Dec 12

Today’s News 12th December 2018

  • "Stronghold Of Evil" – Russia Slams America's Illegal Syrian Occupation

    On Tuesday a top Russian military official slammed the United States for “illegally occupying” a massive zone in southwest Syria surrounding the American garrison of al-Tanf, effectively protecting some 6,000 armed militants that Russia has designated terrorists. 

    The Head of Russia’s National Defense Control Center, Colonel-General Mikhail Mizintsev, called the US-occupied area “the last stronghold of evil” which continues to fester with militants “on the territory of the independent state”. He identified a 55 km zone surrounding the base in a desert region along the Syrian-Iraq border, which American special forces and US-backed FSA groups have held since 2016 after taking the key crossing from ISIS. 

    American base in Syria

    “Perhaps, only our American partners do not want to see up to date how much has been done to revive peaceful life in Syria. They are holding with incomprehensible stubbornness the occupied 55 km area around al-Tanf where 6,000 armed militants are on the loose and are preventing the disbanding of the Rukban refugee camp,” the general said at a Syrian-Russian inter-departmental coordination headquarters, according to TASS.

    The Rukban camp falls withing the US-occupied perimeter and is home to between 50,000 and 60,000 refugees stuck near the desolate Jordanian and Iraqi frontier, especially after Jordan closed its side of the border in 2016. Russia has accused US forces of preventing humanitarian aid from reaching the camp, except through the mediation of armed groups operating in the area, with some militants based in the camp itself. 

    Russia’s Foreign Ministry asked previously this week: “Why do the US’ partners insist on joining the militants from illegal armed groups to render humanitarian aid and not give their consent to real assistance to those in need in Rukhan?” Recent reports suggest the camp is on the brink of mass starvation, with the US and Damascus trading blame for holding up U.N. aid convoys into the camp, which is also occupied by armed groups fighting the Syrian government. 

     Al Rukban camp between the Jordan and Syria borders, via the AP

    The Foreign Ministry further laid specific blame for a UN and Syrian Red Crescent convoy being turned away in November from the US-occupied zone by American occupying forces. 

    Foreign Ministry spokesman Igor Tsarikov said:

    There is growing concern related to the dubious activity of the United State and its allies in Syria. The illegal occupation of the 55 km zone around the base in al-Tanf continues to be the basic source of destabilization in that part of Syria.

    Meanwhile The New Yorker recently acknowledged the US presence in Syria to be much larger than previously thought, describing the total size of American occupied territory as “about the size of Croatia.” 

    According to The New Yorker:

    The United States has built a dozen or more bases from Manbij to Al-Hasakah, including four airfields, and American-backed forces now control all of Syria east of the Euphrates, an area about the size of Croatia. 

    A year ago a Pentagon official let slip that there are about 4,000 American personnel in Syria — a number which has likely climbed since then.

    It goes without saying that of course there’s never been a Congressional vote or authorization on this, just the same shoddy post-911 AUMF fig leaf of “legality”. 

  • The China Agenda Behind Trump Leaving the INF Treaty

    Authored by Richard Bitzinger via The Asia Times,

    A recent decision by the Trump administration could have major implications for defense and security in Asia, although you could be forgiven for missing it, what with the Democratic landslide in the midterm elections and the Mueller investigation causing near-daily meltdowns by America’s commander-in-chief.

    The decision the Trump administration announced was that the US will withdraw from the 1987 Intermediate Nuclear Forces (INF) Treaty in 60 days, unless Russia stops testing weapons that Washington says are in violation of the agreement.

    The INF Treaty was the capstone of arms control efforts undertaken during the late 1980s, a deal signed by President Ronald Reagan and Soviet leader Mikhail Gorbachev to ban the development, production and deployment of nuclear-tipped ballistic and ground-launched cruise missiles with a range greater than 500 kilometers and less than 5,500 kilometers.

    The agreement came about after the Soviets started deploying intermediate-range missiles such as the SS-20 in Eastern Europe in the late 1970s. Given its mobility, load and accuracy, the SS-20 was regarded as a highly effective offensive nuclear weapon that threatened all of NATO Europe. After considerable and often acrimonious debate, NATO responded by emplacing its own INF in Western Europe, mainly the Pershing II ballistic missile and the Ground-Launched Cruise Missile (GLCM).

    It was a move that caused considerable protest in Western Europe, with anti-nuclear marches, demonstrations and sit-ins at US bases across Europe. But the NATO INF deployments had their political effect in bringing the Gorbachev regime to the negotiating table, and the INF Treaty was the first agreement to effectively ban a whole class of nuclear forces, at least by the US and Russia. Within three years of its coming into force, nearly 2,700 missiles were withdrawn and destroyed.

    Why Trump wants to leave the treaty

    Flash forward to 2018. Trump’s foreign policy coterie, led by Secretary of State Michael Pompeo and National Security Advisor John Bolton – a man who was never a fan of arms control agreements – has accused Russia of violating the INF Treaty by continuing to test two types of missiles.

    The first is the SSC-8 cruise missile, reportedly a ground-launched version of the ship- and submarine-based Kalibr missile system. The INF Treaty does not apply to sea-based or air-launched intermediate-range delivery vehicles.

    Russia has been testing the SSC-8 for the past decade and it supposedly has a range of 2,500 kilometers, placing it clearly within the banned zone.

    Second, Moscow is also working on a ballistic missile designated the RS-26. Although technically an intercontinental ballistic missile (ICBM), that is, with a range greater than 5,500 kilometers, the RS-26 has been test-fired at distances of about 2,000 kilometers, potentially making it an INF weapon in disguise.

    Cutting off its nose to spite its face

    Washington’s threat to leave the agreement has supporters outside the administration. The alleged non-compliance was first noted by the Obama administration and a number of Trump critics, including lapsed neoconservative Max Boot, have voiced their support for pulling out of the INF Treaty.

    Still, it is a dangerous bluff. If Washington finds itself dissatisfied with Moscow’s responses and withdraws from the agreement, it simply leaves the field clear for Russia to quickly saturate its European territory with already available INF systems.

    In the meantime, the US has no plans or programs even under consideration for reintroducing such forces to NATO Europe. At the same time, it is highly unlikely Western Europe would ever readily agree to reintroducing such weapons on their territories, especially given the current chill in transatlantic relations – which are mostly of Trump’s own making.

    The US would be cutting off its nose to spite its face.

    Just about China?

    More to the point, it is likely that the Trump administration is concerned more about the build-up of Chinese nuclear forces than it is about Russia. The INF Treaty applies only to the US and Russia, and China has been steadily expanding its stable of medium- and intermediate-range nuclear forces for decades.

    More importantly, it has significantly built up its strategic nuclear forces, which now stands at about 50-60 ICBMs, particularly road-mobile, solid-fueled rockets.

    The US argument inferred here is that Washington lacks the capacity to deploy countering nuclear forces closer to China and that it therefore needs ground-based INF in Asia.

    There are two things wrong with this line of reasoning.

    In the first place, the US already has considerable numbers of INF systems dedicated to Asia. These include the sea-based Tomahawk Land-Attack Missile (TLAM), which can be launched from both surface ships and submarines, and the AGM-86 Air-Launched Cruise Missile (ALCM), which will soon be replaced by new Long Range Stand Off (LRSO) Weapon.

    A few more land-based GLCMs are not going to make that much of a difference.

    Second, like Western Europe, it is hard to see any Asian ally or partner agreeing to permit the deployment of INF on their territories. Certainly not Japan, with its decades-old, baked-in anti-nuclearism. And certainly not South Korea, which experienced major convulsions just trying to deploy what basically is a defensive weapon, the Terminal High Altitude Area Defense (THAAD) system.

    And certainly not Australia, the Philippines or Singapore – the potential political consequences of angering China are just too great, compared with any potential strategic gain.

    In short, any kind of INF in Asia is a non-starter. The US does not need INF to counter China or Russia, it has no place to put them in Asia, and it would force Washington to waste money on yet another misguided military program it can ill-afford.

  • Deutsche Bank Raises Odds That UK Government Will Collapse

    Shortly before the first headlines claiming that the conservatives’ 1922 Committee had finally reached the 48-letter threshold to call a no confidence vote in Theresa May hit the tape, Deutsche Bank analysts published an extremely timely update to its projected Brexit outcome odds that featured a decidedly bearish tilt.

    In the wake of last week’s historic contempt vote that forced May to publish the damaging attorney generals’ findings (which confirmed the worst-case scenario touted by Brexiteers in their warnings about the UK potentially becoming a vassal state), DB has raised the odds that May could be ousted either in an intra-party no-confidence vote or a (significantly more bearish) no confidence vote in May’s government (which could clear the way for a general election).

    May

    Regardless of whether May manages to hold on to power, DB’s “base case” for the timing of successful passage of a deal has shifted to Q1 (something that analysts at Goldman Sachs had pegged from the beginning, noting the tendency for any negotiations involving the EU to go down to the wire).

    However, if May manages to secure “meaningful clarification” from the EU regarding the Irish backstop (something that most analysts believe to be unlikely, given senior EU bureaucrats’ insistence that negotiations cannot be reopened) it’s possible a vote on the current deal could come before lawmakers leave for their holiday recess on Dec. 20.

    As it stands, DB analysts believe the three most likely scenarios for reaching a deal (presumably, a deal will be reached, they believe, given the absence of any meaningful political will for a ‘no deal’ Brexit) are: Abandoning the backstop in favor of the earlier Northern Ireland-specific backstop (which could win over votes from Tory backbenchers but alienate the DUP), using the political declaration to reach some kind of compromise with Labour (which the analysts admit is unlikely) or deferring a vote on the current agreement until next year, where May has set a ‘hard’ deadline of Jan. 21 for a vote.

    There are three possible alternatives. The first is that the UK wide backstop is scrapped altogether in favour of just a Northern Ireland specific backstop (i.e. that the government return to a previous draft of the Withdrawal Agreement). Assuming the EU27 agree, this could win more support for the government from Conservative backbench MPs, but would lose the government support from the DUP. It is not clear whether this could win support from Labour MPs – our view is this is unlikely unless changes are made to the political declaration on the future relationship. In these circumstances, the government would still face defeat in parliament.

    The second option is that Prime Minister May decides to create room for compromise with Labour backbenchers by utilizing the political declaration on the future relationship. At this stage such an outcome looks implausible but given the extremely fluid political situation cannot be ruled out. Such an outcome would be the most bullish, as this path has the highest chance of securing the government a majority in the House of Commons.

    The third option is that Prime Minister May stalls for time, and defers a parliamentary vote until the New Year. In these circumstances the ‘hard stop’ for the government is the 21st January. According to the Brexit Withdrawal Bill, should the government fail to reach agreement with the EU27 by that date, a minister must give a Statement to the House of Commons and the House of Commons would vote on a neutral motion either approving the government’s plans or rejecting them.

    Whichever option May chooses, if her deal is ultimately defeated in a vote, it would open the door to a no confidence in her government and – possibly – general elections. This outcome would be extremely market negative.

    In our view, should a vote be put before the House of Commons without an attempt to reach across party lines, the government is likely to be defeated. Our prior had been such a defeat could create the political room for a compromise, but with Prime Minister May having staked so much politically on her current Brexit agreement, this is now less certain. As a result, the prospects of Prime Minister. May either being forced out in a Conservative no confidence motion, resigning, or the government falling in a vote of no confidence have increased.

    Here’s a breakdown of DB’s probabilities:

    • May passes current deal or modified softer Brexit agreement through parliament: 50% (previously 65%).

    • May loses confidence vote or resigns, or government voted down by DUP and early general election: 30% (previously 10%).

    • Second referendum: 20% (previously 25%).

    And a handy flow chart that helps drive home DB’s point that whatever happens next is anybody’s guess:

    Brexit

     

  • Can The 'Yellow Vests' Protests Go Global?

    Authored by Mike Krieger via Liberty Blitzkrieg blog,

    When it comes to the relationship of U.S. citizens to the politicians and bureaucrats in Washington D.C., there’s no indication that anything remotely resembling self-government is happening. Rather, the relationship is far more like that of a servant to a master.

    From the October post: Americans are Stuck in Abusive Relationships with Power

    The gilets jaunes, or “yellow vests” protests, emerged seemingly out of nowhere about a month ago and have in a few short weeks shaken the French political power structure to its core. Just yesterday, the exceedingly unpopular President Macron cried uncle and offered a series of concessions to the protesters. Many commentators have come to the simplistic and erroneous conclusion that violence works, but it wasn’t the burning cars or streets filled with tear gas that really scared Macron and the people around him. It was something much deeper than that.

    First, powerful elites tend to be control freaks. Abuse of the law, institutionalized corruption and invasive surveillance typically make the powerful feel comfortable their position is secure. What really makes them shake is when something totally unexpected happens — and the virality and force of the gilets jaunes movement caught them off guard.

    Second, the diverse, nebulous and leaderless nature of the participants and their grievances made it a difficult narrative to counter through the media or government spokespeople. It wasn’t masterminded by dissident political parties or even France’s activist unions. Though it was catalyzed by rising taxes on diesel fuel, it quickly became a rallying point for a hodgepodge of individuals with a variety of serious gripes against Macron and his neoliberal policies.

    Third, and most important, the protests have been very popular amongst the wider French population, with polls in early Decembershowing around 70% support. For Macron, a former Rothschild investment banker nicknamed “president of the rich,” that kind of broad support isn’t something easily ignored (though I’m sure he tried).

    As the protests started to attract increased international attention, I began to wonder if they could spread spontaneously to other nations. As such, it was noteworthy to see reports of yellow vest-style protests in Belgium, and to a lesser extent The Netherlands, this past weekend. Then last evening I came across the following headline from the AP.

    CAIRO (AP) — Egyptian authorities have quietly introduced restrictions on the sale of yellow reflective vests, fearing opponents might attempt to copy French protesters during next month’s anniversary of the 2011 popular uprising that toppled autocrat Hosni Mubarak, security officials and retailers said Monday.

    They said industrial safety equipment dealers have been instructed not to sell yellow vests to walk-in buyers and to restrict business to wholesale sales to verified companies, but only after securing police permission. They were told offenders would be punished, the officials said without elaborating.

    You know a government’s weak and paranoid when they’re afraid citizens might wear an article of brightly colored clothing into the streets, but the concern is warranted. Not just in Egypt, but across the world.

    We humans are systematically manipulated into seeing ourselves as totally different and at odds with one another, but the truth of the matter is virtually all of us currently living on this beautiful planet share something very significant in common with one another. We all reside in countries run by and for the benefit of a tiny group of lawless and unscrupulous people. While some nations are clearly in far worse shape than others, we all live in very corrupt and increasingly unfree societies.

    Because humans are easily divided and conquered, both within our own countries and on a global level, the few are able to easily rule over the many. If we can somehow find a way to resist power elite manipulations and unite to focus our attention on the true root of our problems, there’s nothing we can’t accomplish.

    With Christmas coming and the weather in the northern hemisphere set to get colder, it’s certainly possible the gilets jaunes movement dies down a bit. If so, I have no doubt it’ll re-emerge even stronger down the road, because absolutely nothing systemic has been solved with Macron’s pitiful concessions.

    More significantly, the French have provided the rest of the world with an important lesson. That protest movements should ideally tap into widespread grievances and capture the support of the masses in order to be most powerful and effective. This shouldn’t be hard for anyone, since I can’t think of any major governments anywhere in the world that aren’t completely captured by destructive special interests and unprincipled oligarchs.

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

    We live in a global kakistocracy and we’ve been too busy fighting with each other to do anything meaningful about it. Let’s stop doing that.

    *  *  *

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  • Hack Of 500 Million Marriott Guests Traced To Chinese Intelligence Services

    First it was the North Korean hackers that were accused of somehow hacking into Sony’s unbreakable firewall. Then, for a period of almost three years, not a single computer, voting booth, or nuclear power plant appeared to be safe from the Russian hacking scourge, which according to much of the US press, singlehandedly won the election for Trump.

    Well, step aside Russians and make room for the Chinese hacker army, because according to the NYT citing two sources, the recent cyberattack on the Marriott hotel chain that collected passport information or other personal details of roughly 500 million guests was part of a Chinese intelligence-gathering effort that hacked health insurers, other hotels and the security clearance files of millions more Americans.

    And just like in the Russian narrative, these were no ordinary hackers, but the kind that worked on behalf of the Ministry of State Security.

    The latest discovery comes at a very opportunistic time: just as the Trump administration plans a series of actions targeting China’s trade, cyber and economic policies. As reported earlier, even as the trade war between the US and China is supposedly in a tenuous ceasefire, the DOJ is preparing to announce new indictments against Chinese hackers working for the intelligence and military services. The Trump administration also plans to declassify intelligence to reveal concerted efforts by Chinese agents, dating to 2014 or earlier, to build a database containing names of executives and American government officials with security clearances.

    Finally, as we discussed yesterday when we commented that the real reason for the US-China trade war is the US desire to halt or at least delay China from manufacturing its own high-tech semiconductors, the NYT also adds that the Trump administration is considering an executive order intended to make it harder for Chinese companies to obtain critical telecommunications equipment.

    The coordinated moves against Chinese hackers are expected to be announced within days, and stem from the growing concern within the administration that “the 90-day trade truce negotiated between President Trump and President Xi Jinping in Buenos Aires two weeks ago may do little to change China’s behavior — including coercing American companies to hand over valuable technology if they seek to enter the Chinese market, as well as the theft of industrial secrets on behalf of state-owned companies.”

    Meanwhile, the actual hack of Marriott’s Starwood chain, which was only revealed late last month after being discovered in September, is not expected to be part of the coming indictments.

    But two of the government officials said it has added urgency to the administration’s crackdown, given that Marriott is the top hotel provider for United States government and military personnel.

    The crackdown is in response to what has vexed the Trump administration as Russia China appears to have reverted over the past 18 months to the kind of cyber intrusions into American companies and government agencies that former President Barack Obama thought he had ended with a 2015 agreement with Mr. Xi.

    And just like Russia, China has denied any knowledge.

    Geng Shuang, a spokesman for the Chinese Ministry of Foreign Affairs, denied any knowledge of the Marriott hack. “China firmly opposes all forms of cyberattack and cracks down on it in accordance with the law,” he said. “If offered evidence, the relevant Chinese departments will carry out investigations according to the law.”

    “China is one of the major victims of threats to cyber security including cyberhacking,” he said.

    Logically, the risk with the coming sweeping accusations, is that while top administration officials insist that the trade talks are proceeding on a separate track, the broader crackdown on China could undermine Trump’s ability to reach an agreement with Xi as American charges against senior members of China’s intelligence services — in tandem with the targeting of high-profile technology executives, like Meng Wanzhou, the chief financial officer of the communications giant Huawei and daughter of its founder — risk hardening opposition in Beijing to negotiating with Mr. Trump.

    Over the weekend, China was infuriated by the arrest of Meng, who was detained in Canada on suspicion of fraud involving violations of United States sanctions in Iran. She was granted bail of 10 million Canadian dollars, or $7.5 million, while awaiting extradition to the United States, a Canadian judge ruled on Tuesday.

    In response, American business leaders have been bracing for retaliation from China, which has demanded the immediate release of Meng and accused both the United States and Canada of violating her human rights. On Tuesday, the International Crisis Group said that one of its employees, a former Canadian diplomat, had been detained in China. The disappearance of the former diplomat, Michael Kovrig, could further inflame tensions between China and Canada. “We are doing everything possible to secure additional information on Michael’s whereabouts as well as his prompt and safe release,” the group said in a statement on its website.

    Late on Tuesday, in an interview with Reuters, Trump said that he would consider intervening in the Huawei case if it would help serve national security and help get a trade deal done with China. Such a move would essentially pit Trump against his own Justice Department, which coordinated with Canada to arrest Meng as she changed planes in Vancouver.

    “If I think it’s good for what will be certainly the largest trade deal ever made — which is a very important thing — what’s good for national security — I would certainly intervene if I thought it was necessary,” Mr. Trump said.

    Of course, now that cyberwarfare is the strawman to escalate any diplomatic feud, from the first revelation that the Marriott chain’s computer systems had been breached, there was widespread suspicion in both Washington and among cybersecurity firms that the hack was not a matter of commercial espionage, but part of a much broader spy campaign to amass Americans’ personal data; one in which Chinese crack hacker inexplicably left “fingerprints” confirming they were behind the attack.

    Meanwhile, since the Marriott database contained not only credit card information but passport data, that particular intrusion would allegedly have given China access to confidential data belonging to hundreds of millions of Americans.  Specifically, according to the NYT, Chinese spies stole passport numbers for up to 327 million people — many of whom stayed at Sheraton Hotels, Westin and W Hotels and other Starwood brands. But Marriott has not said if it would pay to replace those passports, an undertaking that would cost tens of billions of dollars.

    Lisa Monaco, the former White House homeland security adviser, noted at a conference last week that passport information would be particularly valuable in tracking who is crossing borders, what they look like, and other key data.

    Why would China need this data?

    James Lewis, a cybersecurity expert at the Center for Strategic Studies in Washington, said the Chinese have collected “huge pots of data” to feed a Ministry of State Security database seeking to identify American spies — and the Chinese people talking to them. “Big data is the new wave for counterintelligence,” Mr. Lewis said.

    “It’s Big Data hoovering,” said Dmitri Alperovitch, the chief technology officer at CrowdStrike, who first highlighted Chinese hacking as a threat researcher in 2011 and who was also instrumental in launching the witch hunt targeting Russians in the summer of 2016, accusing them of hacking the DNC server which has yet to be investigated by the FBI. “This data is all going back to a data lake that can be used for counterintelligence, recruiting new assets, anti-corruption campaigns or future targeting of individuals or organizations.”

    The effort to amass Americans’ personal information so alarmed government officials that in 2016 the Obama administration threatened to block a $14 billion bid by China’s Anbang Insurance Group to acquire Starwood Hotel & Resorts Worldwide, according to one former official familiar with the work of the Committee on Foreign Investments in the United States, a secretive government body that reviews foreign acquisitions. Eventually, the failed bid cleared the way for Marriott Hotels to acquire Starwood for $13.6 billion later that year, becoming the world’s largest hotel chain.

    As it turned out, it was too late: Starwood’s data had already been stolen by Chinese state hackers, though the breach was not discovered until this past summer, and disclosed by Marriott on Nov. 30.

    Ironically, while it is unclear that any kind of trade agreement reached with China by the Trump administration can address this kind of theft, the Chinese regard intrusions into hotel chain databases as a standard kind of espionage. So does the United States, which has often seized guest data from foreign hotels.

    Separately, since 2012, analysts at the National Security Agency and its British counterpart, the G.C.H.Q., have watched with growing alarm as sophisticated Chinese hackers, based in the Chinese city of Tianjin, began switching targets from companies and government agencies in the defense, energy and aerospace sectors, to organizations that housed troves of Americans’ personal information.

    At the time, one classified National Security Agency report noted that the hackers’ “exact affiliation with Chinese government entities is not known, but their activities indicate a probable intelligence requirement feed” from China’s Ministry of State Security, the country’s Communist-controlled civilian spy agency.

    Of course, this is the same NSA which as Edward Snowden revealed several years ago, was just as busy spying on foreign targets as it was on America’s own citizens.

  • Catastrophic Power Outage Poses "Profound Threat" To US, New Government Report Finds

    Authored by Mac Slavo via SHTFplan.com,

    The United States is not prepared for a catastrophic power outage, according to an alarming new report from the President’s National Infrastructure Advisory Council (NIAC).

    The report, titled Surviving a Catastrophic Power Outage, explains the findings of the council, which is tasked with examining the nation’s “ability to respond to and recover from a catastrophic power outage of a magnitude beyond modern experience, exceeding prior events in severity, scale, duration, and consequence. Simply put, how can the nation best prepare for and recover from a catastrophic power outage, regardless of the cause?”

    It begins with a grim statement in the Executive Summary:

    After interviews with dozens of senior leaders and experts and an extensive review of studies and statutes, we found that existing national plans, response resources, and coordination strategies would be outmatched by a catastrophic power outage. This profound risk requires a new national focus.

    The NIAC defines a catastrophic power outage as:

    • Events beyond modern experience that exhaust or exceed mutual aid capabilities

    • Likely to be no-notice or limited-notice events that could be complicated by a cyber-physical attack

    • Long duration, lasting several weeks to months due to physical infrastructure damage

    • Affects a broad geographic area, covering multiple states or regions and affecting tens of millions of people

    • Causes severe cascading impacts that force critical sectors—drinking water and wastewater systems, communications, transportation, healthcare, and financial services—to operate in a degraded state

    Actions that all levels of government need to take to prepare are discussed in the report, as summarized in this chart:

    Here’s more from the 94-page report (emphasis ours):

    The NIAC was challenged to think beyond even our most severe power disruptions, imagining an outage that stretches beyond days and weeks to months or years, and affects large swaths of the country. Unlike severe weather disasters, a catastrophic power outage may occur with little or no notice and result from myriad types of scenarios: for example, a sophisticated cyber-physical attack resulting in severe physical infrastructure damage; attacks timed to follow and exacerbate a major natural disaster; a large-scale wildfire, earthquake, or geomagnetic event; or a series of attacks or events over a short period of time that compound to create significant physical damage to our nation’s infrastructure. An event of this severity may also be an act of war, requiring a simultaneous military response that further draws upon limited resources. For the purpose of this study, the NIAC focused not on the cause, but rather on the consequences, which are best categorized as severe, widespread, and long-lasting.

    While most of the report’s focus is on actions that government agencies need to take, the report (on page 14) does mention preparedness for individuals as well:

    People no longer keep enough essentials within their homes, reducing their ability to sustain themselves during an extended, prolonged outage. We need to improve individual preparedness.

    Most preparedness campaigns call for citizens to be prepared for 72 hours in an emergency, but the new emerging standard is 14 days.

    For example, Washington, Oregon, and Hawaii have a standard that individuals have enough food and water to support themselves for 14 days. These efforts could serve as a model for federal and state preparedness resources, campaigns, and training.

    The idea of individual preparedness is not a new concept. Civil defense, an older term used to elevate a level of individual preparedness and activate communities, used to be be more widely accepted.

    FEMA offers a number of tools, resources, and guidance on emergency preparedness, including recent efforts focused on better financial preparedness for disasters, and working with interagency partners on activity books and courses to educate students on emergency preparedness.

    The NIAC is not the only group that has recently issued a report that contains dire warnings for the US. Just two weeks ago, the U.S. Air Force Electromagnetic Defense Task Force (EDTF) published a report that claims “electromagnetic pulse (EMP) and other electromagnetic threats pose an unprecedented threat to U.S. military power and national survival.”

    The EDTF report examined threats from across the electromagnetic spectrum, including nuclear and non-nuclear EMP, geomagnetic disturbance (GMD), lasers and optics, directed energy (DE), and high-power microwaves (HPM), along with management of these threats.

    Dr. Peter Pry (who served as chief of staff of the Congressional EMP Commission, on the staff of the House Armed Services Committee and at the CIA) highlighted some of the report’s findings in an article for The Daily Caller:

    • Protracted blackout of the electric grid could cause U.S. nuclear reactors to “go Fukushima” and contaminate vast regions with radioactivity, crippling U.S. capabilities to mobilize and project military power and threatening the lives of the American people.

    • U.S. military bases depend upon the civilian power grid and would be paralyzed by a protracted blackout.

    • Communications, transportation, food and water that sustain both the U.S. military and the civilian population are all at risk to electromagnetic threats.

    • “Based on the totality of available data, the Task Force contends the second- and third-order effects of an EMS [Electro-Magnetic Spectrum] attack may be a threat to the United States, democracy, and the world order.”

    Both reports should provide an incentive to prepare for a grid-down event, if you haven’t adequately prepped already.

    There are a few (totally insane) things you can expect during a grid failure.

    If you are looking for a simple guide for beginners or for more advanced preppers to help you prepare for the possibility of a power grid failure, try reading The Prepper’s Blueprint. Written by Tess Pennington, the book expertly lays out effective ways everyone can begin to prepare for any apocalyptic situation.

    “If we have learned one thing studying the history of disasters, it is this: those who are prepared have a better chance at survival than those who are not.” -The Prepper’s Blueprint

  • Canadian Personal Bankruptcies Are Surging At Breakneck Speeds

    The shock of rising interest rates isn’t just affecting the macro picture and grinding the US economy to a halt, but it is also having profound effects globally. In Canada, personal bankruptcies are on the rise as household debt lingers at, or above, all time highs and interest rates force the cost of servicing this debt even higher.

    According to data from the Office of the Superintendent of Bankruptcy Canada, insolvencies climbed to 11,641 in October, a 9.2% rise compared to the year prior. Even more alarming, month over month this rise was up a staggering and somewhat inexplicable 16%, as if something “broke”, pardon the pun, in October.

    Bankruptcies increased 1.2% year-over-year and an astounding 13.5% on a month over month basis. Bankruptcy proposals increased 15.8% year-over-year and an even more dramatic 18.6% sequential increase.

    These year-over-year numbers are alarming but the sequential rate at which these proposals and bankruptcies are rising make it clear that even the smallest uptick in interest rates is having an immediate and dire effect. 

    In Canada, annual increases were the highest in British Columbia and Prince Edward Island but there were also double digit gains in provinces like New Brunswick.

    Rates in Canada are only still at 1.75% and the Bank of Canada said as recently as last Thursday that they are targeting a neutral rate “somewhere around 2.5% and 3.5%” – a tightening process which is certain to keep the insolvency and bankruptcy trend accelerating. 

    Chantal Gingras, chair of the Canadian Association of Insolvency and Restructuring Professionals recently stated: “High consumer debt levels and rising interest rates have been a growing concern over the last few years and we are now starting to see this reflected in the number of insolvent Canadians filing bankruptcies or proposals.”

    “Canada is in serious trouble”, we wrote back in April 2018, when we pointed out that the country’s over-reliance on its frothy, bubbly housing sector and the fact that the average Canadian household had failed to reduce its debt load would eventually come back to bite.

    We look forward to the country continuing to prove us right. 

  • Three Clinton Foundation Whistleblowers To Testify About Tax Crimes, Pay-For-Play

    Following allegations of sloppy accounting, potential tax fraud and pay-to-play, the Clinton Foundation will be under a Congressional microscope this week after three whistleblowers have come forward and agreed to testify – one of whom secretly submitted 6,000 pages of documents to the IRS and FBI in August of 2017, and all three of whom have submitted various documents to Congressional investigators. 

    Rep. Mark Meadows (R-NC), Chairman of the House Freedom Caucus, told Fox News‘s Martha MacCallum on Monday night that there are three whistleblowers who have spent the past two years investigating the Clinton Foundation, and have “explosive” allegations which they will share during Thursday testimony on Capitol Hill. 

    MACCALLUM: OK. With regard to the investigation, which doesn’t get a lot of attention, into the Clinton foundation, the DOJ designated John Huber to look into this. They have 6,000 pages of evidence that they’ve gone through. The foundation raised $2.5 billion, and they’re looking into potential improprieties.

    What’s next on this investigation?

    MEADOWS: Well, I think for the American people, they want to bring some closure, not just a few sound bites, here or there, so we’re going to be having a hearing this week, not only covering over some of those 6,000 pages that you’re talking about, but hearing directly from three whistleblowers that have actually spent the majority of the last two years investigating this.

    Some of the allegations they make are quite explosive, Martha. And as – we just look at the contributions. Now everybody’s focused on the contributions for the Clinton Foundation and what has happened just in the last year. But if you look at it, it had a very strong rise, the minute she was selected as secretary of state. It dipped down when she was no longer there.

    And then rose again, when she decided to run for president. So there’s all kinds of allegations of pay-to-play and that kind of thing.

    As we noted in late November, the Clinton Foundation has seen donations plummet approximately 90% over a three-year period between 2014 and 2017. 

    While Hillary Clinton was Obama’s Secretary of State, however, the State Department authorized $151 billion in Pentagon-brokered deals to 16 countries that donated to the Clinton Foundation – a 145% increase in completed sales to those nations over the same time frame during the Bush administration, according to IBTimes. 

    Meanwhile, John Solomon of The Hill reported on Tuesday that one whistleblower who submitted 6,000 pages of evidence through a firm composed of former federal law enforcement investigators, MDA Analytics LLC., has provided evidence of potential tax crimes as well as a “culture of noncompliance.”  

    That submission made with the IRS, and eventually provided to the Justice Department in Washington and to the FBI in Little Rock, Arkansas, alleges there is “probable cause” to believe the Clinton Foundation broke federal tax law and possibly owes millions of dollars in tax penalties. That submission and its supporting evidence will be one focus of a GOP-led congressional hearing Thursday in the House.

    The foundation strongly denies any wrongdoing. But it acknowledges its own internal legal reviews in 2008 and 2011 cited employee concerns ranging from quid pro quo promises to donors, to improper commingling of personal and charity business. –The Hill

    In some instances the Clinton Foundation appears to have misled the IRS, or lied when filling out forms. For example, the Foundation retracted a bid to conduct fundraising in Utah after they refused to correct a filing error which state officials would not allow. 

    When contacted for comments, the Clinton Foundation admitted their errors, but told Solomon they were akin to “minor traffic violations.” 

  • Behold Chaos: Two Months Of Market Headlines

    Feel like you are losing grip of a market which appears to be entirely under the control of headline-scanning algos and CTAs? You are probably not alone. Below we have pulled a little over two months of Bloomberg summary headlines from the Bloomberg Macro Squawk Wrap starting with October 2, just before Chair Powell’s speech declaring that the neutral rate is “a long way off” and continuing through today.

    So for those who feel nostalgic and want to relive the past 10 weeks, feel free to count the various verbs – such as wither, snap, fall, bounce, drop, gain, sag, fluctuate, surge, rally, falter, hammer, waffle, sputter, trample, and so on, describing the daily market action since the start of October in the below summary headlines.

    • 12/11 Stocks Wither, Trump Threatens Govt Shutdown: Macro Squawk Wrap
    • 12/10 Stocks Snap Back as Tech Gains; Pound Slumps: Macro Squawk Wrap
    • 12/07 Stocks Fade Despite Kudlow as Outlook Sours: Macro Squawk Wrap
    • 12/06 Stock Selloff Accelerates, OPEC Zaps Crude: Macro Squawk Wrap
    • 12/03 Risk Rallies on Trade Truce, Pitfalls Remain: Macro Squawk Wrap
    • 11/21 A Thanksgiving Breather for Stocks and Crude: Macro Squawk Wrap
    • 11/20 Oil Slump and Trade Tensions Weigh on Stocks: Macro Squawk Wrap
    • 11/19 Stocks Sag on Trade After Pence China Speech: Macro Squawk Wrap
    • 11/16 Stocks Fluctuate, Trump Cools China Tensions: Macro Squawk Wrap
    • 11/15 Stocks Flip, Lighthizer Says Levies on Hold: Macro Squawk Wrap
    • 11/14 Stocks Mixed, May Gets Backing on Brexit Plan: Macro Squawk Wrap
    • 11/13 Stocks Fall, Kudlow Talks Up China Trade: Macro Squawk Wrap
    • 11/12 Stocks Drop, USD Gains as Oil Rally Fades: Macro Squawk Wrap
    • 11/09 Havens Gain, China Says Global Growth Waning: Macro Squawk Wrap
    • 11/08 Stocks Waffle, Markets Reverse Midterm Boost: Macro Squawk Wrap
    • 11/07 Stocks Surge After Elections, FOMC Up Next: Macro Squawk Wrap
    • 11/06 Stocks Climb, Markets Tiptoe Into Elections: Macro Squawk Wrap
    • 11/05 Stocks Mixed, Risk Shunned Ahead of Elections: Macro Squawk Wrap
    • 11/02 Markets Whipsaw With China Trade Deal Hopes: Macro Squawk Wrap
    • 11/01 Stocks and EM Surge on Trump Tweet, USD Falls: Macro Squawk Wrap
    • 10/31 Stocks Surge, Fitch Trounces Mexico’s Peso: Macro Squawk Wrap
    • 10/30 Equity Rally Falters, USD Gains as GBP Fades: Macro Squawk Wrap
    • 10/29 Equity Rally Fades Amid Tariff Talk, EM Lower: Macro Squawk Wrap
    • 10/26 S&P 500 Bounces; Unscheduled Meeting in Japan: Macro Squawk Wrap
    • 10/24 Stocks Hammered; Dollar Breakout, Bonds Gain: Macro Squawk Wrap
    • 10/23 Stocks Drop, CAT Hit as Tariffs Impact Felt: Macro Squawk Wrap
    • 10/22 Stocks Waffle, China Tax Plan Stimulus Fades: Macro Squawk Wrap
    • 10/19 Stocks Mixed, U.K. Drops Key Brexit Demand: Macro Squawk Wrap
    • 10/18 Stocks Sputter; Trump Warns on Mexico Border: Macro Squawk Wrap
    • 10/17 Stocks Waffle, Fed Debated Rates Past Neutral: Macro Squawk Wrap
    • 10/16 Earnings Fuel Equity Gains, EM Assets Rally: Macro Squawk Wrap
    • 10/12 Stock Rally Fades, Treasuries and Dollar Gain: Macro Squawk Wrap
    • 10/11 Stocks Drop in Late-Session Tumble, USD Falls: Macro Squawk Wrap
    • 10/10 Stocks Trampled, China Ups Trade War Ante: Macro Squawk Wrap
    • 10/09 Tech Stocks Waffle, GBP Gains on Brexit Hopes: Macro Squawk Wrap
    • 10/08 Treasury Concerned About China’s Currency: Macro Squawk Wrap
    • 10/04 Stocks, EM Drop as China Hack Weighs on Trade: Macro Squawk Wrap
    • 10/02 Stocks Mixed, Metals Surge While Italy Weighs: Macro Squawk Wrap

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