment. Trump is facing two charges: one is abuse of power, stemming from President Trump’s alleged attempted “quid pro quo” with Ukraine involving the Bidens.

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    The other is obstruction of Congress, based on the administration’s policy of advising White House employees and members of Trump’s circle to ignore Congressional subpoenas by invoking executive privilege.

    According to the Associated Press, Pelosi has the votes to impeach Trump on a purely party line basis. Many centrist Democrats, including several lawmakers from districts that supported Trump in 2016, have come out publicly in support of impeachment. However, neither the AP or the NYT were able to publish affirmative totals, suggesting that the numbers are still being firmed up, and that there might still be room for Republicans to fight back.

    In a last-ditch effort to peel off as many Democratic votes as possible, Republicans are encouraging voters in districts that flipped to Democratic control in 2018 but voted for Trump in 2016 to flood their representatives’ offices with calls demanding that they take a stand against impeachment.

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    Source: Bloomberg

    As NBC News claims, it’s these swing-district Democrats who made this whole thing possible.

    And they might have a shot: As Congressional Republicans have repeatedly pointed out in recent weeks, the public is evenly split on whether Trump deserves to be impeached.

    That means fully one half of Americans believe the president is innocent, and that the impeachment push is merely a politically calculated smear job.

    Let’s take a look at the latest polls, courtesy of aggregator RealClearPolitics

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    Those numbers are even worse for Republicans: Roughly nine in ten believe the president shouldn’t be impeached. Once it’s been made official, Trump is expected to deliver a public rebuttal during a campaign rally in Battle Creek, Michigan, a formerly Democratic stronghold in a critical swing state that helped deliver Trump to the White House in 2016.

    If we know Trump, we suspect that this rebuttal will be full of fire and brimstone – that is, if Trump’s letter to Pelosi & Co. is any guide.

    Interestingly enough, the last US president to be impeached, Bill Clinton, was formally accused of perjury by the House on Dec. 19, 1998, almost exactly 21 years earlier to the day.

    After Wednesday’s votes, a Democratic delegation will formally deliver the articles of impeachment to the secretary of the Senate, the first step toward a trial in that chamber to determine whether Trump will be removed from office.

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    Then early in the new year, a trial will begin in the Senate, at which Trump is almost guaranteed to be acquitted, thanks to the Republicans’ control of the Senate. Senate Majority Leader Mitch McConnell has said he hopes to carry out a swift trial in the Senate, limiting the number of witnesses.

    As we mentioned earlier, the vote may not take place until late Wednesday – 6:30pm or 7:30pm – or even early Thursday.


    Tyler Durden

    Wed, 12/18/2019 – 20:24

    Tags

  • Bank Of England "Hijacked" Audio Feed Was Used To Secretly Leak Confidential Information To Hedge Funds
    Bank Of England "Hijacked" Audio Feed Was Used To Secretly Leak Confidential Information To Hedge Funds

    Over the past few years there had been numerous allegations in both the trading community and among the media that critical UK data releases were being mysteriously leaked ahead of time. Back in 2017, Reuters reported that “unusual sterling moves often precede UK data releases“, explaining that “on eight occasions over the past 12 months, the pound has moved against the dollar in the minutes before the release of the retail sales numbers, correctly anticipating the direction the currency took once the figures were published” adding that “this has been true even when the retail sales data have gone against the Reuters poll market consensus, leading to speculation among traders about the possibility of leaks of the information before its official publication.”

    One such example took place on Feb. 17, 2017 when sterling fell by around 20 ticks to $1.2440 in the space of around 15 seconds, around three minutes before the release of the numbers for January. When the figures were published by the ONS, they showed sales had been much weaker than economists had expected, sending sterling down further.

    A similar pattern was found to have occurred in seven of the other 12 months for which Reuters analyzed trading data. The moves in sterling were most notable in January, November, October, July and April as well as in February. In five of those months, the official figures were significantly weaker or stronger than forecasts by economists.

    Foreign exchange traders posted messages on Twitter saying they believed that the data had been leaked ahead of time, a regular refrain after the monthly retail sales figures.

    David Woolcock, chair of the committee of professionalism at the Association Cambiste Internationale Financial Markets Association, a body representing foreign exchange dealers, said his review of the analysis suggested either that some investors were very good at predicting what the data would show, or that it was being leaked.

    “Looking at the charts shown to me by Thomson Reuters it seems evident that either a very close correlation in private/public data has been discovered that is allowing traders to pre-position ahead of publication or a leak of the numbers is occurring,” he said.

    A separate analysis by the Wall Street Journal of 207 releases of British inflation, industrial production and labor market data, showed that on 59.5% of occasions British government bond futures moved ahead of the data in what proved to be the right direction, confirming that someone was indeed leaking – and trading on – market-moving information ahead of its scheduled release time.  Alexander Kurov, an associate professor of finance at West Virginia University who conducted the analysis for the Wall Street Journal, told the newspaper it was “very unlikely that we are looking at a random pattern.”

    But where was the leak taking place? As the WSJ noted, the ONS provides a preview of the retail sales figures before their publication to 41 people at the Bank of England, the business ministry, Cabinet Office, Downing Street and the Treasury. Those people had access to the data 24 hours ahead of publication.

    Meanwhile, as part of the now infamous reporter “lock up”, around a dozen journalists from news agencies including Reuters have access to the data around 40 minutes ahead of publication to help them prepare articles ready to go when the data hits the feed. However, they are only given the information in a locked room without Internet or phone access and under the supervision of ONS staff.

    It now appears that we know who the culprit was.

    In a press release issued late on Wednesday, the Bank of England said that following concerns raised with the Bank, “we have recently identified that an audio feed of certain of the Bank press conferences – installed only to act as a back-up in case the video feed failed – has been misused by a third party supplier to the Bank since earlier this year to supply services to other external clients.”

    This wholly unacceptable use of the audio feed was without the Bank’s knowledge or consent, and is being investigated further”, the central bank said.

    The BOE’s shocking admission was in response to a report earlier in the day by the Times, according to which hedge funds had been eavesdropping on the Bank of England’s press conferences before they are officially broadcast after its internal systems were “hijacked.”

    As the BOE has since confirmed, the Times report alleged that the central bank has discovered that one of its suppliers has been sending “an audio feed of its press conferences to high-speed traders who hope to profit by acting on the governor’s comments before the rest of the world.

    While the company that was behind the audio feed hijacking was not named, “the third-party supplier is understood to be connected to a market news service that promises clients will gain an edge over rival traders in a field where getting information microseconds before others can generate huge profits.” While the Bank’s official video feed of press conferences is managed by Bloomberg, the Bank employed contractors to install a separate back-up audio feed several years ago in case the video feed went down. It was never intended to be used by an outsider unless the video failed, and yet for an unknown number of HFTs, it became the primary source of information, and countless profits.

    While the BoE said that the gross insider trading started “earlier this year”, according to the Times, the supplier hacked into the audio feed since “at least the start of this year”, which means the leaks could have been going on for years, and was meant to provide the service to one of its other companies. That service is then sold on to high-speed companies, giving client traders an invaluable edge over everyone when it comes to the most market-moving of events.

    According to the Times, since audio is easier to compress than video, hijacking the backup feed gave paying clients a five to eight-second head start on the rest of the market; in other words, a license to print money in violation of every known insider trading rule known to man.

    The Bank said that it had “disabled the third-party supplier’s access”. A spokesman added: “This wholly unacceptable use of the audio feed was without the Bank’s knowledge or consent, and is being investigated further”.

    Since UK data leaks had been known for almost three years, it’s about time the BOE finally realized that it itself was the source of the leaks. As for the company intermediating all of this, we are confident that they already have moved their money to a non-extradition jurisdiction. The unnamed market news service was selling these feeds charges between £2,500 and £5,000 a press conference for each client in addition to a subscription fee.

    The revelation that the Bank of England’s systems were abused to give HFT traders an advantage over everyone else will be a huge embarrassment because one of the bank’s roles is to support fair and efficient markets. BOE head Mark Carney is due to leave the Bank on January 31 and will become the United Nations special envoy for climate action and finance on a token $1 a year for the part-time role. His successor could be announced as soon as tomorrow.

    While the news may explain why there was no allegations of any information leaks ahead of the latest BOE report, it also explains why there have been recurring instances of clients trading on what appears to be inside information, and it now appears the BOE itself was the culprit.

    And while the BOE may finally be cracking down on insider trading, after an unknown set of clients has already made millions if not billions in illicit profits, consider that high-speed audio services are also offered for press conferences at the ECB, the Fed and the Bank of Canada. Just how much money was made by hedge funds who had found a way to hijack backup feeds at all these central banks. We doubt we will ever find out, especially if the central bankers in question plan on ending up as employees of said hedge funds after their tenure is completed. It almost makes one wonder what “quid pro quo” helped propel former Fed chair Ben Bernanke to the role of senior advisor at the world’s foremost HFT operation, Ken Griffin’s Citadel.


    Tyler Durden

    Wed, 12/18/2019 – 20:05

  • Females & Births, As Rudimentary As We Can Get
    Females & Births, As Rudimentary As We Can Get

    Authored by Chris Hamilton via Econimica blog,

    First, chart of the century…literally.  For those engrossed in the current and engulfing repo fiasco, QE, and monetization…it is helpful to pull back and clarify what it is that is causing the existing economic and financial system to fail? 

    It was, is, and will be a Ponzi to its last day and Ponzi’s fail for lack of new suckers.  In this case, those willing and able to undertake new credit (debt) that enlarges the money supply in our fractional reserve system.  The chart below shows the global annual growth of the 20 to 65 year-olds versus 65+ year-olds (both excluding Africa).  20 to 65 year-olds world over utilize credit (debt) while 65+ year-olds extinguish debt (deleverage). 

    So long as the growth of those levering up outstripped those deleveraging, the system could continue.  But as you’ll note, in 2008, the entire global system shuddered as accelerating growth of potential workers ceased and began decelerating…while the growth of non-workers accelerated. 

    By about 2024, the annual growth of non-workers (deleveragers) will overtake annual growth of potential workers (debtors).  Those rapidly extinguishing debt in old age will outnumber those undertaking the new debt.  Those in retirement or in death offloading assets will outnumber those buying those assets. 

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    The non-technical name for this is a “shit-show” and this is why central banks, federal governments, and ultra wealthy are aligning ever tighter to save themselves. 

    This was never going to work…but that doesn’t mean everybody has to lose.  And the ever tightening circle of winners are attempting to lock in their gains at the expense of the vast majorities losses.  QE is the salve for inadequate credit and money growth due to decelerating population growth among young versus accelerating population growth among elderly.  The forces of elderly deflation are outstripping the inflationary forces of growth among the young.

    Whether you agree, disagree, or are still pondering…the charts below show the global population of 15 to 24 year-old and 25 to 34 year-old potential childbearing females (excluding Africa) and total annual births (excluding Africa), dashed lines.  Why exclude Africa? As a continent, Africa consumes just 3% of global energy, imports about the same in finished goods, and generally consume so little as to be a rounding error…but they are the bulk of population growth.  However, Africa provides a very low level of emigration compared to Mexico, India, and the rest of the world.  The geographic barriers from sub-Saharan Africa (where the vast majority of high fertility nations exist) and extreme levels of poverty have constrained emigration thus far.

    So, when the global population growth among 15 to 24 year-old females (x-Africa, blue line) simply stalled from 1989 through 1995 and annual births declined by 20 million (black dashed lines), there may have been good reason to pay a little closer attention.  When the final impetus of 15 to 24 population growth concluded in 2008 and the echo rise in births likewise concluded, even closer attention should have been warranted.  Since 2008, the final piece of demographic energy came through the 25 to 34 year-old population (brown line) and peaked in 2018.  Now, from a childbearing standpoint, it is all downhill indefinitely.  By 2050, the 15 to 24 female population will decline by another 32 million while the 25 to 34 female population will fall by 39 million.  The UN projects births (x-Africa) will slowly and steadily decline as the childbearing population is in decline.  Something far more dramatic is more likely.

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    The chart below flips the births (black line) from total annual to year over year change, against total female 15-24 (blue) and 25-34 (brown) female populations.  The 18% deceleration in births from ’89 to ’95 coincided with low childbearing growth after decades of high growth.  What comes now as the entire female childbearing population begins declining is likely an asymmetrical decline.  The lack of growth coupled with the accessibility of birth control is likely to lead to a birth dearth unlike anything the world has previously seen.  A species choosing not to reproduce for a myriad of reasons.

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    Next, the global (x-Africa) year over year changes in both the childbearing populations and the year over year change in births.  The decelerating growth of females of childbearing age is plain enough and the large gyrations in births a confluence of population change, war, economic policies, birth control, etc.

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    And just in case the shape of the annual change in the global childbearing population (x-Africa) looks familiar (as it is the foundation of demand growth and inflation), I add the Federal Funds rate (yellow line)…plus the impact upon annual births.  As an aside, strangely, from 1950 to 1981 as global demand growth was accelerating, the Federal Reserve chose to restrict the availability of money by raising rates thus choking the creation of new capacity to meet the rising demand?!?  This was highly inflationary.  And then, on decelerating demand growth from 1981 to 2019, the Federal Reserve has made money more available, creating over-capacity and deflation!?!  Now as demand begins to outright decline, the return of ZIRP and likely NIRP inflating asset prices and costs of living far faster than incomes, further reducing demand and births.  Honest mistake or has the Fed long held yet another unstated mandate?

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    Year over year change in childbearing and births in Africa.  Is the strong deceleration in the growth of births in Africa from 2010 through 2018 an aberration or has something more significant begun?  Getting accurate and real time data from Africa can’t be easy so I won’t overreact or suggest a major change is underway.  I can only surmise it is possible that slowing first world activity is potentially trickling down upon African’s determination to have more children and if this data is correct and sustained…the last bastion of population growth would go poof!?!

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    Viewing historical and projected year over year changes in births of the world (excluding Africa, black line) versus Africa (yellow line).  The declining births and resultant declining demand represented by the world will surely impact Africa and result in a far lower growth path (or no growth?) than presently projected by the UN.  So many of the global economic and environmental models presuming ten or eleven billion persons on earth with far more consuming at “middle class” levels are garbage.  An entirely alternate reality of massive over-supply and over-capacity against fast falling demand is so much more realistic.

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    A quick look at the change per period of 15 to 35 year old females (x-Africa) versus the change in annual births (x-Africa).  From 1950 through 1989, the childbearing female population rose by 111% and annual births by 61%…from 1989 through 2018, the childbearing female population rose by 21% but annual births fell 15%.  The UN projection from 2018 through 2050 is an 8% decline in females of childbearing age while births implausibly “only” fall 15%.  Magnitudes greater decline is far more realistic.

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    Next, same as above in terms of change in millions.  A projected decline of 71 million females of childbearing age is likely to result in a far greater decline than presently suggested.

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    As a point of reference, I am using data from the UN World Population Prospects 2019, released in June of 2019.  This is important because it means that 2018 is the last year of actual observed inputs versus projections and assumptions thereafter.  For the 15 to 34 year old female population, the UN has a long runway to simply advance an existing population forward.  But projecting births forward is trickier.  Large global fluctuations have been more the norm than the exception.

    For the truly curious, I chart out the childbearing female populations and births, by region, from 1950 through 2050.  Like real estate, while the global trends are clear, they vary widely by region.  The first chart for each region is total 15 to 24 year-old and 25 to 34 year-old females versus total annual births.  Second chart is the year over year change in both childbearing females and births.  Knowledge is power.

    Western Asia (Middle East)

    Azerbaijan, Bahrain, Cyprus, Georgia, Iraq, Israel, Jordan, Kuwait, Lebanon, Oman, Qatar, Saudi Arabia, Palestine, Syria, Turkey, UAE, Yemen.  Although presently in a decade long lull in growth among the childbearing, there is still some demographic energy yet to come.  Still, UN projects no further growth in births.

    Year over year changes.  Again, like Africa, hard to know if the declines seen since 2008 are real and sustained…but highly noteworthy as nothing like this has been seen since WWII.  Of course, the UN projections assume this is an aberration and return their projections back to “normal”.

    Stans

    (Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan).  Rising childbearing populations and declining births in the short term, flat to slightly up through the mid century.

    The Stans are in the midst of declining childbearing and declining births last seen around the break-up of the Soviet Union.  Still, some demographic juice yet to come through that may temper the declining births.

    South Asia

    (Afghanistan, Bangladesh, India, Iran, Nepal/Bhutan, Pakistan, Sri Lanka).  The most populous region of the world has rolled over and a far more significant decline in births than the UN projects is likely over the upcoming decades.On a year over year basis, India (et al) are witnessing the decelerating growth among females of childbearing age and the impact of little growth among the childbearing and ongoing declining fertility rates is likely to see a far faster decline in births than the UN suggests through 2050.

    East Asia

    (China, Japan, S/N Korea, Taiwan, Mongolia).

    • China’s female childbearing population has fallen 25 million since 1989 and births down over 50% (-16 million) and yet far larger declines in those capable of childbirth are still upcoming and ongoing.  Those willing to engage in childbirth seems to be falling even faster, as the aftermath of the 2016 “two-child” fiasco highlights.  The female childbearing population will decline by another 50 million by 2050 and fertility rates are likely to go even lower.  Unlike the UN projection below, annual births below 10 million are likely in the near term…and how much further it goes from there is the question.  What will a country with 50 million unoccupied units of housing do as their population continues collapsing from the bottom-up (rhetorical question, Chinese government will be the buyer of everything eventually).

    With Chinese childbearing population and fertility rates tanking, significantly greater declines in births are nearly a sure thing than projected by the UN.

    • Japan, patient zero in depopulation, has been watching their annual births collapse since 1950, down over 60% from peak births, and resultant childbearing population decline for fifty years now, down almost 40%.  There really is nothing to stop or even slow the decline as this daisy-chain continues.  An honest question to pose at this point is, when do we start to consider the likelihood that Japan as a state and society is in true peril of going into terminal decline or are we already passed that point?

    Looking at Japan on a year over year basis, it is easy to see there is only further declines among the childbearing and the UN projected mild declines in birth through 2050 aren’t credible.  A far more realistic viewpoint would be births tumbling below a half million within the next decade…and a more pessimistic viewpoint puts Japan’s future as a functioning nation entirely in question.

    • South Korea, like Japan…but much worse.  South Korea is in population freefall with births down almost 70% since the 1960 peak and the childbearing population down almost 30% from the late 1980’s peak.  But the declines are just getting warmed up and the UN projection of flattish births against collapsing females of childbearing age is just silly.  An unbelievable but more realistic scenario will put births down half again from here over the next decade and children in South Korea will be nearing endangered species status?!?

    Below, South Korea on a year over year basis, and the upcoming large declines in females of childbearing age are hard to miss, but strangely, the resultant decline in births through the mid-century aren’t depicted by the UN.  Perhaps the economic, national, and societal implications are too serious to depict?

    South East Asia

    (Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam).  Annual births peaked here in 1985 and have flatlined for three decades, but now the flatline is coming through the childbearing population and resultant declining births are projected…the only question will be how large the declines will be?

    S.E. Asia year over year, below.  Why this time is different isn’t hard to see as the demographic momentum flips from growth to decline.
    Central America

    Like South and South East Asia, Central America’s births have long been flat…so long that now the childbearing population is likewise flat.  How steep the resultant decline in births will be is the trillion dollar question.

    Year over year change in Central America, below.  The historic deceleration and projected declines are very clear.

    South America

    South America’s population is more mature and the declines are already well underway.

    Year over year changes in S. America below…the demographic deceleration is over and now come the outright declines.

    Western Europe

    (Europe minus East Europe).  Births peaked five and half decades ago and have fallen by 1/3 since.  The childbearing population peaked in the mid ’80’s and has fallen by a quarter.  There is nothing but more of the same in the future.

    Western Europe year over year, below.  Despite all the immigration, really no demographic light out there.  Persistent declines in the childbearing population and likely even greater declining births than projected by the UN below.

    East Europe

    (Belarus, Bulgaria, Czechia, Hungary, Poland, Moldova, Romania, Russia, Slovakia, Ukraine).  The impact of the Soviet Union break-up is still pre-eminent in this part of the world but the in the aftermath of the GFC coupled with a significant decline in the childbearing, a similar decline in births is likely beyond the rather minor decline projected by the UN.

    The year over year view of Eastern Europe, below.  The major impact of the declining childbearing population through the next decade is evident.

    Canada / Australia / New Zealand

    The combined Canadian, Australian, New Zealand childbearing and births are among the more demographically positive.  Some further growth is likely despite negative fertility rates, based on growing childbearing populations thanks to ongoing immigration.

    The days of heady growth are gone, but some demographic growth likely remains.

    United States

    As for the US, the days of a growing childbearing population are done and thanks to ongoing immigration, a flat childbearing population is likely to persist.  However, with ongoing declining fertility rates, declining births are far more likely than the strange UN projection of an imminent birth burst.  This is the same burst that the Census and UN have been projecting since 2008 while births continue moving in exactly the opposite direction.  My best guess for births is the continued path of decline, in dashed yellow below.

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    Year over year, two different views…one based on observation and one based on theory.

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    Finally, a close up of annual change in US childbearing and births from 2000 through 2040…and the difference between the UN and my projection from 2020 through 2040, about 12 million fewer births.  But in truth, my best guestimate could be far too optimistic as 2019 is likely to see a new record low in births, according to CDC data through 2019 Q2.

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    Knowledge is power.


    Tyler Durden

    Wed, 12/18/2019 – 19:45

  • Bolivia Issues Arrest Warrant For Exiled President Morales On "Sedition & Terrorism"
    Bolivia Issues Arrest Warrant For Exiled President Morales On "Sedition & Terrorism"

    Turmoil intensified inside Bolivia on Wednesday as the country’s top prosecutor issued an arrested warrant on “terrorism” charges for former President Evo Morales, also accusing the recently ousted leader of encouraging sedition from abroad.

    First given political asylum in Mexico, but now in Argentina, Morales has claimed he was target of a military coup with the orchestration of Washington and regional enemies of Bolivia. 

    Interior Minister Arturo Murillo first brought the charges following fierce clashes in the capital and other cities between police and his supporters. Ratcheting violence in the wake of his ouster early last month has left at least 35 dead, according to prosecutors. They blame the deaths and continuing violence on Morales’ continued “seditious” speeches and messages from abroad.

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    This also after interim president Áñez said he must “answer to justice” over alleged election fraud and government corruption, following the mayhem of his last reelection, where an independent body charged him and his administration with being behind mass irregularities. 

    Morales is being blamed for stoking the mayhem, which allegedly involved him giving orders from exile to blockade cities to force to removal of interim President Jeanine Áñez. Evo supporters say she had illegally seized power in a unilateral power move to control the Senate and secure her leadership over the country. 

    The former president has since been blocked from running for office again, though Áñez’s administration has voiced concern that he plans to use Buenos Aires as a political headquarters to eventually bring himself back into power. 

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    Interior Minister Arturo Murillo shared a photo of the arrest warrant on social media and has in prior statements personally vowed to put him behind bars “for the rest of his life”. He’s further called the former leader a “terrorist” for actions before and after leaving office. 

    At the start of the counter-protests led by Evo backers the US embassy was forced to evacuate all non-essential personnel after the socialist demonstrators vowed to reject the “right-wing coup”. Washington immediately voiced support for Evo’s ouster, calling it a major advancement of Democracy in Latin America.

    From Buenos Aires, the left-wing populist leader Morales who has been praised by Venezuela’s Maduro, vowed to “continue fighting for the poor” as leader of the Movement for Socialism (MAS) party inside Bolivia. 


    Tyler Durden

    Wed, 12/18/2019 – 19:25

  • Spongebob, Tom Brady, & Cow-'Rape': The 5 Most Insane Academic Works Of 2019
    Spongebob, Tom Brady, & Cow-'Rape': The 5 Most Insane Academic Works Of 2019

    Authored by Faith Allen via Campus Reform,

    Academic publications have historically been revered as bastions of intellectual rigor, and “peer-reviewed” analysis, but are increasingly becoming home to what would have once been considered fringe or radical ideological viewpoints, arguably fueled by political persuasions. 

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    Campus Reform reported on a number of these instances in 2019. Here are just a few of the most outrageous.

    1. Prof: Spongebob perpetuates ‘violent, racist’ acts against indigenous people

    University of Washington professor Holly Barker published an article titled “Unsettling Spongebob and the Legacies of Violence on Bikini Bottom” to express her distaste for the yellow sponge character and his sea-faring friends. Her chief complaint was that the series bases its fictional setting on the nonfictional location of Bikini Atoll, a coral reef in the Marshall Islands used by the U.S. military for nuclear testing during the Cold War. She says Spongebob, as an “American” seems to have no regard for the usage of nuclear warfare and occupying land that does not belong to him. Barker stresses that the fictional lagoon is representative of violence against indigenous people, driven out by colonial powers.

    2. Prof: ‘Welfare of atheists/agnostics is reduced’ by prayers of others

    Economics professor Linda Thunstrom led a study at the University of Wyoming to place a monetary value on “thoughts and prayers.” She used victims from Hurricane Florence, as well as other individuals who experienced hardship in North Carolina to answer the question of how much Christians, agnostics, and atheist victims would be willing to pay for thoughts and prayers from various sources. Thunstrom’s observation of the perceived values led her to the conclusion that “the welfare of atheists and agnostics is reduced by such gestures as sending thoughts and prayers.” Thunstrom told Campus Reform that considering offering thoughts and prayers to a victim of a crisis, “you may want to adjust your response to people’s hardships depending on their religious affiliation.”

    3. Prof: Tom Brady’s ‘white male omnipotence’ buttresses American white supremacy’

    English professor Kyle Kusz at the University of Rhode Island published a chapter this September about the supposed propagation of white supremacy by the New England Patriots quarterback Tom Brady. Kusz said that Brady gained his popularity during the “latest wave of white rage and white supremacy.” The professor reasons that Brady often supports brands that would be considered “upscale” and the commercials he appears in make him appear superior to the viewer. Kusz relates an appearance of Brady in a 2015 commercial to something that would be seen in a Leni Reifenstahl’s Nazi Film, “Triumph des Willens.” He also notes the fact that Brady takes “boys only trips” to the Kentucky Derby with a group of mostly white men, claiming that this shows that he advances white supremacy within his personal life.

    4. NY univ. Promotes paper comparing cow insemination to ‘rape,’ milking cows to ‘sexual abuse’

    An academic paper promoted at the College at Brockport State University of New York by the Women’s and Gender Studies program calls on society to reflect on the rampant “sexual exploitation” of dairy cows by the milk industry in order to “fully fight gendered oppression.” Titled “Readying the Rape Rack, Feminism and the Exploitation of Non-Human Reproductive Systems,” the author questions whether milk is even beneficial to humans. The author encourages the reader to “place the importance of animals’ lives as equal to your own,” and address the plight of dairy cows similarly to women’s rights issues. The piece is aimed at discussing how the bodies of cows, specifically their reproductive system, have been poked and prodded at in “the same way women’s health has been at stake for years.”

    5. Prof says border enforcement harms environment

    A study performed by New Mexico Tech professor Haoying Wang set out to analyze the environmental concerns of increasing border enforcement. The professor says that changes in vegetation near the border could contribute to climate change, and suggested that the heavy machinery used by Border Patrol and the length of time it would take to effect change near the border will also be detrimental to the environment. He argues that the actual act of illegal immigration has a less harmful impact on the environment than border enforcement.


    Tyler Durden

    Wed, 12/18/2019 – 19:05

  • "Very Serious" – 30,000 Pigs Dead As Pig Ebola Spreads In Indonesia's North Sumatra
    "Very Serious" – 30,000 Pigs Dead As Pig Ebola Spreads In Indonesia's North Sumatra

    Last month more than 4,000 pigs died from African swine fever (ASF) in Indonesia’s North Sumatra province. The outbreak appears to be worsening in December with as many as 30,000 pigs dead, according to the province’s food security and livestock agency, reported Reuters

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    The Agriculture Ministry has just declared an outbreak of ASF in the North Sumatra province of the country: “Very serious handling is being carried out, including isolating those areas,” the North Sumatra Minister Syahrul Yasin Limpo told reporters on Wednesday. 

    For several months, carcasses have been found on roadways and rivers as farmers quickly discarded pigs out of fear of contagion would decimate their herds. 

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    Indonesian authority burrying pigs in Danau Siombak village, in Medan -AFP

    ASF was first detected in September in the province’s Dairi district. Government officials have deployed monitors to the 38 districts in the region to make sure the outbreak is contained. 

    Fadjar Sumping Tjatur Rassa, director of animal health at the Agriculture Ministry, said ASF had been found in 16 areas in North Sumatra, including Medan, the capital of Indonesia’s North Sumatra province. 

    In the 16 contaminated zones, the government has frozen all the transport of meat and meat products. Anyone who is in constant contact with infected herds must go trough bio-security screening, Rassa said.

    Rassa said, “road traffic (for pork and its products) are temporarily closed for the infected areas,” adding that the province has a pig population of 1.2 million. 

    Reuters estimates that Indonesia produced 327,215 tons of pork last year. North Sumatra produces about 13% of the country’s pork, coming in at around 43,308 tons last year. 

    As seen in many ASF outbreaks in China, spot prices for pork could surge in Indonesia as a result of the recent pig deaths. 

    China’s pig herd was thinned out by more than half this year thanks to ASF, pushing spot prices of pork in the region to record levels.

    There’s no word if ASF is contained in North Sumatra, nor if there were any transmission to wild boar – if there were, then this would mean ASF could spread to other provinces.

    There was also no word if the ASF outbreak in the country is connected with China. 


    Tyler Durden

    Wed, 12/18/2019 – 18:45

  • Will Modern Monetary Theory Blow Up The Dollar?
    Will Modern Monetary Theory Blow Up The Dollar?

    Authored by James Gorrie via The Epoch Times,

    “As long as the government can print money, we’ll never be broke.”

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    That’s the idea behind modern monetary theory (MMT) in a nutshell. Naturally, many of the nuts in Washington are starting to get behind this unhinged notion. That includes members of Congress such as Rep. Alexandria Ocasio-Cortez (D-N.Y.) and democratic presidential candidate Sen. Elizabeth Warren (D-Mass.).

    An Economic Absurdity

    Sure, a cluster of economists in and around Wall Street and Washington, D.C. are pushing this very dangerous set of policies that are dressed up in academic terminology such as “neo-Keynesianism” so that they sound almost sane. But MMT is as far from economic sanity as one can get. But let’s face it, Wall Street loves any idea that puts money into the market.

    In essence, the main idea behind MMT is that any government spending can be paid for but with printed money. An in depth look into history—or even a brief one—shows that the absurd idea of printing unlimited amounts of money leads a nation into hyperinflation and economic ruin.

    No Good Examples

    A recent example would be Zimbabwe. Unjust land seizures leading to food shortages, price controls, and corruption led to massive deficit spending fueled by printing press money. A inflation rate of 98 percent every day destroyed the economy and the government’s credibility in running it.

    A more distant example is Germany under the Weimar Republic of the mid-1920s. Under duress to pay reparations for World War I, the German government financed domestic spending exclusively via the printing of money. Hyperinflation soon followed, destroying confidence in the German government and the economy, and even led to starvation and mass disorder. We all know what came to Germany after that.

    But surely the United States is different than Zimbabwe 10 years ago and Germany of nearly 100 years ago? Yes, it is. But some economic laws don’t change.

    The Myth of ‘Endogenous Money’

    There are various takes on MMT, so we’ll look at the central idea and see why it’s a really bad one. MMT economists such as Stephanie Kelton (ex-adviser to Bernie Sanders), Bill Mitchell, who coined the term, and others are fans of the “endogenous money” theory. That’s the notion that private and public sectors battle over access to capital is unnecessary and wrong. Rather, their view is that banks create money in response to market demand in the form of loans to both the government and private businesses.

    Taken further, no loans are needed. Just print money.

    In that mythical universe, there’s little or no linkage to the “cost” of money in the form of interest rates as demand for money rises. There’s also, apparently, no “crowding out” effect where government demand for money crowds out private demand, which drives companies out of business (not realistic). Furthermore, it means that the government would never have to default on a loan payment because it can just print more money to pay off the debt.

    It certainly sounds like a wonderful idea. Who needs to create value when you can just print your debt and then print more to pay it off?

    It might work, at least for a while, as long as the creditors—such as the Federal Reserve, which loans the U.S. government money by indirectly buying up its debt—accepts dollars for payment. That’s called “monetizing debt,” by the way, and is essentially what the Fed’s quantitative easing (QE) programs have been doing since 2009. And yet, creditors, both foreign and domestic, still accept dollars as payment.

    So far, so good, right?

    Not so much. Sure, an MMT enthusiast would tell you that QE has, in fact, worked out quite well (it has really helped the stock market the past decade). There will come a day when a more beneficial currency will replace the dollar. But by the MMT logic, there are truly no limits to government spending. That would makes replacing the dollar much easier.

    Admittedly, there are more factors to consider in MMT, but for the sake of space, let’s cut to the chase.

    China’s Economy Built on MMT

    To see how well MMT works in practice today, we need only look at China, which has built its internal economy on fundamental points of MMT. The Chinese state, the central bank, and both public and private industry are all linked together in a recurring cycle of growth paid for by printing money.

    The key point is that even though the money is in the form of loans, it is still capital in the system. Furthermore, that capital is the currency. And, whether printed or lent, the value of the nation’s currency is perceived by the rest of the world as being backed by economic productivity, or devalued by the lack thereof. Confidence in the issuing government and the integrity of the legal system are also related factors. (See the Zimbabwe and Germany examples above.)

    The end results of China’s massive money printing are staggering. From 2013 to 2017, China added $25 in assets (debt) for every $1 dollar of GDP—more than 400 percent of its annual GDP. This is a historical first. What’s more, almost 80 percent of it was in shadow banking, unregulated lending with high default rates.

    And yet, China’s economy has been slowing for the past decade. Its GDP is at its lowest in almost 30 years. Granted, a fraction of that is due to the trade war over the past 18 months, but where’s the $50 trillion worth of growth that should have come from it?

    Today, China’s financial infrastructure is on the brink of collapse. It’s not that there’s a shortage of money in the country, either. China has injected over $126 billion in 2019 alone. At the same time, it’s controlling the quantity by very strict, government-imposed capital controls. That not only conveys its currency’s weakness to the rest of the world but also that even the average Chinese may not believe in the value of their currency.

    As a result, Chinese investors themselves prefer to hold gold or real estate rather than their own currency, because they don’t have confidence in its value or the government. They also suspect that asset valuations denominated in Renminbi are unreliable and prone to collapsing bubbles. The lesson for MMT advocates is that spending money alone does not create demand nor does it fuel long-term growth.

    A Risk to the U.S. Dollar

    Money is a store of value. In the absence of tangible backing such as gold, the issuing country and the strength of its economy are the main drivers of acceptance of a currency, both domestically and internationally.

    Moreover, perception is reality. In the case of the United States, MMT spending doesn’t happen in a vacuum. Other nations have to adjust their currency levels to ours. That means the United States would be exporting inflation. What nation will accept U.S. dollars—the world’s reserve currency—if it’s saddled with an infinite level of debt and the very real prospect of hyperinflation at any time?

    The answer is very few, if any. What’s more, competitor nations such as Russia and China would be tempted to help break the dollar by backing or partially backing their currency—or a basket of currencies—with gold.

    That would be the end of the dollar and the U.S. economy as we know it.


    Tyler Durden

    Wed, 12/18/2019 – 18:25

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Today’s News 18th December 2019

  • Austrian Parliament To Declare BDS Movement As Anti-Semitic
    Austrian Parliament To Declare BDS Movement As Anti-Semitic

    Authored by Soeren Kern via The Gatestone Institute,

    All of the major parties represented in the Austrian Parliament have agreed to support a resolution condemning the anti-Israel Boycott, Divestment and Sanctions (BDS) movement as anti-Semitic.

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    The measure calls on Austria’s federal government to fight anti-Semitism and anti-Zionism, and to withhold any form of financial and other state support from anti-Semitic organizations and advocates of BDS principles.

    The resolution will be submitted to the lower house of Parliament, the National Council, in January 2020. It is expected to be passed with an overwhelming majority. While anti-BDS laws have been passed in Vienna and Graz, the largest and second-largest cities in Austria, this would be the first time that such a measure is enacted at the federal level.

    On December 11, legislators from all five major parties — including the left-leaning Greens and the right-leaning Freedom Party (Freiheitliche Partei Österreichs, FPÖ) — formally agreed to co-sponsor the resolution, which is being spearheaded by Sebastian Kurz, a former (and most likely the next) chancellor of Austria who also leads the center-right Austrian People’s Party (Österreichische Volkspartei, ÖVP). The resolution states:

    “Anti-Semitism has existed since antiquity, although the term itself was not used until the 19th century. The core, however, was always the same: it was — and is — the fomenting of prejudices and hatred in word and deed against Jews. Throughout history they have been victims of violence and exclusion, which reached a devastating climax in the murderous cruelty of National Socialism and the declared goal of the systematic destruction of Jewry by the Nazi regime.

    “In total, more than six million Jews, many of them children, fell victim to the Shoah. They were murdered in the extermination camps by poison gas or otherwise. But even this unimaginably cruel genocide and the memory of it has not caused many people to rethink, and so Jews, even in the present, are exposed, once again, to hate and prejudices, which in the worst cases culminate in violence.

    “In a survey of 16,500 Jewish Europeans in 12 European countries conducted by the EU’s Fundamental Rights Agency in May/June 2018, highly alarming findings emerged: nine out of ten respondents said that anti-Semitism had intensified, and one-third were considering emigrating.

    “The European Parliament’s Working Group on Anti-Semitism (EP WGAS) has already done valuable work. In June 2017, an anti-Semitism resolution was adopted by a large majority in plenary. The text included calling for all EU Member States to adopt the definition of anti-Semitism developed by the International Holocaust Remembrance Alliance (IHRA) and to train their police and judicial authorities on how to prosecute anti-Semitism. Austria was one of the first EU Member States to adopt this IHRA working definition of anti-Semitism by a resolution of the Council of Ministers on April 21, 2017.

    “The Austrian Presidency of the EU unanimously adopted a declaration on combating anti-Semitism and developing a common approach to security for Jewish communities and institutions during the Justice and Home Affairs Council on December 6, 2018. The European Council welcomed this statement in its conclusions of December 13 and 14, 2018. This path must continue to be pursued consistently.

    “Also, in 2018, the President of the National Council, Wolfgang Sobotka, commissioned a study to understand the level of anti-Semitic sentiments in Austria. The result of this study is that 10% of Austrians are manifestly anti-Semitic and 30% are latently anti-Semitic. The percentages are alarmingly higher among the Turkish and Arabic-speaking people who were born in Austria or have lived with us for more than ten years.

    “According to the IHRA anti-Semitism definition adopted by Austria, the State of Israel, which is understood as a Jewish collective, may be the target of anti-Semitic hostility, such as the rejection of the right of the Jewish people to self-determination, collective responsibility of Jews for acts of the State of Israel, or comparisons between current Israeli politics and Nazi policies.

    The ‘Boycott, Divestment and Sanctions’ (BDS) movement, which has increasingly appeared in Austria in recent years, makes use of this anti-Semitic pattern: This movement calls for a boycott of the Jewish state, of Israeli products and companies, of Israeli artists, scientists and athletes. It demonizes and measures Israel by double standards, makes Austrian Jews jointly responsible for Israeli politics, and by calling for the right of return for Palestinian refugees and all their descendants, it questions the right of existence of the Jewish state.

    “For Austria, Israel’s right to exist is non-negotiable, and any form of anti-Semitism, including Israel-related anti-Semitism, is unacceptable and must be severely condemned. Of course, factual criticism of individual measures by the government of Israel must be allowed.

    “The National Council strongly condemns all forms of anti-Semitism, including Israel-related anti-Semitism, and calls on the federal government to resolutely and consequently confront these tendencies.

    “The federal government is further requested:

    • to develop a holistic strategy to prevent and combat all forms of anti-Semitism, with close involvement of all relevant bodies, as part of its strategies to prevent racism, xenophobia, radicalization and violent extremism;

    • to strongly condemn the BDS movement and its goals, in particular the call for a boycott of Israeli products, companies, artists, scientists or athletes;

    • to not provide premises and infrastructure to organizations and associations that use anti-Semitic rhetoric or question Israel’s right to exist;

    • to not support, financially or otherwise, events of the BDS movement or groups that pursue similar goals;

    • to maintain Austria’s role as an excellent place for international dialogue and exchange.”

    The Austrian resolution, one of the most forceful European statements of support for Israel to date, is part of a growing pushback against the BDS movement.

    On November 14, 2019, the City Council of Graz, the second-largest city in Austria, adopted a resolution against anti-Semitism and the anti-Israel BDS movement. The council stated that it “resolutely opposes every form of anti-Semitism and condemns the BDS campaign and the call for a boycott of the Jewish state as clearly anti-Semitic.” The council said that “no organizations should be financially supported that question Israel’s right to exist.” It added:

    “Projects that call for a boycott or support the BDS movement must not be financially supported. Also, as a result of the decision, the City of Graz will no longer provide urban space for BDS campaigns or events in the future.”

    On June 27, 2018, the City Council of Vienna unanimously passed an anti-BDS resolution, which stated:

    “The City of Vienna strongly condemns the spread of anti-Semitism worldwide, opposes the anti-Semitic BDS campaign, will not provide urban space for BDS campaigns or events, exhibitions or demonstrations that pursue BDS goals, and will not provide any other support for BDS events.”

    On May 17, 2019, the German Parliament passed a resolution condemning the BDS movement as anti-Semitic and pledging to cut off funding to any organizations that actively support BDS. The resolution, passed by a broad cross-party alliance, stated:

    “The all-embracing boycott call in its radicalism leads to the branding of Israeli citizens of the Jewish faith. There are statements and actions from the BDS movement that seek to cast doubt on the right of existence of the State of Israel. Calls for boycott are reminiscent of anti-Semitic positions of National Socialism are unacceptable and sharply condemnable.”

    The conservative anti-establishment party, Alternative for Germany (AfD), said that the resolution did not go far enough and called for a total ban of BDS activities in Germany. It noted that the BDS movement “has its origins in the anti-Semitic and anti-Zionist initiatives of Arab groups that were already active long before the founding of the State of Israel and that between 1933 and 1945 were in close and friendly contact with the National Socialist government of Germany.”

    On October 22, 2019, the Czech Chamber of Deputies passed a non-binding resolution calling for the government “to refuse financial support from such organizations for such movements, organizations and organizations in the European Union, the United Nations and other international institutions and associations calling for a boycott of the State of Israel.”

    On July 23, 2019, the U.S. House of Representatives overwhelmingly passed a bi-partisan resolution rejecting the BDS campaign against Israel. The bill — formally known as House Resolution 246 — passed by a vote of 398-17, with five abstentions. The bill was opposed by one Republican and 16 Democrats, including the first two Muslim women elected to Congress: representatives Rashida Tlaib of Michigan and Ilhan Omar of Minnesota.

    The measure “opposes the Global Boycott, Divestment, and Sanctions Movement (BDS Movement) targeting Israel, including efforts to target United States companies that are engaged in commercial activities that are legal under United States law, and all efforts to delegitimize the State of Israel.”

    It also stated that the BDS campaign “undermines the possibility for a negotiated solution to the Israeli-Palestinian conflict by demanding concessions of one party alone and encouraging the Palestinians to reject negotiations in favor of international pressure.”

    Anti-BDS resolutions have been passed in 27 U.S. states: Alabama, Arizona, Arkansas, California, Colorado, Florida, Georgia, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Nevada, New Jersey, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Virginia and Wisconsin.


    Tyler Durden

    Wed, 12/18/2019 – 02:00

    Tags

  • Never Trust A Failing Empire
    Never Trust A Failing Empire

    Authored by Federico Pieraccini via The Strategic Culture Foundation,

    The Washington Post, through documents released through the Freedom of Information Act, has published a long investigation into Afghanistan. Journalists have collected over 400 testimonies from American diplomats, NATO generals and other NATO personnel, that show that reports about Afghanistan were falsified to deceive the public about the real situation on the ground.

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    After the tampering with and falsification of the report of the Organization for the Prohibition of Chemical Weapons (OPCW), we are witnessing another event that will certainly discomfit those who have hitherto relied on the official reports of the Pentagon, the US State Department and international organizations like the OPCW for the last word.

    There are very deliberate reasons for such disinformation campaigns. In the case of the OPCW, as I wrote some time back, the aim was to paint the Syrian government as the fiend and the al-Qaeda- and Daesh-linked “moderate rebels” as the innocent souls, thereby likely justifying a responsibility-to-protect armed intervention by the likes of the US, the UK and France. In such circumstances, the standing and status of the reporting organization (like the OPCW) is commandeered to validate Western propaganda that is duly disseminated through the corporate-controlled mainstream media.

    In this particular case, various Western capitals colluded with the OPCW to lay the groundwork for the removal of Assad and his replacement with the al-Nusra Front as well as the very same al-Qaeda- and Daesh-linked armed opposition officially responsible for the 9/11 attacks.

    As if the massaging of the OPCW reports were not enough in themselves to provoke international outrage, this dossier serves to give aid and comfort to jihadi groups supported by the Pentagon who are known to be responsible for the worst human-rights abuses, as seen in Syria and Iraq in the last 6 years.

    False or carefully manipulated reports paint a picture vastly different from the reality on the ground. The United States has never really declared war on Islamic terrorism, its proclamations of a “War on Terror” notwithstanding. In reality, it has simply used this justification to occupy or destabilize strategically important areas of the world in the interests of maintaining US hegemony, intending in so doing to hobble the energy policies and national security of rival countries like China, Iran and the Russian Federation.

    The Post investigation lays bare how the US strategy had failed since its inception, the data doctored to represent a reality very different from that on the ground. The inability of the United States to clean up Afghanistan is blamed by the Post on incorrect military planning and incorrect political choices. While this could certainly be the case, the Post’s real purpose in its investigation is to harm Trump, even as it reveals the Pentagon’s efforts to continue its regional presence for grand geopolitical goals by hiding inconvenient truths.

    The real issue lies in the built-in mendacity of the bureaucratic and military apparatus of the United States. No general has ever gone on TV to say that the US presence in Iraq is needed to support any war against Iran; or that Afghanistan is a great point of entry for the destabilization of Eurasia, because this very heart of the Heartland is crucial to the Sino-Russian transcontinental integration projects like the Eurasian Economic Union (EAEU) and the Belt and Road Initiative. In the same vein, the overthrow of the Syrian government would have ensured Israel a greater capacity to expand its interests in the Middle East, as well as to weaken Iran’s main regional ally.

    The Post investigation lays bare the hypocrisy of the military-industrial complex as well as the prevailing political establishments of Europe and the United States. These parties are not interested in human rights, the wellbeing of civilians or justice in general. Their only goal is to try and maintain their global hegemony indefinitely by preventing any other powers from being able to realize their potential and thereby pose a threat to Atlanticist preeminence.

    The war in Iraq was launched to destabilize the Middle East, China’s energy-supply basin crucial to fueling her future growth. The war in Syria served the purpose of further dismantling the Middle East to favor Saudi Arabia and Israel, the West’s main strategic allies in the Persian Gulf. The war in Afghanistan was to slow down the Eurasian integration of China and Russia. And the war in Ukraine was for the purposes of generating chaos and destruction on Russia’s border, with the initial hope of wresting the very strategically area of Crimea from Russia.

    The best-laid plans of mice and men often go awry, and this has been on full display in recent times. Almost all of Washington’s recent strategic objectives have ended up producing results worse than the status quo ante. In Iraq there is the type of strong cooperation between Baghdad and Tehran reminiscent of the time prior to 1979. Through Hezbollah, Iran has strengthened its position in Syria in defense of Damascus. Moscow has found itself playing the role of crucial decider in the Middle East (and soon in North Africa), until only a few years ago the sole prerogative of Washington. Turkey’s problems with NATO, coupled with Tel Aviv’s open relation with Moscow are both a prime example of Washington’s diminishing influence in the region and Moscow’s corresponding increase in influence.

    The situation in Afghanistan is not very different, with a general recognition that peace is the only option for the region being reflected in the talks between the Afghans, the Taliban, the Russians, Chinese, Indians and Pakistanis. Beijing and Moscow have well known for over a decade the real intent behind Washington’s presence in the country, endeavoring to blunt its impact.

    The Post investigation only further increases the public’s war weariness, the war in Afghanistan now having lasted 18 years, the longest war in US history. Jeff Bezos, the owner of the Post, is a bitter opponent of Trump and wants the president to come clean on the Afghanistan debacle by admitting that the troops cannot be withdrawn. Needless to say, admitting such would not help Trump’s strategy for the 2020 election. Trump cannot afford to humiliate the US military, given that it, along with the US dollar, is his main weapon of “diplomacy”. Were it to be revealed that some illiterate peasants holed up in caves and armed with AK-47s some 40 years ago are responsible for successfully keeping the most powerful army in history at bay, all of Washington’s propaganda, disseminated by a compliant media, will cease to be of any effect. Such a revelation would also humiliate military personnel, an otherwise dependable demographic Trump cannot afford to alienate.

    The Washington Post performed a service to the country by shedding light on the disinformation used to sustain endless war. But the Post’s intentions are also political, seeking to undermine Trump’s electoral chances by damaging Trump’s military credentials as well as his standing amongst military personnel. What Washington’s elite and the Post do not know, or perhaps prefer to ignore, is that such media investigations directed against political opponents actually end up doing irreparable damage to the political and military prestige of the United States.

    In other words, when journalist do their job, the military industrial complex finds it difficult to lie its way through wars and failures, but when a country relies on Hollywood to sustain its make-believe world, as well as on journalists on the CIA payroll, on compliant publishers and on censored news, then any such revelations of forbidden truths threaten to bring the whole facade crashing down.


    Tyler Durden

    Wed, 12/18/2019 – 00:05

  • SoCal Millennials Are Piling On Most Credit Card Debt
    SoCal Millennials Are Piling On Most Credit Card Debt

    Beverly Hills’ Millennials were far ahead of the competition in terms of credit card debt, showing, as Statista’s Katharina Buchholz explains, the correlation that exists between high incomes and credit card use in the United States. Cities in affluent Southern California, especially in the Los Angeles area, had some of the highest average per capita credit card debt rates for Millennialsaccording to website Experian.

    Beverly Hill’s Millennials piled on an average of more than $12,000 in credit card debt, far more than second-placed Monsey in the New York area, where the average debt rate was around $8,600.

    Infographic: SoCal Millennials Are Piling on Most Credit Card Debt | Statista

    You will find more infographics at Statista

    Because high incomes normally lead to better credit scores, richer people are able to go into more debt on their cards. High debt municipalities were most often found around big cities, showing another reason Millennials might feel the need to go into debt: high cost of living. In recent years, U.S. wage growth has not kept up with housing costs, a fact that is amplified in bigger cities – top 10 cities for credit card debt among Millennials were found around L.A., New York, Houston, Miami and Austin.


    Tyler Durden

    Tue, 12/17/2019 – 23:45

  • 10 Self-Evident Truths That 'We, The People' Have Spontaneously Come To Realize…
    10 Self-Evident Truths That ‘We, The People’ Have Spontaneously Come To Realize…

    Authored by Mike Adams via NaturalNews.com,

    We have a lot to thank Trump for, but among the most important is the idea that Trump has caused the corrupt, fraudulent, lying specter of “Big Government” to fully reveal itself for what it truly is.

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    Does anyone trust the FBI after reading the shocking findings of the Horowitz (IG) report? Not on your life.

    Does anyone believe the Democrats are pursuing legitimate “impeachment” based on legitimate “high crimes?” Not a chance.

    Does any rational person think that high-level lawmakers and bureaucrats aren’t on the take, receiving kickbacks from billions in foreign aid?

    It’s quite stunning, actually, how the mass awakening has accelerated over the last three years as Trump has succeeded as President. In their desperate attempt to destroy Trump, the deep state swamp creatures and corrupt, lawless Democrats have been forced to reveal the truth about their corruption, fraud and malicious abuse of power.

    Because of all this, there are many self-evident truths that have now become obvious to the American people. Read from the point of view of the People talking to the political swamp in Washington D.C.:

    1. We don’t believe you.

    2. You are all dishonest crooks and horrible people who should never be trusted again.

    3. The intelligence community is the enemy of the people and must be dismantled if any American is to ever be truly free.

    4. We are not going to voluntarily hand over our guns. You may come try to take them by force, but we will shoot you if you try.

    5. We are withdrawing our consent. You are now a rogue enemy government that we finally recognize as the ENEMY.

    6. We are never going to vote for establishment candidates ever again.

    7. We will not live as slaves, suffering under your tyranny. We would rather die as Americans, defending our liberty and our republic.

    8. If we ever get the chance, we will arrest all of you and throw you in prison for as long as you live.

    9. We will no longer cooperate with your sham court system, your corrupt FBI and your lawless federal regulators. They are all fraudulent, criminal cartels that have no legitimate authority. You have lost the consent of “the governed.”

    10. Your fiat currency financial system and debt Ponzi scheme is a criminal fraud that steals money from the working class. We will no longer hold your dollars and will seek alternatives at every opportunity.

    I’m sure you can think of dozens more, but that short list sums up the highlights.

    The bottom line should be crystal clear: The United States federal government is run by illegitimate, corrupt, fraudulent swamp creatures and the very future of freedom for America depends on completely dismantling the very concept of a “government” that rules over the people.

    The time has come to end the era of big government. We the People no longer need “representatives” in Washington. We don’t need a United States Senate, packed with treasonous crooks (like McCain or Reid) and foreign aid skimming hucksters. We don’t need the FDA or the CDC, both of which are nothing but fake science marketing departments for Big Pharma. We don’t need the Federal Reserve, a fiat currency counterfeiting operation that steals from all working Americans. And we don’t need the intelligence community, which has morphed into a domestic spying secret police operation that routinely abuses its power to surveil and threaten innocent Americans.

    We don’t need government-run health care, government-run food stamps or government-run anything, other than defending the shores, setting standards and using the limited powers of small government to protect the rights of individuals against dangerous corporations such as banks and tech giants. That’s the proper role of government: To protect liberty, not to rule over the people.

    Do not surrender an inch to this corrupt, lawless system run by traitors and tyrants. Every Democrat in Washington D.C., without exception, is guilty of treason and should be arrested, charged and treated accordingly. And half the Republicans are guilty of the same crime, by the way.

    The entire system is corrupt beyond repair. The deep state swamp cannot investigate itself, yet all the powers of investigation have been concentrated in the hands of the very people who are the most dangerous, corrupt criminals of all.

    It’s time to revoke our consent from this criminal government and dismantle it once and for all.

    Trump is attempting to do exactly that, but even he is spending America into oblivion with record debt spending. Perhaps he realizes a financial implosion is the only sure way to bring down the whole corrupt system.

    There will never be another Trump. Once Trump’s tenure is up, We the People must continue his work of exposing, dismantling and rejecting the criminals, crooks and fraudsters in Washington D.C. The very existence of big government is irreconcilable with personal liberty and prosperity. We can either be free and prosperous, or we can be enslaved and forced into destitution under the rule of big government tyranny.


    Tyler Durden

    Tue, 12/17/2019 – 23:25

    Tags

  • Boeing 737 MAX Production Halt Will Slash A Third Off Q1 GDP
    Boeing 737 MAX Production Halt Will Slash A Third Off Q1 GDP

    Several months ago, when news of the grounding of Boeing’s 737 MAX fleet first hit, we wrote that this would likely lower GDP growth by around 0.3%-0.5% in both Q2 and Q3, as the collapse in shipments was only partially offset by a pickup in the inventory component. Last night’s announcement that production of the plane will also be halted indefinitely, suggests a longer, and more acute hit to US GDP.

    First, some history:  After the plane was grounded in March, deliveries were halted, producing a roughly 33% decline in nondefense aircraft and parts shipments. However, Boeing continued to produce the plane—albeit in more limited quantities (42/month vs. 52/month)—and placed them in inventory instead of shipping them out while waiting for reauthorization. As a result, industry-wide production of aircraft declined by a much less dramatic ~20%.

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    All that stopped last night. According to economists from JPMorgan, Goldman and Capital Economics, Boeing’s work stoppage will cut up to 0.5% from first quarter 2020 GDP, with risk to the upside as Boeing’s suppliers are already reeling from the uncertainty around just how long this production halt will last.

    While Boeing previously cut production of the 737 Max to 42 a month, down from 52 in March, the move did not have a shocking impact on the economy. However, a full stop in production means the GDP-boosting rise in inventories will end, resulting in a hit to growth.

    In the chart below, Goldman used relevant GDP source data to produce a more comprehensive estimate of the GDP contribution from commercial aircraft output. The bank found that the decline in aircraft shipments has indeed only been partially offset by a pickup in measured inventory investment (the former is reflected in the GDP statistics in business investment, the latter in the change in private inventories).

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    What happens next?

    “The expected drag on 1Q GDP growth should be concentrated in reduced inventory accumulation,” said JPMorgan chief economist Michael Feroli, who also expects the monthly factory orders and non-farm payroll reports to be adversely impacted by Boeing’s production halt.

    Meanwhile, according to the FT, Michael Pearce at Capital Economics expects a 0.5% hit to GDP growth in the first three months of the year if the shutdown lasts the entire quarter. He said the move will reduce output of commercial aircraft by about $25bn annualized. Pearce expects the decision could deliver a “big hit to the manufacturing sector just as prospects were beginning to brightenand cautioned that if staff at Boeing’s suppliers are impacted, “there’s a risk the damage could be even worse.”

    Goldman also chimed in today, pointing out that “given that 737 MAX production will halt entirely in January, inventory growth is set to fall sharply, which will weigh on Q1 GDP growth.” Source data available for October and November indicate that the elevated pace of inventory accumulation in Q3 has continued into Q4. Because the second derivative of inventories is what matters for GDP growth, Goldman expects the Q1 slowdown in inventory accumulation to lower growth in the quarter by around 0.4%, reflecting an $18bn decline in the pace of real inventory investment, as shown in the next chart.

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    The good news is that for now, Boeing has avoided any layoffs, but depending on the length of the stoppage that will change; Pearce expects at least some of the workers “at the more than 600 smaller companies in the supply chain will be furloughed or laid off,” and this could halt their investment plans and could crop up in jobless claims and consumer confidence data.

    The bigger issue is that with Q1 GDP already set to print at just 1.5%, another 0.5% in growth being removed will result in the worst quarter for US GDP in years, and would leave the US economy precariously close to a recession.

    The silver lining in this situation is that once the 737 Max gets the green light to get off the ground again, the US economy stands to get a big boost as there will be a surge in exports and investment, though this could be delayed until the second half of 2020 . Indeed, as Goldman puts it, “a potential recertification of the plane suggests scope for the level of GDP to rebound by around 0.3% (or 1.2pp annualized) at some point in the future, but we will wait for clarity on the timing before incorporating this into our baseline forecasts.”

    Of course, the upside scenario is based on the assumption that the 737 Max grounding will end… eventually. The problem is that the longer this plane remains grounded, the lower its odds of ever flying again. Meanwhile, every quarter 737 Max production is mothballed, US GDP will continue to be hit by about 0.5% relative to some optimistic ~2% or so baseline which assumed airplane production in perpetuity. As such, just a fairly modest hit to the US economy will be sufficient to finally send the economy into a recession.


    Tyler Durden

    Tue, 12/17/2019 – 23:05

  • The Big Hole In The China Trade Agreement
    The Big Hole In The China Trade Agreement

    Authored by Gordon Chang via The Gatestone Institute,

    There’s something missing from the “Phase One” trade agreement with China, announced Friday. And it’s something critically important. Yet, Larry Kudlow, President Trump’s director of the National Economic Council, appeared not to know about it afterwards.

    “We will see,” said Kudlow in response to Maria Bartiromo on “Sunday Morning Futures,” her Fox News Channel show, as she asked him about Beijing’s new “cybersecurity” rules.

    “There’s a large IP chapter in this deal and there’s also a large forced technology transfer chapter in this deal. I don’t think we know enough about these new Chinese rules and we’ll have to look at that and by the way if they do violate them of course we will take action.”

    Bartiromo was referring to two sets of Chinese rules.

    • On December 1, Beijing implemented the Multi-Level Protection Scheme 2.0, issued pursuant to the 2016 Cybersecurity Law.

    • On January 1, China’s Cryptography Law becomes effective.

    These measures prohibit foreign companies from encrypting data so that it cannot be read by the Chinese central government and the Communist Party of China. Businesses will be required to turn over encryption keys. Companies will not be able to employ virtual private networks to keep data secret, and some believe they will no longer be allowed to use private servers.

    Together, these measures allow Beijing to take all the data and communications of foreign companies.

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    Beijing’s complete visibility into the networks of foreign companies will have extremely disadvantagious consequences. For instance, Chinese officials will be permitted, under Chinese law, to share seized information with state enterprises. This sharing means the enterprises will weaponize the information against their foreign competitors.

    Moreover, China’s officials, once they have encryption keys and access to the China network of a foreign firm, will be in a good position to penetrate the networks of that firm outside China. Therefore, Beijing will soon steal data stored on foreign networks and put companies, like Nortel Networks, out of business or ruin them to the point where Chinese entities can buy them up at reduced prices. Do we really want the Fortune 500 to be owned by China?

    The U.S. Trade Representative’s skimpy Fact Sheet for the Phase One deal does not address the December 1 and January 1 rules. There is, of course, no point in including in the trade deal forced taking and intellectual property protections if they do not cover the cybersecurity rules.

    Judging from Kudlow’s nonspecific response to Bartiromo and his admission of not knowing much about “these new Chinese rules,” the administration apparently has not considered the linkages between them and the trade deal. If that is indeed the case, the Phase One deal will be pointless. Anything — information, data, communications, trade secrets, or technology — protected under its terms will nonetheless be available to Chinese authorities pursuant to the December 1 and January 1 rules.

    The remedy? President Trump can pull out of the Phase One deal — something he should do anyway — or use his considerable powers under the International Emergency Economic Powers Act of 1977 to prohibit American companies from complying with the new cybersecurity rules or from storing data in China. On August 23, Trump threatened to use the act to force companies out of that country.

    Washington will have to do something fast to protect American businesses in China — and the American economy — because the Phase One deal is clearly inadequate. There is, after all, a big hole in the center of it.


    Tyler Durden

    Tue, 12/17/2019 – 22:45

  • Fed President's Shocking Admission: "We Need To Be Pretty Focused On Asset Prices, Not Just Inflation"
    Fed President’s Shocking Admission: “We Need To Be Pretty Focused On Asset Prices, Not Just Inflation”

    There was an stunning admission by Boston Fed head Eric Rosengren on Tuesday, when during an audience Q&A after a speech to The Forecasters Club of New York, the voting FOMC member (and chronic dissenter – Rosengren has voted against all three rate cuts made by the Fed this year) the former dove warned that lower rates could encourage excessive risk taking and over-leveraging, which would create great risks during a downturn. More importantly, he confirmed that high asset prices are a direct function of low rates, and thus Fed policy, and it is the Fed that is responsible for not only all prior bubbles, but the biggest one them all: the one right now.

    “I do have concerns about that financial stability. I would prefer probably a different level of rates,” the Boston Fed President said, confirming that low rates will eventually result in a financial crisis, and that only higher rates can lead to a final outcome that is not apocalyptic. 

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    Rosengren said that following three rate cuts this year and the launch of QE4, he remains worried that lower rates could encourage corporations to take on excessive risk and borrow too much. The policymaker said companies that are over-leveraged may have to lay off more workers in a downturn, which could amplify losses and cause more damage to the economy.

    Most importantly, the Boston Fed confirmed what we have been saying all along: the Fed should be worried not just about economic inflation – which remains muted – but also asset prices, which have been gripped by runaway inflation over the past decade.

    “If you look at the last two recessions, they were not situations where inflation got out of control. They were situations where asset prices went way up and then came way down. So if your goal is to avoid recessions, I think we need to be pretty focused on asset prices not just inflation“, Rosengren said in a moment of shocking candor and transparency.

    He was referring, of course, to the chart below which we have shown on many prior occasions, yet which most of Rosengren’s peers refuse to admit even exists.

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    Rosengren’s conclusion, while spot on, to wit “If what you want to do is avoid recessions in the future, you have to be thinking about what is happening to asset prices as well”, will be ignored by everyone, from investors to policy makers, because if the Fed admits that Rosengren is right and the Fed has to start “paying attention” to the hyperinflation it has created across asset prices, then the party is over. It’s even worse when considering that the Fed has blown such an asset price bubble in equities and other assets, that the only possible outcome is either for the bubble to burst, or to keep growing exponentially, making the resulting crisis far worse.

    Of course, while the Fed may still be ignoring what is so blatantly obvious to everyone else, the problem is that increasingly more ordinary people are realizing that in a time when the S&P is up 27% and wages are barely higher for the 10th consecutive year, there is something catastrophically wrong… and that thing is called monetary policy. And once the tipping point of populist anger finally arrives and an angry platoon of pitchfork-dragging discontents arrives at the Fed building in D.C., that’s the moment when the insanity of the past decade will finally be over. Insanity, which incidentally started with Ben Bernanke’s explanation in a WaPo op-ed just why the Fed’s true mandate is to push stock prices higher, because – somehow – it would stimulate the economy (recall: “higher stock prices will boost consumer wealth and help increase confidence, which can also spur spending”). Instead, all the Fed’s mandate of levitating asset achieved was to make the top 0.01% richer than ever, crush the middle class, and unleashed a tidal wave of populist anger that will eventually culminate with an angry mob burning down the Marriner Eccles building. For the sake of everyone, we can only hope that said mob does not wait too long.


    Tyler Durden

    Tue, 12/17/2019 – 22:25

  • Buchanan: Will The Secessionist Epidemic Ever End?
    Buchanan: Will The Secessionist Epidemic Ever End?

    Authored by Pat Buchanan via Buchanan.org,

    Fresh from his triumphal “Get Brexit Done!” campaign, Prime Minister Boris Johnson anticipates a swift secession from the European Union.

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    But if Britain secedes from the EU, warns Scotland’s first minister Nicola Sturgeon, Scotland will secede from the United Kingdom.

    Northern Ireland, which voted in 2016 to remain in the EU, could follow Scotland out of Britain, leaving her with “Little England” and Wales.

    Not going to happen, says Boris. His government will not allow a second referendum on Scottish independence.

    Yet the Scottish National Party won 48 of Scotland’s 59 seats in Parliament, and Sturgeon calls this a mandate for a new vote to secede:

    “If (Boris) thinks … saying no is the end of the matter then he is going to find himself completely and utterly wrong. … You cannot hold Scotland in the union against its will.”

    She has a point. If a majority of Scots wish to secede, how does a democratic Great Britain indefinitely deny them the right of self-determination?

    Is Scotland fated to become for Britain what Catalonia is to Spain?

    Where does this phenomenon, this continuing unraveling of old and proliferation of new nations, this epidemic of secessionism, end?

    The most recent population explosion of new nations began three decades ago, when 15 republics of the USSR became independent nations. Soon, several of the 15 began to unravel further.

    Transnistria seceded from Moldova. South Ossetia and Abkhazia seceded from Georgia. Chechnya sought to break free of Russia, only to be crushed. Since 2015, the Donbass has sought to secede from Ukraine.

    When Josip Tito’s Yugoslavia collapsed, six “nations” seceded from Belgrade.

    When did secessionism begin? The Americans started it all.

    The first great secessionist cause was the Revolution, when the 13 American colonies declared and won independence from the British crown.

    It is solemnly declared today that our Revolution was about ideas, such as the equality of all men. But the author of the Declaration did not believe in equality.

    Jefferson was a Virginia plantation owner, some of whose slaves were with him in Philadelphia. He described Native Americans in the Declaration as “merciless Indian Savages.” The British are fraternally called “brethren” with whom we share “ties of a common kindred,” but who have been “deaf to the voice of consanguinity.”

    I.e, our cousins have been deaf to the call of our common blood.

    John Jay, in Federalist 2, before the Constitution was even ratified, spoke of the elements that formed the nation — “one connected country to one united people … descended from the same ancestors, speaking the same language, professing the same religion … similar in their manners and customs.”

    A second secessionist movement, six decades later, created a second American nation. Texans under Sam Houston rose up and ripped that vast province away from its young mother country, Mexico.

    The third secessionist movement united 11 states that sought to create a new confederated nation outside the Union, as the revolutionary generation had created a new nation outside of Britain.

    In the 19th century, a dozen new nations were created by Latin American secessionists of the Spanish and Portuguese empires who emulated the example of the Americans of 1776.

    After 1945, colonies of the British, French, Portuguese and Belgian empires seceded to produce a baby boom of new nations whose most common characteristic seems to be that all receive foreign aid and all have seats in the U.N. General Assembly.

    If the secessionism epidemic is to someday expire, then its causes will have to be addressed. And what are they?

    Secessionism appears rooted principally in issues of national identity — ethnicity, religion, race, language, culture and “the mystic chords of memory” — most of which Jay identified as both uniting Americans and separating us from our British “brethren.”

    Yet these issues of identity appear not to be receding but rising in the Caucasus, Middle East, Africa and South Asia.

    The Kurds, the Palestinians, the Baluch and many more seek their own nations. Taiwan’s secession is not recognized by China. The secession of Russian-speaking Donbass is not recognized by a U.S.-armed Ukraine, or by us.

    As more and more people identify themselves by who they are, and are not, secessions of people from each other will continue.

    These are not inconsequential matters. In 1939, the question of whether 300,000 Germans in a Polish-controlled city, Danzig, should be restored to German rule led to the worst war in the history of the world.

    The peace of mankind in the 21st century may well depend upon our ability to accommodate this inexorable secessionist drive to some degree.

    In June 1945, the U.N. had 50 members. It begins 2020 with 193.

    Last week, Bougainville, a South Pacific island cluster of Papua New Guinea, voted 98%, in a nonbinding referendum for independence, to become the world’s newest nation. Papua New Guinea won its own independence from Australia when Gerald Ford was president.

    And the beat goes on.


    Tyler Durden

    Tue, 12/17/2019 – 22:05

    Tags

  • WeWork Obtains $1.75 Billion Credit Line From Goldman Sachs
    WeWork Obtains $1.75 Billion Credit Line From Goldman Sachs

    Last week it was rumored that Goldman Sachs would provide a new line of credit to bailout Softbank’s money-losing investment in WeWork, thus saving Goldman’s money-losing bet on the struggling shared office space company.

    Now it appears sources familiar with the situation have confirmed to Bloomberg that Goldman has provided a $1.75 billion line of credit as the first step in SoftBank’s pledge to put together $5 billion in debt financing for WeWork as part of its bailout package. The new credit line would free up $800 million in cash that WeWork had set aside for covenants on its previous credit line.

    “We are pleased that WeWork and SoftBank Group Corp. have entered into a commitment letter with Goldman Sachs,” Erin Clark, a spokeswoman for WeWork, wrote in an email to Bloomberg.

    “WeWork and Softbank are co-obligors on a senior-secured and unsecured basis, respectively.”

    She added that WeWork didn’t post any cash collateral under the financing deal with Goldman.

    Clark said the credit line could be tapped as early as next month, preventing WeWork for imminent death.

    WeWork’s bond prices have responded positively to the bailouts from SoftBank and Goldman in the last month, have climbed 10 cents to 82.317 on the dollar, but that’s only after a plunge following a failed IPO in September.

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    Goldman, a top investor in WeWork, took an $80 million loss when WeWork valuations crashed from $39 billion to about $8 billion in under a year.

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    Goldman appears to be fully committed to supplying capital to the struggling company.

    Sources said the new credit line would replace an existing one that totals $1.1 billion, allowing the company to free up working capital to cover lease payments and other expenses.

    Before Goldman agreed to the new credit line with SoftBank for WeWork, the fund approached Mitsubishi UFJ, Sumimoto, and Mizuho banks in late November. 

    It was reported that all three banks balked at the idea to provide SoftBank with more capital so it could bailout WeWork unless it can develop a credible turnaround strategy. 

    At the end of the day, the Japanese banks passed on the deal to save WeWork as Goldman has arranged the credit line as part of WeWork’s rescue package. 

    Has WeWork become Silicon Valley’s biggest “zombie” unicorn?


    Tyler Durden

    Tue, 12/17/2019 – 21:45

  • Krieger: "It's A Systemic Looting On A Massive Scale"
    Krieger: “It’s A Systemic Looting On A Massive Scale”

    Authored by Michael Krieger via Liberety Blitzkrieg blog,

    The United States has historically bragged about its free and transparent markets. But what the Fed is doing today is pulling a dark curtain around the financing of this so-called free and transparent market. The public has no idea which Wall Street firms have received this $3 trillion or why they can’t borrow it elsewhere. This kind of obfuscation by the Federal Reserve could actually stimulate distrust in the U.S. banking system. The Fed admitted as much in its most recent Federal Open Market Committee (FOMC) minutes, writing that participation in the Fed’s loan program “could become stigmatized.”

    – Wall Street on ParadeIs the Fed’s $3 Trillion in Loans to Trading Houses on Wall Street Legal?

    The business model of Wall Street is fraud.

    – Bernie Sanders

    Financial services as currently structured is the most pernicious, predatory and corrupt industry on earth. Moreover, it’s the deliberately complex and opaque nature of the industry which then limits public debate when some problem arises and governments and central banks are called upon to take emergency measures to “save the system,” which is just a euphemism for enormous sums of corporate welfare being funneled to people and institutions who couldn’t survive otherwise.

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    It is systemic looting on a massive scale and the primary patrons of this ongoing and seemingly endless scheme are central banks. In the U.S. this means the Federal Reserve, which recently came back into the “market” with enormous new interventions in both the repo market and via renewed balance sheet expansion. I’ve read many of the smart takes on the repo crisis and still don’t feel confident I know precisely what’s going on. This is intentional.

    https://platform.twitter.com/widgets.js

    One of the main reasons big finance is able to pull off scam after scam in plain sight relates to the complexity, opacity and esoteric jargon associated with the industry. Repo is a perfect example. The market had a spasm in September and the Fed immediately rushed in with billions to bring the rate down without offering any transparency or a credible explanation of what was going on. Meanwhile, as the crisis continued over subsequent months and the central bank response grew larger and larger, we actually seem to be learning less with each passing day.

    Instead of providing the public with the transparency it deserves, Fed officials run around pretending to be financial surgeons called in to perform an unexpected emergency operation on a patient after a freak accident. In reality, central banks are merely pumping billions into an already dead body while enriching connected and powerful individuals and institutions in the process. They know exactly what they’re doing and we need to stop pretending otherwise.

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    While I’m grateful to those who’ve spent time trying to thoughtfully explain the mechanics of the repo crisis and why it happened, I think that’s a sideshow at this point since nobody who really knows what’s going on is talking. Instead, we should focus on the absurd and unconscionable lack of transparency with regard to Federal Reserve actions. As far as I know, we have no idea which parties are taking up this expanded central bank funding. Think about how criminally insane that is. We have no idea if it’s driven by a troubled institution like Deutsche Bank, hedge funds with over-leveraged trades, treasury issuance, a combination of these factors, or something else.

    We don’t know because they don’t want us to know, and they don’t want us to know because they don’t want the public thinking or talking about it. It’s at times like these when the totalitarian nature of central banking comes into crystal clear focus. What we have is government via unelected, unaccountable bankers. It’s the opposite of self-government, and understanding this simple fact blows apart all the myths about our so-called democracy and freedom. Nothing of the sort exists in reality, and when push comes to shove, you’re just a peasant living in an imperial oligarchy.

    This should be the real takeaway from the Fed’s recent actions both in the repo market and via its rapid balance sheet expansion. The public’s not allowed to know anything about what’s really happening, and similar to the post-financial crisis period of a decade ago, the central bank comes in and conducts significant public policy to the tune of hundreds of billions of dollars with zero public debate.

    How is it that we’re accepting this? Why isn’t the inequality obsessed left commenting more aggressively on the central bank mechanism of upward wealth transfer, which is precisely what’s been happening for so long? Why push for a wealth tax while leaving the primary instrument of upward wealth transfer (central banking) completely unchecked?

    It’d be one thing if the Fed came out and detailed exactly what the problem is and told us specifically who’s using the funds and why. Then we could actually have a conversation about whether this is appropriate or, more likely, a gigantic moral hazard financially rewarding various unscrupulous industry players.

    Don’t think for a moment that huge sums of money aren’t being made from these Fed actions. When the spigots come on out of nowhere to the tune of hundreds of billions of dollars someone is benefitting tremendously and it’s not you.

    *  *  *

    Liberty Blitzkrieg is an ad-free website. If you enjoyed this post and my work in general, visit the Support Page where you can donate and contribute to my efforts.


    Tyler Durden

    Tue, 12/17/2019 – 21:25

  • 92% Of Americans Feel Their Freedom Is Threatened
    92% Of Americans Feel Their Freedom Is Threatened

    Americans are most afraid their First Amendment rights could be taken away, according to a new poll by Harris Poll/Purple Project, which surveyed 2,002 people nationwide from November 18-20, 2019. Overall, Statista’s Maria Vultaggio notes that 92 percent were concerned their rights were being jeopardizedUSA Today wrote, citing the poll. Americans also fear their right to bear arms and their right to equal justice are in danger.

    Infographic: Freedoms U.S. Adults Feel Are Most Threatened | Statista

    You will find more infographics at Statista

    The poll comes one week after it was revealed by the Foundation for Individual Rights in Education (FIRE) that at least 6.4 million students at nearly 500 campuses in the U.S. have experienced their freedom of speech being restricted. FIRE discovered this through analyzing the written policies of the schools and coding them with a grade of red, yellow or green. Nearly a quarter of schools received a red rating, meaning speech was most restricted at these schools.

    The finding was worrying for Laura Beltz, the lead author of the study.

    “Colleges should serve as centers of intellectual debate and inquiry, but if you have policies telling you can’t protest unless you submit a request two weeks in advance, or you can’t use words that other people find offensive, that ends up being impossible,” she told The Epoch Times.


    Tyler Durden

    Tue, 12/17/2019 – 21:05

    Tags

  • Everything You Wanted To Know About Impeachment (But Were Afraid To Ask On Twitter)
    Everything You Wanted To Know About Impeachment (But Were Afraid To Ask On Twitter)

    Impeachment can be confusing…

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    But The Babylon Bee is here with an explainer so you will know how the process works and what it takes for Dems to snap their fingers together and make Trump disappear in a cloud of dust.

    What is impeachment?

    It’s the official, constitutional method for screaming at the sky because Trump is president.

    Why is Trump being impeached?

    Trump has committed some very serious offenses, from not being a Democrat to being a Republican. He also won the 2016 election, which rises to the level of high crimes and misdemeanors. He also restored the celebration of Christmas after eight years of winter with no Christmas under Obama. This drove Dems up a wall so they drummed up some charges against him.

    Why didn’t Democrats include any criminal offenses in the articles of impeachment?

    There were just so many of them, it was hard to pick one. So, instead of laying out actually impeachable offenses, the Democrats summarized it all with two main articles of impeachment: 1.) Trump is president. 2.) TRUMP IS PRESIDENT.

    What does it take to remove the president from office?

    Faith, trust, and pixie dust.

    Will Trump be removed from office?

    Lol.

    If we believe in ourselves and try hard, and Trump is removed, Hillary Clinton becomes president, right?

    Actually, Mike Pence would become president, basically making the United States into a Handmaid’s Tale-style dystopia.

    What happens if Trump is impeached in the House but acquitted in the Senate?

    Democrats don’t get the big prize, but they each get a complimentary copy of Impeachment: The Board Game.

    Once the House votes to officially impeach President Trump, what happens next?

    Trump wins the 2020 election.

    * * *

    If you value The Babylon Bee and want to see them prevail against Snopes and anyone else who might seek to discredit or deplatform them, please consider becoming a subscriber. Your support really will make a difference.


    Tyler Durden

    Tue, 12/17/2019 – 20:45

    Tags

  • VIX Options-Whale '50 Cent' Re-Emerges As New Short-Vol ETF Appears
    VIX Options-Whale ’50 Cent’ Re-Emerges As New Short-Vol ETF Appears

    The last few years of constant vol suppression by central banks worldwide has been greeted by the emergence of a veritable bestiary of options whales, characterized by their respective trading patterns…

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    Source: @RobinWigg

    Perhaps the most infamous of them all is “50-cent” – so called for the price at which he is willing to buy VIX calls as VIX itself collapsed (as we have detailed here, here, and here)…

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    And, as Bloomberg reports, today saw his huge footprint re-appear as someone snapped up roughly 130,000 January $22 calls on the index for about 50 cents each.

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    Source: Bloomberg

    “50 Cent” first came to the market’s attention by buying huge amounts of VIX calls during the market turmoil through 2017 and early 2018. The trading pattern reappeared last August as the S&P 500 was locked in a trading range with implied volatility trading around its highest levels of the year.

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    The familiar price point for buying VIX calls “will certainly lead to investors believing ‘50 Cent’ is back,” Chris Murphy, the co-head of derivatives strategy at Susquehanna Susquehanna Financial Group, said in a research note.

    With the options maturing on January 22nd, there are still plenty of catalysts to trigger a spike in vol and a big payout for ’50-cent’ – including this week’s op-ex, the partial trade-deal falling apart, year-end repo/liquidity issues, and potentially bad news from the World Economic Forum in Davos early next year.

    But, as 50-cent buys vol cheap in anticipation of a spike, another financial start-up appears to have gone full Einsteinian madness.

    Bloomberg reports that Volatility Shares LLC has applied to Cboe Global Markets Inc. to register an exchange-traded fund that would give investors the ability to short futures on the Cboe Volatility Index, according to a new filing.

    This is nothing less than a replacement for the XIV product that created volmageddon in February 2018 as vol spiked and the short-vol-ETN crashed and died…

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    Source: Bloomberg

    Bloomberg reports that the new ETF’s design changes some of the attributes that may have contributed to the flame out of XIV.

    “What happened on Feb. 5 was kind of a problem that I think the original architects of those products hadn’t foreseen,” said Barton.

    “That left a gap in the markets, and we were asking people to provide a solution. Nobody stepped up, so we did the research and leg work and hope to bring that solution to market.”

    SVIX would track the Short VIX Futures Index, whose backtest suggests a loss of just 30% on Feb. 5, compared to the 96% retreat in the indicative value of XIV.

    However, this all has the smell of yet another penny-picking trade that will go well… until it doesn’t.

    After XIV’s implosion, Devesh Shah, who helped invent the VIX index, said he didn’t know why these products existed — while predicting that a successor would soon emerge.

    “And what’s going to happen as a result of this? Nothing, other than in a few months’ time someone’s going to come up with a new XIV, and everyone’s going to start putting money into that,” he said back in February 2018.

    “That’s OK, that’s how the world goes.”

    He was right, and simply put, if at first you don’t succeed in blowing up the world with leveraged short vol bets, try, try again…


    Tyler Durden

    Tue, 12/17/2019 – 20:25

  • WA State Steps Up To Defend Female Athletes In Trans Debate
    WA State Steps Up To Defend Female Athletes In Trans Debate

    Authored by Kelli Ballard via LibertyNation.com,

    Competition is the name of the game, but what constitutes fair rivalry? With today’s progressives trying to change everything, including how genders should be addressed, who is in the right when it comes to females in sports and transgenders competing against them? As Liberty Nation’s Onar Am said,

    “Just as you need different weight classes in boxing or wrestling to make the competition fair, you also need a separate category for women so that they have a chance to compete on equal biological terms.”

    Thankfully, at least one politician is aiming to correct this matter: Rep. Bill Klippert. The Republican has filed in the Washington state legislature House Bill 2201, which would prevent biological males who identify as females from competing in some women’s sports.

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    According to the bill, however, this exclusion would not necessarily apply to all female sports. It is designed to target those activities intended only for female students, and it must be an individual competition such as track.

    “I’m running this in support of female athletes,” Klippert said, “so they can compete against each other and not have to compete against male athletes who have different hormones flowing through their veins, which gives them much more muscle capacity.”

    What’s surprising is that this legislation has been proposed in liberal state such as Washington. What’s not surprising is the backlash it’s receiving from LGBTQ activist groups. One such, PFLAG, claimed the bill is “at its core an attempt to invalidate transgender and gender non-binary identity.”

    Klippert’s bill is meant to protect natural-born female rights, not dehumanize transgender people as PFLAG implies. Using that logic, allowing transgenders to compete against females would be an “attempt to invalidate” the latter. PFLAG continued its argument, saying there is no evidence that transgender athletes cause any “serious danger” to the sports in which they participate. That would depend on how “danger” is defined and interpreted. Physical? Emotional? Extinction to female competitive sports?

    Without enumerating the biological differences between males and females, the trend of born-males winning titles in women’s sports should be proof enough that the odds are stacked in their favor when competing against natural-born females. The separation of sports by gender was done so that women could compete on a level playing field.

    PFLAG insisted transgender people deserve their constitutional rights, but what about those of natural-born females? “Transgender people are people, non-binary people are people, they are entitled to a recognition of who they are and to have their civil rights and basic dignity honored,” the organization asserted.  The question is, do their rights supersede others’?

    Save Women’s Sports produced an article on its website entitled “Male Athletes Are Taking Over Women’s Cycling.” In the piece, Mary Verrandeaux, a member of the 1985 U.S. National Team, said:

    It is without a doubt that allowing men, who identify as women, to continue to compete in women’s categories is the end of women’s sports. Women’s opportunities, records, scholarships, and championships are now being awarded to biological men. This has already destroyed the sanctified intent of women competing against other women – not women competing against biological men who ‘identify as women.’”

    Recognizing and respecting people for who they are – biologically or emotionally — does not mean trouncing other individuals’ rights. Here’s a little food for thought. If transgenders who identify as females can’t understand the ‘danger’ they pose to the world of women’s sports, then how can they truly claim to be female? If they cannot identify with the challenges facing natural-born females as they usurp their titles and trophies, how can they claim womanhood?

    Save Women’s Sports summarized the issue:

    This is the beginning of the end for women’s sports. We cannot allow this abuse of female athletes and mockery of women’s sports to continue. It is not bigotry to defend biology, and it is not hate speech to defend your rights.

    Although House Bill 2201 has been only pre-filed, it is at least a step in the right direction. It is hoped more Washington state lawmakers will join in its support. It must be introduced in the House before it can move to a committee.


    Tyler Durden

    Tue, 12/17/2019 – 20:05

  • Supreme Court Lets Lower Court Ruling Stand Allowing Homeless To Sleep On Sidewalk
    Supreme Court Lets Lower Court Ruling Stand Allowing Homeless To Sleep On Sidewalk

    The Supreme Court on Monday rejected to hear a major case concerning homelessness, thus allowing a lower court’s ruling to stand allowing homeless people to sleep on sidewalks or in public parks if there are no other options for shelter.

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    The highest court in the land gave no explanation for their decision to deny the appeal, which is standard practice. It’s possible they may have considered the dispute moot, according to the Los Angeles Times.

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    Mike Westfall stands next to his tent and his bike. Santa Rosa, CA

    The 9th circuit federal court of appeals agreed with lawyers for the homeless, who argued in a case out of Boise, Idaho that prosecuting vagrants for sleeping on sidewalks violates the 8th Amendment’s ban on cruel and unusual punishment in cases where the city has failed to provide adequate shelter, reports the  Times.

    Lawyers for the homeless noted that in 2014, Boise announced a “shall not enforce” policy regarding misdemeanor violations against camping or sleeping in public when no shelter has been provided. While the city thought that would end the litigation, the 9th Circuit proceeded to issue a broad ruling last year.

    The outcome was a significant victory for homeless activists and a setback for city officials in California and other Western states who argued the ruling from the 9th U.S. Circuit Court of Appeals undercut their authority to regulate encampments on the sidewalks. The 9th Circuit had agreed with lawyers for the homeless who argued that prosecuting people for sleeping on the sidewalks violated the 8th Amendment’s ban on cruel and unusual punishment if a city failed to provide adequate shelter.

    A city ordinance “violates the 8th Amendment insofar as it imposes criminal sanctions against homeless individuals for sleeping outdoors on public property, when no alternative shelter is available to them,” said the ruling by the 9th Circuit, which has jurisdiction over California and eight other Western states. –Los Angeles Times

    Officials in Los Angeles say the court’s decision leaves the law unclear about what actions local officials can take. They joined with the city of Boise to ask the Supreme Court to hear the case, which was “never an attempt to criminalize the homeless; rather, it was a pursuit of a legal framework that is clear — in comparison to a status quo that is ambiguous and confusing,” according to LA County Supervisor Mark Ridley-Thomas.

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    California’s growing homeless emergency. Figures as of August 2019 (via the Daily Mail)

    “Letting the current law stand handicaps cities and counties from acting nimbly to aid those perishing on the streets, exacerbating unsafe and unhealthy conditions that negatively affect our most vulnerable residents,” he added.

    According to LA Mayor Eric Garcetti, “homelessness won’t be solved by moving people from one street to another. Our focus will remain on providing services to save lives, keeping our neighborhoods clean and healthy, opening shelters to help get people indoors more quickly, and building permanent units to keep them under a roof for good.”

    Several West Coast cities, including Los Angeles, urged the Supreme Court to take up the appeal of Boise vs. Martin, with lawyers for Boise writing that the “creation of a de facto constitutional right to live on sidewalks and in parks will cripple the ability of more than 1,600 municipalities in the 9th Circuit to maintain the health and safety of their communities.”

    There are approximately 130,000 homeless people across California.

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    Nothing in the Constitution … requires cities to surrender their streets, sidewalks, parks, riverbeds and other public areas to vast encampments,” argued the lawyers. The Times notes that the appeal was filed by Ted Olson and Theane Evangelis, partners at LA-based Gibson Dunn.

    A right to sleep on the sidewalk is not new for Los Angeles or city officials. In 2006, the 9th Circuit handed down a similar ruling that said the city may not enforce laws against sleeping in public places. Rather than appeal, the city negotiated a settlement with lawyers for homeless people in which it agreed to not enforce such laws from 9 p.m. to 6 a.m.

    The Supreme Court has previously relied on the 8th Amendment to limit the punishment for some crimes, but it is rare for judges to strike down a criminal law itself as cruel and unusual punishment. The 9th Circuit cited a 1962 decision in Robinson vs. California, which struck down part of a state law that “made the status of narcotic addiction a criminal offense.”

    Judge Marsha Berzon said this principle extends to homelessness. “Just as the state may not criminalize the state of being homeless in public places,” she wrote, “the state may not criminalize conduct that is an unavoidable consequence of being homeless — namely sitting, lying or sleeping on the streets.” –Los Angeles Times

    LA City Attorney Mike Feuer urged the court to review the 9th Circuit’s opinion, writing “The lack of clarity of the Boise decision, combined with its sweeping rationale, makes more difficult the efforts of Los Angeles to balance the needs of its homeless residents with the needs of everyone who uses our public spaces.”

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    Feuer wanted to know whether the city needs to make shelters available for all 36,000 homeless residents “before taking enforcement action against a single unsheltered individual who refuses an available shelter bed in one of the city’s regional shelters, just because shelters at the opposite end of the city are full.”

    Meanwhile, the California city of Santa Rosa is about to unveil emergency proposals to shelter homeless people at local fairgrounds. The proposal will allow some of those currently living in a mile-long camp along the Joe Rodota Trail – as well as the rest of Sonoma County’s 3,000 or so homeless to move into the fairgrounds, according to The Press Democrat.


    Tyler Durden

    Tue, 12/17/2019 – 19:45

    Tags

  • Bad Capitalism And Good Socialism
    Bad Capitalism And Good Socialism

    Authored by Walter Block via The Mises Institute,

    Is socialism the enemy of the civilized order? It depends on what kind of socialism we are discussing.

    There are several varieties, not only one. If it is the version calling for government ownership and control of all the means of production, the complete nationalization of all industries, then yes, socialism is the work of the devil. All we need do to demonstrate this is to mention economic basket cases like Venezuela, East Germany, Maoist China and the U.S.S.R. They produced dire poverty and the deaths of millions of innocent people.

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    There is a second, just as historically accurate a definition of socialism as the first. It is predicated on the Marxian nostrum: “From each according to his ability, to each according to his need.” If this goal is attained on a coercive basis, then, yet again, this compulsory egalitarianism is surely uncivilized. It amounts to stealing from the innocent rich. But suppose people agree to live under this principle? Ayn Rand might not like this too much, but, if it is truly voluntary, then instead of being incompatible with civilized principles, it is a paradigmatic case of them. That is, the rich agree to be “expropriated” in favor of the poor.

    Are there any such institutions that actually flourish? Here are a few: the convent, monastery, kibbutz, commune, syndicalist association, cooperative. I teach at a Jesuit school, and all members of this order subscribe to the “from each, to each” philosophy. True, kibbutzim were initially subsidized by the state of Israel and are now a shadow of their former selves, and Robert Owen’s commune in New Harmony, Ind., is no longer in operation. But neither does every business last forever. Then there is the average American family. It, too, lives according to this Marxian doctrine. The 3-year-old girl eats, gets toys and is clothed not in accordance with her ability to earn income, but based on her needs.

    Capitalism is likewise divided into several varieties. If it is free-market capitalism we are contemplating, or as near to that system as we can approach in this vale of tears, then this—along with voluntary socialism—is the very foundation of the civilized order. All boats rise on a tide of profit maximization and untrammeled entrepreneurship, as long as personal and property rights are respected. The experiences of places with expansive economic freedom, such as the U.S., Switzerland, Hong Kong, Singapore—and yes, Bernie, Scandinavia too—give ample testimony to this claim.

    Yet under the veneer of economic freedom, markets have their dark side, too: crony capitalism. Uber is brutalized by the taxi industry in the name of protecting the public; young women who braid hair are hassled by licensed beauticians; domestic manufacturers lust after protective tariffs; farm states tried to outlaw dyeing margarine yellow; labor unions champion minimum-wage laws to price their unskilled competitors out of the market. As Adam Smith wisely said, under this type of capitalism, “people of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.”

    No, not all versions of socialism are the enemy of humanity and decency, nor are all types of capitalism their friend. It all depends on which variety of each we are discussing.


    Tyler Durden

    Tue, 12/17/2019 – 19:25

  • "You Have Found NOTHING!": Trump Sends Scathing Letter To Pelosi Slamming "Illegal Attempted Coup"
    “You Have Found NOTHING!”: Trump Sends Scathing Letter To Pelosi Slamming “Illegal Attempted Coup”

    In a six-page letter to Speaker Pelosi, President Trump rages against The Democrats’ “attempted coup,” blasting that “there was more due process at The Salem Witch Trials.”

    This is nothing more than an illegal, partisan attempted coup that will, based on recent sentiment, badly fail at the voting both. You are not just after me, as President, you are after the entire Republican Party,” Trump wrote.

    “History will judge you harshly as you proceed with this impeachment charade.”

    “I have no doubt the American people will hold you and the Democrats fully responsible in the upcoming 2020 election. They will not soon forgive your perversion of justice and abuse of power,” he added.

    The letter comes on the eve of the House vote on two articles of impeachment against Trump for alleged abuse of power and obstruction of Congress, which is widely expected to approve the articles along party lines.

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    Full letter below (emphasis ours):

    Dear Madam Speaker:

    I write to express my strongest and most powerful protest against the partisan impeachment crusade being pursued by the Democrats in the House of Representatives. This impeachment represents an unprecedented and unconstitutional abuse of power by Democrat Lawmakers, unequaled in nearly two and a half centuries of American legislative history.

    The Articles of Impeachment introduced by the House Judiciary Committee are not recognizable under any standard of Constitutional theory, interpretation, or jurisprudence. They include no crimes, no misdemeanors, and no offenses whatsoever. You have cheapened the importance of the very ugly word, impeachment!

    By proceeding with your invalid impeachment, you are violating your oaths of office, you are breaking your allegiance to the Constitution, and you are declaring open war on American Democracy. You dare to invoke the Founding Fathers in pursuit of this election-nullification scheme—yet your spiteful actions display unfettered contempt for America’s founding and your egregious conduct threatens to destroy that which our Founders pledged their very lives to build. Even worse than offending the Founding Fathers, you are offending Americans of faith by continually saying “I pray for the President,” when you know this statement is not true, unless it is meant in a negative sense. It is a terrible thing you are doing, but you will have to live with it, not I!

    Your first claim, “Abuse of Power,” is a completely disingenuous, meritless, and baseless invention of your imagination. You know that I had a totally innocent conversation with the President of Ukraine. I then had a second conversation that has been misquoted, mischaracterized, and fraudulently misrepresented. Fortunately, there was a transcript of the conversation taken, and you know from the transcript (which was immediately made available) that the paragraph in question was perfect. I said to President Zelensky: “I would like you to do us a favor, though, because our country has been through a lot and Ukraine knows a lot about it.” I said do us a favor, not me, and our country, not a campaign. I then mentioned the Attorney General of the United States. Every time I talk with a foreign leader, I put America’s interests first, just as I did with President Zelensky.

    You are turning a policy disagreement between two branches of government into an impeachable offense—it is no more legitimate than the Executive Branch charging members of Congress with crimes for the lawful exercise of legislative power.

    You know full well that Vice President Biden used his office and $1 billion dollars of U.S. aid money to coerce Ukraine into firing the prosecutor who was digging into the company paying his son millions of dollars. You know this because Biden bragged about it on video. Biden openly stated: “I said, ‘I’m telling you, you’re not getting the billion dollars’ …I looked at them and said: ‘I’m leaving in six hours. If the prosecutor is not fired, you’re not getting the money.’ Well, son of a bitch. He got fired.”

    Even Joe Biden admitted just days ago in an interview with NPR that it “looked bad.” Now you are trying to impeach me by falsely accusing me of doing what Joe Biden has admitted he actually did.

    President Zelensky has repeatedly declared that I did nothing wrong, and that there was No Pressure. He further emphasized that it was a “good phone call,” that “I don’t feel pressure,” and explicitly stressed that “nobody pushed me.” The Ukrainian Foreign Minister stated very clearly: “I have never seen a direct link between investigations and security assistance.” He also said there was “No Pressure.” Senator Ron Johnson of Wisconsin, a supporter of Ukraine who met privately with President Zelensky, has said: -At no time during this meeting…was there any mention by Zelensky or any Ukrainian that they were feeling pressure to do anything in return for the military aid.” Many meetings have been held between representatives of Ukraine and our country. Never once did Ukraine complain about pressure being applied—not once!

    Ambassador Sondland testified that I told him: “No quid pro quo. I want nothing. I want nothing. I want President Zelensky to do the right thing, do what he ran on.”

    The second claim, so-called “Obstruction of Congress,” is preposterous and dangerous. House Democrats are trying to impeach the duly elected President of the United States for asserting Constitutionally based privileges that have been asserted on a bipartisan basis by administrations of both political parties throughout our Nation’s history. Under that standard, every American president would have been impeached many times over. As liberal law professor Jonathan Turley warned when addressing Congressional Democrats: “I can’t emphasize this enough… if you impeach a president, if you make a high crime and misdemeanor out of going to the courts, it is an abuse of power. It’s your abuse of power. You’re doing precisely what you’re criticizing the President for doing.”

    Everyone, you included, knows what is really happening. Your chosen candidate lost the election in 2016, in an Electoral College landslide (306-227), and you and your party have never recovered from this defeat. You have developed a full-fledged case of what many in the media call Trump Derangement Syndrome and sadly, you will never get over it! You are unwilling and unable to accept the verdict issued at the ballot box during the great Election of 2016. So you have spent three straight years attempting to overturn the will of the American people and nullify their votes. You view democracy as your enemy!

    Speaker Pelosi, you admitted just last week at a public forum that your party’s impeachment effort has been going on for “two and a half years,” long before you ever heard about a phone call with Ukraine. Nineteen minutes after I took the oath of office, the Washington Post published a story headlined, “The Campaign to Impeach President Trump Has Begun.” Less than three months after my inauguration, Representative Maxine Waters stated, “I’m going to fight every day until he’s impeached.” House Democrats introduced the first impeachment resolution against me within months of my inauguration, for what will be regarded as one of our country’s best decisions, the firing of James Comey (see Inspector General Reports)—who the world now knows is one of the dirtiest cops our Nation has ever seen. A ranting and raving Congresswoman, Rashida Tlaib, declared just hours after she was sworn into office, “We’re gonna go in there and we’re gonna impeach the motherf’***r.” Representative Al Green said in May, -I’m concerned that if we don’t impeach this president, he will get re-elected.” Again, you and your allies said, and did, all of these things long before you ever heard of President Zelensky or anything related to Ukraine. As you know very well, this impeachment drive has nothing to do with Ukraine, or the totally appropriate conversation I had with its new president. It only has to do with your attempt to undo the election of 2016 and steal the election of 2020!

    Congressman Adam Schiff cheated and lied all the way up to the present day, even going so far as to fraudulently make up, out of thin air, my conversation with President Zelensky of Ukraine and read this fantasy language to Congress as though it were said by me. His shameless lies and deceptions, dating all the way back to the Russia Hoax, is one of the main reasons we are here today.

    You and your party are desperate to distract from America’s extraordinary economy, incredible jobs boom, record stock market, soaring confidence, and flourishing citizens. Your party simply cannot compete with our record: 7 million new jobs; the lowest-ever unemployment for African Americans, Hispanic Americans, and Asian Americans; a rebuilt military; a completely reformed VA with Choice and Accountability for our great veterans; more than 170 new federal judges and two Supreme Court Justices; historic tax and regulation cuts; the elimination of the individual mandate; the first decline in prescription drug prices in half a century; the first new branch of the United States Military since 1947, the Space Force; strong protection of the Second Amendment; criminal justice reform; a defeated ISIS caliphate and the killing of the world’s number one terrorist leader, al-Baghdadi; the replacement of the disastrous NAFTA trade deal with the wonderful USMCA (Mexico and Canada); a breakthrough Phase One trade deal with China; massive new trade deals with Japan and South Korea; withdrawal from the terrible Iran Nuclear Deal; cancellation of the unfair and costly Paris Climate Accord; becoming the world’s top energy producer; recognition of Israel’s capital, opening the American Embassy in Jerusalem, and recognizing Israeli sovereignty over the Golan Heights; a colossal reduction in illegal border crossings, the ending of Catch-and-Release, and the building of the Southern Border Wall—and that is just the beginning, there is so much more. You cannot defend your extreme policies—open borders, mass migration, high crime, crippling taxes, socialized healthcare, destruction of American energy, late-term taxpayer-funded abortion, elimination of the Second Amendment, radical far-left theories of law and justice, and constant partisan obstruction of both common sense and common good.

    There is nothing I would rather do than stop referring to your party as the Do-Nothing Democrats. Unfortunately, I don’t know that you will ever give me a chance to do so.

    After three years of unfair and unwarranted investigations, 45 million dollars spent, 18 angry Democrat prosecutors, the entire force of the FBI, headed by leadership now proven to be totally incompetent and corrupt, you have found NOTHING! Few people in high position could have endured or passed this test. You do not know, nor do you care, the great damage and hurt you have inflicted upon wonderful and loving members of my family. You conducted a fake investigation upon the democratically elected President of the United States, and you are doing it yet again.

    There are not many people who could have taken the punishment inflicted during this period of time, and yet done so much for the success of America and its citizens. But instead of putting our country first, you have decided to disgrace our country still further. You completely failed with the Mueller report because there was nothing to find, so you decided to take the next hoax that came along, the phone call with Ukraine—even though it was a perfect call. And by the way, when I speak to foreign countries, there are many people, with permission, listening to the call on both sides of the conversation.

    You are the ones interfering in America’s elections. You are the ones subverting America’s Democracy. You are the ones Obstructing Justice. You are the ones bringing pain and suffering to our Republic for your own selfish personal, political, and partisan gain.

    Before the Impeachment Hoax, it was the Russian Witch Hunt. Against all evidence, and regardless of the truth, you and your deputies claimed that my campaign colluded with the Russians—a grave, malicious, and slanderous lie, a falsehood like no other. You forced our Nation through turmoil and torment over a wholly fabricated story, illegally purchased from a foreign spy by Hillary Clinton and the DNC in order to assault our democracy. Yet, when the monstrous lie was debunked and this Democrat conspiracy dissolved into dust, you did not apologize. You did not recant. You did not ask to be forgiven. You showed no remorse, no capacity for self-reflection. Instead, you pursued your next libelous and vicious crusade—you engineered an attempt to frame and defame an innocent person. All of this was motivated by personal political calculation. Your Speakership and your party are held hostage by your most deranged and radical representatives of the far left. Each one of your members lives in fear of a socialist primary challenger – this is what is driving impeachment. Look at Congressman Nadler’s challenger. Look at yourself and others. Do not take our country down with your party.

    If you truly cared about freedom and liberty for our Nation, then you would be devoting your vast investigative resources to exposing the full truth concerning the FBI’s horrifying abuses of power before, during, and after the 2016 election—including the use of spies against my campaign, the submission of false evidence to a FISA court, and the concealment of exculpatory evidence in order to frame the innocent. The FBI has great and honorable people, but the leadership was inept and corrupt. I would think that you would personally be appalled by these revelations, because in your press conference the day you announced impeachment, you tied the impeachment effort directly to the completely discredited Russia Hoax, declaring twice that “all roads lead to Putin,” when you know that is an abject lie. I have been far tougher on Russia than President Obama ever even thought to be.

    Any member of Congress who votes in support of impeachment – against every shred of truth, fact, evidence, and legal principle – is showing how deeply they revile the voters and how truly they detest America’s Constitutional order. Our Founders feared the tribalization of partisan politics, and you are bringing their worst fears to life.

    Worse still, I have been deprived of basic Constitutional Due Process from the beginning of this impeachment scam right up until the present. I have been denied the most fundamental rights afforded by the Constitution, including the right to present evidence, to have my own counsel present, to confront accusers, and to call and cross-examine witnesses, like the so-called whistleblower who started this entire hoax with a false report of the phone call that bears no relationship to the actual phone call that was made. Once I presented the transcribed call, which surprised and shocked the fraudsters (they never thought that such evidence would be presented), the so-called whistleblower, and the second whistleblower, disappeared because they got caught, their report was a fraud, and they were no longer going to be made available to us. In other words, once the phone call was made public, your whole plot blew up, but that didn’t stop you from continuing.

    More due process was afforded to those accused in the Salem Witch Trials.

    You and others on your committees have long said impeachment must be bipartisan—it is not. You said it was very divisive—it certainly is, even far more than you ever thought possible—and it will only get worse!

    This is nothing more than an illegal, partisan attempted coup that will, based on recent sentiment, badly fail at the voting booth. You are not just after me, as President, you are after the entire Republican Party. But because of this colossal injustice, our party is more united than it has ever been before. History will judge you harshly as you proceed with this impeachment charade. Your legacy will be that of turning the House of Representatives from a revered legislative body into a Star Chamber of partisan persecution.

    Perhaps most insulting of all is your false display of solemnity. You apparently have so little respect for the American People that you expect them to believe that you are approaching this impeachment somberly, reservedly, and reluctantly. No intelligent person believes what you are saying. Since the moment I won the election, the Democrat Party has been possessed by Impeachment Fever. There is no reticence. This is not a somber affair. You are making a mockery of impeachment and you are scarcely concealing your hatred of me, of the Republican Party, and tens of millions of patriotic Americans. The voters are wise, and they are seeing straight through this empty, hollow, and dangerous game you are playing.

    I have no doubt the American people will hold you and the Democrats fully responsible in the upcoming 2020 election. They will not soon forgive your perversion of justice and abuse of power.

    There is far too much that needs to be done to improve the lives of our citizens. It is time for you and the highly partisan Democrats in Congress to immediately cease this impeachment fantasy and get back to work for the American People. While I have no expectation that you will do so, I write this letter to you for the purpose of history and to put my thoughts on a permanent and indelible record.

    One hundred years from now, when people look back at this affair, I want them to understand it, and learn from it, so that it can never happen to another President again.

    *  *  *

    No punches pulled there, for sure.


    Tyler Durden

    Tue, 12/17/2019 – 19:10

    Tags

  • First Made-In-China Aircraft Carrier Enters Active Service
    First Made-In-China Aircraft Carrier Enters Active Service

    China’s second aircraft carrier, the first domestically built one, called the Shandong, was delivered and commissioned by President Xi Jinping, also general secretary of the Communist Party of China Central Committee and chairman of the Central Military Commission, at a commissioning ceremony in Shandong, an eastern Chinese province on the Yellow Sea, on Tuesday, reported China News Service.

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    The commissioning of the new aircraft carrier was a significant milestone for China as it expands its efforts to become a dominant superpower in the Indo-Pacific region. 

    China has now entered an elite circle of superpowers that operate multiple carriers, including the US, the UK, and Italy. 

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    Before Shandongthe People’s Liberation Army Navy (PLAN) operated one aircraft carrier called the Liaoning, which was built on a Soviet-era vessel, refitted as an aircraft carrier and launched into service back in 2012. 

    Construction of Shandong began in 2013 and was launch at the Dalian Shipyard in 2017. By 2018, the vessel started several sea trials, and it wasn’t until late 2019 that the ship completed eight tests, including transiting the Taiwan Strait and the South China Sea. 

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    Shandong has a displacement of 40,000-60,000 tons with a ski-jump flight deck similar to Liaoning. Significant improvements in layout design allow the new aircraft carrier to carry 36 J-15 fighter jets, compared to the Liaoning’s 24. 

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    China is the first Asian country since World War II to operate a domestically built aircraft carrier. 

    Military expert Song Zhongping told the South China Morning Post that Shandong will be stationed Sanya, a port city located on the southern end of China’s Hainan Island.

    Zhongping said: “The South China Sea offers ample scope for Chinese aircraft carriers to show their capabilities. It is also the area where the PLA needs to prepare for military struggles.”

    He added that Shandong “might be placed under the Southern Theatre Command for joint operations in the event of war in the South China Sea.”

    China’s rapid modernization effort of its military in the last decade has caused concern among its neighbors, some of which are strategic allies of the US. 

    Japanese Defence Minister Taro Kono, on Monday, criticized China for its attempt to reconfiguring the balance of powers in the East and South China seas.

    Kono warned that Japan was “also concerned about China’s rapid enhancement of its military power without transparency, including its nuclear and missile capabilities.”

    China’s ascension to become a global superpower could be realized by 2030. The economic war waged by the US on China has been an attempt to limit the rise of China, but if that fails, it seems that a trade war could transform into a shooting war somewhere in the South China Sea.


    Tyler Durden

    Tue, 12/17/2019 – 19:05

  • US Official Gold Reserves Auditor Caught Lying
    US Official Gold Reserves Auditor Caught Lying

    Submitted by Jan Nieuwenhuijs of Voima Gold

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    In my previous post, from March 2018, on the audits of US official gold reserves, I have exposed that during the audit procedures of the US official gold reserves from 1974 through 2008, repeatedly audit staff deviated from the auditing protocol, while internal control meant to prevent this was failing. Many audits and assay reports have been destroyed. For decades a significant share of the metal was excluded from verifications for no apparent reason. And, the US government went to great lengths in withholding information and spreading false information about the audits, among other findings in documents obtained through Freedom of Information Act (FOIA) requests. All in all, these findings made me question the integrity of the auditor.

    After my last publication, I have obtained more documents from the US Treasury through FOIA requests, which expose another falsehood that puts the auditor in an even more peculiar position. In conflict with the audit protocol, the permanent seals of the vault compartments have been broken, time and again. In addition, the auditor has lied about these events, and when confronted, it’s unable to explain its actions. By now, I have lost faith in the auditor fully.

    Prologue

    It’s been a very long investigative journey that has led me to make bold statements, such as the ones above, about the auditor of the world’s largest gold holding. I wouldn’t claim anything of this magnitude if I didn’t thoroughly do my homework and research every single possibility that could have caused the auditor to have accidentally spread inaccurate material, including asking the auditor for an explanation.

    If any of their statements appeared to be false, surely, they would be able to explain what I was missing. The head auditor said during a congressional hearing in 2011 (source video 42:50):

    Transparency is our business.  

    Who would disagree? The US official gold reserves, weighing over 8,000 metric tonnes, deserve nothing less than an accurate audit.

    My journey started in 2014, when I first discovered—in contrast to what I was accustomed to reading on blogs and in newspapers—that the US official gold reserves are audited every year. I published an article on my discoveries, titled A First Glance At US Official Gold Reserves Audits, which was basically a summary of all publicly available documents about the audits. Logically, these documents present a narrative that looks to be credible at the surface, but I found some questions left unanswered, and wrote in my article “this post will be part one of a series.” (Little did I know what I got myself into.) Given the importance of the subject, I intended to submit FOIA requests at the US government, in an open-minded attempt to have my concerns removed.

    Since 2014 I have been prosecuting the US government. I have emailed staff of all related institutions—the US Treasury, The Office of Inspector General of the Treasury, the US Mint, and National Archives—that were initially replied, but as I got closer to the details, ceased altogether. I have submitted several dozen FOIA requests to all related institutions, some of which were honored, some not. In search of answers, I repeatedly called the Inspector General. In one of those calls, my contact simply hung up while I was talking. This incident is emblematic of this whole investigation.

    On one occasion, the Mint wrote me a specific FOIA request would cost $3,145 “based on an estimate of 1,200 pages of responsive documentation and the duplication costs associated with the requested documents. This estimate also includes 40 hours of estimated search time and 8 hours of estimated review time…” The costs seemed outrages to me, but I got financed through a crowdfunding campaign and paid the Mint. A few months late(r), I received 223 redacted pages that contained 68 pages of reports I didn’t ask for and 21 pages that were copied twice. Effectively, I got 134 pages for $3,145. After some pressure on the Mint, they agreed the costs had been estimated too high, and I got the full amount refunded. (And I ordered my crowdfunding platform to refund all my donors.) The barrier of the costs was used to keep me at bay. To no avail, instead, I got some essential pages in my possession.

    In total, I have written nine articles to inform my audience about the developments (IIIIIIIVVVIVIIVIIIIX). After the last one, which was a comprehensive overview of every piece of information I had found (published on March 28, 2018, at the BullionStar website), a reply to another FOIA request came into my mailbox. I received a document that irrefutable reveals a lie by the auditor.

    Today’s article is about this falsehood, and numerous other false statements by the auditor, that all have one thing in common: they hide the fact that most vault compartments have been re-opened multiple times after being put under permanent seals, which were meant to prevent re-opening of the doors. Upon request, the auditor provided me one argument for these actions—the “re-opening” of compartments. Alas the argument is in conflict with another statement by them, made under oath, so the auditor still stands as unable to answer a critical question.

    Unfortunately, and contrary to how it could have been done, the entire audit process from 1974 until 2008 is extremely complicated. The account below is simplified—I can’t discuss every detail in every article—but for the ones that want to know the details I have added external sources (in parentheses with hyperlinks), which can be used to cross-check my statements. (Also, you can read my previous posts, and if anything is still unclear, I invite anyone to ask me to expand on my conclusions in the comment section below this article. I’m willing to substantiate any findings—as one should when making bold claims.) 

    Let’s start with some background information, and then we will discuss the heart of the matter.

    Introduction

    The US official gold reserves are the largest globally at 8,134 metric tonnes (owned by the US Treasury). Although this gold does not back the US dollar at a fixed parity as it did before 1971, it does provide essential support as a final backstop to the dollar and thus credibility to the present world reserve currency.

    The majority of the gold is located at the US Mint depository at Fort Knox. Smaller amounts are stored at US Mint depositories in Denver and West Point. Aggregated this metal is referred to as Deep Storage gold and is captured within 42 sealed vault compartments. The remainder is at the Federal Reserve Bank of New York.

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    When the audits commenced in 1974, the protocol designed was simple (page 534). The following excerpt is from the first auditing committee:

    In performing the audit, the gold bars are physically moved from one vault compartment to another. During this operations [sic], the melt numbers and the number of bars in each melt are verified with an inventory listing, and one in fifty melts is randomly selected for weighing and test assay.

    One melt averages about twenty bars cast from one crucible of molten gold.

    The audit protocol follows that “these actions, having once been performed by an authorized committee, in accordance with established procedures, will not have to be repeated as long as the assets verified remain under an unimpaired joint seal.” Compartments physically verified were placed under Official Joint Seal (OJS) to “avoid the necessity of verifying all assets in each annual or special settlement (audit).” The US Treasury pledged to do a “periodic, cyclical inventory” to “ensure that about 10 percent of the gold” was physically inspected annually, eventually to have audited “all the gold for which the US government is accountable” “by 1984.” The essence of the “established procedures” was to open, audit and seal each compartment once. We will return to this fundamental topic later on.

    Since the stated purpose of joint sealing was to avoid the need of “re-audits,” all the gold could (after 1984) be verified by simply checking if the seals were unimpaired. Great intentions, but this is not what happened.

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    The current auditor of the US monetary gold is the Department of the Treasury’s Office of Inspector General (OIG). Representing the OIG, Eric M. Thorson attended the congressional hearing for the Gold Transparency Act (not enacted) that was initiated by Ron Paul in 2011. Mr. Thorson’s testimony at the hearing serves as the official statement by the government on the audits. Having weighed his words carefully, Thorson spoke under oath:

    … 100 percent of the U.S. Government’s gold reserves in the custody of the Mint has been inventoried and audited. … I can say that without any hesitation, because I have observed the gold and the security of the gold reserves myself.

    … the Committee for Continuing Audit of the U.S. Government-owned Gold [The Committee that started the audits] performed annual audits of Treasury’s gold reserves from 1974[*] to 1986. … by 1986, 97 percent of the Government-owned gold held by the Mint had been audited and placed under joint seal. So once you have done that, and that seal remains unbroken, then I am not sure what other benefit there would be to going back into it at that point. …

    Since 1993, when we [OIG] assumed responsibility for the audit, my office has continued to directly observe the inventory and test the gold. In fact, my auditors signed the official joint seals … placed on those compartments, inventoried and tested in their presence. At the end of Fiscal Year of 2008, all 42 compartments had been audited by … the Committee for Continuing Audit of the U.S. Government-owned Gold, or my office, and placed under official joint seals.

    Thus, in summary:

    • From 1974 until 1986, 97 percent of the gold at the Mint had been verified by the Committee for Continuing Audit.
    • In 1993 the OIG became responsible for the audits, and by 2008 all compartments had been verified and sealed.

    The conclusions we derive from Thorson’s testimony:

    • From 1987 until 1992, there were no audits.
    • From 1993 until 2008, the remaining 3 percent of the gold was verified.

    Thorson doesn’t mention anything about vault compartments having been re-opened.

    The Problem

    First of all, the OIG did not assume responsibility for the audits since 1993, but since 1982 as disclosed in one of the few documents that survived the 1980s (page 2).

    Effective October 1, 1982, the Internal Audit Staffs of BGFO and the United States Mint [Committee for Continuing Audit] were reorganized under the Department of the Treasury, Office of the Inspector General [OIG]. 

    Ever since the OIG became part of the audits in 1982, exactly what was not supposed to happen, did happen: vault compartments that had been physically verified and sealed were re-opened. Read with me, from the 1986 audit report regarding the Fort Knox (page 8) and Denver (page 9) depositories:

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    For some reason, starting in 1983, “re-audits” were performed over 1,929 tonnes “in accordance with the plan approved by the Treasurer.” However, in 1983, both depositories had already been fully audited, while West Point had not. Why were these compartments re-opened when the protocol stated that, “these actions” (physical verification) “having once been performed … will not have to be repeated as long as the assets verified remain under an unimpaired joint seal”? The OIG can’t explain this to me, and neither can it explain to me what “the plan approved by the Treasurer” was.

    What Thorson carefully refrained from mentioning under oath, he mentions in a written statement for the Gold Transparency Act. At the surface, his official testimony seems identical to his written statement, but when I compared both word for word, the latter crosses a topic that’s excluded in the former. Thorson never spoke about this in the congressional hearing (page 45):

    From 1987[**] to 1992, the Mint continued to perform an annual inventory and verification of the gold reserves in accordance with its own policies over those compartments that had not been placed under Official Joint Seal…

    Note that from the quote above, we learn that the US Mint—mind you, the custodian of the gold—audited the US monetary gold “in accordance with its own policies” from 1987 through 1992. This is arguably like a bank opening its customers’ safety deposit boxes. According to universal auditing principles, a custodian is not authorized to audit its client’s assets. An independent entity should audit custodial gold. This might explain why Thorson failed to mention this in the congressional hearing.

    Note also that Thorson writes that the Mint exclusively opened “those compartments that had not been placed under Official Joint Seal.” This is false, and I can prove it.

    I have obtained copies of the seals that were placed by the Mint on 5 Deep Storage compartments (together containing 795 tonnes of gold) between 1987 and 1992 (download here). Thorson’s written statement is false, as these compartments had, for a fact, already been verified and sealed, because they were all at Fort Knox and Denver, which were fully audited by 1982. Let’s have a look at one of the seal copies.

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    We can see the “date sealed” at the top, “July 25, 1990,” and the depository is “Fort Knox, Kentucky.” Thus, Thorson lied to us when he said that the Mint was only verifying “those compartments that had not been placed under Official Joint Seal,” because we know Fort Knox was fully audited, and thus all of its compartments put under Official Joint Seal, by 1982.

    We can also see on the seal when this compartment was “sealed previously.” It was in 1976 (underlined in red). Confirming it was a “re-audit.” If it was the first audit, the “sealed previously” date had to be prior to 1974, before any audits were performed.

    Last but not least, at the very bottom of the seal, we see a date, “February 16, 1993” (in the red oval), which is when this seal was removed by the OIG (presumably for yet another “re-audit”). More evidence that the OIG must have known what happened to these compartments in between 1987 and 1992. As, removing the seal in 1993 by the OIG, clearly would have shown the history of this compartment. Attentive readers might see a pattern emerging.

    From 1993 until 2008, additional compartments were “re-audited.” Thorson, again, did not mention these “re-audits” under oath, but in this specific period, more than 2,000 tonnes*** of gold saw the light of day again. I know through an excel sheet (download here) the OIG sent me in response to a FOIA request. When I asked the OIG for confirmation on how much they audited since 1993 they replied (source):

    [Since 1993]…we observed the counting of 246,203 bars, which equates to 81,638,569 FTOs (or 2,539 tonnes).

    When I asked my contact at the OIG why thousands of tonnes had been “re-audited” in periods from 1983 until 2008, he replied:

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    Unfortunately, the OIG stopped responding to my emails by late 2016. Everything had to be submitted through FOIA requests, I was told, which made my investigations take a few years extra.

    Notice that the OIG doesn’t mention “the plan approved by the Treasurer,” which at least could have explained the “re-audits” from 1983 until 1986.

    An explanation of why so many compartments had been “re-verified (in some cases) was because occasionally vault contents would have to be moved.” However, this argument makes no sense. It is true that since 1974, when the audits started, gold has been moved. Roughly 1,900 tonnes were moved from the New York Assay Office to West Point. But this movement occurred in 1982 before any “re-audits” began. There have been no other substantial movements of gold (read the chapter “Problem 11”).

    Additional evidence indicating there hasn’t been any movement of Deep Storage gold comes, ironically, from Thorson. Let’s go back to the congressional hearing with Paul and Thorson in 2011. After Thorson’s testimony, a Q&A follows wherein Paul asks Thorson about the audits from 1974 until 1986, and if it would be “worthwhile to inventory and assay [audit] this portion of the gold” again. Thorson replies that would be unnecessary because (39:00):

    . . . there is no movement. Those doors aren’t opened. There is nothing there that can happen. Because once those doors are sealed … it’s very obvious if those seals are ever broken. … There is no movement. Those doors are not opened.

    A strange thing to say, for Thorson, as this is exactly what he was continuously doing: re-opening the compartment doors. With this statement, Thorson confirms that any compartment should never have been re-opened. Not only is this what happened time and time again, but it also started precisely from the moment Thorson’s department (OIG) became involved with the audits in 1983.

    In trying to think of any legitimate reason why compartments have been re-opened, ever, I decided to submit a FOIA request for the audit protocols that prevailed after 1992. Maybe the audit approach had changed? If the OIG can’t explain it to me, maybe I can find the answers in some documents? What if I’m still missing something?

    Eventually, I received the Mint’s 2005 audit directive that shows us whenever a compartment has been “verified. . . the annual verification [i.e., audit] will be limited to inspection of the Seals.” Put differently: once physically verified the doors remain closed (from page 11):

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    Makes sense as this auditing approach matches the one from the 1970s. Like Thorson said during the congressional hearing in 2011: “So once you have done that [physical verification], and that seal remains unbroken, then I am not sure what other benefit there would be to going back into it at that point. . . . There is no movement. Those doors are not opened.” (Note in the quote above that “An OIG Representative must be present for any subsequent opening.” The issue isn’t whether it’s possible to re-open a compartment. Gold inside a compartment that can never be opened again has no value. You might as well put it in a rocket a blast it into the sun. The point is that barring legitimate reasons to re-open a compartment (e.g., selling the metal inside), they should remain closed.)      

    Conclusion

    Altogether, the vast majority of Deep Storage vault compartments have been re-opened for dubious reasons. (For exact data on “re-audits,” see my article “Audits Of US Monetary Gold Severely Lack Credibility.”)

    After years of prosecuting, these are the facts as they lay in front of us:

    • The majority of Deep Storage vault compartments have been “re-opened” for unknown or dubious reasons. (Again, for details, see “Audits Of US Monetary Gold Severely Lack Credibility.”)
    • Under oath, the auditor, Thorson, carefully avoided the subject of “re-opening” compartments.
    • In another written statement, the same auditor lied about the subject of “re-opening” compartments.
    • When this auditor was asked for an explanation regarding the “re-opening” of compartments, it could only muster an unfitting one.

    I find it astonishing that all falsehoods the auditor (OIG) has spread have in common that they hide the fact compartments have been “re-opened.”

    My investigation concerns the audits, which appear to have been executed with an inadequate degree of integrity. Accordingly, there should be a new audit authorized by Congress, which, incidentally, is also the opinion of former US Mint Director Edmund C. Moy (see tweet below).

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    Naturally, if the OIG or Treasury wants to respond to my findings, that would be more than welcome, and I would be happy to engage with them.

    Notes

    *: The original documents states “1975” but for the sake of simplicity I have changed it into “1974”. Officially, the Committee for Continuing Audit of the U.S. Government-owned Gold started in 1975, but because they accepted the audit performed in 1974 in their program effectively their program started in 1974.

    **: The original documents states “1986” but to improve the readability of this post I have changed it into “1987.”

    ***: An overview of the “re-audits”:

    – From 1983 until 1986, 1,929 tonnes were “re-audited.”
    – From 1987 until 1992, 796 tonnes were “re-audited.”
    – From 1993 until 2008, 2,296 tonnes were “re-audited.” (By 1986 only 243 tonnes at West Point were not audited. According to the OIG, from 1993 until 2008, 2,539 tonnes were audited. 2,539 minus 243 is 2,296, which is the amount “re-audited” from 1993 until 2008.)

    Altogether from 1983 until 2008, 5,021 tonnes have been “re-audited” for unclear reasons.

    Stay up to date, subscribe to Voima Insight—click here


    Tyler Durden

    Tue, 12/17/2019 – 18:45

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Today’s News 17th December 2019

  • NATO's Real Purpose: Welfare For The Military-Industrial Complex
    NATO’s Real Purpose: Welfare For The Military-Industrial Complex

    Authored by Alastair Crooke via The Strategic Culture Foundation,

    Kevin Baron, editor of Defense One (a leading US defence publication, funded by the defence industry) explains his anxieties about NATO’s future:

    “NATO’s external threats, and internal leaders’ divisions are not what worries me the most … I expected panelists I spoke with over the past month to raise familiar issues … but I was surprised by their serious concern about the very fabric of the alliance: ‘This time it’s different’, many insist: “The philosophy on which this whole institution is built is profoundly challenged,” opined journalist Bobby Ghosh of Bloomberg Opinion (“in our pre-summit conversation at IISS”). [Emphasis added].

    “His point was – that if leaders such as Trump and Erdogan continue to cosy-up to Russia – then what’s the purpose of this Cold War-era alliance? That’s a fair point. But I believe NATO’s biggest threat [comes from] its own inward-turning electorates. To global security leaders, from think tanks to the secure ‘tank’ inside the Pentagon, NATO is an essential organization and tool for the West’s ‘way of life’. It’s not even a question … Those leaders believe: How could anyone want to harm that?”.

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    Yet that is exactly what is happening. Political leaders no longer want (or can afford, politically) to go where US Defence Establishment points.

    “Perhaps the biggest threat to the alliance” Baron suggests, is precisely “the gap between those political leaders – and the national security community [sic] leaders, gathering on the side lines, begging to be heard.”

    President Macron appeared to pinpoint this gap exactly, when he said, “what we are currently experiencing is the brain death of NATO”. Some observers saw this as Macron grandstanding, as he seeks to seize the political leadership of Europe from a fading, Chancellor Merkel (which to an extent, he probably was). But the attention-grabbing point, more likely, was intended to underscore how the world has changed: Both France and Germany are experiencing grave internal political protest, as Europe’s economies slow.

    The EU needs to re-position geo-politically, Macron asserts, “and secondly, we need to reopen a strategic dialogue with Russia – which without being naïve – will take time,” Macron said this week.

    Strategic dialogue? Why? Maybe because Trump does not view the EU as either a close friend, or as trade partner in good standing? Trump puts it straight: the EU is worse than China (in stealing America’s ‘lunch’), and Trump is threatening the EU with a harsh tariff war.

    Such an eventuality – such hostility towards Europe – was unimaginable when Europe was founded as a subsidiary ‘liberal empire’, within the US global orbit. The unquestioned EU premise, had been of ‘uncle’ America, always being ‘there’, in case of difficulties. This is no longer true – and shocking it is, for EU élites.

    And, as America’s radically financialised, max-pressure assault across the globe – with its prime focus on a tech Cold War with China – unfolds, the EU sees itself becoming the unhappy ‘piggy-in-the middle’ of this ‘war’. Expected to give fealty to America as usual, but in want of China and Russia as its trading partners, too.

    Macron thinks Europe therefore, will need added strategic diplomatic strength – hence the notion of Europe partnering Russia. (Macron probably two-facedly, suggests to Trump that this – putative splitting of Russia from China, by Europe – is in the US interest, too).

    It won’t work. Russia well understands Macron’s game (but would be happy to play Macron and Merkel along, towards a lifting of EU sanctions on Russia).

    But more than this, what Macron is proposing is the re-positioning of Europe. Europe, he suggests, must have its own ‘clout’; its own separate global leverage – and this means European military clout. NATO essentially is ‘welfare’ for the US Military Industrial Complex, in his view. Why not spend that 2% of EU GDP with European manufacturers (especially French ones), he muses, and have some military clout of Europe’s own.

    So Bobby Ghosh is somehow right when he says that it is “the philosophy on which this whole institution [NATO] is built, [that is being] profoundly challenged”. It is not just NATO – though – it is rather, the whole ‘constellation’ of Washington consensus institutions. For those (IMF, World Bank, etc.), are being challenged too. (Albeit from a completely different angle):

    France’s finance minister said last week that the post-war international monetary order needed to be reinvented, or become increasingly dominated by China. “The Bretton Woods order as we know it has reached its limits,” Bruno Le Maire said. “The alternative we have is now clear – either we reinvent Bretton Woods; or it risks losing relevance, and eventually disappearing”. Whilst Bretton Woods had defined the international economic order of the second half of the 20th century; the first part of this century may be defined by China’s New Silk Road project. “And Chinese standards – on state aid, on access to public procurements, on intellectual property – could become the new global standards”.

    But that is only the half of it: these fora, David Stockman (President Reagan’s former Budget Director) writes, are but:

    “Washington fostered fig leaves designed to legitimize and provide ‘multilateral’ sanction for the Empire’s projects of global hegemony. Indeed, they are actually the vital glue which cements the bipartisan consensus in favour of Washington’s interventionist foreign policy.

    “This multilateralist scam originated during the Cold War when there was at least a modicum of justification for the Empire’s imperial pretensions. But after the Berlin Wall fell in 1989 … it was multilateralism which enabled the reprise of Empire … [and] provided the fig leaf of cover and sanction for Washington’s imperial ventures, that fueled the rise of the bipartisan ‘War Party’ on the banks of the Potomac. Still [today], the Achilles Heel of the Imperial City is [its] pretense of global leadership and multi-lateral blessing for what amounts to a rogue regime of superpower hegemony.”

    The post-WWII, Washington consensus was, from the outset, a political design that evolved in response to the Woodstock era into something of a counter-revolutionary (neo-liberal) project, designed to weaken the populist forces of organised labour: “It would nip in the bud what, at that time, were revolutionary movements in much of the developing world — Mozambique, Angola, China etc. — but also a rising tide of communist influences in countries like Italy and France and, to a lesser degree, the threat of a revival of that in Spain”.

    “Even in the United States, trade unions had produced a Democratic Congress that was quite radical in its intent. In the early 1970s they, along with other social movements, forced a slew of reforms and reformist initiatives which were anti-corporate: the Environmental Protection Agency, the Occupational Safety and Health Administration, consumer protections, and a whole set of things around empowering labour even more than it had been empowered before.

    “So in that situation there was, in effect, a global threat to the power of the corporate [élite] and therefore the question was, “What to do? …”

    “[The challenge was to keep US corporations profitable]. One way was to open up immigration. In the 1960s, for example, Germans were importing Turkish labour, the French Maghrebian labour, the British colonial labour. But this created a great deal of dissatisfaction and unrest.

    “Instead they chose the other way — to take capital to where the low-wage labour forces were. But for globalization to work you had to reduce tariffs and empower finance capital, because finance capital is the most mobile form of capital. So finance capital and things like floating currencies became critical to curbing labour.

    “At the same time, ideological projects to privatize and deregulate, created unemployment. So, unemployment at home; and offshoring, taking the jobs abroad; and a third component: technological change (deindustrialization through automation and robotisation): That was the strategy to squash labour.

    “It was an ideological assault, but also an economic assault [writes Professor David Hervey].

    It was Paul Volcker, the former Federal Reserve chief who died last week, who finally decided that the working man or woman needed to pay the price of the Fed’s victory in stemming inflation. He explicitly aimed at breaking the power of organised labour, and just after being appointed as Fed Chair declared: “The standard of living of the average American has to decline”.

    When looking at the trend of median real wage stagnation in the US and Europe – something now broadly acknowledged as the root cause of most of Europe’s socio-economic and political problems, and of our distorted markets – all this started with Volcker.

    This (the economic stagnation and the incremental impoverishment of the 60%) is at the root of their complaint, when Europeans, such as Le Maire, lump NATO, together with the whole Washington consensus institutions, as being obsolescent (and lying, as it were, at the root of their domestic crises).

    When the US recession began during the Great Financial Crisis of 2008, Ben Bernanke (the then Fed Chair) thought that low interest rates and massive money printing would lead to lending and spending that would restore growth. But those policies did not result in growth, which requires productive investment (from savings) to increasingly accumulate. Instead rather, it eviscerated private savings (low or negative interest rates).

    The Germans have been warning about this for years – and now Germany is plainly in recession – and the CDU’s coalition partner, the SPD, consequently has taken a sharp turn to the left in response – threatening the viability of Merkel’s government.

    The bottom line: the NATO disquiet is not just because the US wants to prioritize competition with Russia and China over counterterrorism, or that NATO now seeks to address China’s military rise. Though these policies would place Europe in an invidious position strategically, as well as vis-à-vis trade with both powers, but because the entire Washington consensus is blowing up – politically – in the Europeans’ face.

    The underlying, ideological political project (of a ‘liberal’ global order), fuelled and furthered by radical money ‘printing’ as an integral to the project, has produced nothing other than asset bubbles, amidst protests against neo-liberalism spreading across the globe.

    NATO leaders will say they did not print the money. True. But Stockman is quite correct when he says that NATO is part and parcel of the multilateral institutional ‘scam’ which has legitimised, enabled, and encased the underlying, financialised hegemony project.

    The paradox is that originally conceived as a counter-revolutionary tool to smother ‘60s and ‘70s radicalism, neo-liberalism has pushed the pendulum so far towards élite interests, that it has succeeded in birthing a new era of protest and radicalism. Well, what goes around comes around.


    Tyler Durden

    Tue, 12/17/2019 – 02:00

    Tags

  • What Everyone Is Missing About The Afghanistan Papers
    What Everyone Is Missing About The Afghanistan Papers

    Authored by Darius Shahtahmasebi via TheMindUnleashed.com,

    If you need more proof that lawmakers in the U.S. couldn’t care less about America’s woeful commitment to human rights abroad – or even care about the public who vote them into office – look no further than the recent Afghanistan papers and the reaction to the publications from Congress.

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    According to the Washington Post, the outlet had obtained 2,000 pages of notes from interviews with more than 400 generals, diplomats, and other officials directly involved in the war. The documents showed that U.S. officials were lying about the progress being made in Afghanistan, lacked a basic understanding of Afghanistan, were hiding unmistakable evidence that the war had become unwinnable, and wasted close to $1 trillion in the process.

    Barely a few hours following the Post’s publication, Congress rewarded the Pentagon for its stellar efforts with a $22 billion budget increase. How can we as a society justify this?

    One stand-out statistic—among the many concerning ones—is the fact that before the U.S. invasion the Taliban had almost completely put to bed Afghanistan’s illicit opium trade. Since the U.S. invasion, combined with $9 billion in U.S. funding for anti-opium programs, the Taliban is not only stronger than it ever was but sits cemented in a country that now supplies 80 percent of the world’s opium.

    I can’t help but think this was done on purpose.

    Still, it would be worth re-thinking our outrage over the Afghanistan papers and determining what exactly it is we are outraged about. Are we simply angry because top U.S. officials lied to us about the fact they weren’t winning the war, making it a less worthwhile venture? If the U.S. were winning the war, spending $1 trillion in the process, killing record numbers of civilians, ramping up night raids to terrorize local populations, committing war crimes left right and center, would that suddenly make it all okay? As long as the war is being won, right?

    The truth is, like most wars the U.S. finds itself prosecuting; this was yet another war based entirely on lies and misconceptions—right from the outset. As Marjorie Cohn, professor at Thomas Jefferson School of Law and president of the National Lawyers Guild famously said:

    “The UN Charter is a treaty ratified by the United States and thus part of U.S. law. Under the charter, a country can use armed force against another country only in self-defense or when the Security Council approves. Neither of those conditions was met before the United States invaded Afghanistan. The Taliban did not attack us on 9/11. Nineteen men—15 from Saudi Arabia—did, and there was no imminent threat that Afghanistan would attack the U.S. or another UN member country. The council did not authorize the United States or any other country to use military force against Afghanistan. The U.S. war in Afghanistan is illegal.”

    If that was the case in 2001, how this war has continued for close to another two decades begins to beggar belief. In that time, the consequences for the Afghan civilian population has been catastrophic.

    In February of 2010, a NATO night raid conducted in a village in the Paktia province of Afghanistan left seven civilians dead, including two pregnant women. NATO tried to spin the raid as an attack on a compound festering with “militant activity,” but this quickly fell apart thanks to a British reporter, Jerome Starkey, who had already reported that this was a false narrative.

    The compound actually belonged to an anti-Taliban policeman trained by the United States. At the time, the family had gathered to celebrate the naming of a newborn son. In order to cover the tracks of their reckless decision to execute unarmed civilians, the American troops used knives to dig out the bullets from the bodies of the pregnant women killed.

    This is the kind of activity that trillions of dollars of U.S. taxpayer money has been paying for on a regular basis. More than 775,000 troops have served in Afghanistan, with 2,300 U.S. personnel deaths. Not to mention that the U.S. has not been fighting there alone, and has had assistance not just from NATO, but from so-called peaceful states like New Zealand as well (who have been accused of committing war crimes, too).

    Yes, we should be outraged that officials lied about the prospects of success. But we should primarily be disturbed that they first and foremost lie in order to push our countries into these wars in the first place, killing countless innocent civilians over and over again.

    We can’t let this recent publication obscure itself into nothingness. The recent reaction from Congress is a giant middle finger designed to tell you that (a) there will never be anything you can do about it and (b) they simply don’t care how you feel.

    Democracy at its finest from the world’s leading propagator of democratic values.


    Tyler Durden

    Mon, 12/16/2019 – 23:50

  • Hong Kong Airport Passenger Volumes Crash To Decade Lows Amid Socio-Economic Chaos 
    Hong Kong Airport Passenger Volumes Crash To Decade Lows Amid Socio-Economic Chaos 

    Who in their right mind would travel to Hong Kong these days? Six months of violent protests and a deepening recession have transformed the city into a chaotic mess. Mainland Chinese, corporations, and tourists are abandoning the city, reflected in the latest plunge of airport passenger and air freight data.

    Hong Kong International Airport reported on Sunday that passenger volume in November was down 16.2% Y/Y, the most significant decline since 2009, when volumes fell 18.7% Y/Y, reported Reuters, citing a Civil Aviation Department statement.

    In the last three months, passenger volume fell 12% Y/Y as violent protests have kept many away from the city.

    The statement said some of the most significant drops in passenger volumes came from mainland China and Southeast Asia.

    Hong Kong International Airport is the largest airport in the world for cargo and is used as an economic bellwether for the global economy.

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    With passenger volumes slipping and air fright cargo shipments dropping, the global economy could stumble into 2020.

    The statement said flight trips dropped 8.3% Y/Y in November. Cargo throughput for the month fell 3.4% Y/Y to 450,000 tons.

    The air freight slowdown has prompted airport officials to offer a 20% reduction to terminal handling fees for freight forwarders, in a bid to stoke new business.

    The Air International Air Transport Association (IATA) said airlines could start slashing passenger capacity in 1Q20. If the passenger downturn persists through spring, commercial flights could be cut by summer.

    The social unrest has been ongoing for six months and has forced the city’s economy into a recession, affecting its largest sector: tourism.

    Business receipts of tourism, convention, and exhibition services plunged 27.8% Y/Y in Q3, the worst drop since the SARS epidemic in 2003.

    With no end in sight for the protests and a recession that is expected to deepen into 1H20, the time to rebuild business confidence in the city could take years, or in some respects, never — since China now wants to make Macau its next Hong Kong.


    Tyler Durden

    Mon, 12/16/2019 – 23:30

  • Judge Denies Flynn's Requests For Exculpatory Information, Case Dismissal
    Judge Denies Flynn’s Requests For Exculpatory Information, Case Dismissal

    Authored by Peter Svab via The Epoch Times,

    A federal judge has denied requests by Lt. Gen. Michael Flynn to prompt the government to give him information he deems exculpatory and to dismiss the case against him.

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    District Court Judge Emmet Sullivan sided with the government in arguing that Flynn was already given all the information to which he was entitled. The judge also dismissed Flynn’s allegations of government misconduct, noting that Flynn already pleaded guilty to his crime and failed to raise his objections earlier when some of the issues he now complains about were brought to his attention.

    “The sworn statements of Mr. Flynn and his former counsel belie his new claims of innocence and his new assertions that he was pressured into pleading guilty,” Sullivan said in his Dec. 16 opinion (pdf).

    Flynn, former head of the Defense Intelligence Agency, pleaded guilty on Nov. 30, 2017, to one count of lying to the FBI. He’s been expected to receive a light sentence, including no prison time, after extensively cooperating with the government on multiple investigations.

    In June, he fired his lawyers and hired former federal prosecutor Sidney Powell, who has since accused the government of misconduct, particularly of withholding exculpatory information or providing it late.

    Powell has argued that Flynn’s previous lawyers had a conflict of interest because they testified in a related case against Flynn’s former business partner. Flynn had previously told the court he would keep the lawyers despite the conflict, but Powell said prosecutors should have asked the judge to dismiss the lawyers anyway. Sullivan disagreed, saying Flynn failed to show a precedent that the prosecutors had that obligation.

    Powell also said the government had no proper reason to investigate Flynn in the first place and that it had set up an “ambush interview” with the intention of making Flynn say something it could allege was false.

    Sullivan disagreed again and said that previously, with the advice of his former lawyers, Flynn never “challenged the conditions of his FBI interview.”

    Flynn was interviewed by two FBI agents, Joe Pientka and Peter Strzok, on Jan. 24, 2017, two days after he was sworn in as President Donald Trump’s national security adviser.

    The prosecutors argued that the FBI had a “sufficient and appropriate basis” for the interview because Flynn days earlier told members of the Trump campaign, including soon-to-be Vice President Mike Pence, that he didn’t discuss with the Russian ambassador the expulsion of Russian diplomats in late December 2016 by then-President Barack Obama.

    Flynn later admitted in his statement of offense that he asked, via Russian Ambassador to the U.S. Sergei Kislyak, for Russia to only respond to the sanctions in a reciprocal manner and not escalate the situation.

    The FBI was at the time investigating whether Trump campaign aides coordinated with Russian 2016 election meddling. No such coordination was established by the probe, which concluded more than two years later under then-special counsel Robert Mueller.

    Powell argued that whatever Flynn told Pence and others in the transition team was none of the FBI’s business.

    “The Executive Branch has different reasons for saying different things publicly and privately, and not everyone is told the details of every conversation,” she said in a previous court filing.

    “If the FBI is charged with investigating discrepancies in statements made by government officials to the public, the entirety of its resources would be consumed in a week.”

    Powell said Flynn’s answers to the agents weren’t “material,” meaning relevant to the FBI investigation of election meddling.

    Sullivan, however, thought otherwise, using a broader description of the investigation.

    The bureau, he said, probed the “nature of any links between individuals associated with the [Trump] Campaign and Russia” and what Flynn said was material to it.

    The description Sullivan used appears to omit the context of the probe, which focused specifically on the Russian election meddling.


    Tyler Durden

    Mon, 12/16/2019 – 23:10

  • Chinese Crypto Scammers Helped Inspire Recent Bitcoin Market Carnage
    Chinese Crypto Scammers Helped Inspire Recent Bitcoin Market Carnage

    If you’re hoping to make money shorting bitcoin this holiday season, you might be in luck: Analysts say the price of a bitcoin is set to fall even further as the perpetrators of a massive Chinese crypto scheme dump their ill-gotten gains.

    Several of the participants in the $2 billion PlusToken scheme are dumping crypto from anonymous accounts. The sales are believed to be the reason fro bitcoin’s 50% drop since its peak in late June, which was around the time that some of the perpetrators of PlusToken were arrested in China.

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    Unfortunately, Chinese authorities didn’t manage to nab them all, and a team of analysts at the blockchain consultancy Chainalysis are warning that the fallout isn’t over yet, according to Bloomberg.

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    The largest cryptocurrency is likely to remain under pressure as perpetrators of the estimated more than $2 billion PlusToken scandal dump coins to cash out, the New York-based firm said Monday in the wake of a five-month investigation that continues to track the tokens as they filter through various blockchain ledgers.

    Bitcoin has tumbled almost 50% from its 2019 peak in late June, when Chinese authorities arrested multiple suspects in the pyramid scheme that promised returns as high as 600% and guaranteed that investors would be rewarded for inviting new members. Since that time, market observers have often pointed to possible sales tied to PlusToken suspects not in custody as one of many reasons for price declines.

    According to Chainalysis, PlusToken conspirators have already sold 25,000 bitcoins, and it’s believed another 20,000 (worth nearly $142 million at current prices). The coins are spread across some 8,700 anonymous bitcoin wallets.

    “That’s certainly something to consider when you are thinking about where the price is going, at least in the short term.” Kim Grauer, senior economist at Chainalysis said in a phone interview. “It could be, according to our research, continued downward pressure.”

    It’s just the latest example of a ‘whale’ (market parlance for a player with a huge amount of coins) impacting the market in a way that almost smells like manipulation. Remember the “highly suspicious” price action from last month? Like we said, it’s just another example of a fairly common phenomenon.

    Chainalysis believes the illictly gotten PlusToken coins are being sold via coin shuffling services like Wasabi Wallet, or via private, “OTC” transactions with trading desks that have agreed to help them launder their money, for a fee.


    Tyler Durden

    Mon, 12/16/2019 – 22:50

  • Did The Supreme Court Just Pull The Rug Out From Under Article Of Impeachment?
    Did The Supreme Court Just Pull The Rug Out From Under Article Of Impeachment?

    Authored by Alan Dershowitz, op-ed via The Hill,

    The decision by the Supreme Court to review the lower court rulings involving congressional and prosecution subpoenas directed toward President Trump undercuts the second article of impeachment that passed the House Judiciary Committee along party lines last week.

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    That second article of impeachment charges President Trump with obstruction of Congress for refusing to comply with congressional subpoenas in the absence of a final court order. In so charging him, the House Judiciary Committee has arrogated to itself the power to decide the validity of its subpoenas, as well as the power to determine whether claims of executive privilege must be recognized, both powers that properly belong with the judicial branch of our government, not the legislative branch. The House of Representatives will do likewise, if it votes to approve the articles, as is expected to occur on Wednesday.

    President Trump has asserted that the executive branch, of which he is the head, need not comply with congressional subpoenas requiring the production of privileged executive material, unless there is a final court order compelling such production. He has argued, appropriately, that the judicial branch is the ultimate arbiter of conflicts between the legislative and executive branches. Therefore, the Supreme Court decision to review these three cases, in which lower courts ruled against President Trump, provides support for his constitutional arguments in the investigation.

    The cases that are being reviewed are not identical to the challenged subpoenas that form the basis for the second article of impeachment. One involves authority of the New York district attorney to subpoena the financial records of a sitting president, as part of any potential criminal investigation. The others involve authority of legislative committees to subpoena records as part of any ongoing congressional investigations.

    But they are close enough. Even if the high court were eventually to rule against the claims by President Trump, the fact that the justices decided to hear them, in effect, supports his constitutional contention that he had the right to challenge congressional subpoenas in court, or to demand that those issuing the subpoenas seek to enforce them through court.

    It undercuts the contention by House Democrats that President Trump committed an impeachable offense by insisting on a court order before sending possibly privileged material to Congress. Even before the justices granted review of these cases, the two articles of impeachment had no basis in the Constitution. They were a reflection of the comparative voting power of the two parties, precisely what one of the founders, Alexander Hamilton, warned would be the “greatest danger” of an impeachment.

    House Democrats should seriously consider dropping this second article in light of the recent Supreme Court action. In fairness, this development involving the high court occurred after Democrats on the House Judiciary Committee made up their minds to include obstruction of Congress as an impeachment article. Yet the new circumstances give some Democratic members of Congress, who may end up paying an electoral price if they support the House Judiciary Committee recommendation, meaningful reason for voting against at least one of the articles of impeachment.

    It would be a smart way out for those Democrats. More important, it would be the right thing for them to do. It would be smart and right because, as matters now stand, the entire process smacks of partisanship, with little concern for the precedential impact which these articles could have on future impeachments. If a few more Democrats voted in a way that would demonstrate greater nuanced recognition that, at the least, the second article of impeachment represents an overreach based on current law, it would lend an aura of some nonpartisan legitimacy to the proceedings.

    The first article goes too far in authorizing impeachment based on the vague criterion of abuse of power. But it is the second article that truly endangers our system of checks and balances and the important role of the courts as the umpires between the legislative and executive branches under the Constitution. It would serve the national interest for thoughtful and independent minded Democrats to join Republicans in voting against the second article of impeachment, even if they wrongly vote for the first.


    Tyler Durden

    Mon, 12/16/2019 – 22:30

  • Iran Alleges "Terror" Plot As Drug-Laced Cake Scare Impacts Food Industry
    Iran Alleges “Terror” Plot As Drug-Laced Cake Scare Impacts Food Industry


    Tyler Durden

    Mon, 12/16/2019 – 22:10

  • Secret Deep State Demands: The FBI Wants Consumers' Credit Data
    Secret Deep State Demands: The FBI Wants Consumers’ Credit Data

    Authored by Mac Slavo via SHTFplan.com,

    The Federal Bureau of Investigation has secretly demanded access to a whole bunch of consumer credit information and data. Recently revealed documents prove that the FBI wants access to troves of financial information from the nation’s largest credit agencies.

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    According to a report by Tech Crunch, this is a regular thing for the FBI.  The government agency regularly uses these legal powers (known as national security letters) to compel credit giants to turn over non-content information, such as records of purchases and locations, that the agency deems necessary in national security investigations. But these letters have no judicial oversight and are typically filed with a gag order, preventing the recipient from disclosing the demand to anyone else; including the target of the letter.

    Since the law changed (lawmakers changed it to protect themselves and the government at large) in 2015 in the wake of the Edward Snowden disclosures that revealed the scope of the U.S. government’s surveillance operations, recipients have been allowed to petition the FBI to be cut loose from the gag provisions and publish the letters with redactions. Only a few tech companies, including FacebookGoogle, and Microsoft, have disclosed that they have ever received one or more national security letters.

    While tech companies have often reported to their users when government agencies have demanded their information, credit companies have not. Most of these major data collectors have failed to publish their figures altogether.

    Three lawmakers — Democratic senators Ron Wyden and Elizabeth Warren, and Republican senator Rand Paul — have sent letters to Equifax, Experian, and TransUnion, expressing their “alarm” as to why the credit giants have failed to disclose the number of government demands for consumer data they receive.

    “Because your company holds so much potentially sensitive data on so many Americans and collects this information without obtaining consent from these individuals, you have a responsibility to be transparent about how you handle that data,” the letters said. “Unfortunately, your company has not provided information to policymakers or the public about the type or the number of disclosures that you have made to the FBI.” –Tech Crunch

    It still isn’t known just how many demands credit agencies have gotten of the 500 million the FBI has made since they were given the power to access our data in 2001. The New York Times reported that the national security letters to credit agencies were a “small but telling fraction” of the overall half-million FBI-issued demands made to date.

    Other banks and financial institutions, as well as universities, cell service, and internet providers, were also the targets of national security letters, the documents revealed.

    The senators have given the agencies until December 27 to disclose the number of demands each has received.


    Tyler Durden

    Mon, 12/16/2019 – 21:50

  • Japan's Biggest Banks Are Having Second Thoughts About Lending To SoftBank After WeWork Debacle
    Japan’s Biggest Banks Are Having Second Thoughts About Lending To SoftBank After WeWork Debacle

    If we’ve learned anything about Masayoshi Son, the eccentric Japanese billionaire behind SoftBank, over the past few months, it’s that Japan’s most famous business clearly has trouble differentiating between luck and skill.

    This, as Professor Scott Galloway explained yesterday, is a common problem in the world of Venture Capital: In Galloway’s estimation, many investors exemplify what’s called the Dunning-Kruger effect. This posits that dumb people are too stupid to know they are dumb, allowing them to remain colossally overconfident. The effect also includes people who mistakenly believe their expertise in one area translates into expertise in another area or all areas.

    This is probably one of the many concerns running through the minds of Son’s longtime Japanese bankers, as they reevaluate their ties with one of their most important clients, Bloomberg reports.

    And who can blame them? All together, Japan’s biggest banks have billions of dollars in exposure to SoftBank. And now, the firm is returning to its financiers for another round of lending, but this time, it’s coming in the wake of the company’s most embarrassing year on record.

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    SoftBank has had an almost singularly terrible year. The company has had problems with more than a dozen investments, with the biggest flops being WeWork and Uber, though WeWork, which is now the subject of an anxiety-provoking turnaround plan following an emergency lifeline loan from its biggest backer for more than $6 billion, stands out as a particularly massive and predictable disaster (if only Masa read Zero Hedge…).

    There’s now plenty of evidence to suggest that SoftBank’s investment process is deeply flawed. Even Son himself has said he decided to invest after talking to CEO/Svengali Adam Neumann for 20 minutes. He committed billions of dollars of both SoftBank money and money from his now infamous Vision Fund. After one 20 minute face-to-face meeting. How is that even legal?

    SoftBank’s latest fuck-up hit the financial press in Monday’s edition of the Financial Times. Oyo, one of SoftBank’s biggest bets, is facing backlash in China, where a letter signed last week by 172 hoteliers across China accuses the company of imposing “unclear bills and arbitrary deductions” and threatens legal action if their complaints aren’t swiftly resolved, which sounds…ominous.

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    (This chart courtesy of Barron’s)

    That’s a huge problem, because Oyo’s valuation jump in a funding round closed over the summer helped provide some respite to SoftBank as Oyo’s valuation doubled to $10 billion.

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    Masayoshi Son

    And after investors balked at WeWork’s IPO because of the hilariously non-standard governance issues, Neumann, who tried to engineer things so that his family would control WeWork for “the next 300 years” was pushed out with a massive golden parachute, which was like adding insult to injury.

    The banks that SoftBank has approached for its next big loan would see their total exposure to SoftBank climb to $15 billion if they decided to back the deal. These banks include most of the usual suspects: Mitsubishi UFJ, Sumimoto and Mizuho.

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    SoftBank reportedly met with all three on Nov. 26 to discuss the credit facility, according to BBG’s anonymous sources. WeWork executives reportedly went over their plans to save the company with their bankers. This is important, as several bankers have reportedly told BBG that they would be hesitant to continue lending to SoftBank unless it can develop a credible turnaround strategy for WeWork.

    Among all the SoftBank investing blunders that led to this, the near-collapse of WeWork looms largest in bankers’ imaginations.

    “Japanese banks have provided loans in part because of Son’s management power and capability,” said Kazumi Tanaka, an analyst at DZH Financial Research Inc. “The WeWork issue has chipped away at one of the elements that convinced them” to back Son, Tanaka said.

    At the end of the day, we doubt the Japanese banks will pass on SoftBank, and this is why: Son is still one of the biggest fish in Asia’s second-largest economy.

    But just in case, it appears Masa is playing it safe by beginning to diversify his banking business across the Pacific. To wit, Goldman is reportedly arranging a $1.75 billion line of credit as part of WeWork’s rescue package. SoftBank is listed as the primary borrower in that deal, and who knows? Perhaps Goldman is betting on Son and is trying to steal his business away from its Japanese rivals.

    Another reason it will be difficult for Son’s bankers to pass up another loan: With the Japanese economy as starved for yield as it is, SoftBank’s credit rating is BB+, which is a notch below investment grade. In other words, “Japanese banks may be getting more concerned, but they still have to provide more support,” said business school professor and former investment banker Michiaki Tanaka.


    Tyler Durden

    Mon, 12/16/2019 – 21:30

  • Democrats, Deficits, & Whistling Past The Graveyard
    Democrats, Deficits, & Whistling Past The Graveyard

    Authored by Lance Roberts via RealInvestmentAdvice.com,

    I was stunned by a recent article from Marshall Auerback via The Nation entitled “Why Democrats Need To Stop Worrying And Love The Deficit.”

    “Delivering on big progressive ideas like Medicare for All and the Green New Deal will never happen until Democrats get over their fear of red ink.”

    While the article is long, winding, and a convoluted mess of ideas, the following is the all you really need to read:

    The perceived problem:

    “In an environment increasingly characterized by slowing global economic growth, businesses are understandably hesitant to invest in a way that creates high-quality, high-paying jobs for the bulk of the domestic workforce. The much-vaunted Trump corporate “tax reform” may have been sold to the American public on that basis, but corporations have largely used their tax cut bonanza to engage in share buybacks, which fatten executive compensation but have done nothing for the rest of us. At the same time, private households still face constraints on their consumption because of stagnant wages, rising health care costs, declining job security, poorer employment benefits, and rising debt levels.

    Instead of solving these problems, the reliance on extraordinary monetary policy from the Federal Reserve via programs such as quantitative easing has exacerbated them. In contrast to properly targeted fiscal spending, the Federal Reserve’s misguided monetary policies have fueled additional financial speculation and asset inflation in stock markets and real estate, which has made housing even less affordable for the average American.”

    The Non-Solution

    According to Mr.  Auerback is the solution is simple:

    “Democrats should embrace the ‘extremist’ spirit of Goldwater and eschew fiscal timidity (which, in any case, is based on faulty economics). After all, Republicans do it when it suits their legislative agenda. Likewise, Democrats should go big with deficits—as long as they are used for the transformative programs that progressives have long talked about and now have the chance to deliver.”

    This is essentially the adoption of Modern Monetary Theory (MMT), which, as discussed previously, is the assumption debt and deficits “don’t matter,” as long as there is no inflation.

    “Modern Monetary Theory is a macroeconomic theory that contends that a country that operates with a sovereign currency has a degree of freedom in their fiscal and monetary policy, which means government spending is never revenue constrained, but rather only limited by inflation.” – Kevin Muir

    However, the solution isn’t really a solution.

    Mr. Auerback suggests the Democrats should go big with deficits to fund the “transformative programs” they have long talked about. These programs are, as we know, socialistic from government-run healthcare to more social welfare, to free college.

    The problem is that these progressive programs lack an essential component of what is required for “deficit” spending to be beneficial – a “return on investment.” 

    This was a point addressed by Dr. Woody Brock previously in “American Gridlock;”

    Country A spends $4 Trillion with receipts of $3 Trillion. This leaves Country A with a $1 Trillion deficit. In order to make up the difference between the spending and the income, the Treasury must issue $1 Trillion in new debt. That new debt is used to cover the excess expenditures but generates no income leaving a future hole that must be filled.

    Country B spends $4 Trillion and receives $3 Trillion income. However, the $1 Trillion of excess, which was financed by debt, was invested into projects, infrastructure, that produced a positive rate of return. There is no deficit as the rate of return on the investment funds the “deficit” over time.

    There is no disagreement about the need for government spending. The disagreement is with the abuse and waste of it.

    John Maynard Keynes’ was correct in his theory that in order for government “deficit” spending to be effective, the “payback” from investments being made through debt must yield a higher rate of return than the debt used to fund it.

    Currently, the U.S. is “Country A.” 

    The programs that Mr. Auerback suggests the Democrats pursue with deficit spending, only exacerbate the current problem. According to the Center On Budget & Policy Priorities, roughly 75% of every current tax dollar goes to non-productive spending. (The same programs the Democrats are proposing.)

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    To make this clearer, in 2018, the Federal Government spent $4.48 Trillion, which was equivalent to 22% of the nation’s entire nominal GDP. Of that total spending, ONLY $3.5 Trillion was financed by Federal revenues, and $986 billion was financed through debt.

    In other words, if 75% of all expenditures go to social welfare and interest on the debt, those payments required $3.36 Trillion of the $3.5 Trillion (or 96%) of the total revenue coming in. 

    Currently, because of corporate tax cuts, a slowing economic environment, and weak wage growth, tax revenues have declined as federal expenditures have surged.

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    The result of unbridled fiscal largesse is a surging deficit that must be met by growing debt issuance.

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    Debt Begets Debt

    There used to be an actual debate between “Austerity” and “Spending.” Conservatives in Government used to at least talk a “good game” about cutting spending, budgeting, and debt reduction. Now, that is no longer the case as during the past several Administrations, both “conservative” and “liberal” have opted for more “fiscal largesse.”

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    The irony is that increases in debt only lead to further increases in debt as economic growth must be funded with further debt. As this money is used for servicing debt, entitlements, and welfare, instead of productive endeavors, there is no question that high debt-to-GDP ratios reduce economic prosperity over time. In turn, the Government tries to fix the “economic problem” by adding on more “debt.” The Lowest Common Denominator provides more information on the accumulation of debt and its consequences.

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    Another way to view the impact of debt on the economy is to look at what “debt-free” economic growth would be. In other words, without debt, there has been no organic economic growth.

    For the 30-year period, from 1952 to 1982, the economic surplus fostered a rising economic growth rate which averaged roughly 8% during that period. Today, with the economy expected to grow at just 2% over the long-term, the economic deficit has never been greater. If you subtract the debt, there has not been any organic economic growth since 1990. 

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    What is indisputable is that running ongoing budget deficits that fund unproductive growth is not economically sustainable long-term.

    Whistling Past The Graveyard

    Let me be clear.

    As Dr. Brock notes, deficit spending can be beneficial when the debt is used in a productive manner. The U.S. has the labor, resources, and capital for a resurgence of a “Marshall Plan” which could foster the development of infrastructure with high rates of return on each dollar spent.

    However, that isn’t what Mr. Auerback, the Democrats, are suggesting or offering. The Government has already delved into the MMT pool over the last 40-years spending trillions bailing out banks, boosting welfare support, supporting Wall Street, and reducing corporate tax rates, which all have a negative rate of return.

    The results have been disappointing, and suggesting that more of the same will produce a different result is the precise definition of “insanity.” 

    In the meantime, the aging of the population continues to exacerbate the underfunded problems of Social Security, Medicare, and Medicaid, which is roughly $70 trillion and growing. It is simply a function of demographics and math.

    As Dr. Brock noted:

    “Mathematics and Sex create performance anxiety in men – because you can’t fake the outcome of either.”

    Two recent studies show the problem clearly.

    Demographics is an easy problem to see and mathematically calculate. The ratio of workers per retiree, as retirees are living longer (increasing the relative number of retirees), and lower birth rates (decreasing the relative number of workers), present a massive headwind to economic solvency. 

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    The Institute for Family Studies, published a report showing the decline in the fertility ratio to the lowest levels since 1970,

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    With fertility rates low, the future “support-ratio” will continue to be a problem.

    The second, and more immediate, problem is the vastly underfunded savings of the “baby boomer” generation heading into retirement. To wit:

    ” Anxiety over retirement and how to support oneself after calling it a career is impacting many Americans. A recent poll found that one in three adults has less than $5,000 in retirement savings.”

    This is simple math.

    Currently, 75.4 million Baby Boomers in America—about 26% of the U.S. population—have reached or will reach retirement age between 2011 and 2030. A vast majority of them are “under saved” and primarily unhealthy.

    This combination ensures the demand on the health care system, along with Medicaid and Medicare, will increase at a rate faster than it can supply. Bankruptcy, without substantive changes, is inevitable.

    Of course, it isn’t just the social welfare and healthcare system that is effectively “broken,” but the economic model itself.

    The current path we are on is unsustainable. The remedies being applied today is akin to using aspirin to treat cancer. Sure, it may make you feel better for the moment, but it isn’t curing the problem.

    Unfortunately, the actions being taken have been repeated throughout history as those elected into office are more concerned about satiating the mob with bread and games” rather than suffering the short-term pain for the long-term survivability of the empire.

    In the end, every empire throughout history fell to its knees under the weight of debt and the debasement of their currency.

    As Dr. Brock suggests – it is truly “American Gridlock” as the real crisis lies between the choices of “austerity” and continued government “largesse.”

    One choice leads to long-term economic prosperity for all, the other doesn’t.

    “Today we are borrowing our children’s future with debt. We are witnessing the ‘hosing’ of the young.”


    Tyler Durden

    Mon, 12/16/2019 – 21:10

  • Capesize Shipping Rates Plunge To Six Month Low, Weighs Down Baltic Index
    Capesize Shipping Rates Plunge To Six Month Low, Weighs Down Baltic Index

    Another downward slide in dry bulk shipping known as Capesize — vessels with a capacity of more than 100,000 deadweight tons, has been seen on Monday morning with rates hitting six-month lows. The slide in Capesize rates has weighed on the overall Baltic Exchange index.

    The Capesize index slid 4.9%, to 2,334, its lowest since June 21. 

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    The Baltic index, which tracks rates for Capesize, Panamax and Supramax vessels that transport dry bulk commodities, dropped 3% on Monday. 

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    The largest US-listed Capesize companies, Golden Ocean and Star Bulk, recently outlined demand issues for Capesize vessels in separate earnings calls in late November.

    The plunge in Capesize rates is mainly a demand issue, both shippers warned, originating from Brazil, Australia, and China.  

    “The main drivers of Capesize rates are Chinese iron-ore imports from Australia and Brazil. Since the route from Brazil is triple the distance versus the trip from Australia, it soaks up three times as many Capes to carry the same volume,” said FreightWaves

    According to Birgitte Ringstad Vartdal, CEO of Golden Ocean, “at the start of the fourth quarter, it looks like [Brazilian iron-ore miner] Vale is struggling a bit with its production system and there has also been a lot of early rain in Brazil. Vale has reduced its guidance for the fourth quarter and has guided a moderate production level in the first quarter.”

    “In the spot market, we see ships on the Australia-China route being fixed constantly, every day, but we see a lack of volume on the Brazil-China route,” she added, noting that this “should reduce the number of vessels that are willing to ballast toward Brazil.” 

    Persistent weakness in Capesize rates on specific shipping lanes to and from Brazil, Australia, and China, indicates that the global economy is still losing momentum and a giant rebound in which equity markets have already priced in might be fantasy. We don’t discount that the worldwide economy could stabilize in early 2020, but the idea of a massive rebound in economic growth is unlikely at the moment. 

     


    Tyler Durden

    Mon, 12/16/2019 – 20:50

  • We Are In The Midst Of The Worst Drug Crisis In American History
    We Are In The Midst Of The Worst Drug Crisis In American History

    Authored by Michael Snyder via TheMostImportantNews.com,

    There has never been a time in our history when more Americans have been on drugs. According to the most recent government numbers, 24.6 million Americans have used an illegal drug within the last 30 days. Of course the number of Americans taking legal drugs is actually far, far higher.

    According to Bloomberg, 46 percent of all Americans have taken at least one legal pharmaceutical drug within the last 30 days. In most instances, those legal drugs have been prescribed by doctors with the intention of helping people, but sometimes legal drugs are even more addictive than illegal drugs are. In particular, opioids have destroyed countless American lives over the past decade, and in so many cases those that got addicted originally got them legally. Today, Americans consume approximately 80 percent of the total global supply of opioids, and it is a major national crisis. But even if we were able to get rid of all the opioids, we would still be the most drugged up nation on the entire planet. We have become a nation of addicts, and the self-destructive path that we are on does not have a positive ending.

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    Whenever I come across a story about a really crazy crime that someone has committed, it almost always involves drugs. For example, just check out this doozy from West Virginia

    A stripper has been convicted of beheading her boyfriend’s disabled Star Wars-obsessed son after having sex with him. Roena Cheryl Mills, 43, was last Thursday found guilty of the first-degree murder of 29 year-old Bo White at a house in Lerona, West Virginia, in April 2018. Mills – who has the phrase ‘special kinda crazy’ tattooed across her chest – reportedly targeted Bo after having sex with him in return for drugs.

    The stronger the addiction, the more desperate addicts become to get their next fix.

    And very desperate people do very desperate things.

    One of the first things that you will notice when drugs start taking over an area is that crime goes way up. Addicts are always looking for a way to fund their lifestyles, and retailers all over the nation are being hit particularly hard right now.

    In fact, Home Depot is specifically blaming “the opioid crisis” for the epidemic of theft that they have been witnessing…

    The company said organized criminals are stealing millions of dollars’ worth of goods from it and other retailers and storing the merchandise in warehouses. The theft, which retailers call shrink, has gotten so bad that it will narrow Home Depot’s operating profit margins next year, executives said during a meeting with analysts and investors.

    “This is happening everywhere in retail,” Chief Executive Officer Craig Menear said. “We think this ties to the opioid crisis, but we’re not positive about that.”

    Each year, doctors issue approximately 300 million prescriptions for pain medications.

    That number is way, way too high, and so many Americans end up as addicts.

    There has been an effort to educate the American people about these drugs in recent years, but most of us still don’t realize how incredibly dangerous they can be.

    Sadly, the number of Americans dying from opioid overdoses continues to steadily grow

    More than 61,300 people in the U.S. died from drug overdoses in 2017, up from the previous year’s record of 54,800. (See the graphic.) That’s more than the number of Americans who died in the Vietnam War. And it’s happening every year.

    Opioids are directly or indirectly responsible for about 70 percent of those overdose deaths.

    If you can believe it, the number of Americans dying from drug overdoses has actually more than doubled since 2010.

    So many people never would have imagined that their doctors would prescribe them something that is highly addictive and highly dangerous, and once you are hooked it can be exceedingly difficult to escape.

    The New York Times has said that what we are facing is “the worst drug crisis in American history”, and for once I actually agree with the New York Times.

    I have mostly focused on opioids so far in this article, but there are so many other classes of drugs that are also a massive problem in the U.S. right now.

    In fact, federal officials are telling us that meth “is making a big comeback” in this country…

    Meth producers in Mexico are cranking up the speed of production, and the drug is making a big comeback in the U.S.

    “Across the country, it’s probably still the largest problem we have in America,” Derek Maltz, former head of the Drug Enforcement Administration’s (DEA) Special Operations Division, told Yahoo Finance. ”The Mexican cartels… they make it at levels that we’ve never seen before. So business is booming, the country’s addicted, and it’s really, really out of control.”

    “We’re talking super labs,” another former DEA agent, Kevin Hartmann, told a local TV station in Texas. “Super labs that can produce multi hundred kilograms of methamphetamine.”

    Meth is insanely addictive, and it will literally take over your life once you open the door.

    When asked about her multi-year addiction, one opioid addict described it this way

    Erika Haas calls it “the pull.”

    When Haas was 24, her doctor prescribed OxyContin for back pain. She quickly progressed to heroin – and then to methamphetamines. Now 30 and in recovery, she described the grip that meth had over her for more than five years.

    “It’s like God tells you that if you take another breath, your children will die,” she said, shaking her head and trying to hold back tears. “You do everything you can not to take a breath. But eventually you do. That’s what it’s like. Your brain just screams at you.”

    Thanks to decades of border security neglect, the big Mexican drug cartels are able to pump drugs into this country at a staggering rate.

    And now they have apparently come up with a new form of meth that is stronger and cheaper than before

    Primarily imported from Mexico by major drug traffickers, “meth 2.0” is stronger, cheaper and far more plentiful than the old home-cooked variety. And with historic levels of funding from the federal government focused exclusively on fighting opioid addiction, states and counties are scrambling to find resources to combat this most recent drug plague.

    Law enforcement officials are doing the best that they can to fight back, but without sufficient border security it is often a losing battle.

    In South Dakota, they recently came up with a new slogan to show that they are trying to fight back: “Meth. We’re on it.”

    A lot of people got a good laugh out of that, but unfortunately that slogan accurately describes what is happening in community after community all across the United States.

    The ancient Greeks used the word “pharmakeia” to describe the mystical pull that these sorts of drugs can have on people. This is a crisis that just seems to get bigger with each passing year, and it is one of the primary causes for the social decay that we see all around us.

    Those that have been snared by these drugs need our love and compassion, because they are truly victims of a relentless war against our nation. So many lives have already been destroyed, and we desperately need our politicians on the national level to start taking this threat a whole lot more seriously.


    Tyler Durden

    Mon, 12/16/2019 – 20:30

  • PGIM's Hunt Warns Of "Zombie" Future For Asset Management
    PGIM’s Hunt Warns Of “Zombie” Future For Asset Management

    PGIM’s Chief Executive Officer David Hunt spoke with Bloomberg Television on Monday and warned that a zombie apocalypse is set to invade the asset-management industry with at least 80% of firms achieving “zombie” status in the 2020s. 

    “We have never seen such a disparity between winners and losers,” Hunt said during the interview. “The vast majority of firms, if you’re just doing public equities, you’re just doing fixed income, you’re struggling. You’re in outflows, and we don’t see that changing anytime soon.”

    Hunt’s outlook for the industry is rather bleak. He said asset managers have been accustomed to decades of high fees, wide margins, and big salaries. 

    Institutional clients are now demanding lower fees and have allocated money to fewer and fewer asset managers in the last decade. This trend alone threatens to leave managers behind who are underperforming and don’t offer products that offer a wide range of investment exposure. 

    He said the quick rise of passive investing had crushed portfolio managers of active equities. 

    “If you don’t have the performance, you can’t charge the kind of historical fees that you had,” said Hunt, adding that, “If you’re a benchmark-hugging firm, you’re going to be replaced with passive, and so you deserve.”

    Here’s Hunt’s view on the three business models that will thrive in the 2020s: indexing funds such as BlackRock Inc., boutique firms with a concentration in private equity, and multi-asset investors with an international reach. 

    PGIM is the investment arm of insurer Prudential Financial, has an AUM of approximately $1.3 trillion.  

    Hunt and his team focus on public fixed income, real estate debt, and equity/private credit. He expects PGIM to expand more into private equity secondaries and added that his firm wouldn’t be diving into passive products: “We attract really good people, we have a real meritocracy, we support people who have contrarian points of view, sometimes for years, and we encourage people to have non-consensus views,” Hunt said. “We’re oriented toward active outperformance, and we don’t want to dilute that culture.”

    Hunt’s warning could signal that a consolidation wave could strike the industry in the early 2020s. 


    Tyler Durden

    Mon, 12/16/2019 – 20:10

  • The Best And Worst Oil Predictions Of 2019
    The Best And Worst Oil Predictions Of 2019

    Authored by Julianne Geiger via OilPrice.com,

    There’s nothing like wild volatility to destroy the integrity of those high-end bankers and analysts who are brave enough to make oil price predictions year in and year out.

    But the forecasting nightmare doesn’t stop them, even at the worst of times.  

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    In the final month of last year, banks and analysts were brave enough to divulge their predictions for 2019. 

    At that time, the second year of the OPEC agreement was coming to a close; the U.S. had re-imposed sanctions on Iran four months earlier with waiver extensions; and the average price of a Brent barrel for December was changing hands at $56.50, compared to the month earlier average of $65.20. WTI averaged $49 in December 2018. OPEC had agreed to cut production again for 2019.

    So who should we look for when it’s time to forecast what oil prices will do in 2020? That depends on their track record the last time around. 

    Here are some of the best and worst oil price predictions of 2019:

    The World Bank 

    For 2019, the World Bank was one of the first on the scene to provide its outlook in late 2018. 

    The Bank said the most important factor for 2019 would be OPEC, specifically the lack of spare production capacity among OPEC members. This lack of oil production capacity would provide “limited buffers” should there be a sudden shortfall in the supply of oil “raising the likelihood of oil price spikes in 2019.” 

    While WB acknowledged that the world was currently in a state of oversupply, it could swing the other way quickly. In the first month of 2019, the World Bank conservatively predicted that Brent would average $67 per barrel for the year—a $2 per barrel decrease from its June 2018 predictions for 2019. The WB was quick to add that the “uncertainty around this forecast is high.”

    How did they do? Aside from needlessly worrying the market with OPEC’s lack of capacity, it turns out their prediction was a bit high. The average price of the Brent barrel in Q1 2019 was $63.30; for Q2 it was $68.30, and Q3 at $61.90. November’s average was $62.70.

    Citi 

    Citi’s forecast for 2019, also made in December 2018, was more sober-minded, with the bank predicting that Brent would average $60 for the year. It, too, predicted a volatile market for the next year, largely because the U.S., Russia, and Saudi Arabia—the top three oil producers in the world–all had different views as to what that perfect oil price should be. The bank also predicted that oil production in the United States would continue to offset much of what OPEC would cut—a prediction that turned out to be close to reality: US production has increased 1.2 million bpd this year—precisely what OPEC agreed to cut.

    How did they do? Not terrible. Its primary range was for Brent to trade between $55 and $65 per barrel–a generous $10 price range. Even with that big range, oil sat above $65 for the better part of February through May.  

    Bank of America Merrill Lynch (BAML)

    Also in mid-December 2018, BAML took a stab at making Brent price predictions, forecasting that oil would resume its path back up to $70 average in 2019, with a potential for higher prices in Q2. Similar to Citi and World Bank, BAML said that oil prices would be volatile.

    How did they do? It’s hard to argue with the fact that oil indeed appears to be trending upward, which could be interpreted as “resuming its path back up to $70″. And Q2 was in fact higher, with oil prices actually surpassing $70 for a time in April and May.

    However, BAML lost a bit of credibility in our book when it hedged its forecast by saying that “the only certainty is uncertainty.” BAML hedged further in April when it said oil prices had a higher chance of hitting $100 than what the market consensus was, due to OPEC supply cuts, a slowdown in US shale, and IMO 2020 regulations.  

    BAML further watered down its predictions in August when it said oil could fall to $30 or $40 should China decide to import substantial amounts of oil from Iran, despite the US sanctions.

    The EIA

    A month after Citi, WB, and BAML ponied up their predictions, the EIA came out with its own. Its prediction for 2019, provided in its January 2019 Short Term Energy Outlook, was that Brent would average $61 per barrel. Around this time, specifically at the start of the year, Brent was trading at $53.80 and WTI was trading at $45.41.

    How did they do? Not half bad. Brent traded at an average of $61.90 for the 3rd quarter 2019, and November’s average was $62.70—less than $2 off per barrel for a prediction made 11 months ago in a volatile market.

    That’s it for the predictions made at the start of the year. But other predictions along the way, armed with a half a year or more of actual data, are noteworthy as well.

    FX Empire:  Using adaptive dynamic learning (ADL), FX Empire predicted in July of this year that oil prices would rotate between $47 and $64 between July and October, before falling in November and December to a range between $45 and $50. FX Empire said it could actually dip below $40 by the end of 2019, or in early 2020.

    How did they do? FX Empire’s ADL appears to be pretty far off the mark. This CL=F is today trading at $59.42, nearly $20 higher than it’s sub-$40 prediction for the end of the year.

    Goldman Sachs’ Jeff Currie: In October, Currie, head of Goldman’s commodity research, warned that oil prices could fall as low as $20 per barrel for WTI if oversupply were to result in full storage facilities. With nowhere to put it, explains Currie, the price of oil would fall dramatically as production would have to crash.  However, crude oil inventories in the United States are not dramatically up, and are almost even-steven with this time last year, down a total of 1.41 million barrels over the last 50 weeks. Global oil inventories are a different story, though. In Currie’s defense, he did say that there was a less than 50% chance of oil falling below $20 barrel.

    How did they do? By our math, that 50% hedge would have made Goldman correct either way.

    IEA: Piggybacking off Goldman’s October forecast for the oil-inventory-pocalypse, the IEA’s Fatih Birol said that these low prices would force the US to cut production, resulting in a price hike once again. In July, the IEA predicted that slowing oil demand would cap oil prices, and keep them from moving too much higher. At the time, Brent was trading at $63.01, with WTI trading at $56.18.

    How did they do? With Brent trading on December 12 at $64.47, the $1.50 increase comfortably falls within the not-too-much-higher range, so we’d say the IEA’s prediction was spot on.

    Analyst Poll: In August, Reuters polled 51 economists and analysts, who thought Brent would average $65.02 in 2019. At the time, Brent had averaged $65.08, so the $65.02 wasn’t stepping out on a long limb.

    How did they do? Wisely, the analysts cited the US-China trade dispute and risk of an economic slowdown as the reason for its new forecast, which was down from $67.47 for the month before. Still, the price prediction was a bit high.

    RBC Capital Markets: RBC’s Helima Croft in May suggested that Brent could top $80 over the summer due to Iranian tensions.

    How did they do? RBC got it partially right. Iran tensions did indeed escalate. Iran repeatedly made threats to close Hormuz, drone strikes attacked Saudi Aramco’s oil infrastructure, and Iran seized a British oil tanker and held onto it for months. Still, prices didn’t get anywhere near $80. But this isn’t your daddy’s oil market. A year or two ago, tensions in the Middle East—especially ones that are more than just threats, would have sent oil prices soaring. But the market is today permanently spooked with the trade war negotiations with China and slow oil demand growth, meaning these geopolitical risks no longer pack the same punch.

    Iran: In June, a top military aide to Iran’s Supreme Leader issued a prediction which was really more of a warning: that the first bullet fired in the Persian Gulf would push oil prices above $100 per barrel. At the time, oil was trading at $61.67.

    How did they do? Not well. Things did heat up in the Gulf, and bullets—many of them—have been fired over the last month after major fuel protests in Iran. There were also drone strikes over Saudi Arabia that did significant damage to oil infrastructure, which took offline over 5 million bpd. Still, oil got nowhere near $100. 

    Eurasia Group: Henry Rome, a senior analyst at political risk consultancy Eurasia Group, agreed that these same Iranian tensions could push prices above $100, and a major confrontation with Iran “would likely” send prices above $150.  

    How did they do? Even worse than Khamenei’s military aide.

    WSJ Poll: At the end of April, a week or so after the US announced that it would not extend the waivers to buyers of sanctioned Iranian oil, WSJ-polled analysts expected Brent to average $70 per barrel in 2019—an increase of $2 per barrel from its previous poll a month earlier.

    How did they do? Oil was already trading at $70 at the time of their prediction, so it wasn’t really a huge leap of faith at the time. Still, prices failed to get any higher than that for the remainder of the year, rendering their prediction in the far-too-high category.


    Tyler Durden

    Mon, 12/16/2019 – 19:50

  • "You Should Go To Fuc*in' Jail": Chaos Ensues As Schiff Accused Of 'Treason' At California Event
    “You Should Go To Fuc*in’ Jail”: Chaos Ensues As Schiff Accused Of ‘Treason’ At California Event

    A Glendale, California town hall event hosted by Rep. Adam Schiff (D-CA) became less than civil on Saturday, after hecklers accused the House Intelligence Committee chairman of “treason” and being a “liar,” according to the Los Angeles Times.

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    As Schiff began speaking, a man and two women held up signs reading,”Don’t Impeach.” When they were asked to take down the signs, they refused. -LA Times

    Around a dozen Trump supporters attended the event to discuss the House’s recent recognition of the Armenian Genocide. Scattered throughout the audience, the protesters began yelling “Liar!” at the de facto ringleader of House Democrats’ efforts to impeach President Trump. 

    After some aggressive shushing from Schiff supporters, the audience members yelling at Schiff removed their jackets, revealing pro-Trump shirts. One of them then said, “you should go to fuckin’ jail … you will be going to jail, for treason.”

    This man is a fuckin’ liar!” shouted another.

    Watch:

    The outburst lasted around 15 minutes, before the event continued. Three Glendale police officers were present, and no arrests or injuries were reported.

    The event was organized by the Armenian National Committee of America — Western Region to thank the U.S. House of Representatives for recently passing a resolution affirming its recognition of the Armenian genocide and celebrating the U.S. Senate’s passage of the resolution.

    The measure’s passage is considered a rebuke to Trump, who had sought its delay, and to Turkish President Recep Tayyip Erdogan, who had lobbied the White House to block the designation. The Turkish government disputes that a genocide took place.

    Erdogan, in an Oval Office visit last month, warned of dire consequences for the Washington-Ankara relationship if the “genocide” term were to be formalized. The Senate resolution declared it U.S. policy “to commemorate the Armenian Genocide through official recognition and remembrance” and “reject efforts to enlist, engage, or otherwise associate the United States government with denial of the Armenian Genocide or any other genocide.” -LA Times

    “I was grateful for the opportunity to share in the community’s celebration of the historic passage of the Armenian Genocide resolution in both the House and Senate, and thankful for the recognition of the efforts of so many people who made this day possible,” Schiff said in a statement following the event.

    “Unfortunately, some came to the event with the intent to disrupt, but the Armenian community has had to overcome far greater challenges along the road to recognition than to be deterred by a few angry voices.”

    There are more than just a few, from what we gather.


    Tyler Durden

    Mon, 12/16/2019 – 19:30

    Tags

  • Can Democrats Read Minds?
    Can Democrats Read Minds?

    Authored by Sharyl Attkisson , op-ed via The Hill,

    In following the Democrats’ impeachment effort, I have listened to both sides with an open mind, tried to do some original research, and put a lot of thought into the arguments and claims.

    If what the Democrats allege is true, it’s disturbing, indeed.

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    Democrats claim President Trump is corrupt and that he abused his power, primarily because he called the new president of Ukraine and demanded that he find dirt on a Trump political rival — Democratic presidential candidate Joe Biden — to bolster Trump’s chances of winning the 2020 presidential election. The U.S. president acted solely in his own personal political interest, they say, and selfishly sacrificed the nation’s interest.

    Furthermore, Democrats say, what Trump held out as leverage — a quid pro quo — was U.S. taxpayer-funded military aid to Ukraine. They say people died while Ukraine waited for this critical aid, and that it was released only when Trump realized he was in trouble and under investigation. And finally, they say Trump held up a White House meeting with the Ukrainian president until he would commit to announcing an investigation into Biden, in a very public interview with CNN. It’s bribery. Treason. Impeachable.

    The issue I have is that to prove their points, Democrats require us to believe they can read minds.

    President Trump said nothing about a quid pro quo during the phone call in question. He didn’t threaten to hold up aid or a White House meeting. But Democrats say that’s exactly what he meant.

    President Trump didn’t make any expressions of demands in the call. But Democrats say that’s what he meant.

    President Trump didn’t mention the 2020 election or political dirt on the call. He spoke of getting to the bottom of any 2016 foreign election interference under the Obama administration, as Democrats and Republicans have pressed him to do. On the call, Trump spoke of his desire for Ukraine to investigate corruption and whether the Bidens may be connected to any of it. This, said Trump, particularly concerned Joe Biden’s public admission that he demanded a Ukrainian prosecutor be fired and threatened to hold up U.S. taxpayer-funded aid unless it happened within hours. (Biden says the prosecutor wasn’t working hard enough to investigate corruption; Biden’s critics say there was a conflict of interest because the prosecutor was investigating the energy company where Biden’s son was paid to sit on the board.)

    But Democrats say something different than what was said was actually in President Trump’s mind: He was secretly attempting to impact the 2020 campaign. Trump didn’t mention 2020 but, Democrats say, he meant 2020 in his own mind. Trump didn’t allude to political dirt but, they say, that’s exactly what Trump was thinking about.

    Some of the Democrats’ witnesses stated that Trump likely wanted Ukraine’s president to publicly announce a corruption investigation to hold his feet to the fire because the Ukrainians have a habit of committing to one thing but doing another. But Democrats insist Trump had something else in his mind: Trump wanted the public announcement to embarrass and use against Biden in the 2020 campaign. 

    The president of Ukraine has publicly stated, and put in writing, that he felt no pressure from President Trump. But Democrats say the opposite is true. After all, they can read minds.

    President Trump explicitly stated in a private conversation with one of the Democrats’ witnesses that he wanted “no quid pro quo.” But the mind-reading Democrats know Trump meant the opposite; Trump did want a quid pro quo.

    Though Ukrainian experts say a holdup of U.S. aid would not have impacted their ability to fight the Russians, since they manufacture their own lethal weapons (and sell a lot to other countries), the Democrats can read minds: They say people died because of the delay.

    Seeming to disprove the Democrats’ allegations on their face, the Ukrainian president made no public announcement of a corruption investigation on CNN, but the U.S. aid was released anyway. Yet Democrats say they know that President Trump released the aid only because he knew at that point that Congress was investigating him.

    And it’s not just Democrats.

    Each of the Democrats’ witnesses also drew conclusions about President Trump, his supposedly corrupt motivations and thought processes, that would require them to read minds. (Most of them said they’d neither met nor spoken to Trump.)

    Lastly, Democrats can read Joe Biden’s mind, too. They know that when Biden insisted on the firing of the prosecutor investigating his son’s company, that his son didn’t factor into the decision.

    Democrats could be correct on all counts. 

    But I think that from a practical standpoint, it’s difficult to prosecute a serious case based almost solely on the idea that you claim to know what the other guy was thinking.


    Tyler Durden

    Mon, 12/16/2019 – 19:10

    Tags

  • 750 Billion Reasons Why Goldman Is Rooting For Greta Thunberg's Success
    750 Billion Reasons Why Goldman Is Rooting For Greta Thunberg’s Success

    Having lost much of its central banker incubation skills over the past decade, and handing over the crown of Wall Street’s most profitable trading desk to Morgan Stanley, in recent years Goldman Sachs has been best known for enabling and profiting wildly from Malaysia 1MDB criminal fraud, which culminated with the arrest of former Malaysia PM Razak, but not before Goldman made billions in illicit profits from selling bonds offered by the country’s sovereign wealth fund.

    And while Goldman is still waiting to learn its criminal and civil fate, and more importantly, how many billions it will have to pay Malaysia/the DOJ to put its 1MDB fraud in the rearview mirror, the company – which a decade ago was hoping to make billions from aggressively entering the carbon credit/offset market as profiled delightfully in Matt Taibbi’s “The Great American Bubble Machine” – is already scheming how to profit from the latest round of anti-climate change euphoria, conveniently spawned by a 16-year-old child with Asperger’s Syndrome.

    On Monday, Goldman Sachs said it will provide $750 billion in financing, advisory services and investments for initiatives that fight climate change, as well as those that foster economic opportunities for under-served people over the next decade. What Goldman did not say is that it will pocket a generous commission, somewhere in the 3-5% ballpark, by peddling “green” products to naive investors (including central banks) who have fallen for the whole ESG virtue signalling charade.

    The bank also updated its internal environmental policy framework to rule out providing financing to any new projects that will drill for oil in the Arctic or that create new thermal coal plants or new thermal coal mines. Of course, the destructive consequences of the bank’s involvement in the 1MDB scandal would be quietly excluded from this virtuous charade.

    Ironically, Goldman’s policy changes come just as the United Nations concludes a conference that failed to ramp up efforts to combat global warming, according to Reuters.

    Goldman CEO David Solomon announced the plans in an editorial in the Financial Times, where he wrote that there is “a powerful business and investing case” for the bank to take steps to address climate change and the growing worldwide opportunity gap. Very powerful: having failed to make almost any money from the bank’s last foray into carbon tax and cap-and-trade, Goldman is now seeking to directly appeal to fellow fake virtue signalers, who in turn will hope to extract capital from naive investors pursuing the oh so noble goal of only investing in green, renewable, and “clean” (whatever that means) projects. Goldman’s bottom line, assuming a blended 3% commission on the $750BN in financial services it sells to gullible clients, works out to about $22.5 billion – a “powerful business case” indeed.

    Additionally, Goldman emphasized that it will not pass up any significant amount of revenue as a result of the $750 billion commitment and the ban on financing certain drilling and coal activities. A Goldman Sachs executive said on a call with reporters that the bank has not financed any projects like those in recent memory. However, since US shale producers, most of whom are funded by the ultra-generous US junk bond market, are hardly losing sleep, it only means that other, less “virtuous” banks will be delighted to pocket a far higher commission by stepping into the “dirty” market where ESG virtue signalers now refuse to tread.

    And speaking of drilling and coal activities, the bank said it has a rigorous due-diligence process that takes into consideration, among other things, impacts on endangered species and indigenous populations, the executive said.

    The $750 billion commitment will be deployed in several ways, including by investing in and advising companies to take steps to reduce their carbon emissions and become more sustainable, the bank said. For example, earlier this year Goldman worked with Italian electricity company Enel to raise $1.5 billion through a bond offering that linked the investments to Enel’s commitment to increase its renewable energy base by 25% before 2022.

    Translation: Goldman made about $15 million selling a bunch of bonds to a bunch of “green” liberals managing other liberals’ money. Because when central banks have taken over the market and Goldman’s own trading desk is shrinking quarter after quarter, and when the coming negative rates will make Goldman’s recent investment into retail banking a disaster, one can always make money betting on liberal guilt, and nobody knows this better than Goldman Sachs… and Greta Thunberg.

    And just in case Thunberg falls short of sparking the next major revenue driver on Wall Street, there is always the Fed. On Monday, the San Fran Fed published a paper titled “The Economics of Climate Change: A First Fed Conference” in which the authors concluded that “the economic consequences of climate change are likely to be substantial and will require responses from a wide range of policy institutions”. More importantly, they will make tens of billions in revenue for such idealistic, progressive, “green” organizations as Goldman Sachs.

    * * *

    In parting, we remind readers what Matt Taibbi wrote about “the  great vampire squid wrapped around the face of humanity” almost a decade ago: “From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression — and they’re about to do it again.” Fast forward ten years when, with the help of Greta, Goldman is about to do it all over again.


    Tyler Durden

    Mon, 12/16/2019 – 18:50

  • Is The Death Of 'Wokesterism' Upon Us?
    Is The Death Of ‘Wokesterism’ Upon Us?

    Authored by James Howard Kunstler via Kunstler.com,

    An Expulsion Of Demons

    Is there any saving the Democratic Party? This wretched concatenation of ill-will, bad faith, false witness, and sore-loserdom lurches from one defeat to the next like some mindless monster from an ancient fable of ruin, seeking a final spectacular spasm of self-annihilation. Let’s face it: only an exorcism will do, some spiritual emetic to induce the projectile vomiting of all that borscht the monster has swallowed.

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    The “progressive” (not) Resistance took two body-blows last week, one foreign and one domestic.

    • Its cousin in Britain, the Labor Party, led by the red-headed stepchild of a Marxist-Jihadi chimera, Jeremy Corbyn, got such an unexpected and mighty thrashing at the hands of BoJo that it virtually dissolved into a little puddle of bile on the floor of parliament. Corbyn was a piece of work, a cheerleader for Hezbollah and other enemies of western civ, with a zealous antipathy to economic reality, spreading the virus of identitarian Wokesterism that has infected Britain like a plague of yore. Surely the American Dems noticed how that went down.

    • The Horowitz report also staggered the monster lurching across America, though it took a few days to absorb the blow of countless incriminating details in the fine print. UkraineGate maestro Adam Schiff went on TV Sunday to declare that he had been “unaware” of abuses in the FISA warrant process. Gee, ya think? We are left to wonder who exactly pulled the wool over his goggle-eyes. In fact, his self-unawareness extends to virtually every utterance flying out of his pie-hole since 2016. The IG report left the FBI and DOJ in such a shambles of criminal odor that it dispelled all the narrative curses conjured by sorcerers in the news media for three years running. And as everyone in the country knows now, the IG report is hardly the end of the story. Mr. Horowitz labored under — as they say — an extremely narrow purview that will not constrain the legal audit to come.

    Meanwhile, the impeachment dumbshow put on by hobgoblin Jerrold Nadler enters a most interesting zone of suspense this week as fate propels it towards a floor debate and then a vote by the whole house on Wednesday or Thursday. That’s a lot of time for members to reflect on the message sent to the voters by last week’s IG report — namely, that the investigative arms of government are so deeply corrupt and malicious that only fools and cads will go along with their findings, and that the distrust extends to the committees in congress who swallowed all that seditious malfeasance in pursuit of impeachment. That might give the vapors to enough congresspersons in swing districts to bring the actual floor vote for impeachment up short. If the case against General Michael Flynn is dismissed as it should be by the IG’s report of broad prosecutorial misconduct — and possibly at any moment now — that could seal the deal against an impeachment vote.

    How much ignominy can they endure? Have they not grasped the reality that the Mueller investigation failed? That it appears to have been only one part of a larger criminal enterprise to defraud the public? That the Resistance was just an effort to cover up swales of wickedness in a greater swamp of government-gone-rogue? And now, to come to this: two articles of impeachment so transparently empty that they look like windows into vacated soul of the Democratic Party.

    And now consider all this vectoring into the catastrophe that the Democratic primary has become heading into election 2020. Joe Biden? Really? Are they serious? He left a slime trail as wide as the DC Beltway around his doings as Veep, with enough video evidence to make the College of Cardinals weep for his post-mortal prospects. Elizabeth Warren and Bernie Sanders might be moved to study up on what just happened in the UK election, and weigh how US voters might be disposed to another four-year beat-down with the cudgels of inclusion and diversity plus the shady blandishments of free everything. And what else can you show me? Mayor Pete and Cory Booker, two pieces of defective merchandise cluttering up the showroom?

    This solemn holiday may be the Democrat Party’s last chance to avoid suicide. They need to have a conversation with someone on the cosmic hotline, come to the realization that they’ve truly hit bottom now and must, as Rep Devin Nunes suggested Sunday to his colleague Adam Schiff, sign into rehab.


    Tyler Durden

    Mon, 12/16/2019 – 18:30

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  • US Secretly Expelled Chinese Officials Who Breached 'Sensitive' Virginia Facility
    US Secretly Expelled Chinese Officials Who Breached ‘Sensitive’ Virginia Facility

    The United States quietly expelled two Chinese Embassy officials from the country after a September incident in which they were caught entering a sensitive US military facility in Virginia

    According The New York Times, at least one is believed to be an intelligence officer under diplomatic cover. Interestingly, the officials’ wives were accompanying them when they drove onto to the as yet unidentified military facility, and the group actually attempted to flee military personnel pursuing them

    They were reportedly apprehended after fire trucks blocked their path, according to the report. Their subsequent expulsion by US authorities marks the first time Chinese diplomats suspected of espionage have been booted from the country in over three decades. The last such episode happened in 1987.

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    File image of Naval Station Norfolk, via Yelp. Multiple sensitive military and government facilities are in the area, and it’s as yet unknown exactly which site was breached.

    The Times report says the strange incident is part of a broader pattern of “bolder” efforts by Chinese diplomatic personnel to infiltrate government and research facilities:

    The episode in September, which neither Washington nor Beijing made public, has intensified concerns in the Trump administration that China is expanding its spying efforts in the United States as the two nations are increasingly locked in a geopolitical and economic rivalry. U.S. intelligence officials say China poses a greater espionage threat than any other country.

    In recent months, Chinese officials with diplomatic passports have become bolder about showing up unannounced at research or government facilities, American officials said, with the infiltration of the military base only the most remarkable instance.

    The incident resulted in the State Department imposing stricter travel regulations on Chinese diplomatic personnel in the US, resulting in a protest from Beijing.

    This included new requirements for the embassy to notify US authorities anytime a meeting with US or state officials is arranged, or anytime a visit to a government or educational facility will take place. 

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    Chinese Embassy in Washington D.C., via Getty Images.

    Beijing has for years imposed even stricter requirements on US personnel in China. And we can only imagine the outrage and major ‘international incident’ headlines which would ensue if Americans did the same inside China, based on the following further details of the September incident:

    The Chinese officials and their wives drove up to a checkpoint for entry to the base, said people briefed on the episode. A guard, realizing that they did not have permission to enter, told them to go through the gate, turn around and exit the base, which is common procedure in such situations.

    But the Chinese officials instead continued on to the base, according to those familiar with the incident. After the fire trucks blocked them, the Chinese officials indicated that they had not understood the guard’s English instructions, and had simply gotten lost, according to people briefed on the matter.

    Military personnel said they were skeptical of the “gotten lost” excuse, and suspected they were conducting an experimental breach of the base’s security. 

    The report only identified the location as being near Norfolk, Virginia, and as housing Special Operations forces. One such base in the area described includes the headquarters of the Navy’s elite SEAL Team Six; however, it’s as yet unconfirmed the precise facility which was breached. 


    Tyler Durden

    Mon, 12/16/2019 – 18:10

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Today’s News 16th December 2019

  • Hillary Clinton's Six Foreign-Policy Catastrophes
    Hillary Clinton’s Six Foreign-Policy Catastrophes

    Authored by Eric Zuesse for The Saker Blog,

    INTRODUCTION TO THIS UPDATED REPUBLICATION

    Though Hillary Clinton will, of course, be the direct topic here, we are now in the primaries-season for the 2020 elections, and almost all of the contenders for the Democratic Party nomination — and especially Biden, Buttigieg, and all of the others, except for Sanders and Gabbard — are foreign-policy clones of Ms. Clinton and of her former boss Mr. Obama. Therefore, Democrats should know what type of foreign policies they would be voting for, if they will be voting for such a candidate, as she and Obama both were. The foreign policies, that are documented here, were, after all, their foreign policies — not their campaign-rhetoric, but the actual, delivered, reality. This article describes that reality, up through the end of Obama’s first term. All of these policies were continued into Obama’s second term, which began in 2013. 

    This article was, in a shorter version, first published at Huffington Post on 16 August 2013, which had been copied to the Wayback Machine 198 times before being taken down by HuffPo sometime after 4 November 2019, the last copy that was made of it to the Wayback Machine. That article was, however, updated and expanded on 21 February 2016 at RINF.com and a few other sites. Between 2016 and now, around half of the links in that updated version became no longer functional; and, so, the 21 February 2016 version is now being restored again, here, as having 100% currently functioning links to the sources. 

    These were Hillary Clinton’s actual foreign policies, and are the foreign policies of Biden, Buttigieg, Warren, and most other Democratic Presidential candidates. Republicans might be even worse, but this article represents today’s Democratic Party foreign policies — the ugly truths, not the pretty promises. As you will see, there is unfortunately method in their madness. However, Democratic Party voters are just as closed-minded about the Democratic Party as Republican Party voters are about the Republican Party: for example, the reader-comments to this article, when it was excerpted on 22 February 2016 at the Democratic Party website Daily Kos, blamed some of the article’s named functionaries, underlings, but not the principals (Hillary Clinton and Barack Obama), and not the Democratic Party, whose policies these were — the policies of their own Party. It’s always only “the other Party” that’s rotten, not also “my Party” — not both halves of our’ Government. It’s always only “the other guy” that needs to be replaced, not the rotten and corrupt, actually dictatorial, system. And this is how the rot continues on, instead of being replaced. It’s that self-deceit, which enables this rot to continue. 

    Here’s the article:

    HILLARY CLINTON’S SIX FOREIGN-POLICY CATASTROPHES

    Many commentators have here and here and here and here) that Hillary Clinton left behind no major achievement as the U.S. Secretary of State; but, actually, she did. Unfortunately, all of her major achievements were bad, and some were catastrophic. Six countries were especially involved: HondurasHaitiAfghanistanLibyaSyria, and Ukraine. The harm she did to each country was not in the interest of the American people, and it was disastrous for the residents there.

    Hillary Clinton at every campaign debate says “I have a better track-record,” and that she’s “a progressive who gets things done.” Here’s what she has actually  done, when she was Secretary of State; here’s her track-record when she actually had executive responsibility for U.S. foreign-affairs. This will display her real values, not just her claimed  values:

    SUMMARY OF THE CASE TO BE PRESENTED

    The central-American nation of Honduras is ruled today by an extremist far-right government, a fascist junta-imposed government, because of what Hillary Clinton and Barack Obama did in 2009. The lives of all but the top 0.001% of the population there are hell because of this. But the country’s aristocracy, or “oligarchy,” are doing fine.

    The matter in Haiti was similar but less dramatic, and so it received even less attention from the U.S. Press.

    Furthermore, under Secretary of State Clinton, failures at the U.S. Department of State also caused the basis for a hatred of the United States to soar in Afghanistan after the U.S. has drawn down its troops there. This failure, too, has received little coverage in the U.S. press, but our nation will be paying heavily for it long-term.

    Hillary Clinton was the Administration’s leading proponent of regime-change, overthrowing Muammar Gaddafi in Libya. That worked out disastrously.

    Clinton was also the Secretary of State when the 2006-2010 drought was causing massive relocations of population in Syria and U.S. State Department cables passed along up the chain of command — and the U.S. Government ignored them — the Assad government’s urgent request for aid from foreign governments to help farmers stave off starvation. The Clinton State Department ignored the requests and treated this as an opportunity to foment revolution there. It wasn’t only the Arab Spring, in Syria, that led to the demonstrations against Assad there. Sunni jihadist fighters streamed into Syria, from around the world, backed by the U.S., Saudi Arabia, Qatar, and Turkey. The U.S. was, in effect, assisting jihadists to oust the non-sectarian, secular Shiite leader of Syria and replace him with a fundamentalist Sunni dictator.

    The groundwork for a coup d’etat in Ukraine was laid by Hillary Clinton, when she made her State Department’s official spokesperson Victoria Nuland, who had been the chief foreign-affairs advisor to Vice President Dick Cheney. Nuland then became the organizer of the 20 February 2014 coup in Ukraine, which replaced a neutralist leader of Ukraine, Viktor Yanukovych, with a rabidly anti-Russian U.S. puppet, Arseniy Yatsenyuk, and a bloody civil war. Nuland is obsessed with hatred of Russia.

    On top of all that, Hillary Clinton is incredibly corrupt. And she treats subordinates like trash.

    No well-informed Democrat will vote for her in the Democratic Party primaries. Here is what voters in the Democratic primaries need to know, before they vote:

    HONDURAS

    On 28 June 2009, the Honduran military grabbed their nation’s popular democratically elected progressive President, Manuel Zelaya, and flew him into exile.

    The AP headlined from Tegucigalpa the next day, “World Leaders Pressure Honduras to Reverse Coup,” and reported: “Leaders from Hugo Chavez to Barack Obama called for reinstatement of Manuel Zelaya, who was arrested in his pajamas Sunday morning by soldiers who stormed his residence and flew him into exile.”

    Secretary Clinton, in the press conference the day after the coup, “Remarks at the Top of the Daily Press Briefing”, refused to commit the United States to restoration of the democratically elected President of Honduras. She refused even to commit the U.S. to using the enormous leverage it had over the Honduran Government to bring that about.

    Here was the relevant Q&A:

    Mary Beth Sheridan. QUESTION: Madam Secretary, sorry, if I could just return for a second to Honduras, just to clarify Arshad’s point – so, I mean, the U.S. provides aid both under the Foreign Assistance Act and the Millennium challenge. So even though there are triggers in those; that countries have to behave – not have coups, you’re not going to cut off that aid?

    SECRETARY CLINTON: Well, Mary Beth, we’re assessing what the final outcome of these actions will be. This has been a fast-moving set of circumstances over the last several days, and we’re looking at that question now. Much of our assistance is conditioned on the integrity of the democratic system. But if we were able to get to a status quo that returned to the rule of law and constitutional order within a relatively short period of time, I think that would be a good outcome. So we’re looking at all of this. We’re considering the implications of it. But our priority is to try to work with our partners in restoring the constitutional order in Honduras.

    QUESTION: And does that mean returning Zelaya himself? You would insist on that in order to –

    SECRETARY CLINTON: We are working with our partners.

    She refused to answer the question, even though Zelaya had been an ally of the U.S., a progressive democrat. (Though Republicans decried Zelaya for pushing land-reform, the fact is that Honduras is virtually owned by two dozen families, and drastically needs to drag itself out of its feudal system. Doing that isn’t anti-American; it’s pro-American. It’s what Zelaya was trying to do, peacefully and democratically.

    Our nation’s Founders fought a Revolution to overthrow feudalism – British – in our own country. Hillary was thus being anti-American, not just anti-democratic, here. This is stunning. The U.S had even been outright bombed by fascists, on the “day that will live in infamy,” December 7, 1941; and, then, we spilled lots of blood to beat those fascists in WWII. What was that war all about, if not about opposing fascism and fascists, and standing up for democracy and democrats? A peaceful democratic U.S. ally had now been overthrown by a fascist coup in Honduras, and yet Hillary Clinton’s response was – noncommittal?

    The coup government made no bones about its being anti-democratic. On July 4th of 2009, Al Giordano at Narcosphere Narconews bannered “Honduras Coup Chooses Path of Rogue Narco-State”, and he reported that, “Last night, around 10 p.m. Tegucigalpa time, CNN Español interrupted its sports news programming for a live press conference announcement (‘no questions, please’) by coup ‘president’ Micheletti. There, he announced that his coup ‘government’ of Honduras is withdrawing from the Democratic Charter of the Organization of American States. … The Honduras coup’s behavior virtually assures that come Monday, the US government will define it as a ‘military coup,’ triggering a cut-off of US aid, joining the World Bank, the Inter-American Development Bank, PetroCaribe, the UN and the rest of the world in withdrawing economic support for the coup regime.” But that didn’t happen. The U.S. just remained silent. Why was our Secretary of State silent, even now?

    It certainly couldn’t have been so on account of her agent on the ground in Honduras, the U.S. Ambassador to that country: he was anything but noncommittal. He was fully

    American, not at all neutral or pro-fascist.

    Here was his cable from the U.S. Embassy, reviewing the situation, for Washington, after almost a month’s silence from the Administration:

    From: Ambassador Hugo Llorens, U.S. Embassy, Tegucigalpa, Honduras, 24 July 2009.

    To: Secretary of State, White House, and National Security Council.

    SUBJECT: TFHO1: OPEN AND SHUT: THE CASE OF THE HONDURAN COUP”

    This lengthy message from the Ambassador closed:

    The actions of June 28 can only be considered a coup d’etat by the legislative branch, with the support of the judicial branch and the military, against the executive branch. It bears mentioning that, whereas the resolution adopted June 28 refers only to Zelaya, its effect was to remove the entire executive branch. Both of these actions clearly exceeded Congress’s authority. … No matter what the merits of the case against Zelaya, his forced removal by the military was clearly illegal, and [puppett-leader Roberto] Micheletti’s ascendance as ‘interim president’ was totally illegitimate.”

    On the same day when the Ambassador sent that cable, AFP headlined “Zelaya ‘Reckless’ to Return to Honduras: Clinton”, and reported that our Secretary of State criticized Zelaya that day for trying to get back into his own country. “‘President Zelaya’s effort to reach the border is reckless,’ Clinton said during a press conference with visiting Iraqi Prime Minister Nouri al-Maliki. … Washington supports ‘a negotiated peaceful solution to the Honduran crisis,’ Clinton said.” It wasn’t “the Honduran coup” – she wouldn’t call it a “coup” – it was “the Honduran crisis”; so, she accepted the junta’s framing of the issue, not the framing of it by Zelaya and everyone other than the fascists. She wanted “a negotiated peaceful solution” to the forced removal at gunpoint of Honduras’s popular democratically elected President. Furthermore, Hillary’s statement here was undiplomatic: if she had advice for what the elected President of Honduras ought to be doing, that ought to have been communicated to him privately, not publicly, and said to him by suggesting what he ought to do, not by insulting what he already was doing, publicly calling it “reckless.” Such a statement from her was clearly not meant as advice to help Zelaya; it was meant to – and did – humiliate him; and diplomats around the world could see this. Manifestly now, Hillary Clinton supported the fascists. However, her boss, the U.S. President, stayed silent.

    During the crucial next two weeks, Obama considered what to do. Then, on 6 August 2009, McClatchy newspapers bannered “U.S. Drops Call to Restore Ousted Honduran Leader” and Tyler Bridges reported that Zelaya wouldn’t receive U.S. backing in his bid to be restored to power. Though all international organizations called the Honduran coup illegitimate, and refused to recognize the leader chosen by its junta, the Obama Administration, after more than a month of indecision on this matter, finally came out for Honduras’s fascists. According to James Rosen of McClatchy Newspapers three days later, the far-right Republican U.S. Senator Jim DeMint had “placed a hold on two nominees to senior State Department posts to protest Obama’s pushing for ousted Honduran President Manuel Zalaya’s return to power, which the administration backed away from last week.” Obama, after a month of silence, caved silently. Instead of his using the bully pulpit to smear the fascist DeMint publicly with his fascism, Obama just joined him in it, silently. Why?

    Perhaps it was because the chief lobbyist hired in the U.S. by the Honduran aristocracy (whose thugs had installed this new Honduran government), was Hillary’s old friend, Lanny Davis. As slate.com had said on 27 August 2008, headlining “A Day in the Life of Hillary’s Biggest Fan”: “When it comes to defending Hillary Clinton, Lanny Davis has no rival.” He was the fascists’ fixer inside the Obama Administration. On 9 July 2009, The Hill bannered “Hondurans Lobby Against Deposed Leader” and reported that Honduras’s equivalent of the U.S. Chamber of Commerce (which was controlled by those two-dozen families) had hired “Lanny Davis, the former special counsel to President Bill Clinton,” and that, “The lobbying blitz began [6 July] Monday, one day before Zelaya met with Clinton as part of his push to be reinstated.” Lanny Davis had had his input to Hillary even before President Zelaya did. Moreover, The Hill reported that, “17 Republican senators, including Minority Leader Mitch McConnell (Ky.) [and DeMint] wrote Secretary Clinton and asked her to meet with officials from the interim government of Honduras.” America’s Republican leadership were immediately and strongly supporting Honduras’s fascists. This Republican Senators’ letter attacked “the rush to label the events of June 28th a coup d’etat,” and said that it instead reflected “‘the universal principle that people should choose their own leaders.’ In a 125-3 vote, the Honduran Congress approved of the actions taken to remove Mr. Zelaya from office and install Mr. Micheletti.” (The article “2009 Honduran coup d’état” at wikipedia says that after the military seized the President on June 28th, “Later that day, the Honduran Congress, in an extraordinary session, voted to remove Zelaya from office, after reading a false resignation letter attributed to President Zelaya.” A link to the forged letter was provided. To Republicans, that is how democracy is supposed to operate, not a “coup.” Just masked men with machine guns, and then forged documents and well-connected foreign lobbyists. The U.S. Ambassador’s cable on July 24th was emphatic that the “bogus resignation letter dated June 25 that surfaced after the coup” should be publicly recognized as bogus. But it wasn’t.)

    So, the Honduran aristocracy (mainly the Facussé, Ferrari, Canahuati, Atala, Lamas, Nasser, Kattan, Lippman, and Flores, clans) had purchased a line straight to the U.S. Secretary of State, via Mr. Davis. And Obama caved. On 13 August 2009, Mark Weisbrot of the Center for Economic and Policy Research headlined a Sacramento Bee op-ed “Obama Tacitly Backs Military’s Takeover of Honduran Democracy” and he reported that the Administration’s recent “statements were widely publicized in the Honduran media and helped to bolster the dictatorship. Perhaps more ominously, the Obama administration has not said one word about the atrocities and human rights abuses perpetrated by the coup government. Political activists have been murdered, independent TV and radio stations have been shut down, journalists have been detained and intimidated, and hundreds of people arrested.” There was now, again as under Bush, widespread revulsion against the U.S. throughout Latin America. Also on the 13th, Dick Emanuelson, at the Americas Program of the Center for International Policy, headlined “Military Forces Sow Terror and Fear in Honduras” and he described in Honduras a situation very much like that which had occurred in Argentina when the generals there took over in 1976 and rounded up and “disappeared” leaders who constituted a threat to the aristocracy’s continued rule in that country.

    The U.S. was now the only power sustaining the Honduran junta’s government. Hillary had said “We are working with our partners,” but she lied. It turned out that the U.S. was instead working against “our partners” – against virtually all of the world’s democratic nations. Brazil Magazine headlined on August 13th, “Brazil Urges Obama to Tighten the Vise on Honduras to Get Zelaya Back” and reported that Brazilian President Luiz Inacio Lula da Silva had urged President Obama to come out publicly for the “immediate and unconditional” restoration of Zelaya to office. It didn’t happen, however; and on Friday, August 21st, Mark Weisbrot thus bannered in Britain’s Guardian“Obama’s Deafening Silence on Honduras: Seven weeks after the coup in Honduras, the US is hindering efforts to restore President Manuel Zelaya to power.” Weisbrot documented lies from the Obama Administration regarding the coup; and he noted, “The one thing we can be pretty sure of is that no major US media outlet will look further into this matter.” He was assuming that the U.S. had a controlled press, and it seems that he was correct, except for the McClatchy Newspaper chain, which courageously reported on the Honduran horrors.

    Obama was lying – not even acknowledging that the coup was a coup – even though (as Weisbrot pointed out) “on Wednesday, Amnesty International issued a report documenting widespread police beatings and brutality against peaceful demonstrations, mass arbitrary arrests and other human rights abuses under the dictatorship. The Obama administration has remained silent about these abuses — as well as the killings of activists and press censorship and intimidation. To date, no major [U.S.] media outlet has bothered to pursue them.” America’s aristocracy were clearly supporting Honduras’s.

    Nearly a hundred scholars signed a public letter saying that if only the U.S. were to come out clearly against the coup, “the coup could easily be overturned”, because only the U.S. was keeping the coup regime in power (via banking and other crucial cooperation with the coup government). The U.S. was key, and it chose to turn the lock on the Honduran prison, and leave its victims to be murdered.

    During the following months, as the shamefulness of America’s position on this became increasingly untenable, Obama seemed to be gradually tilting back away from the coup in Honduras. However, Senator DeMint and some other Republicans travelled to Honduras and spoke publicly there against the U.S. Government, and endorsed the coup-installed Honduran leadership. DeMint headlined in Rupert Murdoch’s Wall Street Journal, on 10 October 2009, “What I Heard in Honduras” and he wrote: “In the last three months, much has been made of a supposed military ‘coup’ that whisked former Honduran President Manuel Zelaya from power and the supposed chaos it created. After visiting Tegucigalpa last week and meeting with a cross section of leaders, … I can report there is no chaos there. … As all strong democracies do after cleansing themselves of usurpers, Honduras has moved on.” All governments in the hemisphere except the U.S. labeled the coup a “coup,” but DeMint and other top Republicans such as Mitch McConnell simply denied that it was. DeMint received ovations in Washington, at the far-right Heritage Foundation, which he now heads. This U.S. Senator condemned Zelaya there as “a deposed would-be Marxist dictator,” and he referred to the junta as “friends of freedom.” He condemned Obama by indirection, as being the enemy, who led “an American foreign policy unmoored from our commitment to human rights and human freedom and tied instead to the President’s personal ambition,” perhaps communist. Obama remained silent, in the face of these lies against both Zelaya and himself.

    The assertion by Republicans that the coup was not a “coup” was a blatant lie. Everyone worldwide except America’s Republicans (and the official U.S. regime) referred to it as a “coup.” Furthermore, Ambassador Llorens in Tegucigalpa was constantly speaking with leaders (but only leaders) of business, religious, civic, and other organizations throughout Honduras, and everyone he spoke with stated his position in regards to the “coup.” For example (from the Embassy cables), “Monsignor Juan Jose Pineda, the Auxiliary Bishop of Tegucigalpa … stated that the Church had not taken sides in relation to the coup d’etat,” but “vociferously condemned the poor treatment of the Church by what he believed to be elements of the anti-coup movement.” And the leaders of two conservative political parties “argued that anti-coup protests have not been peaceful.” Only America’s Republicans lied that it hadn’t been a “coup.” Not even Republicans’ friends in Honduras, the fascists there, did. It was a coup. Republicans simply lied, as usual. (This is why Fox “News” has been found in every study to have the most-misinformed audience of any major news medium – they’re being lied to constantly.)

    On 5 October 2009, Jason Beaubien of NPR headlined “Rich vs. Poor at Root of Honduran Political Crisis”, and he reported that, though Honduran conservatives were charging that Zelaya secretly intended to make Honduras into a communist dictatorship, the actual situation in Honduras was, as explained by an economics professor there, that “power in Honduras is in the hands of about 100 people from roughly 25 families. Others estimate that Honduran elite to be slightly larger, but still it is a tiny group.” This professor “says the country’s elite have always selected the nation’s president. They initially helped Zelaya get into office, and then they orchestrated his removal” when President Zelaya pressed land- and other- reforms. If communists would ever come to power in Honduras, it will be because of fascists’ intransigence there, not because of progressives’ attempts to end the hammer-lock of the local feudal lords.

    Adolf Hitler similarly used a popular fear of communism to persuade conservative fools to vote for himself and for other fascists; but fascists and communists are alike: enemies of democracy. This hasn’t changed. Nor has The Big Lie technique that fascists still use.

    Then, on 6 October 2009, The New York Times bannered “Honduran Security Forces Accused of Abuse.” (“Abuse” had also been the term that the Times and other major media employed for torture when George W. Bush did it, but now they applied this euphemism to the outright murders perpetrated by Honduras’s junta.) Such “abuse” was “news” to people inside the United States, but not to the people in other nations around the world, where the horrors in Honduras were widely publicized. Also on October 6th, narcosphere.narconews.com/ headlined “Poll: Wide Majority of Hondurans Oppose Coup d’Etat, Want Zelaya Back,” and Al Giordano reported “the first survey to be made public since a July Gallup poll showed a plurality of Hondurans opposed the coup d’etat.” This poll of 1,470 randomly chosen Honduran adults found 17.4% favored the coup, 52.7% opposed it. 33% opposed Zelaya’s return to power; 51.6% favored it. 22.2% wanted the coup-installed leader to stay in power; 60.1% wanted him to be removed. 21.8% said the National Police were not “engaging in repression”; 54.5% said they were repressing. Furthermore, the survey found that “the two national TV and radio stations shut down by the coup regime happen to be the most trusted news sources in the entire country.” Finally, approval ratings were tabulated for the twenty most prominent political figures in the country, and Zelaya and his wife were rated overwhelmingly above all others, as, respectively, #1 and #2, the two most highly respected public figures in Honduran politics.

    An American visitor to Honduras posted online photos of the country prior to Zelaya’s Presidency, and he described them: “It took me awhile to get used to the sight of heavily armed guards and policemen everywhere. … Every supermarket we visited had an armed guard, carrying a shotgun, patrolling the parking lot. Most restaurants or fast food establishments we visited, such as Pizza Hut, had an armed guard in the parking lot. … Only 30% of the people have wealth. The other 70% are poor. Being rich in Honduras can be dangerous. That is why most rich people live in walled or fenced compounds. … And they all have armed guards on the grounds.” This is the type of society that Wayne LaPierre and other officials of the NRA describe as the ideal – every man for himself, armed to the teeth. Republicans, like Honduras’s aristocrats, want to keep such a Paradise the way it is; but the vast majority of Hondurans do not – they want progress.

    Naturally, therefore, the U.S.’s Republican Party was overwhelmingly opposed to Zelaya, and were thus opposed to the Honduran public, who didn’t like their feudal Paradise. Obama remained remarkably silent on the matter. The Obama Administration brokered a supposed power-sharing deal between Zelaya and the coup government, but it fell apart when Zelaya learned that Obama actually stood with the fascists in letting the coup government oversee the imminent election of Honduras’s next President – which would give the “election” to the fascists’ stooge. On 5 November 2009, the Los Angeles Times headlined an editorial “Obama Must Stand Firm on Honduran Crisis: A U.S.-brokered deal to return Honduran President Manuel Zelaya to office is unraveling, and the Obama administration seems to be wavering.” They closed by saying: “If the Obama administration chooses to recognize the [winner of the upcoming] election without Zelaya first being reinstated [with powers to participate in overseeing the vote-counting], it will find itself at odds with the rest of Latin America. That would be a setback for democracy and for the United States.” But it’s exactly what Obama did. On 9 November 2009, McClatchy Newspapers bannered “Honduran Deal Collapses, and Zelaya’s Backers Blame U.S.” Tyler Bridges reported that Senator DeMint now dropped his objections to a key State Department appointment, when the appointee, Thomas Shannon (and also Secretary of State Hillary Clinton herself), made clear that the Obama Administration agreed with DeMint. Thus, “Zelaya’s supporters, who’ve been organizing street protests against the [coup-installed] Micheletti regime, are down to their final card: calling on Hondurans to boycott the elections.”

    On 12 November 2009, the Washington Post bannered “Honduras Accord Is on Verge of Collapse” and quoted a spokesperson for U.S. Senator John Kerry, head of the Senate Foreign Relations Committee, saying: “The State Department’s abrupt change in policy last week — recognizing the elections scheduled for November 29th even if the coup regime does not meet its commitments under the Tegucigalpa-San Jose Accord — caused the collapse of an accord it helped negotiate.” (Let’s hope that Kerry will turn out to be a better Secretary of State than his predecessor was.)

    A week later, on November 19th, the Latin American Working Group bannered “Honduras: Things Fall Apart” and summarized the joint culpability of the Obama Administration, and of the Honduran fascists.

    On 29 November 2009, the Heritage Foundation bannered “Heritage in Honduras: ‘I Believe in Democracy’,” and Big Brother propagandized: “Today the Honduran people are voting in an historic election with consequences for the entire region. Heritage’s Izzy Ortega is on the ground as an official election observer speaking with Hondurans practicing their right to vote. Watch his first interview below.” A typical reader-comment posted there was “I want WE THE PEOPLE back in the United States. For once in my life I’am jealous of another country!” Conservatives wanted fascism in the U.S.A. – not only in Honduras. Of course, the aristocracy’s stooge was “elected” in Honduras. (Zelaya wasn’t even a candidate in this “election.” Most democratic countries throughout the world did not recognize the results of this “election.” However, the U.S. did; and so did Israel, Italy, Germany, Japan, Peru, Costa Rica, and Panama.)

    By contrast, on the same day, Costa Rico’s Tico Times headlined “Peaceful March Faces ‘Brutal Repression’ in San Pedro Sula” Honduras. Mike Faulk reported that, “About 500 people marching peacefully in the northwestern city of San Pedro Sula were repressed by tear gas and water cannons on Election Day today.” The next day, Agence France Presse headlined “Conservatives Win Honduran Election,” and reported that “Conservative Porfirio Lobo has claimed a solid win. … The United States was quick to underline its support.” Barack Obama was the leading (virtually the only) head-of-state supporting the Honduran fascist transfer of power to their new “elected” Honduran President. The major “news” media in the U.S. deep-sixed what was happening in Honduras, but the Honduran situation was widely reported elsewhere. Typical of the slight coverage that it did receive in the U.S., the Wall Street Journal bannered on November 26th, “Honduras Lurches Toward Crisis Over Election”, and their “reporter,” Jose de Cordoba, opened, “Honduran President Manuel Zelaya’s push to rewrite the constitution, and pave the way for his potential re-election, has plunged one of Latin America’s poorest countries into a potentially violent political crisis.” Rupert Murdoch’s rag never reported the gangster-government’s violence. Moreover, Zelaya had never pushed “to rewrite the constitution”; he had wanted to hold a plebiscite on whether there should be a constitutional convention held to rewrite the nation’s existing Constitution, which everyone but the Honduran aristocracy said contained profound defects that made democracy dysfunctional there. The editors of the former U.S.S.R.’s newspaper Pravda would have chuckled at Murdoch’s “reporting.” By contrast, for example, blog.AFLCIO.org had headlined on 16 November 2009, “Trumka: Free Elections Not Possible Now in Honduras.” The American labor movement was reporting on events in Honduras, but had been defeated by the U.S. aristocracy increasingly since 40 years earlier (Reagan), and therefore no longer constituted a major source of news for the American people. Richard Trumka was the AFL-CIO President, but was by now just a marginal character in the new fascist Amerika.

    On 9 January 2010, the Honduras Coup 2009 blog translated from a Honduran newspaper published that day, and headlined “Honduras Is Broke.” Honduras’s Finance Minister, Gabriela Nuñez, was quoted as saying that international aid must keep coming in order for the nation to continue paying its bills, and that avoiding default is “a work from week to week.”

    A few months later, the Council on Hemispheric Affairs headlined on 5 March 2010, “Secretary of State Hillary Clinton Does Latin America” and reported that, “While in Buenos Aires, she carelessly stated, ‘The Honduras crisis has been managed to a successful conclusion … It was done without violence.’ This is being labeled as a misguided statement considering the physical violence including murders, beatings, torture that the coup government used in order to repress the opposition. Many of these tactics are still being used. This diplomatic stumble is expected to draw significant attention to the multiple errors in the U.S. approach.” Moreover, while there, she was “announcing that the Obama administration will restore aid that had been previously suspended.” The commentator said that this drew attention to “a political decision that once again may have served to isolate the U.S. from much of Latin America.” Furthermore, “While in Costa Rica, … Clinton said the post-coup [Honduran] government … was, in fact, democratically elected,” which made a mockery of the term “democracy.” That election was perhaps even less democratic than the “elections” in Iran have recently been, but it was remarkably similar, with the main difference being that in Honduras the aristocracy controlled the “election,” whereas in Iran the theocracy did. Anyway, Hillary approved.

    On 1 May 2010, Britain’s Guardian headlined regarding Honduras, “Cocaine Trade Turns Backwater into Hideout for Brutal Assassins: The Central American nation is on the brink of becoming a fully-fledged narco-state,” and reported that, “Corrupt police and drug gangs are blamed, with the government unable or unwilling to crack down on them.”

    The Herald of Tegucigalpa, El Heraldo, headlined on 26 January 2011, “Presidente Asigna Medalla de Honor al Mérito a J. J. Rendón,” and reported that President Porfirio Lobo had decorated with the Order of Merit the master-propagandist who had deceived enough Honduran voters to “elect” Lobo (with the assistance of vote-rigging and terror). That was the same “John Rendon” (or actually Juan José Rendón) who had been hired by the George W. Bush Administration to deceive the American public into invading Iraq in 2003. This time, he was working for Barack Obama, instead of for George W. Bush, but it was fascism just the same.

    Without Obama, Honduras’s fascists would have been defeated. Obama’s refusal to employ either his financial and banking power or his bully pulpit, and Hillary’s outright support of the fascist junta, together sealed the deaths of many thousands of Hondurans. The U.S. thus, single-handedly among all nations, kept Honduras’s newly-installed fascist regime in power. A U.S. professor who specialized in Honduras, Orlando Perez, said that Obama did this probably because he concluded “that Honduras’ political, military and economic elite wouldn’t accept Zelaya’s return”; in other words, that Obama wanted to serve Honduras’s aristocracy, regardless of the Honduran public, and even regardless of the increased contempt that Latin Americans would inevitably feel toward the U.S. from this matter.

    The results for Hondurans were hellish. On 11 April 2011, McClatchy Newspapers bannered “Honduran Police Ignore Rise in Attacks on Journalists, Gays” and reported that within just those almost-two years, Honduras had become “the deadliest country in the hemisphere,” because of the soaring crime-rate, especially against homosexuals and against journalists. The new fascist government tacitly “sends a message to the criminals, the paramilitaries and the hit men that they can do as they please.”

    Hondurans were by then five times likelier to be murdered than Mexicans were. Honduras’s aristocrats, however, were safe, because they hired their own private security forces, and also because the government’s security-apparatus was controlled by the aristocracy. Only the public were unprotected.

    Fox “News” Latina bannered, on 7 October 2011, “Honduras Led World in Homicides in 2010” and (since Rupert Murdoch’s Fox is a Republican front) pretended that this had happened because Latin America was violent – not because Fox’s Republican friends had had their way in policy on Honduras, and had thus caused the Honduran murder-rate to soar. (During the latest year, whereas homicides had declined in all of the other high-homicide nations, homicides had skyrocketed 22% in Honduras – and that’s why Honduras now led the world in homicides, but Fox “News” didn’t mention any of these facts.)

    The actual problem was that the U.S. had a Republican government under nominal “Democratic” leadership, both at the White House and at the State Department (not to mention at Treasury, Justice, and Education). Obama not only gave Rupert Murdoch a nice foil to gin-up his hate-machine; he also gave Murdoch the most politically gifted Republican in the country: Obama, a Republican in “Democratic” clothing. It certainly was so with regard to Honduran policy, in which Obama seemed to be following Hillary Clinton’s lead to the right.

    On 21 October 2011, The Nation bannered “Wikileaks Honduras: US Linked to Brutal Businessman” and Dana Frank reported that, “Miguel Facussé Barjum, in the embassy’s words, is ‘the wealthiest, most powerful businessman in the country,’ one of the country’s ‘political heavyweights.’” He owned a 22,000-acre palm-oil plantation, including lots of vacant land that thousands of peasants or “campesinos” wanted to farm and make their homes. “The campesinos’ efforts have been met with swift and brutal retaliation,” hired killers – a cost of doing business (like exterminators). Furthermore, wikileaks cables from during George W. Bush’s Presidency indicated that “a known drug trafficking flight with a 1,000 kilo cocaine shipment from Colombia … successfully landed … on the private property of Miguel Facusse. … Its cargo was off-loaded onto a convoy of vehicles that was guarded by about 30 heavily armed men.” The plane was burned and bulldozed into the ground, and the U.S. Ambassador said that this probably couldn’t have happened without Facussé’s participation. But now, the U.S. was actually on the side of such people. Not only was the U.S. continuing as before in Honduras, but “The US has allocated $45 million in new funds for military construction,” including expansion of the U.S. air base that had participated in the 2009 coup. Other wikileaks cables indicated that someone from the U.S. Embassy met with Facussé on 7 September 2009. Furthermore, “A new US ambassador, Lisa Kubiske, arrived in Honduras this August. She is an expert on biofuels – the center of Miguel Facussé’s African palm empire.” Moreover, on 13 August 2009, hondurascoup2009.blogspot had headlined “Get to Know the 10 Families that Financed the Coup”, and cited a study by Leticia Salomón of the Autonomous University of Honduras, which said that, “A fundamental person in the conspiracy was the magnate Miguel Facussé, decorated by the Colombian Senate in 2004 with the Orden Mérito a la Democracia, and who today monopolizes the business of palm oil and in 1992 supported the purchase of land from campesinos at less than 10% of its actual value.” Furthermore, the coup “was planned by a business group lead [led] by Carlos Flores Facussé, ex-president of Honduras (1998-2002) and owner of the newspaper La Tribuna, which together with La Prensa, El Heraldo, TV channels 2, 3, 5 and 9 were the fundamental pillar of the coup.” Moreover, on 10 February 2010, the Honduras Culture and Politics blog headlined “Mario Canahuati Goes to Washington,” and reported that Honduras’s new Foreign Minister, Mario, was related to Jorge Canahuati, “owner of La Prensa and El Heraldo,” and also to Jesus Canahuati, who was the VP of the Honduran chamber-of-commerce organization that hired Lanny Davis. Meanwhile, Mario’s father, Juan Canahuati, owned textile factories that assembled clothing for major U.S. labels, and which would thus benefit greatly from the fascists’ roll-back of Zelaya’s increase in the minimum wage. (Other articles were also posted to the web, listing mainly the same families behind the coup.)

    So, as such examples show, the aristocracy were greatly enriched by the Honduran coup, even though the non-criminal (or “legitimate”) Honduran economy shriveled. By supporting this new Honduran regime, Obama and Hillary assisted the outsourcing of clothes-manufacturing jobs, etc., to such police-states. International corporations would be more profitable, and their top executives and controlling stockholders would reap higher stock-values and capital gains and bigger executive bonuses, because of such fascist operations as the 2009 coup. If workers or campesinos didn’t like it, they could leave – for the U.S., where they would be competing directly against the poorest of our own country’s poor.

    An article quoted Jose Luis Galdamez, a journalist for Radio Globo (a Honduran station briefly shut down by the junta) explaining how that nation’s elite impunity functions: “The rich simply send you out to kill … and then kill with impunity. They never investigate into who killed who, because the groups in power control the media, control the judiciary, and now control the government [the Executive Branch] again.” This is to say: In Honduras, hired killers are safe. The Government represents the aristocracy, not the public; so, aristocrats are free to kill. America’s congressional Republicans like this “Freedom.” It’s maximum liberty – for aristocrats: the people these “Representatives” actually serve.

    On 18 November 2011, Mark Weisbrot in Britain’s Guardian headlined “Honduras: America’s Great Foreign Policy Disgrace”, and he reported that, when the junta’s man “Porfirio Lobo took office in January 2020, … most of the hemisphere refused to recognize the government because his election took place under conditions of serious human rights violations. In May 2011, an agreement was finally brokered in Cartagena, Colombia, which allowed Honduras back into the Organization of American States. But the Lobo government has not complied with its part of the Cartagena accords, which included human rights guarantees for the political opposition.” The frequent murders of non-fascist political and labor union leaders “in broad daylight” (so as to terrorize anyone who might consider to replace them) had continued, despite the accords. Weisbrot noted that, “when President Porfirio Lobo of Honduras came to Washington last month, President Obama Greeted him warmly” and Obama said, “What we’ve been seeing is a restoration of democratic practices and a commitment to reconciliation.” How nice. However, Lobo did comply with one aspect of the Cartagena agreement: he let Manuel Zelaya and his wife back into Honduras.

    Honduras was now (even more than before Zelaya) under a “libertarian” government – a government that respected only property-rights of approved people, no personal or other rights for anyone (such as Facussé’s propertyless campesinos). Paul Romer, the husband of Obama’s former chief economist Christina Romer, was joining with other libertarians to promote the idea of a totally “free market” model city in Honduras. On 10 December 2011, Britain’s libertarian ECONOMIST magazine bannered “Hong Kong in Honduras,” and “Honduras Shrugged [a play on Ayn Rand’s Atlas Shrugged]: Two Start-Ups Want to Try Out Libertarian Ideas in the Country’s New Special Development Regions.” Then, on 6 September 2012, Britain’s Guardian bannered “Honduras to Build New City with Its Own Laws and Tax System.” However, the entrepreneur aiming to develop this new Honduran city freed from the law, the grandson of the far-right economist Milton Friedman, Patri Friedman, headlined at his Future Cities Development Inc., on 19 October 2012, “Closing Statement From Future Cities Development, Inc.” and he announced that though “passing with a vote of 126-1” in the Honduran legislature, his project was ruled unconstitutional by a judge, because it would remove that land from the Honduran legal system. Patri had been fundraising for this project ever since he had publicly announced at the libertarian Koch brothers’ Cato Institute, on 6 April 2009, “Democracy Is Not The Answer,” and he then said, “Democracy is rigged against libertarians.” He ended his statement by announcing “my proposal,” which was to “build new city-states,” where there would be no democracy, and only the investors would have any rights at all – an extreme gated community. Just months later, the new Honduran President, a libertarian like Patri, invited him to do it, but this judge killed the idea.

    Inasmuch as Honduras was becoming too dangerous for Americans, the AP headlined on 19 January 2012, “Peace Corps Pullout a New Blow to Honduras,” and reported that, “The U.S. government’s decision to pull out all its Peace Corps volunteers from Honduras for safety reasons is yet another blow to a nation still battered by a coup and recently labeled [by the U.N. as] the world’s most deadly country.” Three days later, on the 22nd, Frances Robles of the Miami Herald, headlined “Graft, Greed, Mayhem Turn Honduras into Murder Capital of World,” and reported the details of a nation where aristocrats were protected by their own private guards, the public were on their own, and all new entrants into the aristocracy were drug traffickers and the soldiers and police who worked for those traffickers. Narcotics were now by far the most booming industry in Honduras, if not the only booming industry there post-coup. Robles reported, “Everybody has been bought,” in this paradise of anarchism, or libertarianism (i.e.: in this aristocratically controlled country).

    On 12 February 2012, NPR headlined “Who Rules in Honduras? Coup’s Legacy of Violence.” The ruling families weren’t even noted here, much less mentioned, in this supposed news-report on the subject of “Who Rules in Honduras?” However, this story did note that, “Many experts say things got markedly worse after the 2009 coup.” (That was a severe understatement.)

    Jim DeMint, who has since left the Senate, and who recently took over as the head of the far-right Heritage Foundation where he had formerly been a star, got everything he wanted in Honduras, and so did Hillary Clinton’s friend Lanny Davis – the aristocrats’ paid hand in the affair, on the “Democratic” side. (The aristocrats had many other agents lobbying their friends on the Republican side.) Honduras’s public got only hell. Four days later, on February 16th, Reuters headlined “Honduras Under Fire After Huge Prison Blaze”, and reported: “Survivors of a Honduran jailhouse fire that killed more than 350 inmates [some not yet tried, much less convicted], accused guards of leaving prisoners to die trapped inside their cells and even firing on others when they tried to escape.”

    This was how law operated, in a supremely fascist nation. Dwight Eisenhower and the Dulles brothers had done a similar thing to the Iranians in 1953, and then to the Guatemalans in 1954; Obama now, though passively, did it to the Hondurans. When Ike did it in Iran, who would have guessed at the whirlwind that would result there 26 years later, in 1979? (Ironically, when Ike did it, the mullahs were delighted that the elected Iranian President, Mossadegh, whom they hated, had been overthrown. America now reaps their whirlwind.)

    This is the type of hypocritical leadership that has caused the United States to decline in public approval throughout the world under Obama – ironic after his Nobel Peace Prize awarded within just months of his becoming President. On 10 December 2010, Gallup bannered “U.S. Leadership Ratings Suffer in Latin America”, and reported that approval of “the job performance of the leadership of the United States” had declined since 2009 in 14 of 18 nations in the Western Hemisphere. It had declined steepest in Mexico, Argentina, Honduras, and Venezuela. Honduras, however, was the only country where approval of the U.S. was now even lower than it had been under George W. Bush in 2008. This Honduran plunge since the 2009 coup had been that steep. Then, on 19 April 2012, Gallup headlined “U.S. Leadership Losing Some Status”, and reported that across 136 countries, approval of the U.S. had peaked in 2009 when George W. Bush was replaced by Obama, but that “the U.S. has lost some of its status” since 2009, and that the “U.S. Image Sinks in the Americas,” down one-quarter from its 2009 high, though still not yet quite as low in most countries as it had been under Bush. Then, three months later, on June 13th, the PewResearch Global Attitudes Project headlined “Global Opinion of Obama Slips, International Policies Faulted”, and reported that favorable opinion of the U.S. had sunk during Obama’s first term. It declined 7% in Europe, 10% in Muslim countries, 13% in Mexico, and 4% in China. However, it increased 8% in Russia, and 13% in Japan. It went down in eight countries, and up in two, and changed only 2% or less in three nations.

    The global fascist push to eliminate Zelaya’s Presidency had first been well outlined by Greg Grandin in The Nation on 28 July 2009, headlining “Waiting for Zelaya”. He wrote: “The business community didn’t like Zelaya because he raised the minimum wage. Conservative evangelicals and Catholics – including Opus Dei, a formidable presence in Honduras – detested him because he refused to ban the ‘morning after’ pill. The mining, hydroelectric and biofuel sector didn’t like him because he didn’t put state funds and land at their disposal. The law-and-order crowd hated him because he apologized on behalf of the state for a program of ‘social cleansing’ that took place in the 1990s. … Zelaya likewise moved to draw down Washington’s military presence; Honduras, alone among Central American countries, hosts a permanent detachment of US troops.” Later that same year (2009), John Perkins, author of Confessions of an Economic Hit Man, came out with his new Hoodwinked, in which he said (p. 213): “I was told by a Panamanian bank vice president who wanted to remain anonymous, ‘Every multinational knows that if Honduras raises its hourly [minimum-wage] rate, the rest of Latin America and the Caribbean will have to follow. Haiti and Honduras have always set the bottom.’” The increase in Honduras’s minimum wage was widely cited as having probably been the coup’s chief source.

    Zelaya offered an explanation as to why the U.S. helped the fascists. On 31 May 2011, “Democracy Now” radio headlined “Exclusive Interview with Manuel Zelaya on the U.S. Role in Honduran Coup”, and Zelaya revealed that when he was abducted from his house, “We landed in the U.S. military base of Palmerola,” before being flown from there out of the country, and that “Otto Reich started this.” Reich had been the fanatical far-right Cuban-American who ran U.S. Latin-American policy for the Republican Reagan and both the father and son Bush Administrations, including Iran-Contra against Nicaragua (which helped Iran’s mullahs), and the fascist 2002 coup against Venezuela’s popular elected President Hugo Chavez, which coup was then peacefully overturned and reversed, due to worldwide repudiation of the junta everywhere except the U.S. Government. Zelaya said that the coup against himself had been organized via both Reich and the previous, George W. Bush-appointed, U.S. Ambassador to Honduras, Charles Ford, who had subsequently been appointed to the U.S. Southern Command. Zelaya didn’t personally blame Obama. Zelaya said, “Even though Obama would be against the coup, the process toward the coup was already moving forward. … They are even able to bend the arm of the President of the United States, President Obama, and the State Department.” Zelaya portrayed a weak President Obama, not a complicit one. If this was true, then Lanny Davis was pushing against a weak leader, not against strong resistance within the then-new Democratic U.S. Administration. Hillary Clinton’s press conference the day after the coup reflected unconcern regarding democracy, not (like with Republicans such as Sen. DeMint) outright support of fascism. The situation that was portrayed by Zelaya was a U.S. Government that was heavily infiltrated by fascists throughout the bureacracy, and a new Democratic President and Secretary of State who had no stomach to oppose fascists – an Administration who were mere figureheads.

    On 15 March 2012, Laura Carlson, at Foreign Policy In Focus, bannered “Honduras: When Engagement Becomes Complicity,” and she opened: “U.S. Vice President Joe Biden traveled to Honduras on March 6 with a double mission: to quell talk of drug legalization and reinforce the U.S.-sponsored drug war in Central America, and to bolster the presidency of Porfirio Lobo. The Honduran government issued a statement that during the one-hour closed-door conversation between Biden and Lobo, the vice president ‘reiterated the U.S. commitment to intensify aid to the government and people of Honduras, and exalted the efforts undertaken and implemented over the past two years by President Lobo.’ In a March 1 press briefing, U.S. National Security Advisor Tony Blinken cited ‘the tremendous leadership President Lobo has displayed in advancing national reconciliation and democratic and constitutional order.’ You’d think they were talking about a different country from the one we visited just weeks before on a fact-finding mission on violence against women. What we found was a nation submerged in violence and lawlessness, a president incapable or unwilling to do much about it, and a justice system in shambles.”

    Carlson went on to note: “Land grabs to transfer land and resources from small-scale farmers, indigenous peoples, and poor urban residents into the hands of large-scale developers and megaprojects have generated violence throughout the country. Many of the testimonies of violence and sexual abuse that we heard from Honduran women regarded conflicts over land, where the regime actively supports wealthy interests against poor people in illegal land occupations for tourism, mining, and infrastructure projects, such as palm oil magnate Miguel Facusse’s actions.” She noted: “The United States helped deliver a serious blow to the Honduran political system and society. The United States has a tremendous responsibility for the disastrous situation.” And she closed: “There’s no excuse for spending U.S. taxpayer dollars on security assistance to Honduras as human rights violations pile up.” She called this “A Coup for Criminals.”

    What Iran and Guatemala became to the historical record of Eisenhower’s Presidency, Honduras will be to that of Obama. Sometimes even a small country, even a banana republic, can leave a big black mark on a President’s record. Though Czechoslovakia was just a small and weak country, it’s even what Britain’s Prime Minister Neville Chamberlain is primarily remembered for nowadays – his yielding it to the fascists in 1938.

    In November 2013, the Center for Economic Policy Research bannered a study, “Honduras Since the Coup”, and among the highlights they reported were:

    “Economic growth has slowed since the 2009 coup. From 2006-2008 average annual GDP growth was 5.7 percent. In 2009 Honduras’ GDP, as with most countries in Central America, contracted due to the world recession. From 2010-2013, average annual growth has been only 3.5 percent.”

    “Economic inequality, which decreased for four consecutive years starting in 2006, began trending upward in 2010. Honduras now has the most unequal distribution of income in Latin America.”

    “In the two years after the coup, over 100 percent of all real income gains went to the wealthiest 10 percent of Hondurans.”

    “Poverty and extreme poverty rates decreased by 7.7 and 20.9 percent respectively during the Zelaya administration. From 2010-2012, the poverty rate increased by 13.2 percent while the extreme poverty rate increased by 26.3 percent.”

    “The unemployment situation has worsened from 2010-2012.”

    Crime rates and other non-economic factors were unfortunately ignored in this study, but it indicated clearly that, from at least the economic standpoint, the public in Honduras suffered while the elite did not. Hillary Clinton and Barack Obama had done to Honduras something rather similar to what George W. Bush and his team did to Iraq, but with this major difference: Zelaya was a good and democratic leader of Honduras, whereas Saddam was a tyrant (though Iraq was even worse after his reign than during it). This “Democratic” U.S. Administration turned out to support fascism, much as its Republican predecessor had done.

    The soaring murder-rate after the U.S.-supported coup caused a soaring number of escapees from the violence; they’re flooding into the U.S. now as illegal immigrants.

    HAITI

    In Haiti, the situation is similar as an example of the U.S. backing aristocrats, so as to keep the masses in poverty and for American aristocrats to profit from doing so. On 1 June 2011, The Nation headlined “WikiLeaks Haiti: Let Them Live on $3 a Day”, and Dan Coughlin and Kim Ives reported that, “Contractors for Fruit of the Loom, Hanes and Levi’s worked in close concert with the US Embassy when they aggressively moved to block a minimum wage increase for Haitian assembly zone workers, the lowest-paid in the hemisphere, according to secret State Department cables. … The factory owners told the Haitian Parliament that they were willing to give workers a 9-cents-per-hour pay increase to 31 cents per hour to make T-shirts, bras and underwear for US clothing giants like Dockers and Nautica. But the factory owners refused to pay 62 cents per hour, or $5 per day, as a measure unanimously passed by the Haitian Parliament in June 2009 would have mandated. And they had the vigorous backing of the US Agency for International Development and the US Embassy when they took that stand.” Hillary Clinton’s State Department pushed hard to reverse the new law. “A deputy chief of mission, David E. Lindwall, said the $5 per day minimum ‘did not take economic reality into account’ but was a populist measure aimed at appealing to ‘the unemployed and underpaid masses.’” An “Editor’s Note” from The Nation added: “In keeping with the industry’s usual practice, the brand name US companies kept their own hands clean, letting their contractors do the work of making Haiti safe for the sweatshops from which they derive their profits — with help from US officials.” Those “officials” were ultimately Clinton and Obama. On 3 June 2011, Ryan Chittum at Columbia Journalism Review headlined “A Pulled Scoop Shows U.S. Fought to Keep Haitian Wages Down”, and he added some perspective to the story: “Hanesbrands CEO Richard Noll … could pay for the raises for those 3,200 t-shirt makers with just one-sixth of the $10 million in salary and bonus he raked in last year.” And then, when the U.S. turns away “boat people,” trying to escape the “voluntary” slavery of the Haitian masses, the standard excuse is that it’s done so as to “protect American jobs.” But is that really where Hillary Clinton gets her campaign funds?

    AFGHANISTAN

    On 26 July 2009, Marisa Taylor bannered at McClatchy Newspapers, “Why Are U.S.-Allied Refugees Still Branded as ‘Terrorists?’,” and she reported that “DHS [Department of Homeland Security] is working with other agencies, such as the State Department, to come up with a solution” to the routine refusal of the United States to grant U.S. visas to translators and other local employees of the U.S. in Iraq and Afghanistan who wanted to move to the U.S. and who had overwhelming reason to fear retaliation from anti-Americans in their home countries after we left. The State Department did nothing. Then, Human Rights First headlined on 13 August 2009, “Senator Leahy on ‘Material Support’ Bars”, and reported that, “In a powerful statement submitted for the Congressional Record on August 5, 2009, Senator Leahy (D-VT) reaffirmed his commitment to ‘restore common sense’ to the bars to refugee and asylum status based on associations with what the Immigration and Nationality Act defines as terrorism,” which was “written so broadly” that it applied even to “children who were recruited against their will and forced to undergo military training, doctors (acting in accordance with the Hippocratic oath) … and those who fought against the armies of repressive governments in their home countries.”

    The State Department failed to act. On 2 February 2013, the Washington Post bannered “Alleged Terrorism Ties Foil Some Afghan Interpreters’ U.S. Visa Hopes”, and Kevin Sieff in Kabul reported that, “As the American military draws down its forces in Afghanistan and more than 6,000 Afghan interpreters seek U.S. visas, the problem is threatening to obstruct the applications of Afghans who risked their lives to serve the U.S. government.” What kind of lesson is this teaching to interpreters and other local employees of the U.S. missions in unstable foreign countries? Helping the U.S. could be terminally dangerous.

    LIBYA

    “We came, we saw, he died! (Chuckles)”

    And what happened afterwards?

    (And what happened before?)

    But what happened afterwards is even worse than people know: as Wayne Madsen recently reported, Hillary’s success at overthrowing Gaddafi served brilliantly the purposes of the U.S. aristocracy and of the jihadists who are financed by the Saud family and the other fundamentalist Sunni royal families in Arabia. Even if she doesn’t become President, she has already done enough favors for those royals so as to be able to fill to the brim the coffers of the Clinton Foundation.

    SYRIA

    A record drought in Syria during 2008-2010 produced results like this:

    “Two years before the ‘Arab Spring’ even began:

    In the past three years, 160 Syrian farming villages have been abandoned near Aleppo as crop failures have forced over 200,000 rural Syrians to leave for the cities. This news is distressing enough, but when put into a long-term perspective, its implications are staggering: many of these villages have been continuously farmed for 8000 years.

    That source had been published on 16 January 2010.”

    The drought continued on through 2010 and sporadically afterwards, and it intensified in Syria the already widespread ‘Arab Spring’ demonstrations against the existing regimes.

    Even before the ‘Arab Spring’ demonstrations in 2011, the Syrian government was pleading with foreign governments for food aid, and these pleas were reported to Secretary of State Clinton, but she ignored them.

    Obama grabbed this opportunity to dust off an old CIA 1957 plan to overthrow the Ba’athist Party that ruled Syria — the only secular, non-sectarian, party in Syria, and the only political force there that insisted upon separation between church and state. The Ba’athists were allied with Russia, and the U.S. aristocracy wanted to conquer Russia even after the end of communism there in 1990. Replacing a secular government by a fundamentalist Sunni Sharia law regime would end Syria’s alliance with Russia; so, Obama worked with other fundamentalist Sunni dictatorships in the region — Saudi Arabia, Qatar, UAE, Kuwait, and Turkey — to perpetrate a sarin gas attack in Syria that they’d all blame on Syria’s Ba’athist leader, Bashar al-Assad, even though the U.S. and its Arab partners had actually perpetrated it.

    On 12 November 2011, Secretary of State Clinton said:

    The failure of the Assad regime, once again, to heed the call of regional states and the international community underscores the fact that it has lost all credibility. The United States reiterates its calls for an immediate end to the violence, for free unfettered access for human rights monitors and journalists to deter and document grave human rights abuses and for Asad to step aside.

    In other words: she was already demanding “regime change” in Syria. Back in 2002, she had similarly demanded “regime change in Iraq,” because the Ba’athist, Russia-allied, anti-sectarian, Saddam Hussein ruled there. She did it again in Syria — just as she had done it in Lybia in order to get rid of the non-sectarian Russia-allied dictator there, Muammar Gaddafi.

    During the Democratic primary debate on 20 December 2015, her opponent Bernie Sanders said:

    I worry too much that Secretary Clinton is too much into regime change and a little bit too aggressive without knowing what the unintended consequences might be.

    Yes, we could get rid of Saddam Hussein, but that destabilized the entire region. Yes, we could get rid of Gadhafi, a terrible dictator, but that created a vacuum for ISIS. Yes, we could get rid of Assad tomorrow, but that would create another political vacuum that would benefit ISIS.

    He said that defeating the jihadists in Syria should be completed before the issue of what to do about Assad is addressed. The questioner, David Muir, asked Clinton whether she agreed with that. She replied:

    We are doing both at the same time.

    MUIR: But that’s what he’s saying, we should put that aside for now and go after ISIS.

    CLINTON: Well, I don’t agree with that.

    She is obsessed with serving the desires of the U.S. aristocracy — even if that means the U.S. helps supply sarin gas to the rebels in Syria to be blamed on Assad, and even if it also means that the existing, Ba’athist, government in Syria will be replaced by a jihadist Sunni government that serves the Saud family and the other Arabic royal families.

    UKRAINE

    Secretary of State Hillary Clinton chose as being the State Department’s chief spokesperson Victoria Nuland who was previously the Principal Deputy National Security Advisor to Vice President Dick Cheney from 2003 to 2005, after having been appointed by President George W. Bush as the U.S. Deputy Permanent Representative to the anti-Russian military club NATO from 2000 until 2003. Her big passion, and her college-major, as a person who ever since childhood hated Russia, was Russian studies, and she “was twice a visiting fellow at the Council on Foreign Relations — as a ‘Next Generation’ Fellow looking at the effects of anti-Americanism on U.S. relations around the world, and as a State Department Fellow directing a task force on ‘Russia, its Neighbors and an Expanding NATO.’” Although her career started after the Soviet Union and its communism ended in 1990, it has nonetheless been obsessed with her hatred of Russia and with her passion for the U.S. aristocracy to take it over, as if communism hadn’t really been a factor in the “Cold War” — and she has been promoted in her career on that basis.

    V.P. Cheney liked her “neo-conservatism,” which she shared with her husband, Robert Kagan, who had been one of the leading proponents for “regime change in Iraq.” (“Neo-conservatism” is the group of policy intellectuals who passionately argued for “regime change in Iraq” during the Bill Clinton and George W. Bush Administrations, and who support every policy to overthrow the leaders of any nation that’s at all friendly toward Russia.)

    When Hillary Clinton retired in 2013, Obama made Nuland the Assistant Secretary of State for European and Eurasian Affairs, and Nuland’s first assignment (she was already at work on it by no later than 1 March 2013, which was before the U.S. Senate had even confirmed her appointment) was to overthrow the democratically elected government of Ukraine because Ukraine is next door to Russia and the U.S. aristocracy has, since communism ended in the Soviet Union in 1990, been trying to surround Russia by NATO missiles, most especially in Ukraine. President Obama hid from the public his hostility toward Russia until he became re-elected in 2012 (he even mocked his opponent, Mitt Romney, for saying, at 0:40 on this video, that Russia is “our number one geopolitical foe”), but then, once he was safely re-elected, immediately set to work to take over Ukraine and to add it to NATO. Then, in his National Security Strategy 2015, he identified Russia as being by far the world’s most “aggressive” nation. Hillary Clinton is determined to carry this anti-Russian hostility through as President, even though she lies as Obama does and so, similarly, won’t say it during the Democratic primaries. But the takeover of Ukraine was an Obama operation in which she played an important role, to set it up.

    Here is the recording of Nuland on 4 February 2014, telling the U.S. Ambassador in Ukraine, Geoffrey Pyatt, whom to place at the top of the Ukrainian government when the coup will be completed, which occurred 22 days later. It was to be the culmination of her efforts, which had started even prior to 1 March 2013.

    Here is the broader video of that coup.

    Here is the head of the “private CIA” firm Stratfor saying it was “the most blatant coup in history.”

    Here is the electoral map showing the voting percentages in each region of Ukraine for the election that had chosen the President, “Janukovych,” whom Obama overthrew in that coup. The region in purple on that map had voted 90% for “Janukovych.” It’s called Donbass and consists of Donetsk and Luhansk. It refused to accept the coup-imposed leaders. Obama wanted the residents there bombed into submission. Here’s a video of that bombing-campaign. Here’s another — specifically of firebombings (which are illegal). The money for that bombing-campaign came from taxpayers in U.S. and EU, and also from the IMF, in the form of loans that saddled Ukraine with so much debt it went bankrupt on 4 October 2015, as determined by a unanimous vote of the 15 international banks that collectively make this decision. The infamously high corruption in Ukraine went even higher after the U.S.-EU takeover of Ukraine. After Ukraine’s bankrupttcy, the IMF changed its rules so that it could continue to lend money there, until the people in Donbass are either exterminated or expelled. The U.S. President controls the IMF. For the international aristocracy, the U.S. President is the most important servant there is. Hillary Clinton wants to become that servant. It’s why her top twenty financial backers represent the U.S. aristocracy.

    OTHER MATTERS

    Finally, it should also be noted that Hillary’s record as the chief administrator at the State Department was also poor. The State Department’s own Accountability Review Board Report on Benghazi Attack said: “In the months leading up to September 11, 2012, security in Benghazi was not recognized and implemented as a ‘shared responsibility’ in Washington, resulting in stove-piped discussions and decisions on policy and security. Key decisions … or non-decisions in Washington, such as the failure to establish standards for Benghazi and to meet them, or the lack of a cohesive staffing plan, essentially set up Benghazi.” That’s failure at the very top. It’s not in Libya. It’s not even in Africa. It’s in “Washington.”

    Who, at the State Department in “Washington,” had “buck stops here” authority and power? Hillary Clinton.

    Republicans are obsessed with the Benghazi failure, because it reflects negatively upon her but not on themselves. However, Hillary’s real and important failures reflected negatively upon Republicans also, because these failures (such as her supporting fascists in Honduras) culminated actually Republican foreign-policy objectives, and dashed Democratic (and  democratic) policy-objectives. This is the real reason why Republicans focus instead upon Hillary’s Benghazi mess.

    Hillary Clinton also was a notoriously poor administrator of her own 2007-2008 presidential primary campaign. Even coming into 2014, some leading Democrats were afraid that if she were to become the Party’s candidate, then the entire Party would get “Mark Penned,” which is the euphemism for her inability to select top-flight people for key posts. Obama had a far higher-skilled campaign-operation than she did, even though she started out with an enormous head-start against Obama in 2008.

    Back in 2006, the encyclopedic Democrat Jack Beatty headlined in The Atlantic“Run, Barack, Run,” and he contrasted the “enthralling” presence and speaking-style of Barack Obama to the presence and speaking-style of the Party’s presumptive 2008 nominee. He said of Clinton: “As she showed in her speech at the memorial service for Coretta Scott King, Hillary Clinton is a boring, flat-voiced, false-gesturing platform speaker. She shouts into the microphone; Obama talks into it. Her borrowed words inspire no trust – they remind us of her borrowed foundation – and her clenched personality inspires little affection. Money can’t buy her love, nor buzz protect her political glass jaw. The question for Democrats is, Who will break it first? Will it be one of her Democratic challengers – Obama, Joe Biden, John Edwards – or John McCain?” He was hoping that it would turn out to be one of the Democrats, especially Obama, so as to avoid a continuation of the Bush years. He got his wish, even if not his intended result. (Obama was so gifted a con-man that even the brightest Democrats, such as Beatty, couldn’t see through his con. Nobody could – so, the Republicans had to invent an ‘Obama’-demon that was almost diametrically opposite to the real one, in order to provide a punching-bag that their suckers would hate. Republicans ended up punching actually the most gifted Republican since the time of Ronald Reagan — a black and charismatic version of Mitt Romney, the man who lost to Obama in 2012 though having created the model both for Obamacare and for Obama’s policies toward Wall Street, and even toward Russia.)

    At the start of the present campaign, it had seemed almost inevitable that Hillary Clinton would be the Democratic Presidential nominee in 2016. A Quinnipiac poll released on 7 March 2013 was headlined “Clinton, Christie Lead The Pack In Early Look At 2016,” and reported that, “Former First Lady, and Secretary of State Clinton wins easily against any” opponent, from either Party.

    Her public statements aren’t consistent, because she changes them whenever politically convenient to do so; but the statements of a liar are simply ignored by intelligent people, anyway. Her statements are ignored by intelligent voters. What matters is her actions, her actual record, which is lengthy, and ugly. Her record is, moreover, consistent. So, it leaves no doubt as to what her actual  policies are: only fools will listen to anything that a liar such as she is, says on the stump, because she’s a con-person who is selling, essentially, a toxic dump, and trying to get top-dollar for it by describing the pretty land covering it over, and by crossing her fingers that not many people will smell any stench percolating up from down below. The only people who can intelligently trust her verbal commitments are her big donors, who hear those commitments in private, not in public, and who understand how to interpret them. Her voters are there merely to be conned, not to be served. She needs them to be the rug she walks upon in order to get back into the White House, where she intends to be serving real gold to her big donors, to make their bets, on her, profitable for them.

    And here are her big donors — the people she seeks to serve there.

    This presentation will now close with a brief update on the situation in Honduras, because that catastrophe was Hillary Clinton’s first one as the Secretary of State:

    On 15 February 2016, Alexander Main, of the Center for Economic and Policy Research, headlined an op-ed in The New York Times“An Anti-Corruption Charade in Honduras,” and he wrote there:

    In Honduras, protests erupted when a local journalist revealed that millions of dollars of public funds from the country’s health care system had been funneled to the ruling National Party and the election campaign of President Juan Orlando Hernández. A handful of administrators and business executives have been indicted for other corruption in the health system, but no charges have been brought against Mr. Hernández or other top party officials over the diversion of funds to the party. … The country’s security forces are heavily infiltrated by organized crime — ‘rotten to the core,’ a former police official told The Miami Herald. Two weeks later, the official was shot dead. Scores of journalists, lawyers, land rights activists, gay rights advocates and opposition figures have been assassinated, without consequence for their killers. …

    Sadly, the American government is ill positioned to offer help. In 2009, the State Department under Secretary Hillary Clinton helped a military coup in Honduras succeed by blocking efforts to restore the left-leaning president, Manuel Zelaya, to power. Since then, Washington’s diplomatic efforts have focused on shoring up a series of corrupt post-coup governments. More than 100 members of Congress have called on the Obama administration to condemn human rights violations by security forces, and have questioned America’s security assistance to Honduras.

    Yet Washington continues to back Mr. Hernández. 

    Hillary Clinton did, indeed, have an impact as the Secretary of State, and it continues to this day, and will live on as a curse, probably for decades to come — especially in the lands that she played a principal role in helping to destroy.

    She prides herself on her “experience,” as if having a title, “Secretary of State,” and performing miserably in that function, qualifies someone to be a good U.S. President. America’s press hasn’t challenged her on the claim, either. Thus, many people, who trust both her and the American press, think that there must be truth to her claim: that she has achieved a lot, and that what she has achieved was terrific for the American people, and for the world. They’ve been successfully deceived.

    There is an alternative, within the Democratic Party: Bernie Sanders. Here is his experience. And here are his top donors.

    CONCLUSION

    Only fools vote for her. Her campaigns are targeting especially fools who are either female or black or Hispanic, but she (and her financial backers) will welcome any  fool to vote for her, because clearly no non-fool (except those financial backers) will.

    *  *  *

    PostScript:

    This article was submitted to the major print news-media, and major online news-media, with the question: “Would you want this as an exclusive?” None replied even to say something like, “Maybe, give us a week to check out the linked sources.” None replied at all. Consequently, this article is now being provided free of charge to the public, and free of charge to all media to publish, but that’s the choice a journalist must make in order to present a truthful and reasonably comprehensive picture of Hillary Clinton’s record as the U.S. Secretary of State. Republican ‘news’ media don’t want this article, because it shows her as being hardly different from the Republicans on international matters; and Democratic ‘news’ media don’t want it, because it shows her as being hardly different from the Republicans on international matters. So, only the few news-media that are neither Republican nor Democratic, and are dedicated only to honestly and truthfully informing the public about the candidates for the U.S. Presidency, will publish it, even if it’s offered free-of-charge. About foreign affairs, there’s no truth in any of the large U.S. ‘news’ media: they’re all controlled by the U.S. aristocracy, who (in both Parties) agree overwhelmingly with the neoconservative (or American-imperialist) position on foreign-policy matters, and who are united against the interests of the publics in every nation, in favor of their own, personal, interests.

    Here below are the news-media that had received the article, submitted to them for consideration as an exclusive, and all of which media rejected this article, without comment, so that you can see that the editors there know the information that’s revealed here (they have read it here, even if they didn’t already know it before and simply hid it from their readership). The reason they don’t want their readers to know these facts is that they don’t want the public to know that (except on purely groupist issues concerning women, Blacks and Hispanics — her voting-base) Hillary Clinton is actually a Republican in ‘Democratic’ verbal garb. Neither Republican, nor Democratic, ‘news’ media, want their readers to know that she’s actually a Republican — even more than her husband was. Anyway: here, you’ll see that though the information that has been included in this article is ignored in the reporting by all of the big reporters and by the talking heads on TV ‘news’, they’re not actually unaware of it; they’re simply not allowed to let the public know it.

    Those media are: Vanity Fair, National Review, Rolling Stone, Harper’s, BusinessWeek and Bloomberg News, McClatchy newspapers, New York Times, Guardian, Washington Post, Mother Jones, The Nation, Progressive, The New Republic, New Yorker, Foreign Policy, Politico, Salon, Huffington Post, and Slate. (If any of your friends subscribe to or read those, why not pass this along to them, so that they’ll know what they don’t know about Hillary Clinton. Maybe they already know how bad the Republicans are, but do they know how bad the Clintons and Obama really are? Perhaps they don’t know it, from sources that want them not  to know it.)

    *  *  *

    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.


    Tyler Durden

    Sun, 12/15/2019 – 23:55

  • Visualizing The World's Stock Market's Performance For The Past 30 Years
    Visualizing The World’s Stock Market’s Performance For The Past 30 Years

    Most investors around the world are familiar with the S&P 500 index.

    Not only is it the most widely accepted barometer of U.S. stock market performance, but it’s also been on a 10-year bull run, now sitting at all-time highs near 3,170.

    This week, Visual Capitalist’s Jeff Desjardins charts those historical returns, and then use the U.S. benchmark as a backdrop to compare other major stock markets around the world, such as those in Europe, Asia, and Canada.

    Putting Them All at Scale

    One challenge in comparing global markets directly is that all indices are on arbitrary scales.

    To directly compare them, the most natural option would be to transform the data to percentage terms. While that’s all fine and dandy, it’s also a little boring.

    To make things more interesting, we’ve collected historical data that goes back nearly 30 years for each index. This was mostly done using Macrotrends, a fantastic resource for historical data. We used November 26th, 1990 as a cut-off date, since that was the earliest data point available for some of the country indices used.

    We then transformed all of this data to be on the same scale of the S&P 500, so performance can be directly compared to the common American stock market benchmark.

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    Comparing Markets Using the S&P 500

    Alright, now that we have the same scale for each market, let’s dive into the data:

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    Note: Data has been transformed to match the scale of the S&P 500, and is current as of December 13, 2019

    If you invested $100 in the U.S. market on November 26, 1990, you’d have over $1,000 today.

    Over nearly 30 years, the S&P 500 has increased by 901%, which is the most out any of these major indices. If you invested in the German or Hong Kong markets, you’d have fairly similar results as well — each gained more than 800% over the same time period.

    Meanwhile, the markets in Canada, France, and the United Kingdom have all increased, but at a far slower pace:

    • In S&P 500 terms, Canada would be sitting at 1,717 — which is where the U.S. market was back in 2013.

    • France would be at 1,160, a mark the S&P 500 last hit in 2010.

    • The United Kingdom would sit at 1,072, also equivalent to 2010 for the U.S. market.

    Finally, in S&P 500 terms, the Japanese stock market would be at a lowly 315 points today — roughly where it started 30 years ago. In other words, if you had invested $100 in Japanese stocks in 1990, you’d have gained just $1 over a period of three decades.


    Tyler Durden

    Sun, 12/15/2019 – 23:30

  • Former CIA Spook: Eric Holder Just Revealed That The "Deep State Is Running Scared"
    Former CIA Spook: Eric Holder Just Revealed That The “Deep State Is Running Scared”

    Via Greg Hunter’s USAWatchdog.com,

    Former CIA officer and counter-intelligence expert Kevin Shipp says that former Obama Administration Attorney General (AG) Eric Holder gave a big Deep State panic signal when he wrote in an Op-Ed last week in the Washington Post trashing current AG William Barr and his top prosecutor John Durham. Shipp explains,

    “This is very significant. We all remember that Holder was Obama’s right hand man. Eric Holder was Barack Obama’s enforcer. The fact that Holder comes out this quickly after the Inspector General (IG) Horowitz Report comes out… and makes this veiled threat against Durham’s reputation. The fact that Eric Holder came out and made this statement is a clear indication to me they are running scared.

    We have to understand it was Eric Holder that Barack Obama used to target the heads of corporations that spoke out publicly about Barack Obama. We know Holder was held in ‘Contempt of Congress.’ He spied on AP reporters, ran guns to drug cartels and blacked out the information. He spied on over a hundred journalists, and on and on we go…

    They (Deep State) are convinced there are going to be indictments. Secondly, there is AG Barr’s outrage over (IG) Horowitz’s report and what it did not do. He made statements that there was spying and actions by government officials that need to be criminally looked into. Barr’s outrage over this shows me that there are going to be indictments, and that he is taking this seriously. Again, when Holder comes out and puts out this bombshell in the Washington Post, which is another indication that indictments are coming. John Brennan, former Obama Administration CIA Director, is going to be at the top of the list.

    Shipp says during the entire Trump Presidency, the mainstream media (MSM) has operated as a propaganda arm of the Deep State and the Democrats. Shipp contends,

    “They put these stories out intentionally because they are creating their own story, and that is what the propaganda mainstream media does. It creates its own story…

    They want to frame their latest story that there really wasn’t any spying on Trump. That’s what FISA warrants and applications are all about. They are all about spying.”

    Shipp thinks this will be a big nail in the coffin of the MSM. Shipp says, “The mainstream media will never come back from this…”

    “…because finally, through shows like this and others, the real information is coming out as to what the mainstream media has done. At the top of that list is the New York Times, the Washington Post, CNN and MSNBC…

    What they did is they created the Russia collusion story as if it was reality, as if it was real. That is part of the procedure in doing this. Then, they invented the evidence, and that was the Steele Dossier. They portrayed this as evidence to create this false narrative. Then they sent this story out to each outlet, and all repeat the same story over and over and over again knowing the more they repeat it, the more people were going to believe it. Then, the FBI leaked information to the mainstream media. The FBI took that information leaked to the media and used their stories as evidence. Brennan leaked the dossier to the mainstream media as part of this whole machine.”

    Shipp says the hoax of Russia collusion and the impeachment sham of President Trump is distracting us from other very big problems such as the extreme debt the country and the world is facing. Shipp says,

    “Trump inherited a financial monster that was not his doing. When he was sworn into office, it already existed. It is very serious, and I think now or very soon the U.S. government will not be able to afford the interest on the national debt, much less paying off the debt itself.”

    It is reported that central banks are buying record amounts of gold, and even Goldman Sachs is telling its clients to buy the yellow metal. Shipp says,

    This is a solid indicator that we are headed for the financial rapids with Goldman Sachs especially. Goldman Sachs is a global bank, and it’s one of the main banks in the United States. The fact that Sachs and others are building up gold reserves is a clear indication that they expect a financial downturn, to put it mildly, that is coming.

    Join Greg Hunter as he goes One-on-One with former CIA Officer and whistleblower Kevin Shipp.

    To Donate to USAWatchdog.com Click Here


    Tyler Durden

    Sun, 12/15/2019 – 23:05

    Tags

  • Is China Or The US The Biggest Global Superpower? Here's What The World Thinks
    Is China Or The US The Biggest Global Superpower? Here’s What The World Thinks

    Is the US still the world’s largest superpower? Some might argue that China may have already taken its place.

    To be sure, the US still has the world’s largest economy by GDP, but doubts are growing about whether the US’s reputation, with a rising China increasingly seen as equal, or even more powerful, than the US.

    A new study commissioned by the Pew Research Center found that more countries still believe the US is the world’s foremost economic superpower.

    But among the world’s emerging economies, a growing number are growing more dependent on China.

    In the US, a majority believe their own country is the No. 1 power, though there are stark partisan differences, with Democrats more likely to see China as No. 1.

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    Even if China’s rise is largely perceived as positive by the citizens of emerging market economies, the results show that they have more reservations about the country’s growing military might.

    What’s perhaps even more interesting is how China’s neighbors feel about China. According to Pew, they generally feel more negative about both China’s growing economic and military might.

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    Generally speaking, China’s economic influence is seen in a similar or even slightly more positive light than the US’s. Still, the US remains, in terms of perception, the world’s largest economic and military power.

    Across Latin America, to sub-Saharan Africa, to the Asia Pacific, more people see the US as the world’s top economy. So it makes sense that most of those who see the US as the top economy prefer having economic ties with the US over China.

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    The American Press seemingly fixates on the US’s crumbling relationship with its closest allies in Western Europe – something that we’ll be hearing even more about if Trump moves ahead with tariffs on Europe – but Pew’s research found that the US is viewed as the “top ally”.

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    The Pew survey was pretty ambitious: 38,426 people in 34 countries participated between May and October of this year.


    Tyler Durden

    Sun, 12/15/2019 – 22:40

  • Colas: "I Met Paul Volcker A Few Years Ago…"
    Colas: “I Met Paul Volcker A Few Years Ago…”

    Submitted by Nicholas Colas of DataTrek Research

    With Paul Volcker’s passing on Sunday we would like to dedicate Story Time Thursday to some personal recollections and lesser-quoted wisdom from “Tall Paul”.

    #1: I met Paul Volcker a few years ago, and since we share a birthday (September 5th) I used that to start a conversation with him. His observation was that he had benefited greatly from the timing of his birth. “In my day, you got to start school as soon as you turned 5. Since the school year started in early September, I got to go earlier than most kids.” Paul Volcker was, at heart, a true analyst and considered the role of something over which he had no control as important to his eventual success.

    Since there were many other people waiting to talk to him, my only other question was why his only long-form press interview as Fed Chair was with Andy Warhol’s Interview magazine. “That was Ida’s doing… no one in DC ever said no to Ida.” It’s true, that. Ida Ginsburg was a famous 1970s socialite who hosted the most exclusive dinner parties in Washington. She was a huge Warhol fan, and the feeling was mutual enough that Andy made her Interview’s DC editor and head interviewer.

    #2: That Interview magazine article (June 1987) is not available online, but I have a hard copy and it shows much about why Volcker was so successful in his time as Fed Chair:

    • On the Federal Reserve’s independence. Current Chair Powell is not the first Fed head to be threatened with firing. Then-Treasury Secretary Don Regan under President Reagan openly agitated for a change to the laws governing a Fed Chair’s tenure in order to remove Volcker. His policy of high interest rates to dampen inflation was not popular in the White House, of course. When asked if this scared him, Volcker’s reply was “No… what could I do about it?” White House pressure clearly played no role in Volcker’s thinking. He could not have cared less…

    • On how much the general population understands monetary and fiscal policy. Volcker had a great deal of confidence in the American people: “It’s basically common sense, and sometimes ordinary people know what you’re dealing with better than very sophisticated people.” “Is something the matter if you don’t save very much? Is something the matter if you don’t invest very much? Those aren’t very complicated concepts.”

    #3: The other interview with Volcker that sticks in my mind was one he gave PBS back in 2000 for its excellent series “Commanding Heights”. As Chair Powell mentioned at the start of Wednesday’s press conference, it was Volcker’s success in taming inflation that paved the path for decades of prosperity thereafter. As it turns out, it wasn’t just economic theory that guided Volcker’s thinking about monetary policy.

    • Volcker saw the value of a country’s money as a national moral obligation. “The issue of money is a government responsibility predominantly, and to use that authority in a way that leads to inflation is a system that fools a lot of people, and to keep doing it you have to do it more and more.”

    • He also saw a nation’s monetary system as central to its citizens’ confidence in all government: “It (bad monetary policy) corrodes trust, particularly trust in government. It is a governmental responsibility to maintain the value of the currency they issue. And when they fail to do that, it is something that undermines an essential trust in government.”

    The bottom line is that, yes, Paul Volcker was the right person holding the right job at the right time in history but his guiding principles apply more broadly. He understood at a deep and intuitive level that all government institutions – including the Fed – have to connect their actions to the needs of ordinary citizens. At times, that takes conviction and even some risk to personal reputation. Get it right, as Volcker did, and the resultant success will outlive the individual who made the tough calls for the right reasons.

    Source: PBS Interview: https://www.pbs.org/wgbh/commandingheights/shared/minitext/int_paulvolcker.html


    Tyler Durden

    Sun, 12/15/2019 – 22:15

  • A Quarter Of Kids Treated At Transgender Clinics May Just Be Autistic, New Study Finds
    A Quarter Of Kids Treated At Transgender Clinics May Just Be Autistic, New Study Finds

    A few short days after former psychologists at the NHS’s flagship Gender Identity Development Service (GIDS) told Sky News they feared young people were “being over-diagnosed and then over-medicalised,” warning that:

    “We fear that we have had front-row seats to a medical scandal.”

    The Daily Mail reports that Australian doctors, writing in the Journal Of Autism And Developmental Disorders, stated that

    “The few studies employing diagnostic criteria for ASD suggest a prevalence of 6-26 per cent in transgender populations.”

    Notably, they added, that this was “higher than the general population, but no different from individuals attending psychiatric clinics.”

    The Australians also quoted ‘definitive findings’ from a US study of almost 300,000 children, which discovered those with autism “were over four times as likely to be diagnosed with gender dysphoria” compared to those without autism.

    Last year The Mail on Sunday unearthed an internal study by GIDS in London, also known as the Tavistock Clinic, which found 35 per cent of children and teenagers referred there between 2011 and 2017 had “moderate to severe autistic traits.”

    A recent study published in the American Journal of Preventive Medicine found that 80 percent of gender minority students report having mental health problems, nearly double the rate of “cisgender” students

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    This should not come as a huge surprise to many, as a reminder, in 2017, The American College of Pediatricians issued a statement condemning gender reclassification in children by stating that transgenderism in children amounts to child abuse.

    “The American College of Pediatricians urges educators and legislators to reject all policies that condition children to accept as normal a life of chemical and surgical impersonation of the opposite sex. Facts – not ideology – determine reality.”

    The policy statement listed eight arguments on why gender reclassification is harmful.

    1. Human sexuality is an objective biological binary trait: “XY” and “XX” are genetic markers of health – not genetic markers of a disorder.

    2. No one is born with a gender. Everyone is born with a biological sex. Gender (an awareness and sense of oneself as male or female) is a sociological and psychological concept; not an objective biological one.

    3. A person’s belief that he or she is something they are not is, at best, a sign of confused thinking. When an otherwise healthy biological boy believes he is a girl, or an otherwise healthy biological girl believes she is a boy, an objective psychological problem exists that lies in the mind not the body, and it should be treated as such.

    4. Puberty is not a disease and puberty-blocking hormones can be dangerous. Reversible or not, puberty-blocking hormones induce a state of disease – the absence of puberty – and inhibit growth and fertility in a previously biologically healthy child.

    5. According to the DSM-V, as many as 98% of gender confused boys and 88% of gender confused girls eventually accept their biological sex after naturally passing through puberty.

    6. Children who use puberty blockers to impersonate the opposite sex will require cross-sex hormones in late adolescence. Cross-sex hormones (testosterone and estrogen) are associated with dangerous health risks including but not limited to high blood pressure, blood clots, stroke and cancer.

    7. Rates of suicide are twenty times greater among adults who use cross-sex hormones and undergo sex reassignment surgery, even in Sweden which is among the most LGBQT – affirming countries.

    8. Conditioning children into believing a lifetime of chemical and surgical impersonation of the opposite sex is normal and healthful is child abuse.

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    Finally, as Paul McHugh, a renowned psychiatrist from Johns Hopkins University, told The College Fix, transgender people are being experimented on because the doctors treating transgender patients with hormones “don’t have evidence that (the treatment) will be the right one.”

    He also criticized the manner of treatment given to many children who claim to be transgender.

    “Many people are doing what amounts to an experiment on these young people without telling them it’s an experiment,” he told The Fix via phone.

    “You need evidence for that and this is a very serious treatment. It is comparable to doing frontal lobotomies.”

    Simply put, as McHugh dared to admit in public, the medical and psychiatric industries are reckless and irresponsible in their treatment of patients who claim to be transgender.


    Tyler Durden

    Sun, 12/15/2019 – 21:50

  • Virtue Signaling To The Max: Dems Dis Their Own Debate
    Virtue Signaling To The Max: Dems Dis Their Own Debate

    Authored by Sarah Cowgill via LibertyNation.com,

    The American electorate may be on the receiving end of an early Christmas present as the entire field of Democratic presidential wannabes that made the grade are boycotting their own December 19 debate. After months of pandering for press and polling numbers and increasing amounts of individual donors, a simple labor dispute has the field tweeting out their collective disgust at the battle taking place at the scheduled venue, Loyola Marymount University.

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    The issue is simple. No self-identifying Democrat will cross the picket line and snub UNITE HERE Local 11, the union representing cooks, dishwashers, cashiers, and servers – employed by global services company Sodexo –  who toil away for Loyola Marymount University (LMU) students, faculty, and staff. In an ongoing – as in seemingly never ending – heated battle, UNITE HERE Local 11 is going toe-to-toe with Sodexo for increased wages and benefits.

    What better stage to force Sodexo to their negotiating knees than the Democratic primary debate? Of course, everyone from LMU, UNITE HERE, and the Democratic National Committee – who had to move this tired sixth debate locale from UCLA to LMU over another labor dispute – is in a tizzy.

    What’s The Deal?

    Since early last spring, Local 11 has been in negotiations on a collective bargaining agreement with Sodexo – a subcontractor by Loyola Marymount University for foodservice operations and human resources, such as vetting and hiring workers on campus. But as negotiations between labor and corporate America rarely are an easy feat, there is no such resolution in the near future – namely by debate time. A picket line with all eyes on the not so magnificent seven who have qualified is an optic Local 11 would be foolish to pass up.

    They didn’t waste a moment: One week out and Local 11 has a picket line ready to roll, daring the Dems to cross it.

    Sen. Elizabeth Warren (D-MA) was the first to raise her Twitter fist in solidarity: “Unite Here is fighting for better wages and benefits—and I stand with them. The DNC should find a solution that lives up to our party’s commitment to fight for working people. I will not cross the union’s picket line even if it means missing the debate.”

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    Joe Biden

    And then everyone else rushed to make the same pledge. Former Vice President Joe Biden said, “A job is about more than just a paycheck. It’s about dignity.”

    Don’t you just feel warm and fuzzy inside now?

    Susan Minato, Co-President of UNITE HERE Local 11, issued a public statement that seemed to mean more for the DNC. She said she “hoped that workers would have a contract with wages and affordable health insurance before the debate next week,” before adding the “or else” of a picket line.

    DNC spokeswoman Xochitl Hinojosa tweeted the official party stance:

    “Working with all stakeholders to find an acceptable resolution that meets their needs and is consistent with our values and will enable us to proceed as scheduled. Tom Perez would absolutely not cross a picket line and would never expect our candidates to either.”

    Oh Please, Oh Please

    As America readies for a holiday fraught with uncertainty, thanks to the actions of Congress, the Dems face yet another problem in getting a clear message to the electorate. Will the big day be lights out for the struggling field of candidates? Does anyone even tune in anymore for the debates?

    This sixth weeding of candidates – if it happens at all – will be the first to be held in California before the state’s March 3, 2020, primary election. It’s a big deal to be in the state yammering about climate change, free stuff, and deflating the bad orange man to potential voters. Perhaps Tom Perez, the chair of the listing DNC ship, can use his experience as former President Barack Obama’s Secretary of Labor and get the job done. But I’d wager that America hopes the picket goes off and the debate doesn’t.


    Tyler Durden

    Sun, 12/15/2019 – 21:25

  • AsiaPac Manufacturing PMIs Slump, But China Retail Sales Surge Amid Inflation Spike
    AsiaPac Manufacturing PMIs Slump, But China Retail Sales Surge Amid Inflation Spike

    The day started off poorly in AsiaPac with Aussie PMIs notably disappointing (both Services and Manufacturing in contraction).

    The latest Commonwealth Bank Flash Composite PMI® pointed to a further marginal decrease in business activity across the manufacturing and service sectors in the final month of 2019. Weakness was particularly evident at manufacturers, which saw the sharpest decline in the 44-month survey history.

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    Commenting on the Commonwealth Bank Flash PMI data, CBA Chief Economist, Michael Blythe said:

    The PMI readings indicate that the Australian economy ended 2019 on a softish note. The RBA’s “gentle turning point” for the economy remains elusive. And the weakness in private spending evident in the Q3 GDP data looks to have continued in Q4, with a flow on to labour demand as well. There were also some early indications that the disruptions associated with the terrible bushfires around Sydney and elsewhere are having some impact.”

    This was followed by New Zealand Institute of Economic Research lowering GDP growth expectations to 2.2% (from 2.3% in previous survey published in September), lowering wage inflation expectations as well as employment and raising overall inflation forecasts.

    Then Japan’s PMIs hit with manufacturing contracting further and Services rebounding modestly (as the composite Japan PMI was flat from November (and still in contraction).

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    Commenting on the latest survey results, Joe Hayes, Economist at IHS Markit, said:

    Latest survey data showed that the Japanese economy remained stagnant in December, following on from a similar outturn in November. Taking fourth quarter survey data as a whole, the poor performance in October could see Japan’s economy dip into contraction.

    “The most disconcerting takeaway from fourth quarter survey data has been the marked loss of momentum in the service sector, which alongside domestic consumption, has been a key driving force of the economy in 2019, negating much of the manufacturing malaise. It is now clear that the service sector is unable to offset the industrial weakness, which does not bode well for growth prospects in 2020.

    “That said, the recent stimulus package launched by Abe has the potential to breathe life back into the domestic economy. Indeed, this will certainly alleviate pressure on the Bank of Japan to take immediate policy action if the economic outlook worsens.”

    And finally, the big kahuna, China released its November data – all of which were expected to improve sequentially after disappointing weakness in October.

    Chinese data has miraculously rebounded in the last few weeks with China’s manufacturing PMIs coming in on the high side for November, with both the official and the Caixin gauges beating the median forecast and showing some improvement from October.

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    Source: Bloomberg

    So here is tonight’s smorgasbord of ‘managed’ misinformation from China…

    China’s New Home Prices rose at just 0.3% MoM – below expectations and the weakest growth since Feb 2018…

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    Source: Bloomberg

    And then the rest of the China data avalanche hit…

    • China’s Fixed Assets Investment YoY was +5.2% as expected and the same as October

    • China Industrial Production YoY rose by 5.6% (the same as October but better than the expected 5.5% rise)

    • China Retail Sales YoY jumped to +8.0% (from +7.2% and better than the 7.6% expected) but the impact of inflation, which will push the nominal level higher. CPI rose 4.5% in November year on year (thanks to soaring pork prices driving food inflation dramatically higher), well above the 3.8% rise in October.

    • China Surveyed Jobless Rate remained at 5.1%

    • China Property Investment YoY slowed modestly to +10.2%

    So all in all, flat to positive reports from China

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    Source: Bloomberg

    So the big question is, how much of a lift retail sales got from inflation.

    Additionally, Bloomberg reports that Iris Pang, an economist at ING Bank, says retail sales are distorted somewhat by a long holiday in October that had depressed some spending. But, she does see the numbers overall as positive for growth.

    As China’s credit impulse inched into the positive… (despite Chinese policy makers’ crackdown on shadow lending – credit extended outside of bank balance sheets – which has contracted for at least 14 straight months – and has been a major dampener for growth.)

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    Source: Bloomberg

    And China defaults are soaring…

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    Source: Bloomberg

    Of course, given the “phase one” deal that is being heralded by so many, all of this will be cleared up and economic growth will soar to the moon, alice. Or maybe, just maybe, none of the slowdown in economic growth was related to trade wars’ de minimus tariffs at all, and in fact, the limit of printing money, raising debt, and forcing consumption has been reached globally.

    PBOC fixed the yuan below 7.00 (at 6.9915), the strongest since August 6th, and we note that Chinese stocks opened lower (despite the trade deal) but the China data – as one veteran EM trader noted – was little more than “recovery propaganda” at this point in the cycle.


    Tyler Durden

    Sun, 12/15/2019 – 21:07

  • Why Illinois Property Taxes Won't Drop Without Major Spending Reform
    Why Illinois Property Taxes Won’t Drop Without Major Spending Reform

    Authored by Mark Glennon via Wirepoints.org,

    A commenter here recently asked it this way: “How high would income taxes have to ramp in order to offset reducing Illinois’ property tax burden to that of Indiana, Iowa or Wisconsin?”

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    That’s a great angle to look at it from because you learn much by seeing that math. Don’t worry, we’ve done the math for you below. You’ll see that no meaningful property tax relief is possible without major, structural reforms that cut spending. You’ll also see that Governor JB Pritzker’s property tax relief task force cannot be expected to come up with much. Its report is due out by the end of this month.

    The reason is simple. The numbers are overwhelming. Meaningful property tax cuts can’t be achieved without real spending reforms.

    Here is the answer to that commenter’s question:

    • If we cut Illinois’ residential property tax rates to match Indiana’s and shifted the burden to the state income tax, we’d have to cut property tax rates by 56% and nearly double the income tax. Seventeen billion dollars of property tax revenue would be lost, which represents 92% of what Illinois collects on the state income tax.

    • Even to match Wisconsin’s property tax rates, which are fourth highest in the nation, Illinois would have to cut its property tax rates by 24%, and shifting that to the income tax would mean a $7.6 billion income tax increase – a 40% jump.

    • Iowa’s property tax rates are one-third lower than ours, and cutting ours to match theirs would mean a $10 billion income tax hike – a 54% increase.

    For perspective on how big those tax hikes would be, consider that the pending progressive income tax proposal – the “Fair Tax” – is optimistically estimated to raise just $3.5 billion of additional revenue. So, it would cost five times that to match Indiana’s property tax rates through an Illinois income tax hike. New revenue from the Fair tax is less than half of what it would take even to match high-tax Wisconsin’s property tax rate.

    That’s just part of the absurdity of claims that the Fair Tax will help cut property taxes meaningfully. The $3.5 billion of new revenue from the Fair tax has already been promised away several times over. Endless messaging from supporters says the tax would also provide for fixing the state’s structural deficit, investing in schools and health care, fixing our crumbling infrastructure, creating thousands of jobs, “paying off the Republican Party’s old bills,” assuring that domestic violence shelters are kept open, helping stabilize our pensions, putting us on a path to fiscal stability and more. Truly paying for all that’s been promised from the Fair Tax would require tax rates that become absurd, which we’ve estimated before.

    Nor can you expect much help from the Property Tax Relief Task Force. It’s not charged with producing the kinds of drastic spending reforms that are truly needed, including genuine pension reform and the constitutional amendment needed for that. Besides, the Pritzker Administration has ruled that out. The task force now has over 80 members, making it difficult to see how it will agree on anything bold. They already rejected a measure on perhaps the most obvious, albeit small, reform needed, which is putting an end to lawmakers running property tax appeal businesses as side jobs.

    What about the pending legislation to consolidate investment functions of suburban and downstate police and firefighter pensions? Isn’t it supposed to relieve the property tax burden? It will only save an estimated $164 to $500 million per year, according to Pritzker, and that’s entirely speculative. That’s only 1.6% of property taxes at best, and nobody knows whether any savings from the plan will really go into property tax relief instead of being spent elsewhere.

    The initial aspect of the problem is that Illinois property taxes are monstrous – highest in the nation along with New Jersey. They total $31 billion across the state, which is far higher than any other source of government revenue for Illinois and its municipalities.

    But the ultimate, core problem when you add them together with all other taxes imposed statewide and locally is that we end up as America’s “least tax-friendly state,” as Kiplinger Personal Finance recently put it. It’s that total that’s the problem.

    Maybe the Property Tax Task Force will suggest at least some of the reforms that would help, such as consolidation of school districts and other units of government. But returning Illinois to competitive levels of taxation and services will require a long list of reforms small and large that address the state’s total tax burden. They include real pension reform, collective bargaining reforms, ending unfunded mandates imposed by the state on municipalities and much more.

    In summary, any meaningful property tax reduction, such as matching rates for neighboring states, would require reforms that our political establishment won’t consider.


    Tyler Durden

    Sun, 12/15/2019 – 20:35

  • "Great Slowdown" – Indian Economy Headed Towards ICU, Warns Former Economic Official
    “Great Slowdown” – Indian Economy Headed Towards ICU, Warns Former Economic Official

    The former Indian Chief Economic Adviser Arvind Subramanian warned that the Indian economy is headed for increased financial hardships, reported Business Today.

    Subramanian said the country’s current economic slowdown is considered a “Great Slowdown.” He suggested that the economy is headed towards an “intensive care unit,” referencing how the economy is on life support.

    He warned that the second wave of twin balance sheet (TBS) crises is crushing the economy, which will develop into an even more massive crisis, expected to unfold in the year ahead.

    “Look at electricity generation growth, it’s falling off the bottom, and it’s never been like this ever. So this is the sense in which I would say this is not just any slowdown, this is the great slowdown that India is experiencing and we should look at it with all seriousness …and the economy seems headed for the intensive care unit,” Subramanian said during a conference at Harvard University’s Centre for International Development.

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    Subramanian also warned about the TBS crisis in 2014 when he was Chief Economic Advisor under the Modi government.

    TBS refers to the developing problems in corporate debt and increasing non-performing assets have led to difficulties in the country’s banking sector that have weighed on credit growth. This has further slowed the economy and will likely lead to more deceleration through 2020.

    Subramanian said IL&FS Ltd, or Infrastructure Leasing & Finance Services crisis in 2018, was a “seismic event” as it triggered panic in banks and raised questions about sustainability.

    The TBS problem in India will push the economy much lower into 2020. Already, growth in Q3 stood at its lowest in six years.

    As economic growth rapidly slows, the Indian rupee has tumbled.

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    Industrial production growth is at the weakest level in a decade.

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    Business confidence has also plunged to decade lows.

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    And maybe because the 2016 recovery is over, a much longer-term downturn has resumed.

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    Clearly, the financial sector is the most significant imbalance in the system that could be corrected as the economy continues to decelerate.

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    Indian stocks are bumping up against a two-decade diagonal resistance line.

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    Saxo Bank’s Christopher Dembik, global head of macro research, warned on Twitter earlier this month, that “All the leading indicators point out it will get worse.”

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    Putting this all together, it means that central banks’ are failing to stabilize the global economy as it seems their policies are becoming less effective than ever before. This also means desynchronization continues to persist in the global economy, and really in manufacturing hubs around the world, indicating that a massive rebound in global growth, already priced in by global equity markets for early 2020, might be a fantasy at the moment.


    Tyler Durden

    Sun, 12/15/2019 – 20:10

  • Hyperinflation, Money Demand, & The Crack-Up Boom
    Hyperinflation, Money Demand, & The Crack-Up Boom

    Authored by Thorsten Polleit via The Mises Institute,

    In the early 1920s, Ludwig von Mises became a witness to hyperinflation in Austria and Germany – monetary developments that caused irreparable and (in the German case) cataclysmic damage to civilization.

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    Mises’s policy advice was instrumental in helping to stop hyperinflation in Austria in 1922. In his Memoirs, however, he expressed the view that his instruction — halting the printing press — was heeded too late:

    Austria’s currency did not collapse — as did Germany’s in 1923. The crack up boom did not occur. Nevertheless, the country had to bear the destructive consequences of continuing inflation for many years. Its banking, credit, and insurance systems had suffered wounds that could no longer heal, and no halt could be put to the consumption of capital.

    As Mises noted, hyperinflation in Germany was not stopped before the complete destruction of the reichsmark. To illustrate the monetary catastrophe, one may take a look at the exchange rate of the reichsmark against the US dollar.

    Before the start of World War I in 1914, around 4.2 marks would buy 1 US dollar. As soon as war action began, the convertibility of the mark was suspended and paper marks (papiermark) were issued, largely for financing war-related outlays. In 1918, after the end of World War I, 8.4marks bought 1 US dollar. In December 1919, the mark had depreciated to 46.8 per US dollar, and in December 1920 to 73.4 per dollar.

    In July 1922, the US dollar cost 670 marks.

    When French and Belgian troops occupied the Rhineland at the beginning of 1923, however, the exchange rate of the mark plummeted to 49,000 marks per US dollar.

    On November 15, 1923, when hyperinflation reached its peak, the currency reform effectively made 1 trillion (1,000,000,000,000) papiermarkequal to 1 rentenmark, and as 4.2 trillion papiermark exchanged for 1 US dollar at that time, 4.2 rentenmark would equal 1 US dollar.

    Increases in the Money Supply

    The 20th century saw many hyperinflations, including China in 1949–50, Brazil in 1989–90, Argentina in the late 1980s and early 1990s, Russia in 1992, Yugoslavia in 1994, and, most recently, Zimbabwe in 2006–09. All of these hyperinflations were the direct result of a system of unfettered fiat money under government control — a system that produces money in a non-market-conforming way: the money supply is increased out of thin air by banks simply extending loans (circulation credit) and/or monetizing assets.

    Hyperinflation is perhaps the darkest side of a government fiat money regime. Among mainstream economists, hyperinflation typically denotes a period of exceptionally strong increases in overall prices of goods and services, thus denoting a period of exceptionally strong erosions in the exchange value of money. Some people consider a rise in overall prices of 10 percent per month (which implies an annual rate of price increases of around 214 percent) as hyperinflation; others indentify hyperinflation as a monthly price rise of at least 20 percent (which implies an annual increase in prices of nearly 792 percent).

    However, any such numerical definition can be criticized, as it refers to the symptom rather than the root cause of the accelerating loss of the purchasing power of money. Economically speaking, hyperinflation is the inevitable consequence of an ever-greater rise in the amount of money. And this is exactly what the monetary theory of the Austrian School of economics teaches: In fact, Austrian theory shows that inflation is the logical consequence of a rise in the money supply, and that hyperinflation is the logical outcome of ever-higher growth rates in the money supply.

    According to the Austrian school, money is, like any other good, subject to the irrefutably true law of diminishing marginal utility. It is this law, which is implied by the axiom of human action, which is at the heart of Mises’s praxeology. As it relates to money, the law of diminishing marginal utility states that an increase in the quantity of money by an additional unit will inevitably be ranked lower (that is, valued less) than any same-sized unit of money already in an individual’s possession. This is because the new money can only be employed as a means for removing a state of uneasiness that is deemed less urgent than the least-urgent uneasiness which one has up to now been removing with the money in one’s possession.

    Money Demand

    People hold money because money has purchasing power (which people desire, given the fact of uncertainty as an undeniable category of human action), and the purchasing power of money is determined by the supply of and demand for money.

    If a rise in the money supply is accompanied by an equal rise in money demand, overall prices and the purchasing power of money remain unchanged. Once people start to exchange their increased money holdings against other goods, however, prices will start to rise, and the purchasing power of money will fall. That said, it is rise of the money supply relative to the demand for money that brings to the fore the obvious effect of an increasing money supply: rising prices.

    Mises saw that money demand plays a crucial role for the possibility of an unfolding hyperinflation. If the central bank is expected to increase the money supply in the future, people can be expected to rein in their money demand in the present — that is, increasingly surrendering money against vendible items. This would, other things being equal, drive up money prices. Mises noted that “this goes on until the point is reached beyond which no further changes in the purchasing power of money are expected.”4 The process of rising prices would come to a halt once people have fully adjusted for the expected increase in the money supply.

    What happens, however, if people expect that, in the future, the money-supply growth rate will increase to ever-higher rates? In this case, the demand for money would, sooner or later, collapse. Such an expectation would lead (relatively quickly) to a point at which no one would be willing to hold any money — as people would expect money to lose its purchasing power altogether. People would start fleeing out of money entirely. This is what Mises termed a crack-up boom:

    If once public opinion is convinced that the increase in the quantity of money will continue and never come to an end, and that consequently the prices of all commodities and services will not cease to rise, everybody becomes eager to buy as much as possible and to restrict his cash holding to a minimum size. For under these circumstances the regular costs incurred by holding cash are increased by the losses caused by the progressive fall in purchasing power. The advantages of holding cash must be paid for by sacrifices which are deemed unreasonably burdensome. This phenomenon was, in the great European inflations of the ‘twenties, called flight into real goods (Flucht in die Sachwerte) or crack-up boom (Katastrophenhausse).5

    The Unrelenting Power to Inflate

    If people expect a forthcoming, drastic increase the money supply — but if they at the same time expect that such an increase will be limited (i.e., a one-off increase) — the central bank can actually orchestrate a debasing of money without causing its complete destruction. As long as government and its central bank succeed in making people believe that any future rise in the money supply will remain within an acceptable limit, from the viewpoint of the money holder, monetary policy is an effective and most perfidious instrument for expropriation and non-market-conforming income redistribution.

    This may explain why Murray N. Rothbard, in his famous essay The Case for a 100 Percent Gold Dollar, wrote the following:

    I am not saying that fiat money, once established on the ruins of gold, cannot then continue indefinitely on its own. Unfortunately … if fiat money could not continue indefinitely, I would not have to come here to plead for its abolition.6

    Rothbard saw the danger that the government-controlled fiat money could be held up and running indefinitely, that it would not necessarily drive itself into a fatal and final collapse. As long as people do not expect that a money supply increase will spin out of control, the central bank is in a position to debase the currency without completely destroying it.

    In other words: hyperinflation would be possible without destroying the money completely. The crack-up boom, as Mises pointed out, would unfold only when people come to the conclusion that the central bank will expand the money supply at ever-greater rates:

    But then finally the masses wake up. They become suddenly aware of the fact that inflation is a deliberate policy and will go on endlessly. A breakdown occurs. The crack-up boom appears. Everybody is anxious to swap his money against “real” goods, no matter whether he needs them or not, no matter how much money he has to pay for them. Within a very short time, within a few weeks or even days, the things which were used as money are no longer used as media of exchange. They become scrap paper. Nobody wants to give away anything against them.7

    Debt Levels

    Today’s fiat-money regimes are characterized by ever-greater amounts of debt relative to real income — caused by policies that try to solve the economic problems caused by credit and money creation out of thin air by using even greater amounts of credit and money created out of thin air. And it is fair to say that the higher an economy’s overall debt level is, the more likely hyperinflation becomes.

    To show this, let us assume that after a long period of money creation through bank circulation credit expansion a credit crisis emerges: Creditors are no longer willing to roll over maturing debt at prevailing interest rates. Borrowers cannot repay their obligations when payment is due, and neither can they afford paying higher borrowing costs. Investors start fleeing out of bonds, making interest rates increase sharply and thereby covering up unprofitable investment. More borrowers, including banks, fail to meet their obligations, and bankruptcies spread. Ensuing recession and rising unemployment aggravate the collapse of the credit structure.

    Should investors in such a situation expect that the government and its central bank would opt for bailouts financed through additional money creation, the demand for money and fixed claims would most likely dry up. This would make it necessary for the central bank to extend ever-greater amounts of money to struggling borrowers in order to prevent the spread of bankruptcies. The larger the amount of outstanding debt is, the larger will be the potential increase in the money supply. The more the money supply grows, the more likely it is that there will be hyperinflation and a potential breakdown of money demand: the unfolding of a crack-up boom.


    Tyler Durden

    Sun, 12/15/2019 – 19:45

  • What Will The Market Care About In 2020? Here Is Goldman's Answer
    What Will The Market Care About In 2020? Here Is Goldman’s Answer

    Now that two of the market’s greatest unknowns – Brexit/the UK election, and the “Phase One” part of the US-China trade war (with the Phase Two supposedly on the “to do” list after the Nov 2020 elections) – appear to have found an interim, if not fully satisfactory, resolution, a recurring question among the trader community is what will the market care about in the coming year.

    Conveniently, an answer to that question is the topic of a Goldman report published over the weekend, and which points out that despite the immediate newsflow vacuum now that stocks will no longer rally on “optimism” of an imminent deal announcement, there is still quite a bit to occupy traders. Starting with the Treasury-market, Goldman notes that activity here will depend crucially on the Fed’s reaction function and the current pace of growth (among other things).

    As shown in the chart below, sensitivity to inflation surprises picked up sharply in late 2017 and 2018 as the Fed hiked, as realized inflation moved towards the target, and as the risk of overheating entered the mainstream policy debate.

    However, 2019 saw a reversal of all three trends, and inflation sensitivity declined arguably as a result.

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    Following the sharp tightening in financial conditions at the turn of the year, the combination of renewed growth fears, declining core inflation, and the dovish Fed pivot resulted in a roughly 50% decline in inflation sensitivity. Equity-market inflation sensitivity also declined, albeit more modestly.

    In contrast, sensitivity to growth data picked up sharply in 2019, reflecting slowing growth and the return of recession fears. In fact, growth sensitivity in the bond market is already back to its level during the shale bust and capex-driven growth scare of 2016-17.

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    Looking ahead to 2020, Goldman expects another signal reversal, as its forecast of improving growth and diminished trade risks suggests scope for a modest pullback in sensitivity to growth data. Treasury-market sensitivity has already overshot relative to the bank’s predictions (see blue and red line in the left panel of Exhibit 6), and the end of the mid-cycle adjustment coupled with its expectation of firming US growth argues for more a normal degree of data sensitivity in early 2020.

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    Similarly, equity-market reactions to growth data could also wane a bit early next year if growth picks up.

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    It is also worth recalling that 2020 will be the year of the presidential election. As a result, Goldman analyzes the impact of elections on data sensitivity since 2000. Adding election dummy variables to the models shown in Exhibit 6, the bank finds a negative and significant “election effect” on growth sensitivity—with reactions to growth surprises attenuating in the quarter of presidential elections. Goldman analysts also find tentative evidence of attenuation in the quarter preceding the election (statistical power may be limited by the short sample).

    The implications for 2020 are shown by the dotted lines above (i.e., a short-lived lull in data reactions in the coming fall 2020).

    In contrast, the bank finds no such effects for inflation sensitivity. This may suggest that market participants view elections as more important for the growth outlook than for the near-term trajectory of core inflation (such that inflation news continues to be an important driver of price action, even if growth surprises are faded). In conclusion, Goldman expects inflation reactions to pick up gradually in 2020 as inflation rebounds towards the target and the Fed begins to contemplate its next move. All of that, of course, assumes that inflation will rebound next year as most on Wall Street now openly expect. However, if there is anything that 2019 once again vividly demonstrated, it is that when everyone expects something, the opposite happens.


    Tyler Durden

    Sun, 12/15/2019 – 19:20

  • Deluge Of New Leaks Further Shreds The Establishment Syria Narrative
    Deluge Of New Leaks Further Shreds The Establishment Syria Narrative

    Authored by Caitlin Johnstone via Medium.com,

    It’s been a bad last 24 hours for the war propagandists.

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    WikiLeaks has published multiple documents providing further details on the coverup within the Organisation for the Prohibition of Chemical Weapons (OPCW) of its own investigators’ findings which contradicted the official story we were all given about an alleged chlorine gas attack in Douma, Syria last year. The alleged chemical weapons incident was blamed on the Syrian government by the US and its allies, who launched airstrikes against Syria several days later. Subsequent evidence indicating that there was insufficient reason to conclude the chlorine gas attack ever happened was repressed by the OPCW, reportedly at the urging of US government officials.

    The new publications by WikiLeaks add new detail to this still-unfolding scandal, providing more evidence to further invalidate attempts by establishment Syria narrative managers to spin it all as an empty conspiracy theory. The OPCW has no business hiding any information from the public which casts doubt on the official narrative about an incident which was used to justify an act of war on a sovereign nation.

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    The following are hyperlinks to the individual OPCW documents WikiLeaks published, with some highlights found therein:

    A first draft of the OPCW’s July 2018 Interim Report on the team’s findings in Douma.

    Contains crucial information that was not included in either the final draft of the July 2018 Interim Report or the March 2019 Final Report, including (emphasis mine):

    1. The symptoms of the alleged victims of the supposed chemical incident were inconsistent with chlorine gas poisoning.

    “Some of the signs and symptoms described by witnesses and noted in photos and video recordings taken by witnesses, of the alleged victims are not consistent with exposure to chlorine-containing choking or blood agents such as chlorine gas, phosgene or cyanogen chloride,” we learn in the unredacted first draft. “Specifically, the rapid onset of heavy buccal and nasal frothing in many victims, as well as the colour of the secretions, is not indicative of intoxication from such chemicals.”

    “The large number of decedents in the one location (allegedly 40 to 45), most of whom were seen in videos and photos strewn on the floor of the apartments away from open windows, and within a few meters of an escape to un-poisoned or less toxic air, is at odds with intoxication by chlorine-based choking or blood agents, even at high concentrations,” the unredacted draft says.

    This important information was omitted from the Interim Report and completely contradicted by the Final Report, which said that the investigation had found “reasonable grounds that the use of a toxic chemical as a weapon took place. This toxic chemical contained reactive chlorine. The toxic chemical was likely molecular chlorine.”

    2. OPCW inspectors couldn’t find any explanation for why the gas cylinders supposedly dropped from Syrian aircraft were so undamaged by the fall.

    “The FFM [Fact-Finding Mission] team is unable to provide satisfactory explanations for the relatively moderate damage to the cylinders allegedly dropped from an unknown height, compared to the destruction caused to the rebar-reinforced concrete roofs,” reads the leaked first draft. “In the case of Location 4, how the cylinder ended up on the bed, given the point at which it allegedly penetrated the room, remains unclear. The team considers that further studies by specialists in metallurgy and structural engineering or mechanics are required to provide an authoritative assessment of the team’s observations.”

    We now know that a specialist was subsequently recruited to find an answer to this mystery. A leaked document dated February 2019 and published by the Working Group On Syria, Propaganda and Media in May 2019 was signed by a longtime OPCW inspector named Ian Henderson. Henderson, a South African ballistics expert, ran some experiments and determined that “The dimensions, characteristics and appearance of the cylinders, and the surrounding scene of the incidents, were inconsistent with what would have been expected in the case of either cylinder being delivered from an aircraft,” writing instead that the cylinders being “manually placed” (i.e. staged) in the locations where investigators found them is “the only plausible explanation for observations at the scene.”

    More on Ian Henderson in a moment.

    3. The team concluded that either the victims were poisoned with some unknown gas which wasn’t chlorine, or there was no chemical weapon at all.

    “The inconsistency between the presence of a putative chlorine-containing toxic chocking or blood agent on the one hand and the testimonies of alleged witnesses and symptoms observed from video footage and photographs, on the other, cannot be rationalised,” the unredacted first draft reads. “The team considered two possible explanations for the incongruity:
    a. The victims were exposed to another highly toxic chemical agent that gave rise to the symptoms observed and has so far gone undetected.
    b. The fatalities resulted from a non-chemical-related incident.”

    Again, none of this information made it into any of the OPCW’s public reports on the Douma incident. The difference between the information we were given (that a chlorine gas attack took place and the strong suggestion that it was dropped by Syrian aircraft) and the report the inspectors were initially trying to put together (literally the exact opposite) is staggering. For more insider information on the deliberation between OPCW inspectors who wanted their actual findings to be reported and the organisation officials who conspired to omit those findings, read this November report by journalist Jonathan Steele.

    A memo from a member of the OPCW’s Fact-Finding Mission (FFM) in Douma to the OPCW Director General Fernando Arais.

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    It’s worth noting that this memo is dated two weeks after the OPCW published its Final Report on the Douma incident in March 2019, because it further invalidates the bogus argument made by narrative management firms like Bellingcat claiming that the grievances of the dissenting OPCW inspectors had been satisfactorily addressed by the time the Final Report was published.

    Clearly the concerns were not addressed, because the memo consists entirely of complaints, and according to its author “there are about 20 inspectors who have expressed their concern over the current situation.”

    The memo’s author complains that the FFM report was made almost exclusively by team members who never even went to Douma, doing their research instead solely in “Country X”, which WikiLeaks speculates may be Turkey.

    “The FFM report does not reflect the views of all the teams that deployed to Douma,” the memo says. “Only one team member (a paramedic) of the so-called ‘FFM core team’ was in Douma. The FFM report was written by this core team, thus by people who had only operated in Country X.”

    “After the exclusion of all team members other than a small cadre of members who had deployed (and deployed again in October 2018) to Country X, the conclusion seems to have turned completely in the opposite direction. The FFM team members find this confusing, and are concerned to know how this occurred.”

    The memo’s author is unnamed in the WikiLeaks document, but claims to have been “assigned the task of analysis and assessment of the ballistics of the two cylinders,” indicating that it was likely the aforementioned Ian Henderson. A concurrent publication by Peter Hitchens in the Daily Mail appears to confirm this. Hitchens reports that when Henderson lodged his Engineering Assessment in the OPCW’s secure registry after failing to get traction for his report, which the memo’s author also reports to have done, an unpopular unnamed OPCW official nicknamed “Voldemort” ordered that every trace of the report be removed.

    “Mr Henderson tried to get his research included in the final report, but when it became clear it would be excluded, he lodged a copy in a secure registry, known as the Documents Registry Archive (DRA),” Hitchens reported. “This is normal practice for such confidential material, but when ‘Voldemort’ heard about it, he sent an email to subordinates saying: ‘Please get this document out of DRA … And please remove all traces, if any, of its delivery/storage/whatever in DRA’.”

    So to recap, the OPCW enlisted a longtime ballistics expert with an extensive history of work with the organisation to run some experiments and produce an Engineering Assessment to explain how the alleged chlorine cylinders could have been found in the condition they were found in, and when he came to conclusions which were exculpatory for the Syrian government, his boss ordered every sign of it purged from the registry.

    Again, not a whisper of any of this was breathed in the OPCW’s public reports on the Douma incident, despite somewhere around 20 inspectors having objections. The OPCW had no business hiding this from the public.

    An internal email from May 2019 voicing further concerns.

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    This interesting email, sent to the OPCW’s Office of Strategy and Planning Director Veronika Stromsikova, defended Ian Henderson and objected to the mistreatment of a principled and respected team member.

    “A member of the FFM team has been suspended from his post and escorted from the OPCW building in a less than dignified manner,” the email’s author complains. “After more than 12 years, I believe, serving the OPCW with dedication and professionalism, Ian Henderson’s personal and professional integrity have taken a knock in the most public of fora, the internet. A falsehood issued by the OPCW, that Ian did not take part in the Douma FFM team, has been pivotal in discrediting him and his work.”

    Indeed, as soon as Henderson’s Engineering Assessment was leaked this past May, Syria narrative managers like Idrees AhmadBrian Whitaker, and Bellingcat founder Eliot Higgins immediately set to work trying to spin him as merely a lone “disgruntled employee” who was “not a part of the Fact-Finding Mission”.

    “The denial is patently untrue,” the email’s author writes. “Ian Henderson WAS part of the FFM and there is an abundance of official documentation, as well as other supporting proof, that testifies to that.”

    But I don’t suppose we can expect to see any apologies or corrections from the usual suspects in light of this new information.

    “We are not insisting on being right in our assertions, but we are demanding to be heard,” the email’s author writes. “We have desperately tried to limit expression of concerns to within the Organisation and will continue to do so. However, we have been stonewalled throughout by obfuscationexclusion, and even thuggish and bullying behavior.”

    The author wraps things up by explaining why they’re pushing so hard to be heard with a quote from Edmund Burke: “All that is required for evil to triumph is for good men to do nothing.

    Email communications between FFM members and their team leader Sami Barrek.

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    This July 2018 correspondence is significant mainly because it brings in hard evidence for the exchange described by the OPCW whistleblower “Alex” in the aforementioned Jonathan Steele report, which was described as follows:

    “This request was rejected but Sami Barrek, the team leader, was put in charge of replacing the doctored version with what turned out to be a toned-down but still misleading report. During the editing four of the Douma inspectors, including Ian Henderson, the engineering expert, had managed to get Barrek to agree that the low levels of COCs [Chlorinated Organic Chemicals] should be mentioned. On the day before the new publication date, July 6, they found that the levels were again being omitted.”

    The back-and-forth exchanges feature one or more anonymous team members arguing with Barrek that more information needs to be included in the Interim Report so that people won’t jump to conclusions that the team had found evidence it hadn’t. And sure enough, Moon of Alabama documented multiple mass media headlines which falsely claimed the Interim Report had asserted chlorine gas was used (that invalid claim wasn’t made until the Final Report in March 2019).

    Here’s a sample exchange where one inspector tries to persuade Barrek to change the language in the report so readers will understand that the information they had about chlorinated organic chemical concentrations at the time hadn’t reached any “damning conclusion”, with Barrek throwing up inertia and saying he can unilaterally overrule them if he wants to:

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    Again, none of the findings which were inconsistent with the US narrative were included in either the final draft of the Interim Report or in the Final Report. Nothing about the low levels of chlorinated organic chemicals, nothing about the inconsistencies in symptoms with chlorine gas poisoning, nothing about the lack of damage to the cylinders, nothing about Ian Henderson’s findings. Nothing. The OPCW had no business withholding that information.

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    These new leaks take care of the latest spin jobs by establishment narrative managers, who were just the other day beginning to argue that the fact that there hadn’t been any more OPCW leaks in a while indicated that the whole OPCW scandal was bogus. Sorry to disappoint you, fellas.

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    The WikiLeaks documents and Hitchens’ Daily Mail article came out the same day as ex-Newsweek reporter Tareq Haddad shared emails sent to him by his editors forbidding him to publish information on the OPCW scandal, an important slice of information on the way mass media outlets stifle commentary on important stories that are inconvenient for US imperialism.

    Newsweek’s foreign affairs editor Dimi Reider (who Haddad notes has Council on Foreign Relations ties) shot down Haddad’s pitch for a story about the OPCW scandal last month by falsely claiming that Bellingcat had “published a thorough refutation” of the story Haddad wanted to report on. In fact, as I documented at the time, Bellingcat had published an unbelievably pathetic spin job in which it tried to paint the whole OPCW scandal as a big misunderstanding.

    Bellingcat argued that the concerns voiced in the leaked email published by WikiLeaks last month about the developing Interim Report in July 2018 had been fully addressed by the time the Final Report was published in March 2019, citing as evidence the fact that some slight adjustments had been made in the wording, like changing “likely” to “possible” and changing “reactive chlorine containing chemical” to “chemical containing reactive chlorine.” In focusing on this ridiculous, pedantic nonsense, Bellingcat tries to weave the narrative that because the whistleblower’s concerns were addressed with this pedantry, there was therefore no OPCW coverup. Never mind the fact that the multiple OPCW whistleblowers were still plainly so incensed by the organisation’s publishing that they felt the need to leak internal documents. Never mind that Bellingcat made no attempt whatsoever to address the aforementioned actual grievances by the OPCW whistleblowers like the low levels of chlorinated organic chemicals on the scene, the inconsistencies in symptoms and testimony with chlorine poisoning, or the Ian Henderson report.

    But that’s what happens when mass media outlets like The New York Times and The Guardian publish swooning puff piece after swooning puff piece about Bellingcat; they grant a US government-funded narrative management firm so much unearned legitimacy that even a transparently bogus argument like the one they made about the OPCW scandal gets passed around newsrooms by credulous editors assuring each other that it’s a “thorough refutation” of facts and reality. Mass media outlets help puff up Bellingcat’s legitimacy, and in turn Bellingcat rewards them with an excuse to not have to ever challenge establishment narratives.

    Reider also argued that Haddad’s report on the OPCW couldn’t be published because “not a single respected media outlet — many of whom boast far greater regional expertise, resources on the ground and in newsroom than Newsweek does — have taken the leak remotely seriously.”

    That’s a great self-reinforcing system, isn’t it? MSM outlets validate US government-funded narrative managers like Bellingcat so they can tell them with authority why an unauthorised story shouldn’t be published, and each outlet sees the absence of other outlets reporting on it as evidence that it shouldn’t be reported on. And we wonder why no one’s reporting on the OPCW scandal.

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    And Newsweek’s Digital Director Laura Davis gave Haddad the same answer, regurgitating the absolutely bogus Bellingcat line that the leaked email wasn’t newsworthy because “it predates the final report” and because no one else has written about it. It’s a system fully locked down against any oppositional reporting, and we can surmise that this is the norm for newsrooms throughout the English-speaking world.

    Haddad also published a similar email he’d received from International Business Times then-editor-in-chief Julian Kossoff, who rejected a pitch he’d made for an opinion piece he’d written about the Khan Sheikhun incident in April 2017.

    “Thanks for the suggested opinion piece,” Kossoff wrote. “However, I do not think we will be able to use it. Its narrative is highly controversial and likely to offend and only a writer or expert of repute (e.g Noam Chomsky) could get away with such an incendiary thesis.”

    And what was this “incendiary thesis”? Well, Haddad published it with CounterPunch, so you can see for yourself. He simply argued what in my opinion should be a completely uncontroversial position: that there wasn’t yet enough evidence to be certain Assad was behind the attacks, and the US has a known history of entering into military entanglements based on lies, so the warmongers demanding Assad’s overthrow shouldn’t be listened to.

    This insight into the dynamics behind the mass media’s lies by omission are very valuable, and they help us paint a better picture about the reason we’re not seeing more discussion of these OPCW leaks.

    *  *  *

    Thanks for reading! The best way to get around the internet censors and make sure you see the stuff I publish is to subscribe to the mailing list for my website, which will get you an email notification for everything I publish. My work is entirely reader-supported, so if you enjoyed this piece please consider sharing it around, liking me on Facebook, following my antics on Twitter, checking out my podcast on either YoutubesoundcloudApple podcasts or Spotify, following me on Steemit, throwing some money into my hat on Patreon or Paypalpurchasing some of my sweet merchandise, buying my new book Rogue Nation: Psychonautical Adventures With Caitlin Johnstone, or my previous book Woke: A Field Guide for Utopia Preppers. For more info on who I am, where I stand, and what I’m trying to do with this platform, click here. Everyone, racist platforms excluded, has my permission to republish or use any part of this work (or anything else I’ve written) in any way they like free of charge.

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    Tyler Durden

    Sun, 12/15/2019 – 18:55

  • 'You Need Rehabilitation': Nunes Letter Dismantles Schiff Over FISA Lies, Stroking Steele, And Participating In Coverup
    ‘You Need Rehabilitation’: Nunes Letter Dismantles Schiff Over FISA Lies, Stroking Steele, And Participating In Coverup

    “As part of your rehabilitation, it’s crucial that you admit you have a problem – you are hijacking the Intelligence Committee for political purposes while excusing and covering up intelligence agency abuses.” -Devin Nunes to Adam Schiff

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    Rep. Devin Nunes (R-CA) has written perhaps the most brutal ‘I told ya so’ letter in recent memory to Adam Schiff, his Democratic rival and chairman of the House Intelligence Committee. 

    After last week’s Inspector General report on FBI FISA abuse revealed Schiff was peddling lies to the American public in a February, 2018 ‘counter-memo’ to Nunes’s now-proven claims, Schiff passed the buck – telling Fox News host Chris Wallace on Sunday that he was ‘unaware’ of certain things unccovered by the IG – while failing to admit he’s been dead wrong on an ongoing basis about a number of things.

    Nunes isn’t letting this go. In a Sunday letter, he reminded Schiff that “The IG’s findings of pervasive, major abuses by the FBI dramatically contradict the assertions of your memo released on February 24, 2018, in which you claimed, “FBI and DOJ officials did not ‘abuse’ the Foreign Intelligence Surveillance Act (FISA) process, omit material information, or subvert this vital tool to spy on the Trump Campaign.

    Schiff is in clear “need of rehabilitiation,” continues Nunes, adding “I hope this letter will serve as the first step in that vital process.

    “Outlining every false claim from your memo would require an extremely long letter,” Nunes continues, who then lists several key claims made by Schiff which ‘the IG report has exposed as false.’ 

    • FBI and DOJ officials did not omit material information from the FISA warrant.

    • The DOJ “made only narrow use of information from [Christopher] Steele’s sources about Page’s specific activities in 2016.”

    • In subsequent FISA renewals, DOJ provided additional information that corroborated Steele’s reporting.

    • The Page FISA warrant allowed the FBI to collect “valuable intelligence.”

    • “Far from “omitting’ material facts about Steele, as the Majority claims. DOJ repeatedly informed the Court about Steele’s background, credibility, and potential bias.”

    • The FI31 conducted a “rigorous process” to vet Steele’s allegations, and the Page FISA application explained the FBI’s reasonable basis for finding Steele credible.

    • Steele’s prior reporting was used in criminal proceedings.

    Nunes goes on to dismantle Schiff’s bullshit point by point using findings from the IG report, which include: 

    • Information provided by Christopher Steele played a “central and essential role” in the decision to seek a FISA warrant on Carter Page.

    • There were seventeen “significant errors or omissions” in the FISA application and renewals, and the IG did not get satisfactory explanations for them.

    • The Crossfire Hurricane team failed to inform the DOJ of “significant information”, and “much of that information was inconsistent with, or undercut” assertions in the FISA applications.

    • The FBI relied solely on Steele information for its assertions about Page’s alleged coordination with Russians to hack the 2016 elections.

    (See entire list below)

    Nunes then calls out Schiff for defending Steele, who peddled his discredited, Clinton-funded dossier to the media six weeks before the 2016 US election

    “As you know, your misguided validation of the FISA warrant was part of a years-long pattern in which you touted Christopher Steele’s credentials and reliability,” writes Nunes.

    “For example, during this committee’s March 20, 2017 open hearing, you claimed Steele “is reportedly held in high regard by U.S. Intelligence.” and proceeded to read into the congressional record numerous conspiracy theories proffered by Steele, all of which are false.” 

    Next, Nunes accused Schiff of participating in a coverup: 

    As is clear from the 16 report, Carter Page was the victim of a smear campaign that was funded by the Democratic National Committee and the Hillary Clinton campaign and was implemented by Christopher Steele and Fusion GPS. The FBI used these false allegations to obtain a warrant to spy on Page, a gross violation of an American citizen’s civil liberties. Your direct participation in the smear campaign against Page is extremely concerning. considering you are chairman of the committee responsible for uncovering precisely these sorts of abuses by the Intelligence Community. Instead of joining committee Republicans in exposing these abuses, however, you excused them. And by supporting the agencies’ stonewalling of our attempts to gather information on this affair, you helped cover up this misconduct.

    Because of Schiff’s misdeeds, and his blind faith in the US intelligence communities which the House Intelligence Committee is supposed to monitor, Nunes says “This makes it clear your rehabilitation will be a long, arduous process.” 

    “this committee is responsible for overseeing the Intelligence Community and exposing abuses. Yet when the IG identified gross abuses in our jurisdiction, you expressed full faith in the agencies we’re supposed to be vigilantly monitoring. and you rejected any oversight whatsoever of their supposed clean-up efforts,” writes Nunes. 

    Read the entire letter below:

    ***

    Dear Chairman Schiff:

    As you are aware, on December 9, 2019, U.S. Department of Justice Inspector General (IG) Michael Horowitz published the results of his investigation of the FISA warrant and renewals obtained by the Federal Bureau of Investigations (FBI) and the Department of Justice (DOJ) to spy on Trump campaign associate Carter Page. The IG’s findings of pervasive, major abuses by the FBI dramatically contradict the assertions of your memo released on February 24, 2018, in which you claimed, “FBI and DOJ officials did not ‘abuse’ the Foreign Intelligence Surveillance Act (FISA) process, omit material information, or subvert this vital tool to spy on the Trump Campaign.”

    After publishing false conclusions of such enormity on a topic directly within this committee’s oversight responsibilities, it is clear you are in need of rehabilitation, and I hope this letter will serve as the first step in that vital process.

    Outlining every false claim from your memo would require an extremely long letter, so I will limit my summary to a few highlights. In your memo you made the following assertions:

    • FBI and DOJ officials did not omit material information from the FISA warrant.

    • The DOJ “made only narrow use of information from [Christopher] Steele’s sources about Page’s specific activities in 2016.”

    • In subsequent FISA renewals, DOJ provided additional information that corroborated Steele’s reporting.

    • The Page FISA warrant allowed the FBI to collect “valuable intelligence.”

    • “Far from “omitting’ material facts about Steele, as the Majority claims. DOJ repeatedly informed the Court about Steele’s background, credibility, and potential bias.”

    • The FI31 conducted a “rigorous process” to vet Steele’s allegations, and the Page FISA application explained the FBI’s reasonable basis for finding Steele credible.

    • Steele’s prior reporting was used in criminal proceedings.

    The IG report has exposed all these declarations as false. Despite your denial of any problems with the FISA warrant, the 16 found:

    • Information provided by Christopher Steele played a “central and essential role” in the decision to seek a FISA warrant on Carter Page.

    • There were seventeen “significant errors or omissions” in the FISA application and renewals, and the IG did not get satisfactory explanations for them.

    • The Crossfire Hurricane team failed to inform the DOJ of “significant information”, and “much of that information was inconsistent with, or undercut” assertions in the FISA applications.

    • The FBI relied solely on Steele information for its assertions about Page’s alleged coordination with Russians to hack the 2016 elections.

    • The applications omitted information provided to the FBI about Page’s operational contact with another U.S. government agency and the agency’s positive assessment of him. In fact, an FBI official altered an email stating that Page was a source for another government agency in order to have it read the opposite—that he was “not a source.”

    • FBI Director James Conley and Deputy Director Andy McCabe sought to include Steele’s reporting in the Intelligence Community Assessment even though the CIA dismissed the Steele information as `Internet rumor.”

    • In FBI interviews, Steele’s own sources contradicted information from Steele that was used in the FISA applications.

    • The significance of Steele’s prior reporting was ‘-overstated.”

    • None of the Steele reporting on Caner Page used in the FISA applications could be corroborated, and some of it contradicted other information in the FBI’s possession.

    • The FBI omitted information about Steele’s bias provided by DOJ official Bruce Ohr.

    • The applications omitted exculpatory statements by Page and others.

    • The FBI failed to reveal in the applications that the Democratic National Committee and the Hillary’ Clinton campaign were receiving and/or funding Steele’s work through Fusion UPS.

    Overall, the Inspector General found, “That so many basic and fundamental errors were made by three separate, hand-picked teams on one of the most sensitive FBI investigations that was briefed to the highest levels within the FBI, and that FBI officials expected would eventually be subjected to close scrutiny, raised significant questions regarding the FBI chain of command’s management and supervision of the FISA process… In our view, this was a failure of not only the operational team, but also of the managers and supervisors, including senior officials, in the chain of command.” Indeed, the problems are so severe that the Inspector General has initiated an audit to further investigate FBI’s compliance with Woods Procedures in FISA applications.

    As you know, your misguided validation of the FISA warrant was part of a years-long pattern in which you touted Christopher Steele’s credentials and reliability. For example, during this committee’s March 20, 2017 open hearing, you claimed Steele “is reportedly held in high regard by U.S. Intelligence.” and proceeded to read into the congressional record numerous conspiracy theories proffered by Steele, all of which are false. These included:

    • Carter Page had a secret meeting with Rosneft CEO Igor Sechin.

    • Sechin offered Page a brokerage fee involving the sale of 19 percent of Rosneft.

    • Russians offered the Trump campaign dirt on Hillary Clinton in exchange for the Trump administration adopting policies favorable to Russia

    • Paul Manafort chose Page to act as a go-between for the Trump campaign and Russia.

    As is clear from the 16 report, Carter Page was the victim of a smear campaign that was funded by the Democratic National Committee and the Hillary Clinton campaign and was implemented by Christopher Steele and Fusion GPS. The FBI used these false allegations to obtain a warrant to spy on Page, a gross violation of an American citizen’s civil liberties. Your direct participation in the smear campaign against Page is extremely concerning. considering you are chairman of the committee responsible for uncovering precisely these sorts of abuses by the Intelligence Community. Instead of joining committee Republicans in exposing these abuses, however, you excused them. And by supporting the agencies’ stonewalling of our attempts to gather information on this affair, you helped cover up this misconduct.

    I am particularly concerned by the press release you issued after the release of the IG report. I applaud you for acknowledging that the report identified “issues and errors” and “potential misconduct” connected to the FISA warrant. This acknowledgement, though dramatically downplaying the scale of the abuse the IG uncovered, could be a valuable first step – a baby step, but a step nonetheless – in your rehabilitation. Nevertheless, in your statement you expressed full faith in FBI Director Christopher Wray’s promise to address the problem: demanded that the implementation of reforms be confined to “career officials, away from the political arena;” and denounced Attorney General Bill Barr and U.S. Attorney John Durham for expressing concerns about these matters.

    This makes it clear your rehabilitation will be a long, arduous process. As previously noted, this committee is responsible for overseeing the Intelligence Community and exposing abuses. Yet when the IG identified gross abuses in our jurisdiction, you expressed full faith in the agencies we’re supposed to be vigilantly monitoring. and you rejected any oversight whatsoever of their supposed clean-up efforts. If agencies with a documented, severe abuse problem should be trusted to police themselves, then it’s fair to ask why this committee even exists and what we’re supposed to be doing, if anything, aside from being exploited by you as a launching pad to impeach the president for issues that have no intelligence component at all.

    As part of your rehabilitation, it’s crucial that you admit you have a problem – you are hijacking the Intelligence Committee for political purposes while excusing and covering up intelligence agency abuses. The next step will be to convene a hearing with IG Horowitz, as the Senate Judiciary Committee has done and the Senate Homeland Security Committee will do next week.

    I understand taking action on this issue will be difficult for you, as it will be an implicit acknowledgment that you were wrong to deny these abuses and that you were complicit in the violation of an American’s civil liberties. I also understand such an acknowledgement is made even more difficult by the fact that you’ve already been discredited by your years-long false claim that the Trump campaign colluded with Russia to hack the 2016 presidential election.

    Nevertheless, I refuse to believe you are beyond redemption. I invite you to work closely with me on your rehabilitation program, and look forward to your scheduling a committee hearing with IG Horowitz at the nearest opportunity.


    Tyler Durden

    Sun, 12/15/2019 – 18:32

    Tags

  • Second Damning FBI Lie About Carter Page Revealed In IG Report: Sperry
    Second Damning FBI Lie About Carter Page Revealed In IG Report: Sperry

    Thanks to the DOJ Inspector General report on FBI surveillance abuses, we now know that the agency didn’t just lie about former Trump campaign aide Carter Page – they fabricated evidence to obtain a surveillance warrant, excluding the fact that he had worked with the CIA.

    But wait, there’s more!

    Thanks to a deep dive into the IG report, the Mueller report, and interviews with Trump campaign officials, RealClearInvestigations Paul Sperry has found another fraud on the American public perpetrated by James Comey’s FBI: The agency, as well as Special Counsel Robert Mueller, knew full well that Page wasn’t “an agent of Russia,” and that he had no role in gutting a pro-Russia / anti-Ukraine GOP platform plank at the 2016 convention.

    Strap in, Sperry goes deep on this one.

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    Authored by Paul Sperry via RealClearInvestigations  (emphasis ours)

    The FBI and Special Counsel Robert Mueller repeatedly kept alive a damning narrative that investigators knew to be false: namely, that a junior Trump campaign aide as a favor to the Kremlin had “gutted” an anti-Russia and pro-Ukraine plank in the Republican Party platform at the GOP’s 2016 convention. 

    Federal authorities used this claim to help secure spy warrants on the aide in question, Carter Page, suggesting to the court that he was “an agent of Russia” – even though investigators knew that Page was working for U.S., not Russian, intelligence, and that they had learned from witnesses, emails and other evidence that Page had no role in drafting the Ukraine platform plank.

    The revelation is buried in the Justice Department watchdog’s just-released report on FISA surveillance abuses. RealClearInvestigations fleshed out this unreported story with footnotes from the Mueller report and exclusive interviews with Trump campaign officials who worked on the convention platform.

    Of all the Trump-Russia rumors, insinuations and falsehoods – from secret payments for shadowy hackers, to videotaped prostitutes with active bladders, to a clandestine rendezvous with Kremlin figures in Prague – the supposedly pro-Russia Ukraine platform alteration stands out. It seemed to offer early, public, concrete evidence of an actual bending of prospective U.S. policy to suit Moscow. The false narrative is also significant because it was initially pushed not by Democrats, but by associates of Republican Sen. John McCain and other so-called Never Trumpers. As a bipartisan red flag, it helped build momentum around a narrative of Trump treachery with, then as now, Ukraine playing a central role. It also shows how the Russia and Ukraine controversies were linked from the beginning by Trump’s foes.

    This episode loomed so large that the first person Mueller’s team interviewed after taking over the Russia investigation in May 2017 was Rachel Hoff, who was serving as McCain’s policy adviser on the Senate Armed Services Committee. Like her boss, Hoff was no fan of President Trump. Agents sought to confirm with her reports that the Trump campaign had “gutted” the GOP’s platform plank on Ukraine to favor Russia during the party’s convention in Cleveland in early July 2016. 

    As a disgruntled convention delegate, Hoff got the story started by putting Washington Post columnist Josh Rogin in touch with another Never Trump delegate, Diana Denman, who had lost her bid to amend the GOP plank to call for providing “lethal” weapons to Ukraine to help fend off Russian incursions, according to people with direct knowledge of the matter. Instead, the platform called for “appropriate assistance to the armed forces of Ukraine.”

    Denman was overruled because heavily arming Ukraine was out of step with the GOP consensus at the time – to say nothing of the Obama administration’s policy, which refused to arm the Ukrainians. And it was at odds with Trump’s stated position, which sought to avoid military escalation in the region, while encouraging the European Union to take a larger peacekeeping role.

    On July 18, 2016, the Post ran Rogin’s sensational story under the misleading headline, “Trump Campaign Guts GOP’s Anti-Russia Stance on Ukraine.” Pushing the narrative that Trump was doing the Kremlin’s bidding, it quoted Hoff warning that Trump “would be dangerous for America and the world.” The story left out the key part of the final Trump-approved plank pledging aid “to the armed forces of Ukraine.” Reached by phone, Rogin declined comment. 

    This story was quickly amplified in the Steele dossier, the series of now-debunked opposition research memos alleging Trump-Russia collusion. Compiled by ex-British intelligence officer Christopher Steele for the Clinton campaign, those memos became a foundation for the FBI and Mueller probes even though – as this week’s IG report established – bureau agents knew that the material in them included demonstrably false assertions and exaggerated gossip dismissed as nonsense by Steele’s own purported source.

    Steele also embellished the GOP convention story by claiming that Carter Page had played a key role in drafting the Ukraine plank as part of a commitment he had allegedly made to his Kremlin handlers “to sideline Russian intervention in Ukraine as a campaign issue.” 

    None of this was true. And the FBI — and Mueller — knew it, the Justice inspector general reveals in his report.

    Still, the FBI presented the Steele dossier’s smear, cataloged as “Steele Report 95,” as key evidence in all four of its warrant applications to obtain wiretaps to eavesdrop on Page, according to the IG report.

    To keep renewing the spy warrants, the FBI had to produce fresh evidence for FISA judges to support suspicions Page was “an agent of Russia.” Just a few weeks before the FISA warrant was set to expire in June 2017, Mueller had his investigators interview Hoff, as his first witness, followed by Denman, hoping they could provide fresh details to keep building an espionage case against Page and the Trump campaign.

    But Mueller struck out. 

    According to agents’ notes documenting their June 2017 interview, as revealed in the IG report, Denham told the FBI that Page was not involved in the drafting of the Ukraine plank. But Mueller’s team did not update its fourth and final FISA warrant application on Page with this exculpatory information. Instead, it recited the same baseless claim that he had shaped the Ukraine policy with guidance from Russia. And the court renewed the warrant that June to electronically monitor Page, allowing the government to continue vacuuming up all of his emails, phone calls, text messages and other communications for another 90 days.

     “Although the FBI did not develop any information that Carter Page was involved in the Republican Platform Committee’s change, the FBI did not alter its assessment of Page’s involvement in the FISA applications,” Justice Department Inspector General Michael Horowitz noted in his 476-page report released Monday.

    Added Horowitz: “We found that, other than this information from Report 95 [of the Steele dossier], the FBI’s investigation did not reveal any information to demonstrate that Page had any involvement with the Republican Platform Committee.” Yet, “all four FISA applications relied upon information in the Steele reporting” alleging Page’s role in drafting the Republican plank on Ukraine and Russia.

    A former U.S. Navy lieutenant, Page was never charged with espionage or any crime. He told RealClearInvestigations that he has received “numerous death threats that directly resulted from the false allegations” that he was a traitor.

    The FBI and Mueller failed to correct the record about Page in their FISA warrant applications even after they identified the Trump campaign officials who actually had a hand in influencing the GOP plank, J.D. Gordon and Matt Miller. A July 14, 2016, email from Gordon confirmed what Page had personally told the FBI in an interview — that he had not taken part in the decision. The FBI knew about the email since at least March 2017, when agents sat down with Page. (Gordon and Page were chatting by email about the convention, and it’s clear from Page’s responses he had no idea what Gordon had done in the Ukraine-Russia platform drafting sessions. IG Horowitz published the relevant excerpt in his report and noted the FBI had the email in its possession.)

    Still, Horowitz found, “The FBI never altered the assessment.”

    Horowitz further concluded that the FBI should not have included the dossier’s rumor even in its original October 2016 application for a FISA warrant targeting Page, let alone its three renewals, because a confidential source the FBI assigned to spy on Page at the time found no basis for it. In the IG report, Horowitz noted that during that same month of October 2016, the FBI informant met with Page and tape-recorded him denying he was involved in the drafting of the Ukraine plank. Page told the informant, Stefan Halper, that he “stayed clear of that.”

    Horowitz’s investigators established that the informant’s recorded statements were sent to the FBI agent assigned at the time to Page’s case, and were copied to a supporting team of other agents, supervisors and analysts. Yet the FBI also withheld that critical exculpatory evidence from the FISA court in the initial application for a warrant on Page (and then continued to deny the court the information in subsequent requests to monitor Page).

    The lead case agent, unnamed in the report, told investigators the FBI was operating on a “belief” that Page was involved in the Ukraine and Russia platform, and that he and the FISA team were “hoping to find evidence of that” from the wiretaps. Despite all the snooping on Page, the FBI never collected the hoped-for proof.

    The lead supervisor, also unidentified, told investigators “he did not recall why Page’s denial was not included.”

    Horowitz reports that the exculpatory documents were also sent to a Justice Department attorney before the warrant was renewed for the first time in January 2017, “[y]et, the information remained unchanged in the renewal applications.”

    Added Horowitz: “The attorney told us that he did not recall the circumstances surrounding this, but he acknowledged that he should have updated the descriptions in the renewal applications to include Page’s denials.”

    The FBI also failed to inform surveillance court judges that Page was an “operational contact” for the CIA for several years, according to the Horowitz report. In 2013, Page also volunteered as a cooperating witness in an FBI espionage case, and helped put away a real Russian agent in 2016. This was additional exculpatory evidence the FBI kept from the FISA court, as RealClearInvestigations first reported last year.

    Peter Strzok, then the FBI’s top counterintelligence official, rode herd on the Page wiretap requests and reported back to FBI attorney Lisa Page (no relation to Carter), who in turn, updated then-Deputy FBI Director Andrew McCabe.

    Text messages previously uncovered by Horowitz and shared with Mueller revealed that Strzok and Page, who were having an affair, rooted for Hillary Clinton during the 2016 campaign and held Trump in complete contempt. In one exchange, they discussed the need to “stop” Trump from winning the election. And the two of them had also huddled with McCabe in his office to devise an “insurance policy” in the “unlikely event” Trump ended up winning.

    The inspector general’s report points out that it was McCabe who urged investigators to look at the Clinton-funded dossier. The previous year, his Democratic politician wife, Jill, received hundreds of thousands of dollars in donations arranged by Clinton ally and Virginia’s governor at the time, Terry McAuliffe.

    Strzok remained central to the investigation well into 2017 – until Mueller was forced to kick him off his team when the anti-Trump bias was revealed. The bureau fired him in 2018, the same year Lisa Page resigned from the FBI. In spite of their anti-Trump political bias, Horowitz said he found “no evidence” their bias influenced their investigative decisions.

    Lawyers for Strzok and McCabe did not respond to requests for comment. The FBI and a spokesman for Mueller declined comment.

    Putting Carter Page under surveillance starting in October 2016 effectively let the FBI spy on the Trump campaign since its beginnings, because it allowed the bureau to scoop up all of Page’s prior communications. Former Trump officials who have reviewed Horowitz’s new findings confirmed their view that the bureau was trying to make it look like Page and the Trump campaign were doing something sinister to help Russia.

    “Page actually had no role in the platform, whatsoever,” Gordon, the Trump campaign’s director of national security, told RCI. “Failing to include the exculpatory information in the FISA application is horrifying.” 

    While it’s true that Trump sought better relations with Russia, Gordon said, there was nothing nefarious about the drafting of the Ukraine platform. He said the FBI simply assumed it was watered down as a favor to Russia based on a false narrative driven by liberal media outlets like the Post and Never Trumpers such as Rachel Hoff. He said the FBI, under the direction of McCabe, Mueller and former FBI Director James Comey, also wanted to believe the worst about Trump, whom they simply did not like.

    Gordon noted that, except for the two Never Trump delegates, nobody in the platform drafting sessions raised a fuss about the Ukraine plank — not even the press.

    “The media was present in the room, yet not one person wrote about the Ukraine issue,” he said — until, that is, the Never Trumpers went to the Washington Post that July and helped launch the Trump-Russia “collusion” myth.

    Moreover, the narrative was untrue even on its own terms – without the spurious inclusion of Carter Page. Internal platform committee documents show the Ukraine plank could not have been weakened as claimed, because the “lethal” weapons language was never part of the GOP platform in the first place. The final language actually strengthened the platform by pledging direct assistance not just to the country of Ukraine, but to its military in its struggle against Russian-backed forces.

    Far from “gutting” assistance, the Trump administration approved the transfer of tank-busting Javelin missiles to Kiev — something the Obama administration refused to do. More than 200 of those weapons have been sold to Ukraine since Trump took office. And the sale and delivery of Javelins never stopped even during this year’s temporary suspension of military aid to Ukraine that is now the subject of the Democrats’ impeachment proceedings.

    The final draft of the Ukraine plank also branded Russia a menace, and pledged to stand against “any territorial change imposed by force in Ukraine.” Yet Mueller and his prosecuting staff of mostly Democratic donors still suspected collusion, and they dispatched FBI agents to grill Gordon about the drafting of the platform three times between 2017 and 2019. They also got a grand jury to subpoena his phone records.

    In the end, the Mueller report found no Russian influence in the platform.

    But the false narrative – that the Ukraine plank stood as early proof of the “extensive conspiracy” between the Trump campaign and Moscow that Steele alleged in his now-debunked dossier – has persisted. 

    Earlier this year, House Judiciary Committee Chairman Jerry Nadler demanded Gordon provide additional documents, and he has complied. Nadler is now marking up articles of impeachment against Trump over a request he lodged with Ukraine’s new president this summer to help investigate the former Clinton-friendly regime’s attempts to “sabotage” Trump’s election bid in 2016. Trump also asked Kiev to look into possible corruption involving former Vice President Joe Biden’s son Hunter and a Ukrainian energy oligarch.

    Meanwhile, Nadler’s impeachment partner, House Intelligence Committee Chairman Adam Schiff, continues to insist that the Trump team “softened” the GOP platform to accommodate “Putin’s invasion of Ukraine.” 

    A retired Navy commander and former Pentagon spokesman, Gordon said he has run up a five-figure legal bill defending against what he calls a “hoax” perpetrated by Never Trumpers, the media, Comey, Mueller, and now congressional Democrats. 

    In the vicious frenzy to destroy President Trump and his associates at all costs, they attempted to turn a routine foreign policy debate in conjunction with the four-year renewal of the GOP platform into a crime scene,” Gordon said in an interview with RCI.

     “Incredibly,” he added, “the GOP platform change hoax [later] became the very first order of business in Mueller’s nearly two-year investigation.”


    Tyler Durden

    Sun, 12/15/2019 – 18:05

    Tags

  • Schiff: 'I Had No Idea FBI Was Committing Serious Abuses When I Said All That Stuff'
    Schiff: ‘I Had No Idea FBI Was Committing Serious Abuses When I Said All That Stuff’

    Rep. Adam Schiff (D-CA) can’t admit when he’s wrong.

    After last week’s DOJ Inspector General report revealed that the FBI committed serious abuses while obtaining a warrant to spy on Trump campaign aide Carter Page – including fabricating evidence, Schiff was asked on Sunday by Fox News host Christ Wallace:

    “Given what you know now … are you willing to admit that you were wrong in your defense of the FBI’s FISA process?

    To which Schiff replied: “I’m certainly willing to admit that the inspector general found serious abuses of FISA that I was unaware of.

    That’s an odd way of admitting your entire thesis has been dead wrong for three years.

    Watch (via the Daily Caller)

    In short:

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    Tyler Durden

    Sun, 12/15/2019 – 17:40

  • How Trump Opened A Pandora's Box By Announcing The "Phase One" Trade Deal
    How Trump Opened A Pandora’s Box By Announcing The “Phase One” Trade Deal

    Trump’s “Phase One” deal left pretty much everyone disappointed: from experts who were expecting a realistic compromise between the two superpowers instead of the ludicrous and completely undoable Beijing promise to quadruple US agricultural purchases to $50 billion (a detailed explanation why this is impossible can be read in the following thread by the former USDA Chief Economist and USTR ag negotiator, Joe Glauber)…

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    … to media pundits, to Trump’s political enemies (Schumer said the president “sold out” in phase one deal), to Wall Street banks (Goldman said  “The Tariff Reduction Is Only Half What We Expected”).

    Not unironically, the only party that appears to be happy with the outcome of the “Phase One” deal in addition to Trump of course, is China: as the Chinese foreign minister Wang Yi said on Saturday, the China-U.S. trade deal “ serves as bullish news for both countries and the rest of the world.”

    Here alarms should be going off, because if indeed both Trump and China are happy with the deal outcome, by definition that means that the US is reverting back to the old “non zero-sum” world where US politicians catered to China in the context of a globalized world. In other words, Trump’s effort to keep China’s superpower ascent in check appears to have taken a back seat to the president’s desire to keep markets supporter and avoid the shock of a fresh re-escalation of the trade war.

    But is that feasible?

    Before, we answer that question, here is a recap of what the Trump admin announced on Friday as part of the “Phase One” trade deal:

    • List 4B (December 15) tariffs suspended: This was in line with our expectations and media reports in recent days.
    • List 4a (September 1) tariff ratereduced to 7.5% from 15%: This falls short of expectations influenced in recent days by the media reports, where WSJ suggested broader and deeper tariff reductions were possible.
    • List 1-3 tariffs remain unchanged: This too fell short of what the broader tariff rollbacks hinted by the media in recent days.

    The first complication is that while Trump explicitly agreed to roll back some tariffs, substantial ambiguity on agriculture: While both sides agreed on increased agricultural and other US commodity purchases by China, it’s unclear what level such purchases will reach and how this will be enforceable. Given the US’s focus on this issue, experts remain concerned (and confident) that disappointment on this point as negotiations continue would be a potential catalyst for re-escalation of tariffs.

    Yet even assuming no major re-escalation in the context of Phase One, which is in the history books, what happens next?

    Well, as Morgan Stanley’s policy strategist Michael Zezas writes, with the easy stuff, i.e., the generally hollow and/or impossible promises that make up the bulk of Phase 1, agreed upon, it is only the difficult stuff that has to be resolved, or as MS puts it, “key execution risks remain as the US/China relationship moves forward.

    Specifically, the end of Phase 1 and commencement of Phase 2 negotiations will materially strain goodwill: recall, “Phase 2” negotiations are, per the US, to commence immediately. And given that ‘Phase 1’ focused on the “easy” topics that were ‘low-hanging fruit’, Zezas warns that “Phase 2 negotiations could be more challenging, problematic, and potentially subject to stalls, as both sides debate the far more difficult issues of industrial policy.”

    In other words, Trump may have taken what wasn’t broken, namely the tried and true strategy of ramping the market higher on daily speculation and “trade deal optimism”, i.e., leaks, rumors and innuendo that an easy to achieve Phase 1 deal was imminent, and “fixed it”, in the process replacing the easy Phase 1 outcome with the vastly more complex Phase 2 process, where an agreement between the two superpowers and a successful outcome is next to impossible.

    Hence, Morgan Stanley argues the dynamic has shifted from ‘uncertain pause’ to ‘uncertain progress’, with the following key takeaways for investors:

    • No game-changer for the tariff burden: About $380bn of imports remain under tariff. While phase 1 reportedly includes an agreement in principle to reduce all remaining tariffs over time as progress is made on phase 2, it is unlikely that such progress can be made quickly, if at all, given the relatively intractable nature of industrial policy issues.
    • No game-changer for corporate confidence: While this deal is certainly more durable than another simple swap of agricultural purchases for a pause in tariffs, the experience of this trade conflict has created a high hurdle for what corporate executives would judge to be confidence-inspiring. And as Morgan Stanley has noted in the past, companies in the US and China have already put plans in motion to protect themselves from changes in the US/China dynamic. It also means that they are unlikely to revert back to baseline as a result of Friday’s (non) deal.

    In other words, as Morgan Stanley concludes, “given the execution risks going forward that we cited earlier and the lack of clarity on important details, we don’t yet have the conviction that this deal can be a catalyst to a meaningful uptick in business confidence.”

    As for markets, the outcome could be even more dire for one simple reason: over the past year, the interminably recurring catalyst that pushed stocks ever higher, was “optimism” that a deal was imminent. Well the Phase One is “now in the books”, and not even the most gullible traders – or algos – will believe that a Phase 2 deal can be done before the elections, or frankly, ever. As such, the most important crutch behind the market climbing the trade war Wall of Worry for the past year is now gone.

    Worse, by removing the risk of trade war, the Fed’s monetary policy will no longer be constrained on the downside by the risk of a potential trade war re-escalation. This is critical because as we explained in August, it was the Fed itself that was underwriting Trump’s trade war.

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    That said, there is a silver lining: the Fed’s “NOT QE” bailout of the repo market remains, and as long as Powell continues to inject hundreds of billions (just to stabilize a handful of banks and push markets higher), the risk of market bloodbath remains remote. However, if and when this process too begins to taper some time in Q2 2020, that may be the time to watch out below. Worst of all for Trump – this will take place just a few months before the November election. What he plans to do to full the void left by both “Trade Deal” optimism and “NOT QE4” remains unclear.


    Tyler Durden

    Sun, 12/15/2019 – 17:40

  • A History Of Inflationary Money: From 1844 To Nixon
    A History Of Inflationary Money: From 1844 To Nixon

    Authored by Alasdair Macleod via GoldMoney.com

    So that we can understand the financial and banking challenges ahead of us, this article provides an historical and technical background. But we must first get an important definition right, and that is the cause of the periodic cycle of boom and bust. The cycle of economic activity is not a trade or business cycle, but a credit cycle. It is caused by fractional reserve banking and by banks loaning money into existence. The effect on business is then observed but is not the underlying cause.

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    Modern banking has its roots in England’s Bank Charter Act of 1844, which led to the practice of loaning money into existence, commonly described as fractional reserve banking. Fractional reserve banking is defined as making loans and taking in customer deposits in quantities that are multiples of the bank’s own capital. Case law in the wake of the 1844 act, having more regard for the status quo as established precedent than for the fundamentals of property law, ruled that irregular deposits (deposits for safekeeping) were no different from a loan. Judge Lord Cottenham’s ruling in Foley v. Hill (1848) 2 HLC 28 is a judicial decision relating to the fundamental nature of a bank which held in effect that

    The money placed in the custody of the banker is to all intents and purposes, the money of the banker, to do with it as he pleases. He is guilty of no breach of trust in employing it. He is not answerable to the principal if he puts it into jeopardy, if he engages in haphazardous speculation.

    This was undoubtedly the most important ruling of the last two centuries on money. Today, we know of nothing else other than legally confirmed fractional reserve banking. However, sound or honest banking, with banks acting as custodians, had existed in the centuries before the 1844 act and any corruption of the custody status was regarded as fraudulent.

    This decision has shaped global banking to this day. It created a fundamental flaw in the gold-backed sound-money system, whereby the Bank of England, as a prototype central bank, could only issue extra sterling backed entirely by gold while a commercial bank could loan money into existence, the drawdown of which created deposit balances. The creation of these deposits on a systemwide basis meant that any excesses and deficiencies between banks were easily reconciled through interbank lending.

    Bankers’ Groupthink and the Credit Cycle

    While an individual bank could expand its balance sheet, the implications of all banks doing the same may have escaped the early banking pioneers operating under the 1844 act. Thus, when their balance sheets expanded to a multiple of the bank’s own capital, there was little cause for concern. After all, so long as a bank paid attention to its reputation it would always have access to the informal interbank market. And so long as it could call in its loans at short notice, the duration mismatch between funding by cash deposits and its loan book would be minimized.

    Since the Bank Charter Act, experience has shown that the expansion of bank credit leads to a cycle of credit expansion, overexpansion, and then sudden contraction. The scale of bank lending was determined by its management, with lenders tending to be as much influenced by their own crowd psychology as by a holistic view of risk. Of course, the expansion of bank credit inflates economic activity, spreading a warm feeling of improving economic prospects and feeding back into increasing the bankers’ confidence even further. It then appears safe and reasonable to take on yet more lending business without increasing the bank’s capital.

    With profits rapidly increasing due to lending being a multiple of the bank’s own capital, confident bankers begin to think strategically. They reduce their lending margins to attract business they believe to be important to their bank’s long-term future, knowing they can expand credit further against a background of improving economic conditions to compensate for lower margins. They begin to protect margins by borrowing short from depositors and offering businesses term loans, reaping the benefits of a rising slope in the yield curve.

    The availability of cheap finance encourages businesses to enhance their profits in turn by increasing the ratio of debt to equity and by funding expansion through debt. By this point, a bank is likely to be raking in net interest on loan business amounting to eight or ten times its own capital. This means that an interest margin of a net two percent is a 20 percent return to the bank’s shareholders.

    There is nothing like profitable success to boost confidence, and the line between it and overconfidence is naturally fuzzed by hubris. The crowd psychology fueled by a successful banking business leads to an availability of credit too great for decent borrowers to avail themselves of, so inevitably credit expansion becomes a financing opportunity for poorly thought out loan propositions.

    Having oversupplied the market with credit, banks begin to expand their interests in other directions. They finance businesses abroad, oblivious to the fact that they have less control over collateral and legal redress generally. They expand by entering other lines of banking-related business, assuming that their skills as bankers can be extended into those other business lines profitably. A near contemporary example was Deutsche Bank’s failed expansion into global investment banking and principal trading in foreign securities and commodities. And who can forget Royal Bank of Scotland’s bid for ABN-Amro just as the credit cycle peaked before the last credit crisis.

    At the time when their balance sheets have expanded to many multiples of their own capital, the banking crowd finds itself with lending margins too low to compensate for risk. Bad debts arising from their more aggressive lending decisions begin to materialize. One bank beginning to draw in its horns as it perceives it is out on a limb can probably be weathered by the system. But other bankers will stop and think about their own risks, bearing in mind that operational gearing works two ways.

    Operational gearing may be marked by an unexpected event, or just an apparent loss of bullish momentum. With bad debts beginning to have an impact, groupthink quickly takes bankers from being greedy for more business to fearful of it. Initially, banks stop offering circulating credit, the overdraft facility that lubricates business activity. But when the credit tap is turned off former lending decisions begin to be exposed as bad, and investments in foreign lands begin to reflect their true risks. Lending in the interbank market dries up for the banks with poor or marginal reputations, and banks begin to report losses. Greed turns rapidly to fear.

    The cycle of bank credit expansion then descends into a lending crisis, with increasing numbers of banks exposed as having taken on bad loans and becoming insolvent. A slump in business activity ensues. With frightening rapidity, all the hope and hype created by monetary expansion is destroyed by its contraction.

    Before central banking evolved into acting as the representative and regulator for licensed banks, the credit cycle described above threw up some classic examples. Overend, Gurney and Company was the largest discount house in the world, trading in bills of exchange before it made long-term investments and became illiquid. When the railway boom faltered in 1866 it collapsed. The bank rate rose to 10 percent and there were widespread failures. Then there was the Baring crisis in 1890. Poor investments in Argentina led to the bank’s near bankruptcy. The Argentine economy slumped, as did the Brazilian one, which had been experiencing its own credit bubble. This time, a consortium of other banks rescued Barings. Nathan Rothschild remarked that if Barings hadn’t been rescued the entire banking system in London would have collapsed.

    Out of Barings came the precedent of a central bank acting as lender of last resort, famously foreseen and promoted by Walter Bagehot.

    In the nineteenth century it became clear that crowd psychology in the banks, the balance of greed and fear over lending, drove a repeating cycle of credit boom and slump. With the passage of time, bankers recovering their poise from the previous slump forgot its lessons and rhymed the same mistakes all over again. Analysts promoting theories of stock market cycles and cycles of economic activity need look no further for the underlying cause.

    In the absence of credit expansion, businesses would come and go in random fashion. The coordinated expansion of credit changed that, with businesses being bunched into being created at the same time and then all failing at the same time. The process of creative destruction went from unnoticed market evolution to becoming a periodic violent event. Monetary institutions still ignore the benefits of events being random. Instead they double down, coordinating their interventions on a global scale with the inevitable consequence of making the credit cycle even more pronounced.

    It is a huge mistake to call this repeating cycle a business cycle. The name implies that it comes down to the failure of free markets, of capitalism, when in fact it is entirely due to monetary and credit inflation licensed and promoted by governments and central banks.

    The Rise of Central Banking

    Following the Barings crisis of 1890, the concept of a lender of last resort was widely seen to be a solution to the alleged extremes of free markets. Initially, this meant that the bank nominated by the government to represent it in financial markets and to oversee the supply of bank notes took on a role of coordinating the rescue of a bank in difficulty in order to prevent a full-blown financial crisis. When the gold standard applied, however, it comprised the practical limitation of a central bank.

    This was the general situation before the First World War. But, in fact, even under the gold standard there was significant inflation of base money occurring in the background. Between 1850 and 1914, aboveground gold stocks increased from about five thousand tons to nearly twenty-four thousand tons. Not all of it became monetary gold, but the amount that did was decided by the economic actors that used money, not the monetary planners as is the case today.

    It was against this background that the US Federal Reserve Bank was founded in December 1913. Following World War I, the Federal Reserve became a powerful institution under the leadership of Benjamin Strong. Those early postwar years were turbulent: due to wartime inflationary financing, wholesale prices doubled in the US between 1914 and 1920 while the UK’s trebled. This was followed by a postwar slump, and by mid-1921 unemployment in the UK had soared to 25 percent. In the US, the Fordney-McCumber tariffs of 1922 restricted European debtors from trading with America, which was necessary to pay down their dollar debts. A number of countries descended into hyperinflation, and the Dawes Plan, designed to bail out the Europeans, followed in 1924.

    Although America remained on a gold standard, Britain had suspended it, only going back to it in 1925. While the politicians decided overall policy, it was left to central bankers such as Strong at the Fed and Montague Norman at the Bank of England to manage the fallout. Their relationship was the most tangible evidence of central banks beginning to collaborate in the interests of mutual financial stability.

    With the backing of ample gold reserves, Strong advocated for price targeting through the management of the money supply, particularly following the 1920–21 slump. His inflationary policies assisted in the management of the dollar-sterling exchange rate, supporting sterling, which at that time was not backed by gold. Strong also made attempts to develop a discount market in the US, which inflated credit markets further. One way and another, with the Fed following expansionary money policies and commercial bankers becoming more confident in lending prospects, monetary inflation fueled what came to be known as the Roaring Twenties.

    That came to a sharp halt in October 1929, when the credit cycle turned, and the stock market crashed. Top to bottom, that month saw the Dow fall 35 percent. The trigger was Congress agreeing to the Smoot-Hawley Tariff Act on October 30, widely recognized at the time as a suicide note for the economy and markets, since it raised trade tariffs to an average of 60 percent from the Fordney-McCumber average of 38 percent. President Hoover signed it into law the following June, and by mid-1932 Wall Street had fallen 89 percent.

    With such a clear signal to the bankers, it is not surprising that they drew in their horns, contracting credit and indiscriminatingly bankrupting their customers. All the expansion of bank credit since 1920 was reversed by 1934. Small banks went bankrupt in the thousands, overwhelmed by bad debts, particularly in the agricultural sector, as well as through loss of confidence among their depositors.

    The depression of the 1930s overshadowed politics in the capitalist economies for the next forty years. Instead of learning the lessons of the destruction wrought through cycles of bank credit, economists doubled down, arguing that more monetary and credit inflation was the solution. To help economic sentiment recover, Keynes favored deficit spending by governments to take up the slack. He recommended a move away from savers being the suppliers of capital for investment in favor of the state taking a more active role in managing the economy through deficit spending and monetary inflation.

    The printing of money, particularly dollars, continued under the guise of gold convertibility with the postwar Bretton Woods system. America accumulated enormous gold reserves; by 1957 they amounted to over twenty thousand tons — one-third of estimated aboveground gold stocks at that time. It felt secure in financing first the Korean and then the Vietnam War by printing dollars for export. Unsurprisingly, this led to the failure of the London gold pool in the late 1960s and to President Nixon suspending the fig leaf of dollar convertibility into gold in August 1971.

    Once the dollar was freed from the discipline of gold, the repeating cycle of bank credit was augmented by the unfettered inflation of base money, a process that has continued to this day.


    Tyler Durden

    Sun, 12/15/2019 – 17:15

  • It's D-Day For The Repo Market: On Monday $100 Billion In Liquidity Will Be Drained – What Happens Next?
    It’s D-Day For The Repo Market: On Monday $100 Billion In Liquidity Will Be Drained – What Happens Next?

    Last week’s apocalyptic report by repo market guru Zoltan Pozsar, which for those who missed it predicted that an imminent market crash and loss of control of overnight rates by the Fed would spark nothing short of QE4, sparked an unprecedented panic at the Federal Reserve, which just two days later unveiled a historic liquidity injection, in which the Fed promised to inject no less than $500 billion in the next 4 weeks to avert a catastrophic freeze in the repo market as we approach the year end “turn”, which would consist not only of a continuation of the Fed’s T-Bill POMO, but also a massive injection of nearly $500 billion in overnight and term repos in the coming days.

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    In other words, instead of a reactive QE4 – as predicted by Pozsar – the Fed will flood the repo market with a proactive firehose of liquidity.

    There’s more: add in the incremental liquidity from the expanded overnight repo of about $50 billion and another $60 billion in T-Bill purchases, and the Fed will inject a total of just shy of $500 billion in the next 30 days. This also means that by Jan 14, the Fed’s balance sheet would have grown by a cumulative $365BN in “temporary” repos, and together with the expanded overnight repos, and the $60BN in monthly TBill purchases, and by mid-January, the Fed’s balance sheet, currently at $4.066 trillion, will surpass its all time high of $4.5 trillion!

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    The question then is whether this will be sufficient to refute the repo Doomsday predicted by Pozsar, one which was supposed to launch QE4, or will the Fed’s gargantuan liquidity injection still not be enough and lead to a collapse in the repo market.

    Well, since the next key catalyst in the potential repo market turmoil is imminent, we may know as soon as tomorrow, when there is another large December corporate tax payment date (with as much as $78BN being remitted to the TSY) and another $54 billion in US Treasury settlements.

    Recall, that as we explained last week, the mid-December funding dynamics looks very similar to mid-Sep except for the outsized role of the Fed. On Monday, Dec 16, Bank of America anticipates that $54Bn of UST coupon settlements coupled with what has historically been $30-50BN of corporate tax payments to UST. This could result in a UST cash balance inflow – or a liquidity drain – of up to $80-$100bn in just one day.

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    Also recall, every dollar of UST cash balance increase represents a similar USD reserve drain from the banking system, and a similar liquidity drain in mid-September culminated with the now historic explosion in overnight repo rates.

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    So should traders panic? Well, if the Fed’s gargantuan liquidity injection is anything to go by, the answer is no, and as BofA’s Mark Cabana writes, “despite the similarities we do not anticipate a material spike in funding due to the Fed’s ongoing reserve management operations.”

    The main reason we do not anticipate considerable funding stress is due to the outsized presence of the Fed now vs mid-Sep. In mid-Sep the Fed was still under the impression it could drain reserves from the banking system without a material impact on funding levels. Since mid-Sept the Fed has learned the banking system has reached reserve scarcity and the Fed it is now adding reserves via repo operations and outright bill purchases to stabilize funding markets. The Fed will ensure it adds enough reserves to offset any Treasury cash balance drain in Dec.

    Consider that as of last week, the Fed has provided $340bn in funding through their existing repo and bill purchase operations:

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    Furthermore, as revealed on Friday, in anticipation of the Monday liquidity drain, the Fed announced that it would expand the Monday term repo up to $50 billion, and extend the maturity date to January 17, allowing dealers to lock in excess liquidity well beyond the “turn”. However, contrary to Cabana’s expectation that “the Fed will increase O/N repo operation limits to around $200bn in the days surrounding Dec 16” there is some risk the Fed has misjudged how much net liquidity will be soaked up as a result of Monday’s drain.

    As a result, Cabana notes that even with this operational change, funding could still be volatile as bank portfolios and money fund deposits get pared back amidst corporate outflows, while dealer intermediation of Fed repos may also be challenged with year-end regulatory reporting dynamics limiting how smoothly this funding gets passed along, something Pozsar discussed extensively last week.

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    In any case, the adjustment to Fed repo operations is the latest of measures undertaken to ensure repo remains relatively stable at year end, and although overnight repo markets will likely be volatile around year-end BofA’s concern around the turn has moderated in recent weeks and certainly after Friday’s announcement of a gargantuan liquidity backstop.

    As a result, Cabana now “thinks the Fed has provided enough liquidity and dealers have adjusted their businesses around GSIB to ensure funding markets remain relatively stable leading into year end.” Ironically, the BofA strategist now sees risks that “funding trades too soft early in 2020 vs the Fed’s policy target range. This will likely result in one or two 5bps technical IOER increases to ensure fed funds does not fall below the Fed’s target range in 1H ’20” as the overall funding situation shifts from too little reserves, to too many, potentially forcing dealers to shift from the repo facility to the reverse repo facility!

    Incidentally that observation was echoed by another repo market experts, Curvature’s Scott Skyrm, who on Friday penned the following year-end repo market prediction:

    Soft December Funding

    With the Fed committed to dumping $500 billion in liquidity into the market over year-end, there WILL be an abundance of cash overall. More cash will be added than will actually leave the market. However, the Fed is adding much of this cash via term RP operations over the next two weeks, whereas most of the cash is only needed for the Turn itself. I predict, by the last week in December, overnight GC rates will trade very soft. Perhaps opening at 1.50% each day – though GC will have a hard time dropping below the 1.45% RRP rate.

    Soft Year-End Funding

    I believe the Turn rate will close soft on year-end. Probably below 1.00%. What will be even more interesting is that Money Market Funds will be “crowded out” by the Fed cash entering the market. When Primary Dealer banks take billions of dollars of cash from the Fed, they will give all of their collateral to the Fed. That will leave little collateral for banks to give to Money Market Funds on the day of quarter-end – forcing the MMFs to go to the Fed’s RRP window. The Fed will effectively both loan cash into the market and borrow cash from the market.

    Bottom line: after Pozsar’s apocalyptic forecast prompted the Fed to unleash a liquidity tsunami, fears about an imminent seizure in the repo market have faded, with BofA’s Cabana now writing that “overall, the Fed’s guiding hand should make market participants comfortable not to fear material repo stress around the mid-Dec corporate tax date and to believe any year-end funding pressures should be relatively short lived.”

    Still, as Skyrm cautions, “there is still one major phantom year-end risk looming around the market. If the Fed’s term RP operations fully fund the Primary Dealer bank balance sheets and the banks cannot increase their balance sheets further, the last few Fed operations of the month might not have any takers. There is a chance there will be little Primary Dealer bank balance sheet left by year-end.”

    In any case, when looking at tomorrow’s massive $100 billion liquidity drain, the repo market should be able to digest it without a spike in the G/C repo rate now that the Fed has effectively backstopped any and all year-end liquidity needs. If, however, the first repo prints come in elevated: at 2% or higher, it will mean that not even the Fed’s half a trillion dollar liquidity injection was enough, and that Pozsar’s fire and brimstone forecast is starting to come true.


    Tyler Durden

    Sun, 12/15/2019 – 16:50

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