Jan 11

Today’s News 11th January 2017

  • Bill Blain: "Throughout My Career, Years Ending In 7 Haven’t Been Good"

    While we wish one of our favorite market commentators’, Mint’s Bill Blain, all the best as he recovers from his recent heart attack, we would like to share with readers his inaugural for 2017 note, which lays out his current concerns about the state of the markets, and the global economy.

    From the January 10 edition of Blain’s Mid-Morning Porridge

    Let me start by stating the issues causing me some worry:

    Throughout my career, years ending in 7 haven’t been good.

    1987 saw a massive stock market crash, in 1997 we got the Asian Financial Crisis, and 2007 saw the start of the Global Financial Crisis and consequences we’re still struggling with today. In the case of year 7s, the trend is not our friend.

    I’m told by my stock picking chartists there is a 10-yr stock cycle that looks to have peaked. Many factors about this succession of market turnaround moments worry me – firstly, the scale of crisis seems to be multiplying as each 10-yrs event. A simple stock market rout in 1987 became near global catastrophe in 2007.

    Thankfully we haven’t ever had the kind of absolute global market meltdown doomsters say will happen, but it does strike me that market moves – whether caused by an evil conjunction of rogue algorithims and Hi-Speed-Trading, or simple human foolishness – are becoming increasingly chaotic, thus raising the scale of crashes.

    The second aspect is how financial crisis are solved. Each is new – but it worries me the efforts made to ensure the last crisis doesn’t happen again may contribute to the causes the next one. I certainly don’t believe the deluge of regulatory tat since 2008 has made the world safer. It has not… it has made it more.. difficult. It’s a game of consequences…

    And change is definitely coming…

    I’ve been looking at the dismal science of Economics. It’s proper name is political economy and its not a proper science. It’s a language for understanding complex events and responding to them,rather than mathematical rules. Over the past 10-years we’ve seen a massive economic experiment in monetary economics. It’s hasn’t gone well. It strikes me the legions of central bank economists are akin to the ancient alchemists looking to change base metal into gold….

    The piper will soon want paid. The next phase – underway already – will be a reversal back to fiscal economics. That one potentially positive reality for the US and UK, but yet another minefield for Europe. It’s a big if to see whether Trump delivers the fiscal boost the market expects, or whether the continued weakness of sterling continues to push the FTSE into the stratosphere. I have my doubts…!
    In Europe a swing towards Fiscal policy spells crisis.

    The fact that France and Italy could be steaming towards fiscal stimuli will break the current ECB monetary consensus, while Germans become increasing strident about the need for higher rates and an end to QE. Add to that a hefty dose of European politics. Dutch Elections, French Elections and the Germans.. its all much to worry about. 

  • U.S. Intelligence Agencies Have No Clothes

    Submitted by Mike Krieger via Liberty Blitzkrieg blog,

    The true patriotism, the only rational patriotism is loyalty to the nation all the time, loyalty to the government when it deserves it.

     

    – Mark Twain, The Czar’s Soliloquy”

    At this point, pretty much everyone in America has seen the results of Hillary Clinton media pet, John Harwood’s recent Twitter poll.

    The significance of the above cannot be overstated. U.S. intelligence agencies, like so many other national institutions, have lost nearly all credibility in the eyes of the American public. The list is long, but includes economists, politicians, the mainstream media, central bankers, the financial system, and a lot more. The loss in credibility is well deserved and has nothing to do with Russia. Rather, it’s a function of a disastrous 21st century outcome for U.S. citizens both at home and abroad. A result that was achieved under eight years of Republican rule and then eight years of Democratic rule. The results were the same whether a donkey or elephant was in charge, because the people determining policy behind the scenes never really changed (same economists, central bankers, intelligence officials, etc), and the people selling the catastrophic policies to the public definitely never changes (mainstream media and its worthless pundits).

    So here we stand at a moment where trust in essentially all U.S. institutions is at a well deserved all-time low, and the best the establishment can come up with is to blame Russia. Even worse, those pushing the whole “Putin is to blame for everything” conspiracy theories, consistently refuse to back up their assertions with any evidence whatsoever. In fact, with each passing week the case looks increasingly flimsy, with the latest declassified document issued Friday being particularly suspect. Even many of those largely convinced of Russia’s meddling in the U.S. election admit the most recent report was pathetic, embarrassing and proved absolutely nothing.

    Robert Parry of Consortium News summarizes the farce perfectly in his recent piece U.S. Report Still Lacks Proof on Russia ‘Hack’. Here’s how he begins the article:

    Repeating an accusation over and over again is not evidence that the accused is guilty, no matter how much “confidence” the accuser asserts about the conclusion. Nor is it evidence just to suggest that someone has a motive for doing something. Many conspiracy theories are built on the notion of “cui bono” – who benefits – without following up the supposed motive with facts.

     

    But that is essentially what the U.S. intelligence community has done regarding the dangerous accusation that Russian President Vladimir Putin orchestrated a covert information campaign to influence the outcome of the Nov. 8 U.S. presidential election in favor of Republican Donald Trump.

     

    Just a day after Director of National Intelligence James Clapper vowed to go to the greatest possible lengths to supply the public with the evidence behind the accusations, his office released a 25-page report that contained no direct evidence that Russia delivered hacked emails from the Democratic National Committee and Hillary Clinton’s campaign chairman John Podesta to WikiLeaks.

     

    The DNI report amounted to a compendium of reasons to suspect that Russia was the source of the information – built largely on the argument that Russia had a motive for doing so because of its disdain for Democratic nominee Clinton and the potential for friendlier relations with Republican nominee Trump.

     

    But the report’s assessment is more than just a reasonable judgment based on a body of incomplete information. It is tendentious in that it only lays out the case for believing in Russia’s guilt, not reasons for doubting that guilt.

     

    For instance, while it is true that many Russian officials, including President Putin, considered Clinton to be a threat to worsen the already frayed relationship between the two nuclear superpowers, the report ignores the downside for Russia trying to interfere with the U.S. election campaign and then failing to stop Clinton, which looked like the most likely outcome until Election Night.

     

    If Russia had accessed the DNC and Podesta emails and slipped them to WikiLeaks for publication, Putin would have to think that the National Security Agency, with its exceptional ability to track electronic communications around the world, might well have detected the maneuver and would have informed Clinton.

     

    So, on top of Clinton’s well-known hawkishness, Putin would have risked handing the expected incoming president a personal reason to take revenge on him and his country. Historically, Russia has been very circumspect in such situations, usually holding its intelligence collections for internal purposes only, not sharing them with the public.

    Another very good breakdown of the clownishness of the latest intel report was written by noted anti-Putin activist Masha Gessen in The New York Review of Books. Like many others, she finds the obsession with RT within the report bizarre to say the least. She notes:

    Finally, the bulk of the rest of the report is devoted to RT, the television network formerly known as Russia Today.

     

    A seven-page annex to the report details RT activities, including hosting third-party candidate debates, broadcasting a documentary about the Occupy Wall Street movement and “anti-fracking programming, highlighting environmental issues and the impacts on public health”—perfectly appropriate journalistic activities, even if they do appear on what is certainly a propaganda outlet funded by an aggressive dictatorship. An entire page is devoted to RT’s social media footprint: the network appears to score more YouTube views than CNN (though far fewer Facebook likes). Even this part of the report is slightly misleading: RT’s tactics for inflating its viewership numbers in order to secure continued Kremlin funding has been the subject of some convincing scholarship. That is the entirety of the case the intelligence agencies have presented: Putin wanted Trump to win and used WikiLeaks and RT to ensure that outcome.

    Indeed, it appears the intelligence community is more concerned that RT is doing a better job than U.S. journalists at covering issues Americans care about than it is about Russia “hacking the election.” She also concludes:

    Despite its brevity, the report makes many repetitive statements remarkable for their misplaced modifiers, mangled assertions, and missing words. This is not just bad English: this is muddled thinking and vague or entirely absent argument…

     

    It is conceivable that the classified version of the report, which includes additional “supporting information” and sourcing, adds up to a stronger case. But considering the arc of the argument contained in the report, and the principle findings (which are apparently “identical” to those in the classified version), this would be a charitable reading. An appropriate headline for a news story on this report might be something like, “Intel Report on Russia Reveals Few New Facts,” or, say, “Intelligence Agencies Claim Russian Propaganda TV Influenced Election.” Instead, however, the major newspapers and commentators spoke in unison, broadcasting the report’s assertion of Putin’s intent without examining the arguments.

    Which brings me to the biggest red flag in the entire intelligence report. The part where it states:

    We also assess Putin and the Russian Government aspired to help President-elect Trump’s election chances when possible by discrediting Secretary Clinton and publicly contrasting her unfavorably to him. All three agencies agree with this judgment. CIA and FBI have high confidence in this judgment; NSA has moderate confidence.

    If any agency should have high confidence it’s the NSA, and pretty much every security expert I follow seems to agree. First, here’s what Bruce Schneier wrote in his recent piece, Attributing the DNC Hacks to Russia:

    Attribution is easier if you are monitoring broad swaths of the Internet. This gives the National Security Agency a singular advantage in the attribution game. The problem, of course, is that the NSA doesn’t want to publish what it knows.

    Isn’t that interesting. The one agency with the most information is the one least confident in the conclusion. Why only moderate confidence from the NSA? I wonder.

    Schneier isn’t the only one of course. As famed NSA whistleblower William Binney noted in a recent article coauthored with Ray McGovern, The Dubious Case on Russian ‘Hacking’:

    With respect to the alleged interference by Russia and WikiLeaks in the U.S. election, it is a major mystery why U.S. intelligence feels it must rely on “circumstantial evidence,” when it has NSA’s vacuum cleaner sucking up hard evidence galore. What we know of NSA’s capabilities shows that the email disclosures were from leaking, not hacking.

    Here’s the difference:

     

    Hack: When someone in a remote location electronically penetrates operating systems, firewalls or other cyber-protection systems and then extracts data. Our own considerable experience, plus the rich detail revealed by Edward Snowden, persuades us that, with NSA’s formidable trace capability, it can identify both sender and recipient of any and all data crossing the network.

     

    Leak: When someone physically takes data out of an organization — on a thumb drive, for example — and gives it to someone else, as Edward Snowden and Chelsea Manning did. Leaking is the only way such data can be copied and removed with no electronic trace.

     

    Because NSA can trace exactly where and how any “hacked” emails from the Democratic National Committee or other servers were routed through the network, it is puzzling why NSA cannot produce hard evidence implicating the Russian government and WikiLeaks. Unless we are dealing with a leak from an insider, not a hack, as other reporting suggests. From a technical perspective alone, we are convinced that this is what happened.

    Again, if any agency should have high confidence, it is the NSA.

    Moving along, the U.S. government’s case gets even weaker the more you dig into it. A perfect example can be seen in how poorly State Department spokesman Robert Kirby handled a few questions during a recent press conference. Here’s the clip:

    Three major red flags appear in this exchange. First, Mr. Kirby admits that no evidence has been provided to the public regarding Russian hacking and distribution of information to Wikileaks, and that none would be forthcoming.

    Second, Mr. Kirby repeatedly insists that the fact “all 17 intelligence agencies” came to the same conclusion should be sufficient for the American public in the absence of any actual proof. To this I reply:

    I don’t know about you, but the fact that seventeen agencies representing a bipartisan status quo that has been catastrophically wrong about pretty much everything came to the same conclusion, does not inspire confidence or credibility in the mind of this citizen.

    Finally, there’s red flag number three. When AP reporter Matt Lee follows up wondering why the WMD assessment debacle holds no relevance to the current intelligence assessment, Mr. Kirby responds by highlighting all of “the kinds of gains that have been made in intelligence and analysis since then.”

    Here’s the problem. The Director of National Intelligence (DNI), James Clapper does not have clean hands when it comes to the WMD affair. He also blatantly lied to the American people with regard to NSA surveillance before being called out by Edward Snowden. As Binney and McGovern explain:

    Mr. Trump’s skepticism is warranted not only by technical realities, but also by human ones, including the dramatis personae involved. Mr. Clapper has admitted giving Congress on March 12, 2013, false testimony regarding the extent of the National Security Agency’s collection of data on Americans. Four months later, after the Edward Snowden revelations, Mr. Clapper apologized to the Senate for testimony he admitted was “clearly erroneous.” That he is a survivor was already apparent by the way he landed on his feet after the intelligence debacle on Iraq.

     

    Mr. Clapper was a key player in facilitating the fraudulent intelligence. Defense Secretary Donald Rumsfeld put Mr. Clapper in charge of the analysis of satellite imagery, the best source for pinpointing the location of weapons of mass destruction — if any.

     

    When Pentagon favorites like Iraqi émigré Ahmed Chalabi plied U.S. intelligence with spurious “evidence” on WMD in Iraq, Mr. Clapper was in position to suppress the findings of any imagery analyst who might have the temerity to report, for example, that the Iraqi “chemical weapons facility” for which Mr. Chalabi provided the geographic coordinates was nothing of the kind. Mr. Clapper preferred to go by the Rumsfeldian dictum: “The absence of evidence is not evidence of absence.” (It will be interesting to see if he tries that out on the President-elect Friday.)

     

    A year after the war began, Mr. Chalabi told the media, “We are heroes in error. As far as we’re concerned we’ve been entirely successful.” By that time it was clear there were no WMD in Iraq. When Mr. Clapper was asked to explain, he opined, without adducing any evidence, that they probably were moved into Syria. 

    To conclude, I certainly think it is important to know if the Russian government hacked the DNC/Podesta and then handed that information to Wikileaks. Likewise, such an explosive claim necessitates publicly available evidence given the horrible track record of U.S. intelligence agencies. Until such evidence is made available I, like countless other Americans, will tend to believe Wikileaks, which has a track record of proving its claims and being accurate, as opposed to U.S. intelligence, which doesn’t.

  • Caught On Tape: U.S. Immigration Official Okays Syrian Immigrants With "Fake Passports"

    Over the past several months, we have frequently noted the staggering increases in the number of refugees Obama has permitted into the United States just as his Presidency is winding down.  In fact, just a couple of weeks ago, we noted that in the first 84 days of the 2017 fiscal year (October 1, 2016 – December 23, 2016), the Obama administration has accepted 25,584 refugees into the United States, an 86% increase year-over-year (see “Refugee Admissions Surge 86% YoY As Obama Rushes Arrivals Ahead Of Trump Inauguration“).  And while we were expecting a large increase in refugee admittances in 2017 (see “Hillbama Administration Plans To Admit At Least 110,000 Refugees In 2017“), the ~30% increase that Secretary John Kerry estimated back in September is looking like a fairly modest increase now compared to the actual numbers. 

    Meanwhile, just a few weeks ago we pointed out that European officials finally admitted that refugees were being directly recruited by ISIS both in Syria and in migrant camps throughout Europe to carry out terrorist attacks (see “Europol Admits ISIS Actively Targeting Refugees To Carry Out Terrorist Attacks In The EU“).

    Confirming what most of us deduced long ago via the application of just a bit of common sense, Europol and Frontex, Europe’s  border and coast guard agency, are finally admitting that their intelligence indicates coordinated efforts on the part of ISIS to recruit asylum seekers, both in Syria and in migrant camps after they’ve already reached Europe, to carry out terrorist attacks.  In a report published by Europol, counter-terrorism experts warn that, among other things, “Syrian refugee diaspora may become vulnerable to radicalisation once in Europe and may be specifically targeted by Islamic extremist recruiters.”

    But, here in the U.S. there should be no similar cause for concern because Josh Earnest has assured us that “significant screening was put in place to ensure that these [refugees] don’t pose an undue threat to our national security.”

    And while we have no doubt in the Obama administration’s commitment to a rigorous vetting process, we were somewhat alarmed by an undercover video revealed earlier today by the Daily Caller which seems to show a U.S. Immigration Services official in New York coaching a woman on how to help a Syrian family gain asylum in the US with “fake passports”…a situation which the official describes as “far from unique.”

    “The fake passport is one thing, we are going to use the name that is on the passport as AKA, also known as,” the man identified as Sergio responded. He added, “chances are considering the situation in Syria, they are not going to be sent back.”

     

    The USCIS employee went on to say, “Was there ever a situation where people came with fraudulent documents and qualified for asylum? Yes, because it’s understood that they can not always obtain genuine documents. So it’s far from being unique.”

    Of course, when the Daily Caller attempted to confirm whether granting asylum to refugees with “fake passports” was indeed “far from unique,” they were courteously referred to a website for further assistance with their concerns.

    The Daily Caller asked the USCIS if giving asylum to immigrants with fake documents is “far from unique” like the USCIS employee said in the video. A spokesperson responded by saying they do not “publicly discuss individual immigration cases” and giving a link to a information on their refugee and asylum programs.

     

    A USCIS spokesperson also said that the agency cannot confirm the authenticity of the video as they claim it is heavily edited. The USCIS did not confirm nor deny that Sergio is an employee with the agency.

     

    TheDC has previously reported on an internal Immigration and Customs Enforcement memo which states difficulty in preventing fraud in the refugee program as “bad actors” use false biographies and “produce and submit fictitious supporting documentation.” It has also been reported that the Islamic State has a thriving fake passport industry.

     

    Guess there is really no need for the elaborate games when you can just walk straight through the front door…

    Refugee ISIS

  • Fed Remits Only $92 Billion To Treasury In 2016, Lowest Since 2013

    The world was reminded of the cozy relationship between The Fed and The Treasury again today as Janet sent Jack $92.0 billion of freshly ponzi'd net income for 2016 providing the federal government with an important source of funding. This, however, is down almost 6% from 2015 and despite a considerably larger balance sheet is the lowest remittance since 2013 due to doubling the handouts to the major banks to $12 billion last year.

    As Reuters reports, part of the decline is due to a drop of about $2.6 billion in what the Fed earns on its holdings of U.S. Treasury bonds and mortgage-backed securities accumulated in fighting the 2007 to 2009 financial crisis.

    But most of it is a result of the interest paid on excess reserves held by commercial banks at the 12 regional Federal Reserve institutions. Banks are required to hold some reserves, but are allowed to deposit more if they choose.

     

    Between more cautious lending and weak economic growth, total reserves have been at historically high levels since the financial crisis — roughly $2 trillion as of the end of the last year compared with a few billions of dollars in more typical times.

     

    When the Fed increased its target interest rate in Dec. 2015 by a quarter of a percentage point, to a range of between 0.25 and 0.5, it increased the rate paid to banks as well – and pushed its overall reserve interest costs from $6.9 billion in 2015 to $12 billion last year.

     

    The increase may draw attention from lawmakers who have been critical of the Fed paying money to large commercial institutions. The central bank argues that the payments are its most effective way to push rates higher: by offering interest on excess reserves, the Fed forces banks to raise the rate at which they are willing to lend to each other.

    In the last 15 years, The Fed has handed over $880 billion to The Treasury…

    Source: The Fed

    As is clear in the chart above, a decade ago, back when the Fed was a smaller size, Fed remittances were fairly steady, in the neighborhood of $20 billion a year. This all changed after 2008 as the Fed’s Quantitative Easing programs increased the amount of interest-earning assets that would generate funds to transfer back to the Treasury.

    Big Bucks for the US Treasury

    For the US Treasury, Fed remittances are something of a free lunch. When someone buys a Treasury bond, the government must pay them interest. This applies to the Fed as well, but then at year-end the Fed remits the interest back to the Treasury.

    As we noted previously, in more “normal” times (i.e., prior to 2008) around 7 percent of the Treasury’s interest payments were paid back to it by the Fed. This figure has grown to over three times that amount over the past few years…

    Implications for Fed “Independence”

    As much as economists talk about the independence that the Fed holds from Congress, these remittances represent a strong link. In fact, since they enable federal spending they create a form of quasi-fiscal policy for the Fed to use, in addition to its more common monetary policy options.

    Consider that since Treasury debt is almost never repaid in net terms (old issues are retired but replaced with new debt issuances), the true cost of financing the US government’s borrowing is not the gross amount of debt outstanding but the annual interest expense it faces. Viewed this way, nearly half of the Treasury’s borrowing was financed by the Fed last year. Absent these Fed remittances, Congress would need to look at either an alternative funding source (though I am not sure how many takers there are for the Fed’s $2.5 trillion Treasury holdings) or make some serious cuts.

    How serious? NASA’s operating budget was roughly $18 billion last year, so a lack of Fed remittances would cause the Treasury to cut around five NASA-sized programs. Alternatively, the governments Supplemental Nutrition Assistance Program (previously known as “food stamps”) cost $70 billion in 2014. Without the Fed’s remittances, Congress would have to stop paying out all food stamp recipients plus it would be forced to defund almost two NASAs.

    More important in many Americans’ hearts is their monthly social security check. In 2014, $830 billion of social security checks were mailed out. Without Fed remittances, retirees might see their monthly check cut by about 12 percent.

    For those concerned with the burgeoning size of the federal government, putting a stop to Fed remittances would put a serious dent in public finances and force some serious thought as to what programs need to be cut.

  • Taiwan Scrambles Jets, Navy After Chinese Aircraft Carrier Group Enters Taiwan Strait

    While much of America was preparing to listen to Obama speak one final time, the Chinese had far less lofty ambitions, and on Wednesday morning Beijing sent a group of Chinese warships led by China’s sole aircraft carrier north through the Taiwan Strait, resulting in Taiwan scrambling jets and navy ships in the latest sign of heightened tensions between China and the self-ruled Taiwan.

    According to Reuters, The Soviet-built Liaoning aircraft carrier, returning from exercises in the South China Sea, was not trespassing in Taiwan’s territorial waters but entered its air defense identification zone (ADIZ) in the southwest, Taiwan’s defense ministry said.


    China’s Liaoning aircraft carrier conducts a drill in an area of South China Sea,
    in this undated photo taken December, 2016

    As a result Taiwan scrambled jets and navy ships to “surveil and control” the passage of the Chinese ships through the narrow body of water separating Taiwan and China. “We have full grasp of its movements,” Taiwan defense ministry spokesman Chen Chung-chi said.

    The defense ministry spokesman added that the Taiwanese military aircraft and ships have been deployed to follow the carrier group, which is sailing up the west side of the median line of the strait.

    Previously, China has said the Liaoning aircraft carrier was on drills to test weapons and equipment in the disputed South China Sea and its movements comply with international law.

    As Reuters adds, the latest Chinese naval exercises have unnerved Beijing’s neighbors, especially Taiwan which Beijing claims as its own, given long-running territorial disputes in the South China Sea. China claims most of the energy-rich waters of the South China Sea, through which about $5 trillion in ship-borne trade passes every year. Neighbors Brunei, Malaysia, the Philippines, Taiwan and Vietnam also have claims.

    While China traditionally distrusts Taiwan, and especially the new President Tsai Ing-wen, it has has stepped up pressure on her following a protocol-breaking, congratulatory telephone call between her and U.S. President-elect Donald Trump last month.

  • 4Chan Claims To Have Fabricated Anti-Trump Report As A Hoax

    In a story that is getting more surreal by the minute, a post on 4Chan now claims that the infamous “golden showers” scene in the unverified 35-page dossier, allegedly compiled by a British intelligence officer, was a hoax and fabricated by a member of the chatboard as “fanfiction”, then sent to Rick Wilson, who proceeded to send it to the CIA, which then put it in their official classified intelligence report on the election.

    Here is 4Chan’s explanation of how the story came to light:

    >/pol/acks mailed fanfiction to anti-trump pundit Rick Wilson about trump making people piss on a bed obama slept in

    >he thought it was real and gave it to the CIA

    >the central intelligence agency of the united states of america put this in their official classified intelligence report on russian involvement in the election

    >donald trump and obama have both read this pol/acks fanfiction

    >the cia has concluded that the russian plans to blackmail trump with this story we made up

    just let that sink in what we have become.

     

    And a summary posted on pastebin:

    On january 10, Buzzfeed posted a story under the byline of Ken Bensinger, Mark Schoofs and Miriam elder titled “these reports Allege Trump Has Deep Ties To Russia” and posted a link to a document alleging, among other things, that russia has been cultivating trump for 5+ years, that trump has been in constant contact with the kremlin for information on his opponents, and perhaps most inflammatory, that there are many recorded instances of blackmail of trump in sexual misconduct. A prominent claim is that trump rented the presidential suite of the Ritz Carlton Hotel in moscow, where he knew that the Obamas had slept in; he them hired a number of prostitutes to perform a ‘golden shower’ (pissplay) on the bed and in the room. https://www.buzzfeed.com/kenbensinger/these-reports-allege-trump-has-dee…
    https://assets.documentcloud.org/documents/3259984/Trump-Intelligence-Al…

     

    Noted #nevertrump voice Rick Wilson later commented on twitter, stating that the report “gave a new meaning to Wikileaks” (https://twitter.com/TheRickWilson/status/818982395202379777) and that the report was the reason everybody was fighting so hard against the election of Trump. (https://twitter.com/TheRickWilson/status/818983514335047680)

     

    The remarkable thing? It’s all fake. And not only fake; it’s a prank perpetuated by 4chan, on Rick Wilson himself. A post on 4chan on october 26 stated “mfw managed to convince CTR and certain (((journalists))) on Twitter there’ll be an October surprise on Trump this Friday” along with a picture of a smug face with a hash name. http://archive.4plebs.org/pol/thread/94704894/#94705224

     

    on november 1, a person without a picture but is assumed to be the same person posted “So they took what I told Rick Wilson and added a Russian spy angle to it. They still believe it. Guys, they’re truly fucking desperate – there’s no remaining Trump scandal that’s credible.” https://archive.4plebs.org/pol/thread/95568919/#95571329

     

    on january 10, moments after the story broke and began to gain traction on social media, a person with the same smug grin face, and the same hash title for the picture, stated “I didn’t think they’d take it so far.” http://boards.4chan.org/pol/thread/106514445#p106520376

     

    This story has taken on something of a life of it’s own. Going through Rick Wilson’s twitter, you can find many different stories from the time that he had shown the story to a wide number of anti-trump news sources, trying to find a news organization that would actually publish the story. During that time period, he referred to it often as ‘the thing’, and often playing coy with followers on the content with the story with anybody who was not also a #Nevertrumper. Unconfirmed sources has people as high up as John McCain giving the story to FBI Director James Comey to attempt to verify the story. Given that Rick Wilson runs in Establishment circles, it is not an impossible scenario that long-serving senators are falling for what amounts to a 4chan troll trump supporter creating an ironic October Surprise out of wholecloth to punk a GOPe pundit who derogatorily referred to them as single men who masturbate to anime.

    While this entire incident is laughable, and even more so if the 4Chan account is accurate, what makes it quite tragic, is that it is no longer possible to dismiss the “fake news” angle to an intelligence report. And if the CIA is compromised, what is left for “news outlets” like CNN and BuzzFeed, which were all too eager to run with the story without any attempt at verification?

  • Hungary To Launch Crackdown On All George Soros-Funded Organizations

    In a dramatic example of blowback against the establishment in the post-Trumpian world, Hungary announced it plans to crack down on non-governmental organizations linked to billionaire George Soros now that Donald Trump will occupy the White House, according to the deputy head of Prime Minister Viktor Orban’s party, cited by Bloomberg.

    The European Union member, and native country of Soros, will use “all the tools at its disposal” to “sweep out” NGOs funded by the Hungarian-born financier, which “serve global capitalists and back political correctness over national governments,” Szilard Nemeth, a vice president of the ruling Fidesz party, told reporters on Tuesday. No one answered the phone at the Open Society Institute in Budapest when Bloomberg News called outside business hours.

    “I feel that there is an opportunity for this, internationally,” because of Trump’s election, state news service MTI reported Nemeth as saying. Lawmakers will start debating a bill to let authorities audit NGO executives, according to parliament’s legislative agenda.

    As a reminder, Orban was the first European leader to publicly back Trump’s campaign, and was reportedly invited by Trump to visit the US; he has ignored criticism from the European Commission and U.S. President Barack Obama’s administration for building a self-described “illiberal state” modeled on authoritarian regimes including Russia, China and Turkey. In 2014, Orban personally ordered the state audit agency to probe foundations financed by Norway and said that civil society groups financed from abroad were covers for “paid political activists.” As a result of Trump’s victory, Orban has felt empowered to further last out against Europe’s established structures, and its core supporters.

    As Bloomberg notes, Orban and his administration have repeatedly singled out NGOs supported by Soros, a prominent Hillary Clinton and Democratic Party supporter, with a wide network of organizations that promote democracy in formerly communist eastern Europe.

    Orban is not alone: Trump has also accused the 86-year-old billionaire of being part of “a global power structure that is responsible for the economic decisions that have robbed our working class, stripped our country of its wealth and put that money into the pockets of a handful of large corporations and political entities.” In a pre-election commercial, he showed images of Soros along with Federal Reserve Chair Janet Yellen, and Goldman Sachs Group Inc. CEO Lloyd Blankfein, all of whom are Jewish. The Anti-Defamation League criticized the ad for touching on “subjects that anti-Semites have used for ages.”

    Since then things have changed, however, and Trump has retained the services of two prominent Goldman alumni, Steven Mnuchin and Gary Cohn, to serve on his administration. His current thinking on George Soros is unknown.

  • Live Stream: Obama Says Farewell; Reminds Us One Last Time How Awesome He Is

    Once again parting with Presidential tradition, rather that delivering his farewell speech from the oval office, the ever so humble Obama has decided to give his final address to the American people from his home town of Chicago.  And, like his 2008 speech at the Democratic National Convention in Denver, we're certain this will be a glorious event complete with a slew of celebrities and all the pomp and circumstance befitting a king…rest assured that no taxpayer expense was spared.

    While the content of Obama's remarks have not been revealed, earlier today he posted the following preview on Facebook which noted that he looks forward to going back to "where it all started" and humbly affirmed that he's "made America a better, stronger place for the generations that will follow."

    For Michelle and me, Chicago is where it all started. It’s the city that showed us the power and fundamental goodness of the American people.

     

    It’s that inherent strength that brought our country through our fair share of challenges these last eight years. Because of you, we’ve come through them stronger. Because of you, we’ve held to a belief that has guided us ever since our founding – our conviction that, together, we can change this country for the better.

     

    It’s easy to lose sight of that in the blizzard of our minute-to-minute Washington news cycles. But America is a story told not minute to minute, but generation to generation – a story written by parents, and teachers, and veterans, and neighbors who’ve taken on the call of citizenship, working together, without fanfare, to form a more perfect union.

     

    Over the course of my life, I’ve been reminded time and again that change can happen – that ordinary people can come together to achieve extraordinary things. And I’ve seen that truth up close over these last eight years.

     

    We’ve made America a better, stronger place for the generations that will follow. We’ve run our leg in a long relay of progress, knowing that our work will always be unfinished. And we’ve reaffirmed the belief that we can make a difference with our own hands, in our own time. That’s the imperative of citizenship – the idea that, with hard work, and a generous heart toward our fellow Americans, people who love their country can change it.

     

    So tonight, I’m returning to where it all began to offer my most grateful farewell to the American people. I hope you’ll join me – I want to thank you for everything you’ve done.

    And while Obama will undoubtedly brag about his amazing "economic recovery," we would once again highlight the following data that seemingly paints a slightly more sobering picture.

    Harvard

     

    Of course, these charts that we presented last summer also cast a slight shadow over Obama's "economic recovery." 

     

    Unfortunately for Obama, simply stating something repeatedly doesn't actually make it a fact. 

    And speaking of repeating fictitious stories until they somehow become fact, as Post News pointed out yesterday, for weeks now Obama and his various mouthpieces have been peddling the fiction that his administration managed to spend 8 years in the White House without a single major scandal.  And while that would be a fantastic accomplishment, unfortunately it's every bit as "fake" as the Obama "economic recovery."  In fact, here are just a few of the scandals that plagued the Obama administration over the years (a detailed description of each can be viewed here).

    • Iran Nuclear Deal and Ransom Payment
    • NSA Spying
    • Benghazi
    • Operation Fast and Furious
    • Eric Holder – First Attorney General Ever Held In Contempt Of Congress
    • IRS Targeting Of Conservative Groups
    • Bowe Bergdahl
    • The Great “Stimulus” Heist
    • Solyndra
    • Spying On Journalists
    • VA Death-list Scandal

    Finally, since Obama will undoubtedly use his pedestal tonight to defend his one crowning piece of legislation, in a last-ditch effort to save it from being repealed by the incoming Trump administration, we leave you with the following charts displaying the epic collapse of Obamacare in just 1 year as insurers pulled out of exchanges all around the country in 2017 leaving Americans with minimal insurance options and substantially higher premiums.

     

    2016 healthcare insurance carriers by county:

    Obamacare 2016

     

    2017 healthcare insurance carriers by county:

    Obamacare 2017

     

    With that intro, here is Obama's farewell speech for your viewing pleasure:

     

  • China's Exorbitant Detriment (Mirror Image Of America's Exorbitant Privilege) Is Costing It Dearly

    Submitted by Benn Steil and Emma Smith via The Council on Foreign Relations,

    The so-called Exorbitant Privilege of the United States, the power to conjure the world’s primary reserve currency, is reflected in the unique combination of being deeply in debt to the rest of the world (that is, having a massive negative net international investment position, or NIIP) while earning far more income abroad than it pays out in interest (that is, having massive positive annual net investment income, or NII).  The U.S. NIIP averaged negative $7.5 trillion over FY15/16, while its NII was positive $167 billion, as shown in the top left of the graphic below.  Basically, foreigners are willing to accept a trivial return to hold dollar-denominated assets.

     

    Far less well known is the mirror-image of the Exorbitant Privilege, or what we might call the Exorbitant Detriment.

    It is, not surprisingly, borne by China.  It is, to some extent, the price the country bears as the world’s largest holder of dollar-denominated central bank reserves.  Reserves account for half of China’s foreign assets, of which around 40 percent are invested in low-yielding U.S. Treasury securities.  But it also reflects the fact that China is lending to the rest of the world at paltry rates.  Chinese government institutions lend to Chinese, as well as foreign, firms operating abroad far more cheaply than alternative lenders. This reflects the Chinese government’s efforts both to subsidize its companies and to strengthen economic ties with resource-rich countries in, for example, Africa and Latin America.  China’s Exorbitant Detriment is reflected in an NIIP of $1.6 trillion and NII of negative $80 billion in FY15/16.

    Can China continue supporting its Exorbitant Detriment indefinitely?

    Not if it wants to prioritize a halt to reserve sales, which have been necessitated by capital outflows.  Negative investment income reduces the current account surplus, and therefore the amount of capital that can leave the country before the central bank has to match outflows with reserve sales. If China’s investment income balance had been zero over FY15/16 it would, all else being equal, have been able to absorb an additional $80 billion of capital outflows before having to sell reserves.  This is equivalent to 17 percent of the actual decline in reserves over this period.  China’s reserves fell to $3 trillion in December and, as we pointed out in an earlier post, could actually fall to what the IMF reserve-analysis rubric would deem dangerously low levels by summer if outflows continue at the pace seen over the last three months.  China can slow this decline by demanding higher returns on its lending abroad, but this will require sacrificing its efforts to subsidize its companies as well as those aimed at putting dollars to the service of geostrategic objectives.

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