- For The First Time Ever, Greece Issues Negative Yielding Debt
For The First Time Ever, Greece Issues Negative Yielding Debt
As armies of fixed income strategists battle over whether US Treasuries are facing higher or lower yields, Greece has no such qualms and in a historic shift today, the former bond market pariah and Eurozone’s most indebted nation, joined the exclusive club of negative-yielding European nations when bond investors lined up to pay the nation that was at the heart of Europe’s sovereign debt crisis.
A sale of €487.5 million of 13-week bills on Wednesday drew Greece’s first-ever negative yield of minus 0.02% as investors now pay Athens for the privilege of lending it cash, as Bloomberg first reported. Greece joins the likes of Ireland, Italy and Spain – not to mention virtually all core Eurozone nations – which benefit from the ECB’s insane monetary policy and deepening fears of a global recession.
It’s been an unprecedented turnaround for twice bankrupt Eurozone member, whose bondholders suffered massive losses back in March 2012 when the country was forced to accept the biggest bond restructuring in history, bringing the Eurozone to the verge of collapse.
Just a few years and several trillions in bond purchases by the ECB later, the region is grappling with an altogether different problem – the spread of negative yields, which reduces borrowing costs for governments in a form of soft default, one which is crushing savers, pension funds and insurers, and which has prompted some of the most respected names in finance to shriek in terror as the cost of money in even Europe’s most insolvent nations is now negative.
Jon Day, a fixed-income portfolio manager at Newton Investment Management, said the move was “another symptom” of the “global grab for yield, especially in euro-denominated bonds,” pointing out that short-dated Greek bonds were previously one of the few government markets where a positive return was on offer. Indeed, as recently as 2017, the Greek 13-week bills yielded a “generous” 2.70% before they started their journey to NIRP just over two years ago.
Still, despite Europe’s artificial, central bank-propped up bond market, nothing has been fixed with respect to the Greek economy: “There remain substantial risks around Greece’s financial position and it remains vulnerable to a significant economic slowdown,” Day said. “Current yields on their bonds do not reflect this risk.”
Greece foray into negative rates comes after the ECB cut its deposit rates even deeper into negative territory and said it would restart quantitative easing (unlike in the US, the ECB has no qualms about calling “not a QE” by its real name). Investors are also looking toward fiscal stimulus as the ability of monetary policy to stoke growth is tested to its limits, and unlike Germany, we expect Greece to fully take advantage of negative yields to stick it to creditors “investing” with other people’s pensions. Earlier this week, the nation also took advantage of record-low borrowing costs by selling 10-year bonds this week at a yield of 1.5%.
Greece’s government is forecasting 2.8% economic growth in 2020, which it says puts it on track to meet a budget target agreed with creditors while still enacting tax relief measures.
“Greece issuing negative-yielding bills is more evidence of the positive effect that negative interest rates and QE has on debt sustainability for governments,” said Mizuho’s head of rates strategy Peter Chatwell, even though it is not quite clear how Greece accumulating even more debt to “fix” a catastrophe that was the result of record debt actually works out in the long run… but that’s ok, by then it will be someone else’s problem.
“Side effects are large for banks and investors, but for the governments there are very significant benefits.”
Indeed: as the world’s banks and investors founder, at least perpetually corrupt and incompetent governments are rewarded, and all it took was several years of insane monetary policy by a former Goldmanite to unleash the biggest revolution in the European bond market in history, one which will end in the biggest bond bubble crash ever seen.
But – as the supporters of the ECB will tell you – “not yet”…
Tyler Durden
Thu, 10/10/2019 – 02:45 - UK: New Subversive "Guidance" For Journalists
UK: New Subversive “Guidance” For Journalists
Authored by Judith Bergman via The Gatestone Institute,
The British think-tank Policy Exchange, recently published a report, Eroding the Free Press, about a leaked draft of “Guidance for Reporting on Islam and Muslims”. The guidance was drafted by the Independent Press Standards Organisation (IPSO), the UK’s independent press regulator, an initiative that IPSO announced in late 2018. In the past, IPSO has, among other issues, published guidance on the reporting of death and inquests, sexual offences, suicides, and transgender people. According to IPSO, its guidance is “designed to support editors and journalists” and “does not limit or restrict editorial decision making, but may inform that decision making”.
In a January 2019 blog on IPSO’s main priorities for 2019, IPSO Head of Standards Charlotte Urwin laid out the five priorities of the year. “Reporting of Islam and Muslims” was listed as the first priority and described in the following way:
“In October 2018, we began working towards producing guidance for journalists on the reporting of Islam and Muslims in the UK, an area of broad political and social concern. The guidance will help journalists to report on a sensitive area, whilst also ensuring that it does not impinge their right to criticise, challenge or stimulate debate. We have established an informal working group to help us draft the guidance, bringing together academics who have research experience in relation to Islam and Muslims in the UK and representatives of organisations interested in the coverage of Islam…”
Policy Exchange’s report on the leaked guidance gives rise for concern.
In the words of the report, the guidance, “seems designed to bind the hands of UK newspapers when it comes to reporting on stories relating to Islam and Muslims – with potentially serious long-term consequences for the workings of a free and independent press”.
According to the Policy Exchange report, the draft IPSO guidance states:
“Journalists should be aware that their content can have an impact on the wider community and on how minority communities are treated. Inaccuracies and insensitivities can damage communities and prevents their accurate representation. They can also contribute to members of communities feeling divorced from, or misunderstood, by the media. Finally, inaccuracies and unbalanced coverage can work to increase tension between communities, which can make harassment more likely”.
As the Policy Exchange authors write:
“In all of this, there seems to be a suggestion that journalists should take a different approach to covering Muslims than that employed towards other faith groups. This all seems remarkably ill-conceived. If we ruled out reporting on matters specific to Muslims not only would we miss some big issues – not least the threat from Islamist extremist terrorism, which continues to dwarf other global terrorist threats – but we would also be unable to report properly on discrimination against Muslims. More generally, we must ask: is it really the role of journalists to consider community cohesion before truth and accuracy? And what are the potential consequences of such an ethos?”
In addition, the draft guidance has a section on “accuracy in reporting”, which suggests that journalists should do one, or all of the following: “Provide contextualising information; present more than one opinion; verify the information from another source”. While sounding banal and innocuous in and of itself, the guidance goes on to say, more disturbingly:
“Identifying the ‘right’ person to speak to can be extremely challenging and journalists should be aware that individuals and organisations may have different interpretations of a particular belief. Journalists may find it helpful to consider the expertise of the person/organisation, their background and any previous comments on the issues, in deciding who to approach for comment.”
In a previous draft, the Policy Exchange report tells us, the word was not “expertise”, but “representativeness”.
It does appear to be the case that what is uppermost in the minds of the drafters of the guidance is not so much factually accurate reporting, but concerns of a far more political nature, namely those of accommodating religious and cultural “sensitivities” and avoiding the causing of any offense.
Another aspect also concerns the authors of the Policy Exchange report: The “informal working group” under IPSO that has authored the guidance apparently includes members who have publicly supported[3] the new definition of “Islamophobia” as defined by the All-Party Parliamentary Group on British Muslims (APPG). In December 2018 the APPG published Report on the inquiry into a working definition of Islamophobia / anti-Muslim hatred. The report, conflating religion with ethnic origin or nationality, defined “Islamophobia” as a form of racism: “Islamophobia is rooted in racism and is a type of racism that targets expressions of Muslimness or perceived Muslimness.” For a full account of that report, see Gatestone’s previous reporting on the issue here.
The authors of the Policy Exchange Report write:
“Against this backdrop, one might ask whether the IPSO ‘guidance’ process is being used to advance the kind of ‘anti-Islamophobia’ agenda promoted by the APPG on British Muslims… despite the fact that the Government has deemed that definition not fit for purpose… one of the things that makes the APPG’s attempts to institutionalise an illiberal definition of Islamophobia so unpalatable, is the fact that it resembles a form of blasphemy law, protecting Islam specifically, implemented by the back door“.
In conclusion, the Policy Exchange report states:
“Taken as a whole, the IPSO guidance document seems to mark a decisive shift in the purpose of the regulator – which takes it beyond considerations of accuracy or discrimination, as per the Editor’s Code. Instead, it is moving into the realm of ‘insensitivities’ and ‘unbalanced coverage’ – elastic and subjective terms”.
Policy Exchange’s description of the leaked guidance is hardly shocking if one recalls the campaigns and guidelines made by European journalists’ own organizations in recent years. As previously reported by Gatestone, the largest organization of journalists in Europe, the European Federation of Journalists (EJF) — which represents more than 320,000 journalists in 72 journalists’ organizations across 45 countries and claims that it “promotes and defends the rights to freedom of expression and information as guaranteed by Article 10 of the European convention on human rights” — ran a Europe-wide campaign, sponsored by the EU, called “Media against Hate” in 2016-2018. The purpose of it was to, “improve media coverage related to migration, refugees, religion and marginalised groups… counter hate speech, intolerance, racism and discrimination… improve implementation of legal frameworks regulating hate speech and freedom of speech…”
None of the above appears to have had much to do with freedom of expression or journalism. Rather, it was actually a political campaign, spearheaded by one of the largest journalism organizations and supported by the Rights, Equality and Citizenship (REC) Programme of the European Union. The Council of Europe, another international political body constituted by 47 European member states was also listed as a partner. The mix-up of government interests with journalistic principles seemed to bother no one.
Similarly, in September 2017, a project called respectwords.org published guidelines — the publication of which were financially supported by the Rights, Equality and Citizenship (REC) Programme of the European Union — on reporting about migration and minorities. According to those guidelines, “more than 150 European radio outlets and 1300 journalists from the eight RESPECT WORDS countries (Austria, Germany, Greece, Hungary, Ireland, Italy, Slovenia and Spain) have joined together to strengthen media coverage of migrants and minorities, an indispensable tool in the fight against hate speech”.
One of the guidelines in the book, which IPSO’s recommendations seem to echo, was to “Remember that sensitive information (eg race and ethnicity, religious or philosophical beliefs, party affiliation or union affiliation, health and sexual information) should only be mentioned when it is necessary for the public’s understanding of the news”. The key here, again, seems to have been to respect “sensitivities” and avoid causing offense – not the factually correct reporting of newsworthy events. The guidelines also advised:
“Take care not to further stigmatise terms such as ‘Muslim’ or ‘Islam’ by associating them with particular acts… Don’t allow extremists’ claims about acting ‘in the name of Islam’ to stand unchallenged. Highlight… the diversity of Muslim communities…”
The respectwords.org guidelines, two years old, barely seek to hide that they are a political tool.
This, then, is the highly politicized atmosphere that journalists breathe and that their organizations openly promote. It is hardly surprising, then, that even independent regulators, such as IPSO, choose to take what looks like a similar path. As for the eroding of the freedom of the press, the question seems not so much to be “if” as “to what degree”.
Tyler Durden
Thu, 10/10/2019 – 02:00 - Forget Facial Recog: DHS New Amazon-Based Database Uses Scars, Tattoos, & Your Voice To ID You
Forget Facial Recog: DHS New Amazon-Based Database Uses Scars, Tattoos, & Your Voice To ID You
Authored by Daisy Luther via The Organic Prepper blog,
These days, you can’t really go anywhere without encountering cameras. Going into a store? Chances are there are security cameras. Getting money at an ATM? More cameras. Driving through the streets of a city? More cameras still. Your neighbors may have those doorbells from Amazon that are surveilling the entire neighborhood.
And many of these cameras are tied into facial recognition databases, or the footage can be quite easily compared there if “authorities” are looking for somebody.
But as it turns out, it isn’t just facial recognition we have to worry about.
DHS has a new recognition system called HART.
Homeland Advanced Recognition Technology system is the alarming new identity system being put in place by the Department of Homeland Security.
DHS is retiring its old system that was based on facial recognition. It’s being replaced with HART, a cloud-based system that holds information about the identities of hundreds of millions of people.
The new cloud-based platform, called the Homeland Advanced Recognition Technology System, or HART, is expected to bring more processing power, new analytics capabilities and increased accuracy to the department’s biometrics operations. It will also allow the agency to look beyond the three types of biometric data it uses today—face, iris and fingerprint—to identify people through a variety of other characteristics, like palm prints, scars, tattoos, physical markings and even their voices. (source)
Incidentally, the cloud hosting for HART is being done by none other than Amazon – you know, the ones with surveillance devices like the Ring doorbell and the Alexa home assistant and the Nest home security system. Does anyone see a pattern here?
Also note that Amazon Web Services also hosts data for the CIA, the DoD, and NASA.
More about HART
As HART becomes more established, that old saying “you can run but you can’t hide” is going to seem ever more true. The DHS is delighted at how much further the new system can take them into surveilling Americans.
And by freeing the agency from the limitations of its legacy system, HART could also let officials grow the network of external partners with whom they share biometric data and analytics capabilities, according to Patrick Nemeth, director of identity operations within Homeland Security’s Office of Biometric Identity Management.
“When we get to HART, we will be better, faster, stronger,” Nemeth said in an interview with Nextgov. “We’ll be relieved of a lot of the capacity issues that we have now … and then going forward from there we’ll be able to add [capabilities].” (source)
The DHS wants to break free of the limitations of the old system with their new and “improved” system. HART will use multiple pieces of biometric data to increase identification accuracy.
Today, when an official runs a person’s face, fingerprint or iris scans through IDENT’s massive database, the system doesn’t return a single result. Rather, it assembles a list of dozens of potential candidates with different levels of confidence, which a human analyst must then look through to make a final match. The system can only handle one modality at a time, so if agent is hypothetically trying to identify someone using two different datapoints, they need to assess two lists of candidates to find a single match. This isn’t a problem if the system identifies the same person as the most likely match for both fingerprint and face, for example, but because biometric identification is still an imperfect science, the results are rarely so clear cut.
However, the HART platform can include multiple datapoints in a single query, meaning it will rank potential matches based on all the information that’s available. That will not only make it easier for agents to analyze potential matches, but it will also help the agency overcome data quality issues that often plague biometric scans, Nemeth said. If the face image is pristine but the fingerprint is fuzzy, for example, the system will give the higher-quality datapoint more weight.
“We’re very hopeful that it will provide better identification surety than we can provide with any single modality today,” Nemeth said. And palm prints, scars, tattoos and other modalities are added in the years ahead, the system will be able to integrate those into its matching process. (source)
HART will also use DNA.
Remember a while back when we reported that DNA sites were teaming up with facial recognition software? Well, HART will take that unholy alliance even further.
The phase-two solicitation also lists DNA-matching as a potential application of the HART system. While the department doesn’t currently analyze DNA, officials on Wednesday announced they would start adding DNA collected from hundreds of thousands of detained migrants to the FBI’s criminal database. During the interview, Nemeth said the agency is still working through the legal implications of storing and sharing such sensitive data. It’s also unclear whether DNA information would be housed in the HART system or a separate database, he said. (source)
Nifty.
The DHS is operating without any type of regulation.
Currently, there’s no regulation or oversight of government agencies collecting and using this kind of data. Civil liberty activists and some lawmakers are alarmed by this, citing concerns about privacy and discrimination. This hasn’t slowed down the DHS one iota, however.
Critics have taken particular issue with the government’s tangled web of information sharing agreements, which allow data to spread far beyond the borders of the agency that collected it. The Homeland Security Department currently shares its biometric data and capabilities with numerous groups, including but not limited to the Justice, Defense and State departments.
In the years ahead, HART promises to strengthen those partnerships and allow others to flourish, according to Nemeth. While today the department limits other agencies’ access to IDENT to ensure they don’t consume too much of its limited computing power, HART will do away with those constraints. (source)
Mana Azarmi, the policy counsel for the Freedom, Security and Technology Project at the Center for Democracy and Technology is one of those people voicing concern.
A person might give information to a single agency thinking it would be used for one specific purpose, but depending on how that information is shared, they could potentially find themselves subjected to unforeseen negative consequences, Azarmi said in a conversation with Nextgov.
“The government gets a lot of leeway to share information,” she said. “In this age of incredible data collection, I think we need to rethink some of the rules that are in place and some of the practices that we’ve allowed to flourish post-9/11. We may have overcorrected.” (source)
You think?
Many people voluntarily provide biometric data.
Many folks provide biometric data without giving it a second thought. They cheerfully swab a cheek and send it into sites like Ancestry.com, providing not only their DNA, but matches to many relatives who never gave permission for their DNA to be in a database.
Then there are cell phones. If you have a newer phone, it’s entirely possible that it has asked you to set up fingerprint login, facial recognition, and even voice recognition. It isn’t a stretch of the imagination to believe that those samples are shared with folks beyond the device in your hand. Add to this that your device is tracking you every place you go through a wide variety of seemingly innocuous apps, and you start to get the picture.
You can’t opt-out.
Back in 2013, I wrote an article called The Great American Dragnet. At that time, facial recognition was something that sounded like science fiction or some kind of joke. Our drivers’ licenses were the first foray into creating a database but even in 2013, it far exceeded that.
Another, even larger, database exists. The US State Department has a database with 230 million searchable images. Anyone with a passport or an immigration visa may find themselves an unwilling participant in this database. Here’s the breakdown of who has a photo database:
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The State Department has about 15 million photos of passport or visa holders
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The FBI has about15 million photos of people who have been arrested or convicted of crimes
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The Department of Defense has about 6 million photos, mainly of Iraqis and Afghans
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Various police agencies and states have at least 210 million driver’s license photos
This invasion of privacy is just another facet of the surveillance state, and should be no surprise considering the information Edward Snowden just shared about the over-reaching tentacles of the NSA into all of our communications. We are filing our identities with the government and they can identify us at will, without any requirement for probable cause. (source)
Some people don’t even seem to mind that their identities have been tagged and filed by the US government. And even those of us who do mind have no option. If you wish to drive a car or travel outside of the country or have any kind of government ID, like it or not, you’re in the database. Six years ago, I wrote:
The authorities that use this technology claim that the purpose of it is to make us safer, by helping to prevent identity fraud and to identify criminals. However, what freedom are we giving up for this “safety” cloaked in benevolence? We are giving up the freedom of having the most elemental form of privacy – that of being able to go about our daily business without being watched and identified. And once you’re identified, this connects to all sorts of other personal information that has been compiled: your address, your driving and criminal records, and potentially, whatever else that has been neatly filed away at your friendly neighborhood fusion center.
Think about it: You’re walking the dog and you fail to scoop the poop – if there’s a surveillance camera in the area, it would be a simple matter, given the technology, for you to be identified. If you are attending a protest that might be considered “anti-government”, don’t expect to be anonymous. A photo of the crowd could easily result in the identification of most of the participants.
Are you purchasing ammo, preparedness items, or books about a controversial topic? Paying cash won’t buy you much in the way of privacy – your purchase will most likely be captured on the CCTV camera at the checkout stand, making you easily identifiable to anyone who might wish to track these kinds of things. What if a person with access to this technology uses it for personal, less than ethical reasons, like stalking an attractive women he saw on the street? The potential for abuse is mind-boggling.
If you can’t leave your house without being identified, do you have any real freedom left, or are you just a resident in a very large cage? (source)
When I wrote that, it still seemed far-fetched but remotely possible, even to me. This was before we were really aware of anything like the social credit program in China or how crazy the censorship was going to become or how social media would change the very fabric of our society.
Now, it’s here and it looks like there’s no stopping it.
Tyler Durden
Wed, 10/09/2019 – 23:45 -
- 18-Year Old US Soldiers Now Entering Afghanistan 18 Years After War Began
18-Year Old US Soldiers Now Entering Afghanistan 18 Years After War Began
This week America’s longest war in Afghanistan turned eighteen, and so did its youngest solder. To mark the occasion, ABC News profiled the US occupation’s newest American member: “Pvt. Hunter Nines is about to join a war nearly as old as he is,” the report said.
Reflecting on his first impending deployment with the Army Pvt. Nines said, “I didn’t have a lot of thoughts on Afghanistan in particular.” He was but 7 months when the war began with the arrival of US troops on Oct. 7, 2001 following the 9/11 attacks. “I honestly just had the notion of I wanted to serve, and wherever that is, that’s where I’ll go.”
Army Pvt. Hunter Nines, via ABC News. Over the span of the now eighteen-year long war, an estimated 775,000 American troops have served at least one tour in the historically war-racked central Asian country, in a region which everyone from Alexander the Great to Genghis Khan to the British Empire had trouble subduing, as all were ultimately unsuccessful.
Very soon, the US will begin sending young service personnel who hadn’t even been born at the time of the start of Bush’s so-called ‘war on terror’. As this stunning line from the report emphasizes:
Department of Defense statistics reflect the increasing shift in demographics of service members such as Nines who were babies or not even yet born on Sept. 11, 2001, which led to what’s become America’s longest war.
By the numbers, there are 15,364 active-duty enlisted Army members who are 18, and among these 1,052 of whom were born after the 9/11 attacks, reported ABC.
And the much smaller (by total numbers), more elite branch, the Marine Corps, has 28,048 active-duty personnel aged 17 to 19.
It appears that Trump as Commander-In-Chief had this tragic reality of the country’s longest running quagmire in mind when he tweeted early this week, specifically in response to the unfolding crisis in Syria, that “it is time for us to get out of these ridiculous Endless Wars, many of them tribal, and bring our soldiers home.”
To be expected, the DC beltway blob had a collective conniption fit this week at the mere suggestion of a US troop exit from the Middle East.
To see inside the warped worldview of ‘official Washington’ it’s enough to recall this 2014 Washington Post op-ed (no, not The Onion) which argued, “War may be the worst way imaginable to create peaceful societies but it is pretty much the only way.”
Don’t even know where to begin with this @wapo defense of every war and genocide ever. pic.twitter.com/qFVfeN8tHv
— Alan MacLeod (@AlanRMacLeod) October 9, 2019
https://platform.twitter.com/widgets.js
Assuming the ‘deep state’ continues to have its way, we can expect many more 18-year olds to be sent to distant lands the American military machine has been active in since before they were born.
Tyler Durden
Wed, 10/09/2019 – 23:25 - National (In)Security: The Hypersonic Road To Hell
National (In)Security: The Hypersonic Road To Hell
Authored by Rajan Menon via TomDispatch.com,
Why Arms Races Never End
Hypersonic weapons close in on their targets at a minimum speed of Mach 5, five times the speed of sound or 3,836.4 miles an hour. They are among the latest entrants in an arms competition that has embroiled the United States for generations, first with the Soviet Union, today with China and Russia. Pentagon officials tout the potential of such weaponry and the largest arms manufacturers are totally gung-ho on the subject. No surprise there. They stand to make staggering sums from building them, especially given the chronic “cost overruns” of such defense contracts — $163 billion in the far-from-rare case of the F-35 Joint Strike Fighter.
Voices within the military-industrial complex — the Defense Department; mega-defense companies like Lockheed Martin, Northrup Grumman, Boeing, and Raytheon; hawkish armchair strategists in Washington-based think tanks and universities; and legislators from places that depend on arms production for jobs — insist that these are must-have weapons. Their refrain: unless we build and deploy them soon we could suffer a devastating attack from Russia and China.
The opposition to this powerful ensemble’s doomsday logic is, as always, feeble.
The (Il)logic of Arms Races
Hypersonic weapons are just the most recent manifestation of the urge to engage in an “arms race,” even if, as a sports metaphor, it couldn’t be more off base. Take, for instance, a bike or foot race. Each has a beginning, a stipulated distance, and an end, as well as a goal: crossing the finish line ahead of your rivals. In theory, an arms race should at least have a starting point, but in practice, it’s usually remarkably hard to pin down, making for interminable disputes about who really started us down this path. Historians, for instance, are still writing (and arguing) about the roots of the arms race that culminated in World War I.
The arms version of a sports race lacks a purpose (apart from the perpetuation of a competition fueled by an endless action-reaction sequence). The participants just keep at it, possessed by worst-case thinking, suspicion, and fear, sentiments sustained by bureaucracies whose budgets and political clout often depend on military spending, companies that rake in the big bucks selling the weaponry, and a priesthood of professional threat inflators who merchandise themselves as “security experts.”
While finish lines (other than the finishing of most life on this planet) are seldom in sight, arms control treaties can, at least, decelerate and muffle the intensity of arms races. But at least so far, they’ve never ended them and they themselves survive only as long as the signatories want them to. Recall President George W. Bush’s scuttling of the 1972 Anti-Ballistic Missile Treaty and the Trump administration’s exit from the Cold War-era Intermediate-Range Nuclear Forces (INF) Treaty in August. Similarly, the New START accord, which covered long-range nuclear weapons and was signed by Russia and the United States in 2010, will be up for renewal in 2021 and its future, should Donald Trump be reelected, is uncertain at best. Apart from the fragility built into such treaties, new vistas for arms competition inevitably emerge — or, more precisely, are created. Hypersonic weapons are just the latest example.
Arms races, though waged in the name of national security, invariably create yet more insecurity. Imagine two adversaries neither of whom knows what new weapon the other will field. So both just keep building new ones. That gets expensive. And such spending only increases the number of threats. Since the end of the Cold War in 1991, U.S. military spending has consistently and substantially exceeded China’s and Russia’s combined. But can you name a government that imagines more threats on more fronts than ours? This endless enumeration of new vulnerabilities isn’t a form of paranoia. It’s meant to keep arms races humming and the money flowing into military (and military-industrial) coffers.
One-Dimensional National Security
Such arms races come from the narrow, militarized definition of “national security” that prevails inside the defense and intelligence establishment, as well as in think tanks, universities, and the most influential mass media. Their underlying assumptions are rarely challenged, which only adds to their power. We’re told that we must produce a particular weapon (price tag be damned!), because if we don’t, the enemy will and that will imperil us all.
Such a view of security is by now so deeply entrenched in Washington — shared by Republicans and Democrats alike — that alternatives are invariably derided as naïve or quixotic. As it happens, both of those adjectives would be more appropriate descriptors for the predominant national security paradigm, detached as it is from what really makes most Americans feel insecure.
Consider a few examples.
Unlike in the first three decades after World War II, since 1979 the average U.S. hourly wage, adjusted for inflation, has increased by a pitiful amount, despite substantial increases in worker productivity. Unsurprisingly, those on the higher rungs of the wage ladder (to say nothing of those at the top) have made most of the gains, creating a sharp increase in wage inequality. (If you consider net total household wealth rather than income alone, the share of the top 1% increased from 30% to 39% between 1989 and 2016, while that of the bottom 90% dropped from 33% to 23%.)
Because of sluggish wage growth many workers find it hard to land jobs that pay enough to cover basic life expenses even when, as now, unemployment is low (3.6% this year compared to 8% in 2013). Meanwhile, millions earning low wages, particularly single mothers who want to work, struggle to find affordable childcare — not surprising considering that in 10 states and the District of Columbia the annual cost of such care exceeded $10,000 last year; and that, in 28 states, childcare centers charged more than the cost of tuition and fees at four-year public colleges.
Workers trapped in low-wage jobs are also hard-pressed to cover unanticipated expenses. In 2018, the “median household” banked only $11,700, and households with incomes in the bottom 20% had, on average, only $8,790 in savings; 29% of them, $1,000 or less. (For the wealthiest 1% of households, the median figure was $2.5 million.) Forty-four percent of American families would be unable to cover emergency-related expenses in excess of $400 without borrowing money or selling some of their belongings.
That, in turn, means many Americans can’t adequately cover periods of extended unemployment or illness, even when unemployment benefits are added in. Then there’s the burden of medical bills. The percentage of uninsured adults has risen from 10.9% to 13.7% since 2016 and often your medical insurance is tied to your job — lose it and you lose your coverage — not to speak of the high deductibles imposed by many medical insurance policies. (Out-of-pocket medical expenses have, in fact, increased fourfold since 2007 and now average $1,300 a year.)
Or, speaking of insecurity, consider the epidemic in opioid-related fatalities (400,000 people since 1999), or suicides (47,173 in 2017 alone), or murders involving firearms (14,542 in that same year). Child poverty? The U.S. rate was higher than that of 32 of the 36 other economically developed countries in the Organization for Economic Cooperation and Development.
Now ask yourself this: how often do you hear our politicians or pundits use a definition of “national security” that includes any of these daily forms of American insecurity? Admittedly, progressive politicians do speak about the economic pressures millions of Americans face, but never as part of a discussion of national security.
Politicians who portray themselves as “budget hawks” flaunt the label, but their outrage over “irresponsible” or “wasteful” spending seldom extends to a national security budget that currently exceeds $1 trillion. Hawks claim that the country must spend as much as it does because it has a worldwide military presence and a plethora of defense commitments. That presumes, however, that both are essential for American security when sensible and less extravagant alternatives are on offer.
In that context, let’s return to the “race” for hypersonic weapons.
Faster Than a Speeding Bullet
Although the foundation for today’s hypersonic weaponry was laid decades ago, the pace of progress has been slow because of daunting technical challenges. Developing materials like composite ceramics capable of withstanding the intense heat to which such weapons will be exposed during flight leads the list. In recent years, though, countries have stepped up their games hoping to deploy hypersonic armaments rapidly, something Russia has already begun to do.
China, Russia, and the United States lead the hypersonic arms race, but others — including Britain, France, Germany, India, and Japan — have joined in (and more undoubtedly will do so). Each has its own list of dire scenarios against which hypersonic weapons will supposedly protect them and military missions for which they see such armaments as ideal. In other words, a new round in an arms race aimed at Armageddon is already well underway.
There are two variants of hypersonic weapons, which can both be equipped with conventional or nuclear warheads and can also demolish their targets through sheer speed and force of impact, or kinetic energy. “Boost-glide vehicles” (HGVs) are lofted skyward on ballistic missiles or aircraft. Separated from their transporter, they then hurtle through the atmosphere, pulled toward their target by gravity, while picking up momentum along the way. Unlike ballistic missiles, which generally fly most of the way in a parabolic trajectory — think of an inverted U — ranging in altitude from nearly 400 to nearly 750 miles high, HGVs stay low, maxing out about 62 miles up. The combination of their hypersonic speed and lower altitude shortens the journey, while theoretically flummoxing radars and defenses designed to track and intercept ballistic missile warheads (which means another kind of arms race still to come).
By contrast, hypersonic cruise missiles (HCMs) resemble pilotless aircraft, propelled from start to finish by an on-board engine. They are, however, lighter than standard cruise missiles because they use “scramjet” technology. Rather than carrying liquid oxygen tanks, the missile “breathes” in outside air that passes through it at supersonic speed, its oxygen combining with the missile’s hydrogen fuel. The resulting combustion generates extreme heat, propelling the missile toward its target. HCMs fly even lower than HGVs, below 100,000 feet, which makes identifying and destroying them harder yet.
Weapons are categorized as hypersonic when they can reach a speed of at least Mach 5, but versions that travel much faster are in the works. A Chinese HGV, launched by the Dong Feng (East Wind) DF-ZF ballistic missile, reportedly registered a speed of up to Mach 10 during tests, which began in 2014. Russia’s Kh-47M2 Kinzhal, or “Dagger,” launched from a bomber or interceptor, can reportedly also reach a speed of Mach 10. Lockheed Martin’s AGM-183A Advanced Rapid Response Weapon (ARRW), an HGV that was first test-launched from a B-52 bomber this year, can apparently reach the staggering speed of Mach 20.
And yet it’s not just the speed and flight trajectory of hypersonic weapons that will make them so hard to track and intercept. They can also maneuver as they race toward their targets. Unsurprisingly, efforts to develop defenses against them, using low-orbit sensors, microwave technology, and “directed energy” have already begun. The Trump administration’s plans for a new Space Force that will put sensors and interceptors into space cite the threat of hypersonic missiles. Even so, critics have slammed the initiative for being poorly funded.
Putting aside the technical complexities of building defenses against hypersonic weapons, the American decision to withdraw from the ABM Treaty and develop missile-defense systems influenced Russia’s decision to develop hypersonic weapons capable of penetrating such defenses. These are meant to ensure that Russia’s nuclear forces will continue to serve as a credible deterrent against a nuclear first strike on that country.
The Trio Takes the Lead
China, Russia, and the United States are, of course, leading the hypersonic race to hell. China tested a medium-range new missile, the DF-17 in late 2017, and used an HGV specifically designed to be launched by it. The following year, that country tested its rocket-launched Xing Kong-2 (Starry Sky-2), a “wave rider,” which gains momentum by surfing the shockwaves it produces. In addition to its Kinzhal, Russia successfully tested the Avangard HGV in 2018. The SS-19 ballistic missile that launched it will eventually be replaced by the R-28 Samrat. Its hypersonic cruise missile, the Tsirkon, designed to be launched from a ship or submarine, has also been tested several times since 2015. Russia’s hypersonic program has had its failures — so has ours — but there’s no doubting Moscow’s seriousness about pursuing such weaponry.
Though it’s common to read that both Russia and China are significantly ahead in this arms race, the United States has been no laggard. It’s been interested in such weaponry — specifically HGVs — since the early years of this century. The Air Force awarded Boeing and Pratt & Whitney Rocketdyne a contract to develop the hypersonic X-51A WaveRider scramjet in 2004. Its first flight test — which failed (creating something of a pattern) — took place in 2010.
Today, the Army, Navy, and Air Force are moving ahead with major hypersonic weapons programs. For instance, the Air Force test-launched its ARRW from a B-52 bomber as part of its Hypersonic Conventional Strike Weapon (HCSW) this June; the Navy tested an HGV in 2017 to further its Conventional Prompt Strike (CPS) initiative; and the Army tested its own version of such a weapon in 2011 and 2014 to move its Advanced Hypersonic Weapon (AHW) program forward. The depth of the Pentagon’s commitment to hypersonic weapons became evident in 2018 when it decided to combine the Navy’s CPS, the Air Force’s HCSW, and the Army’s AHW to advance the Conventional Prompt Global Strike Program (CPGS), which seeks to build the capability to hit targets worldwide in under 60 minutes.
That’s not all. The Center for Public Integrity’s R. Jeffrey Smith reports that Congress passed a bill last year requiring the United States to have operational hypersonic weapons by late 2022. President’s Trump’s 2020 Pentagon budget request included $2.6 billion to support their development. Smith expects the annual investment to reach $5 billion by the mid-2020s.
That will certainly happen if officials like Michael Griffin, the Pentagon’s undersecretary for research and engineering, have their way. Speaking at the McAleese and Credit Suisse Defense Programs conference in March 2018, he listed hypersonic weapons as his “highest technical priority,” adding, “I’m sorry for everybody out there who champions some other high priority… But there has to be a first and hypersonics is my first.” The big defense contractors share his enthusiasm. No wonder last December the National Defense Industrial Association, an outfit that lobbies for defense contractors, played host to Griffin and Patrick Shanahan (then the deputy secretary of defense), for the initial meeting of what it called the “Hypersonic Community of Influence.”
Cassandra Or Pollyanna?
We are, in other words, in a familiar place. Advances in technology have prepared the ground for a new phase of the arms race. Driving it, once again, is fear among the leading powers that their rivals will gain an advantage, this time in hypersonic weapons. What then? In a crisis, a state that gained such an advantage might, they warn, attack an adversary’s nuclear forces, military bases, airfields, warships, missile defenses, and command-and-control networks from great distances with stunning speed.
Such nightmarish scenario-building could simply be dismissed as wild-eyed speculation, but the more states think about, plan, and build weaponry along these lines, the greater the danger that a crisis could spiral into a hypersonic war once such weaponry was widely deployed. Imagine a crisis in the South China Sea in which the United States and China both have functional hypersonic weapons: China sees them as a means of blocking advancing American forces; the United States, as a means to destroy the very hypersonic arms China could use to achieve that objective. Both know this, so the decision of one or the other to fire first could come all too easily. Or, now that the INF Treaty has died, imagine a crisis in Europe involving the United States and Russia after both sides have deployed numerous intermediate-range hypersonic cruise missiles on the continent.
Some wonks say, in effect, Relax, hi-tech defenses against hypersonic weapons will be built, so crises like these won’t spin out of control. They seem to forget that defensive military innovations inevitably lead to offensive ones designed to negate them. Hypersonic weapons won’t prove to be the exception.
So, in a world of national (in)security, the new arms race is on. Buckle up.
Tyler Durden
Wed, 10/09/2019 – 23:05 - Inside Hunter Biden's Dealings With Shadowy Foreign Firms
Inside Hunter Biden’s Dealings With Shadowy Foreign Firms
Hunter Biden is the ultimate fail-son, or black sheep.
For those who are unfamiliar with the term, it has emerged in recent years to describe the spoiled, sloppy and clumsily power-hungry offspring of powerful individuals. Hunter Biden is more infamous for his often drug-fueled antics, and the brief and embarrassingly public romance he shared with his deceased brother’s widow, than he is for being a successful businessman. But now his business career has been exposed for what it truly is: Foreign players hoping to use the younger Biden as a backdoor connection to the White House, and the American political elite.
Often, Biden dropped hints about how these connections could be useful, though there’s not much of a record of him actually using his connections (that is, actually being useful) on his employer’s behalf (which doesn’t mean it didn’t happen).
According to the FT, Biden’s business interests “often show up in unexpected places.” While Democrats obviously prefer to focus on their impeachment investigation, there’s no denying that Biden’s business dealings in Ukraine, China and elsewhere clearly raise questions about potential conflicts that existed while his father was in office. Joe Biden has denied wrongdoing, but questions linger over his role in the ouster of a top Ukrainian prosecutor, which some have suggested was done to help protect Hunter.
When Hunter joined the Navy Reserves in May 2013, he required several waivers (at 42, he was above the age of enlistment, and there was an unspecified ‘drug-related’ incident that also would have disqualified him).
Despite his apparent eagerness to join, Biden was discharged from the Navy the following year after testing positive for cocaine. Soon after, his more successful older brother, Beau, passed away, and his wife Kathleen filed for divorce, citing Hunter’s “spending extravagantly on his own interests including drugs, alcohol, prostitutes, strip clubs and gifts for women with whom he has sexual relations.”
Next, he started dating his brother’s widow.
But in between trips to rehab and legendary drug benders. In 2016, shortly after he started dating Hallie Biden, Beau’s widow, Hunter made plans to stay at a detox center in Arizona. But he somehow got sidetracked during a stopover in Los Angeles, and ended up missing the next wing of his flight. Instead, he traveled to Skid Row, where he was reportedly held up at gun point, but nevertheless apparently succeeded in buying and using crack, causing him to return several times over the following days. Eventually, Hunter Biden took a Hertz rental car to his treatment center in Arizona, but workers at the Hertz office called the police after finding a crack pipe and baggie of crack, along with Biden’s license and a badge from Beau’s time as Delaware AG.
Prosecutors declined to pursue the case, claiming a lack of evidence, but it definitely wasn’t a good look for Hunter. More recently, Hunter has been in the headlines for his whirlwind marriage to a South African Instagram model, and for a paternity suit brought by a woman claiming Hunter is the father of her newborn son.
Of course, none of these transgressions have stopped Biden from earning millions of dollars off his family name and connections. In Wednesday’s issue, the FT published a breakdown of Biden’s foreign business interests.
Burisma Holdings:
Role: Board member (2014-2019)
Pay: $50,000 a month.
Burisma, Ukraine’s leading privately owned natural gas producer, obtained some of its most prized production assets while its founder Mykola Zlochevsky headed a ministry that doled out gas licences under the kleptocratic administration of ex-president Viktor Yanukovich. After Mr Yanukovich fled to Russia in 2014, investigators started probing the company.
That year Burisma appointed prominent westerners to its board, including Hunter Biden, who reportedly earned $50,000 per month for this role. Mr Trump’s calls for his Ukrainian counterpart Volodymyr Zelensky to investigate Burisma over links to Joe Biden, his potential Democratic rival in next year’s presidential election, triggered the impeachment probe.
In tweets and in a July phone call with Mr Zelensky, Mr Trump and Rudy Giuliani, his personal lawyer, alleged that Joe Biden protected Burisma and his son’s interests while he was vice-president. Ukraine’s western backers deny this narrative.
Paradigm Companies
Role: investor and employee
Pay: $1.2 million salary
In 2006, Hunter Biden acquired a stake in Paradigm, a hedge fund group, following a failed attempt to buy the entire company through LBB, a limited liability partnership set up with his uncle James Biden. Hunter Biden recently told the New Yorker that, while the failed deal sounded “super attractive”, it fell apart after he and his uncle learned that the company was worth less than they had thought.
Both James and Hunter Biden faced a lawsuit from Anthony Lotito Jr, a former business partner, who accused them of defrauding him over the failed deal. The Bidens countersued Mr Lotito, accusing him of hiding company debts and falsely claiming he held securities licences. An independent audit of the fund conducted in 2008 found accounting problems at the firm including “failure to timely prepare financial statements” and “failure to reconcile Investment Advisors reimbursement of fund expenses”.
Paradigm itself was founded by James Park in 1991, the son-in-law of one of the founder’s of the Korean Unification Church, which some have called a cult. In 2009, a fund run by Paradigm became associated with Allen Stanford, a Texas financier, who was later convicted of running an $8bn Ponzi scheme. Stanford’s company was responsible for marketing one of Paradigm’s funds of hedge funds, and also invested millions of dollars in it. At the time, a lawyer representing Paradigm said neither Hunter nor James Biden had ever met Stanford.
The Bidens filed for voluntary liquidation of the company in 2010.
Seneca Global Advisors
Role: Founder, consultant
Pay: n/a
Hunter Biden launched his consultancy in September 2008, weeks after his father Joe Biden had been announced as Barack Obama’s running mate on the Democratic presidential ticket. Mr Obama was elected president in November 2008, with Joe Biden as his vice-president.
The consultancy pitched itself as a firm that could help small and midsized companies expand across the US and into foreign markets. Clients included Achaogen, a pharmaceutical company focused on anti-bacterial treatments that filed for bankruptcy in April 2019, and GreatPoint Energy, an energy technology start-up.
In 2012, GreatPoint received a $420m investment from China Wanxiang Holdings, an industrial conglomerate. It was the largest venture capital investment into the US that year. It is unclear if Hunter Biden was directly involved in securing this investment.
Rosemont Seneca Partners
Role: Co-founder, consultant
Pay: n/a
Hunter Biden co-founded Rosemont Seneca Partners in 2009 with Christopher Heinz, stepson of John Kerry, the former secretary of state, and scion of the Heinz processed food fortune, and Devon Archer, a financier and former Abercrombie & Fitch model who attended Yale with Mr Heinz.
In 2014, Rosemont Seneca was involved in an attempted $1.5bn fundraise for a new fund launched by Harvest Fund Management and Bohai Industrial Group, the Chinese asset manager, according to a Wall Street Journal report at the time. The Bank of China International Holdings was one of the biggest stakeholders in Bohai at the time.
Mr Archer first connected with Mykola Zlochevsky, co-founder of the Ukrainian gas company Burisma, in 2014 when he travelled there to pitch a Rosemont-linked real estate fund that he managed. Mr Archer joined Burisma’s board in 2014. Hunter joined soon after.
BHR Partners
Role: Director, consultant, 2013-today
Pay: n/a
BHR Partners, of which Hunter remains a director, is a private investment fund backed by some of China’s largest state banks, local government and the national pension fund.
At its inception in 2014, BHR listed Rosemont Seneca Thornton LLC, an investment firm co-founded by Hunter Biden, as a shareholder that owned 30% of the fund.
A year later, the two partners in RST, a consortium of Rosemont Seneca and Thornton Group, a Massachusetts-based firm with local political ties, split their shares in BHR. Rosemont Seneca took 20% and Thornton 10%. Rosemont Seneca unloaded its BHR stakes in 2017, while Thornton kept its shares.
BHR is known for being an early investor in some of the fastest-growing technology start-ups, including Didi Chuxing, the digital transport group. It has also invested in Megvii, a facial recognition start-up whose technology has been used in Chinese government surveillance of Uighur populations in China’s western provinces.
Li Xiangsheng, CEO of BHR, told local media that the fund’s strong government background would allow it to make super-big investments, saying the fund could take loans from its shareholders such as China Development Bank and Bank of China to complete transactions.
Hunter Biden’s investment in the fund totalled $420,000, according to one of his lawyers, implying the fund’s total value sits at $4.2m. The New Yorker reported in July that Hunter and his partners said they had not yet received a payment from BHR.
BHR Portfolio Companies (per FT):
Didi Chuxing:
Cashed out. China’s largest ride-hailing service. BHR invested in Didi in 2015 and exited two years later.
Megvii
Current. Leading facial recognition company whose technology was linked to Beijing’s mass surveillance of Uighurs in Xinjiang. BHR was an investor in Megvii’s Series C funding round in 2017.
Sinopec Petroleum Sales
Current. Retail unit of one of world’s largest oil refiners. Sinopec participated in China’s mixed ownership reform of the state sector by selling shares in its retail business in 2014 to an investor group that includes BHR. The fund paid Rmb6bn for a 1.7% stake.
Yancoal Australia
Current. Australian subsidiary of China’s third-largest coal producer. BHR teamed up with two Chinese banks in 2016 to purchase a nine-year bond issued by Yancoal Australia and valued at $950m.
CGN Power Group
Current. Major nuclear power company that was placed under US export blacklist in August over accusations of stealing US technology for military use. BHR was a cornerstone investor in CGN’s Hong Kong IPO in 2014.
Tuniu
Current. Major online travel agency. BHR invested in Tuniu in 2016.
Contemporary Amperex Technology
Current. World’s largest lithium-ion battery maker. BHR invested Rmb100m in CAT in 2015 and cashed out for Rmb197m three years later.
3SBio
Current. Leading Chinese biopharmaceutical firm in which BHR has invested.
Tenke Copper Mine
Cashed out. BHR paid $1.1bn for a 24% stake in DRC’s Tenke copper mine, one of the world’s largest, from Canada-based Lundin Mining. BHR acted as middleman in the deal, as it later sold its stake to China Molybdenum, a state-backed miner, allowing the latter to gain full control of Tenke.
Henniges Automotive
Current. In 2015, BHR teamed up with Chinese state-owned Avic Auto to acquire Michigan-based Henniges Automotive, which makes auto components. The deal, valued at $600m, gave BHR a 49% stake in Henniges. A research institute under Avic Auto’s parent company, China’s largest defence contractor, was added to the US export blacklist in 2014.
Gemini-Rosemont Realty
Current. In 2015, Gemini Investments Limited, the investment arm of China’s state-owned Sino-Ocean Land Holdings, purchased a 75 per cent stake in Rosemont Realty, Devon Archer’s sister company of Rosemont Seneca, where Hunter Biden was a partner. The deal resulted in a joint venture — Gemini-Rosemont Realty that owns 135 buildings in 22 US states.
Jilin Zhishi Dairy Co
Current. BHR-invested dairy product maker based in northeastern China.
Chengdu Xijiao Rail Transportation Technology Co
Current. Leading railway technology firm in which BHR has a 10% stake.
Source: Financial Times
Tyler Durden
Wed, 10/09/2019 – 22:45 - Secretary Of Defense, Incorporated
Secretary Of Defense, Incorporated
Authored by Danny Sjursen via TruthDig.com,
The man is so beautifully bland. In fact, I’d wager that only a tiny segment of Americans could name the current Secretary of Defense—and far fewer could pick him out of a lineup. Perhaps that’s the point. President Trump, a celebrity ham, has tired of sharing the stage with big-name advisers such as Defense Secretary Jim Mattis and national security adviser John Bolton. So they’re both gone. In their place, Trump has installed faceless bureaucrats to run the most powerful national security state in human history. And the rest of us hardly notice.
Trump’s appointment of Mark Esper as head of the largest and most active Cabinet department, and the new Defense Secretary’s near unanimous approval by the U.S. Senate, is no less of a scandal than Trump’s apparent efforts to seek foreign interference in the 2020 elections. Only it isn’t.
Still, the nomination of Esper, a recent lobbyist for the defense contracting corporation Raytheon, ranks as one of the most egregious illustrations of the “revolving door” between lobbyists and the Defense Department. It’s crony capitalism in fatigues, and while nothing new, a clear indication that things have only worsened under our reality-show-mogul-president.
Of course, seen through the rose-colored glasses of American empire, Esper is highly qualified to head the Defense Department. He’s a West Point graduate, former Army infantry officer, recipient of a master’s degree in public administration from Harvard and a doctorate in public policy from George Washington University, and has past experience working in the Pentagon.
If one digs further, however, Esper is wildly problematic—loaded with conflicts of interest, a veteran of the (should be) discredited neoconservative Bush-era DOD, and little more than a corporate “company man.” He didn’t just work for Raytheon, he lobbied on the defense contractor’s behalf only recently. Under rather sharp questioning by Sen. Elizabeth Warren during his confirmation hearings, Esper refused to recuse himself from participating in government business involving Raytheon. In typically lifeless language, Esper replied that “On the advice of my ethics folks at the Pentagon, the career professionals: No, their recommendation is not to.” How’s that for accepting responsibility? No matter, he was swiftly and quietly confirmed by a vote of 90-8 in the Senate.
Expect another banner year for Raytheon. It’s already the third-largest U.S. defense contractor, and produces, among other tools of destruction, Paveway precision-guided missiles—the very weapons that Congress recently sought to stop shipping to Saudi Arabia due to (rather tardy) concerns about the heads of Yemeni civilians upon which they’re dropped.
I predict more deals and more taxpayer billions for Raytheon with Esper at the Defense helm. Not that the company has done poorly during the Trump years. In 2018, Raytheon CEO Thomas Kennedy candidly quipped that “It’s the best time that we’ve ever seen for the defense industry.” Not for indebted taxpayers, bombed-out Middle Easterners or U.S. soldiers still dying in endless wars, it’s not. But sure, it truly is the best of times for what prominent American leaders—once upon a time—labeled the “merchants of death.”
Conflicts of interest, sliding seamlessly between defense contracting boards and the Pentagon, and securing post-government largesse on corporate boards, that’s an old story indeed. Looking back to 2001, most Defense Secretaries have troublesome private sector connections. Donald Rumsfeld entered the Pentagon after a 24-year business career; Robert Gates was on the board of directors of Fidelity Investments and the Parker Drilling Company; Chuck Hagel served on the boards of Chevron and Deutsche Bank; Ash Carter—an exception—was mostly an academic and a bureaucratic wonk, but still consulted for Goldman Sachs. All made millions.
That covers the Bush and Obama years. What we’ve seen in the Trump administration, is, however, something far more brazen. His three Secretaries of Defense (one of whom, Patrick Shanahan, was only acting head) have been unapologetically ensconced in the world of defense contracting and corporate lobbying.
“Saint” Jim Mattis had, while still a general, encouraged the military to buy the blood test products of Theranos, then dropped the service and joined its corporate board. But Theranos’ products did not work, the deal described by the Securities and Exchange Commission as an “elaborate, years-long fraud.” Mattis also served, both before and after his Pentagon stint, on the board of General Dynamics, the nation’s fifth largest defense contractor. Nonetheless, Mattis easily slid through his confirmation and was praised by all types of mainstream media as the administration’s “adult in the room.”
After Mattis resigned, he being unable to countenance even Trump’s hints at modest withdrawal from the wars in Syria and Afghanistan, Patrick Shanahan stepped in as interim defense chief. Unlike his predecessor, Shanahan didn’t emerge from the military, but rather from yet another defense contractor, Boeing, for which he’s worked some 30 years. Trump thought that was dandy and nominated him to officially replace Mattis, but Shanahan decided to withdraw due to alleged personal scandals. Enter Mark Esper, Raytheon lobbyist extraordinaire.
Esper’s in good company in Washington’s military-industrial swamp. Recent reports by the Project on Government Oversight (POGO)—a vital organization that hardly any American has heard of—identified “645 instances in the past 10 years in which a retired senior official, member of Congress or senior legislative staff member became employed as a registered lobbyist, board member or business executive at a major government contractor.” POGO also noted that “those walking through the revolving door included 25 generals, nine admirals, 43 lieutenant generals and 23 vice admirals.”
All of which begs some questions and provides some disturbing answers. Perhaps we ought to ditch the myth that the Defense Secretary simply heads the Pentagon, and admit that Esper is really the emperor of a far grander military-industrial complex that includes a veritable army of K-Street lobbyists and venal arms dealers. Maybe it’s time to concede that unelected national security czars, and not a stalemated bought-and-sold Congress, run national defense and set the gigantic Pentagon budget. Perhaps we should confess to ourselves that the nation’s vaunted soldiers are little more than political pawns in a game that’s far bigger, far more Kafkaesque, than those troopers could begin to fathom. And, finally, let’s admit one last thing: Few of us care.
* * *
Danny Sjursen is a retired U.S. Army Major and regular contributor to Truthdig. His work has also appeared in Harper’s, The LA Times, The Nation, Tom Dispatch, The Huffington Post and The Hill. He served combat tours with reconnaissance units in Iraq and Afghanistan and later taught history at his alma mater, West Point. He is the author of a memoir and critical analysis of the Iraq War, “Ghostriders of Baghdad: Soldiers, Civilians, and the Myth of the Surge.” He co-hosts the progressive veterans’ podcast “Fortress on a Hill.” Follow him on Twitter at @SkepticalVet.
Tyler Durden
Wed, 10/09/2019 – 22:25 - People Who Work From Home Earn More Money, New Study Shows
People Who Work From Home Earn More Money, New Study Shows
According to a new Census Bureau report, people who work from home were the highest earning workers in the “median earnings by means of transportation to work” category. Bloomberg highlighted this in a new report that also noted that in 2018, people who took public transportation to work had higher median earnings than those who didn’t.
From the public transportation angle, the statistics are mostly a reflection of where buses, subways and commuter trains are located. Places like New York, Chicago and San Francisco accounted for a large portion of Americans who took public transportation to work, and pay is notably higher in those areas.
People who work from home gain their income advantage from the kind of work that can be done remotely. For instance, white-collar work is much more likely to be done from home than blue-collar work. Perhaps this is a reason why, in 2010, those who worked from home made 11% less than those who drove to work, but in 2018, they made 5% more.
Over the same period of time, the number of people who reported working at home has risen to 8.3 million from 5.9 million. The rise began in the early 2000’s, as broadband connections at home made it easier for people to accomplish work tasks while not in the office.
As Bloomberg notes, the survey can also leave some people out:
The annual American Community Survey from which the current data 1 are derived asks people how they usually got to work the previous week. This misses out on lots of people who didn’t happen to work from home that particular week but do sometimes. A 2016 Gallup survey found that 43% of American employees worked remotely at least occasionally. The European Union’s Eurostat tracks whether people work at home “usually” or “sometimes,” and over the past decade the former group hasn’t grown as a share of the EU workforce but the latter has.
But in general, the trend toward working at home seems to be a good one. Studies have shown that employees who are given the opportunity to work from home are more productive and happier with their jobs. They can also save time and money by not commuting.
People who work at home also get the advantage of being able to live in scenic places, like Boulder, Colorado or the Catskills.
And another portion of the study shows that people who work at home either make a significant sum of money, or not very much at all. This could be due to some people working at home just as part-timers looking to supplement household income. Others, who make $75,000 or more, are likely white-collar executives or work in technology. Remote work websites like Upwork are also becoming popular for people to take on full-time workloads from remote locations.
Finally, the study showed that working at home seems to still predominantly be the most popular with white people.
Tyler Durden
Wed, 10/09/2019 – 22:05 - Duelling US-China Trade Headlines Spark Chaotic Volatility In Futures
Duelling US-China Trade Headlines Spark Chaotic Volatility In Futures
Update: Good luck trading this…
Dow futures have swung up and down 300-plus points four times…
And Yuan is even more chaotic…
Source: Bloomberg
* * *
And to think how blissfully stocks surged today on optimism that China was willing to pursue a partial deal…
Moments after US equity futures reopened for trading, they plunged after the SCMP reported that deputy-level trade talks between the US and China aimed at laying the groundwork for high-level negotiations later this week “failed to yield any progress on critical issues, according to two sources with knowledge of the meetings.”
According to the report, the deputy-level negotiators, led on the Chinese side by vice-minister for finance Liao Min, spent the time focusing on only two areas: agricultural purchases and intellectual property protection. This apparently was not enough.
As other newswire reported earlier, during the discussions on Monday and Tuesday in Washington, the Chinese refused to talk about forced technology transfers, one source said, which is a core US grievance regarding China’s economic policies.
Speaking on condition of anonymity, the person said that talks had also skirted the issue of state subsidies, which the Trump administration says give Chinese companies an unfair advantage over international competitors.
“They have made no progress,” said another source familiar with the talks, adding that the Chinese side had not made headway in persuading US negotiators to consider a freeze on tariff increases, a main priority for Beijing.
And confirming that the week’s entire negotiation was a fiasco from the start, the SCMP reports that the Chinese delegation is planning to leave Washington on Thursday – one day early – and after just one day of principal-level talks, the SCMP source noted. Beijing’s negotiating team, headed by Vice-Premier Liu He, had previously planned to leave Washington late on Friday, allowing for up to two full days of talks.
Liu arrived in the US capital on Tuesday afternoon amid one of the tensest weeks for bilateral relations since the trade war began in July 2018.
It appears that this week’s NBA fiasco may have been the straw that broke the camel’s back:
Fallout from an NBA team general manager’s message of support for Hong Kong protesters has roiled public opinion on both sides. And earlier this week Washington announced sanctions against Chinese government entities, officials and companies it considers implicated in Beijing’s policies targeting largely Muslim ethnic minority groups in the Xinjiang Uygur autonomous region.
The Chinese government shot back, calling for an immediate reversal in the administration’s actions.
To be sure, Wednesday’s announcement that the US would block visa of various Chinese officials did not help.
In any case, with any hopes of even a modest, or mini, trade deal now seemingly collapsed, so have futures, which are puking after hours… (Dow futures -320 points)
… as is the Yuan.
Source: Bloomberg
And gold is spiking…
If confirmed, expect much more pain for a market which some have said has priced in the US-China trade deal no less than three times already.
Tyler Durden
Wed, 10/09/2019 – 21:50
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