Jul 12

Today’s News 12th July 2017

  • Tear Gas, Guns, & Riot Squads: The Police State's Answer To Free Speech Is Brute Force

    Authored by John Whitehead via The Rutherford Institute,

    Forget everything you’ve ever been taught about free speech in America.

    It’s all a lie.

    There can be no free speech for the citizenry when the government speaks in a language of force.

    What is this language of force?

    Militarized police. Riot squads. Camouflage gear. Black uniforms. Armored vehicles. Mass arrests. Pepper spray. Tear gas. Batons. Strip searches. Surveillance cameras. Kevlar vests. Drones. Lethal weapons. Less-than-lethal weapons unleashed with deadly force. Rubber bullets. Water cannons. Stun grenades. Arrests of journalists. Crowd control tactics. Intimidation tactics. Brutality.

    This is not the language of freedom.

    This is not even the language of law and order.

    Unfortunately, this is how the government at all levels—federal, state and local—now responds to those who choose to exercise their First Amendment right to peacefully assemble in public and challenge the status quo.

    Recently, this militarized exercise in intimidation reared its ugly head in the college town of Charlottesville, Va., where protesters who took to the streets to peacefully express their disapproval of a planned KKK rally were held at bay by implacable lines of gun-wielding riot police. Only after a motley crew of Klansmen had been safely escorted to and from the rally by black-garbed police did the assembled army of city, county and state police declare the public gathering unlawful and proceed to unleash canisters of tear gas on the few remaining protesters to force them to disperse.

    To be clear, this is the treatment being meted out to protesters across the political spectrum.

    The police state does not discriminate.

    As a USA Today article notes, “People demanding justice, demanding accountability or demanding basic human rights without resorting to violence, should not be greeted with machine guns and tanks. Peaceful protest is democracy in action. It is a forum for those who feel disempowered or disenfranchised. Protesters should not have to face intimidation by weapons of war.”

    A militarized police response to protesters poses a danger to all those involved, protesters and police alike. In fact, militarization makes police more likely to turn to violence to solve problems.

    You want to turn a peaceful protest into a riot?

    Bring in the militarized police with their guns and black uniforms and warzone tactics and “comply or die” mindset. Ratchet up the tension across the board. Take what should be a healthy exercise in constitutional principles (free speech, assembly and protest) and turn it into a lesson in authoritarianism.

    Frankly, any police officer who tells you that he needs tanks, SWAT teams, and pepper spray to do his job shouldn’t be a police officer in a constitutional republic.

    All that stuff in the First Amendment sounds great in theory. However, it amounts to little more than a hill of beans if you have to exercise those freedoms while facing down an army of police equipped with deadly weapons.

    It doesn’t have to be this way.

    There are other, far better models to follow.

    For instance, back in 2011, the St. Louis police opted to employ a passive response to Occupy St. Louis activists. First, police gave the protesters nearly 36 hours’ notice to clear the area, as opposed to the 20 to 60 minutes’ notice other cities gave. Then, as journalist Brad Hicks reports, when the police finally showed up:

    They didn’t show up in riot gear and helmets, they showed up in shirt sleeves with their faces showing. They not only didn’t show up with SWAT gear, they showed up with no unusual weapons at all, and what weapons they had all securely holstered. They politely woke everybody up. They politely helped everybody who was willing to remove their property from the park to do so. They then asked, out of the 75 to 100 people down there, how many people were volunteering for being-arrested duty? Given 33 hours to think about it, and 10 hours to sweat it over, only 27 volunteered … and were escorted away by a handful of cops. The rest were advised to please continue to protest, over there on the sidewalk … and what happened next was the most absolutely brilliant piece of crowd control policing I have heard of in my entire lifetime. All of the cops who weren’t busy transporting and processing the voluntary arrestees lined up, blocking the stairs down into the plaza. They stood shoulder to shoulder. They kept calm and silent. They positioned the weapons on their belts out of sight. They crossed their hands low in front of them, in exactly the least provocative posture known to man. And they peacefully, silently, respectfully occupied the plaza, using exactly the same non-violent resistance techniques that the protesters themselves had been trained in.

    As Forbes concluded, “This is a more humane, less costly, and ultimately more productive way to handle a protest. This is great proof that police can do it the old fashioned way – using their brains and common sense instead of tanks, SWAT teams, and pepper spray – and have better results.”

    It can be done.

    Police will not voluntarily give up their gadgets and war toys and combat tactics, however. Their training and inclination towards authoritarianism has become too ingrained.

    As I make clear in my book Battlefield America: The War on the American People, if we are to have any hope of dismantling the police state, change must start locally, community by community. Citizens will have to demand that police de-escalate and de-militarize. And if the police don’t listen, contact your city councils and put the pressure on them.

    Remember, they work for us. They might not like hearing it—they certainly won’t like being reminded of it—but we pay their salaries.

    We must adopt a different mindset and follow a different path if we are to alter the outcome of these interactions with police.

    The American dream was built on the idea that no one is above the law, that our rights are inalienable and cannot be taken away, and that our government and its appointed agents exist to serve us.

    It may be that things are too far gone to save, but still we must try.

  • Mt. Gox Chief Denies Stealing $500 Million In Bitcoin As Trial Starts

    Two-and-a-half years after the collapse of Mt. Gox ushered in a multi-year bear market in the world of digital currencies, the trial of former Gox chief executive officer Mark Karpeles began Tuesday in Tokyo.  Karpeles pleaded “not guilty” to charges of embezzlement and fraud stemming from the collapse of what was once the world’s most-active platform for buying and selling digital currencies. Some 850,000 bitcoins – then worth around half a billion U.S. dollars – were stolen in the hack, which was disclosed in February 2014, along with $28 million in cash from the exchange's bank accounts, according to Reuters.

    “The 32-year-old chief executive of defunct Mt. Gox pleaded not guilty on Tuesday to charges relating to the loss of hundreds of millions of dollars’ worth of bitcoins and cash from what was once the world's biggest bitcoin exchange.

     

    French national Mark Karpeles filed the plea in response to charges of embezzlement and data manipulation at the Tokyo District Court, according to a pool report for foreign journalists.”

    Karpeles was indicted for transferring 341 million yen ($3 million) from a Mt. Gox account holding customer funds to an account in his name during September to December 2013. The prosecution also alleged Karpeles boosted the balance of an account in his name in Mt. Gox's trading system.

    In its opening statement to the court, Karpeles' defense team did not dispute that the transfers took place, but denied they amounted to embezzlement. Karpeles told the court he was an information technology engineer.

    While the Gox bankruptcy badly damaged the public’s perception of digital currencies – particularly among risk-averse Japanese investors – it did spur Japanese lawmakers to develop a legal framework that officially recognizes digital currencies as legal, regulated assets. It also created a system for grating licenses to digital currency exchanges. Japan this year became the first country to regulate exchanges at the national level, part of a government effort to reestablish its lost influence over the crypto market.

    That framework, passed into law earlier this year, officially took effect in April and presaged the entrance of Japanese banks into the digital currencies marketplace.

    * * *

    However, institutional investors in Japan remain wary, say those running virtual currency exchanges in Tokyo. Only 4 percent of large and mid-sized Japanese firms plan to use bitcoin in the near to medium term, showed a Reuters poll last month.

    Karpeles, who disappeared from public view shortly after Gox’s collapse, was rumored to have been the target of a super subpoena, preventing him from discussing Gox or the pending case against him.
    But now that the trial is underway, the public may soon receive some long-awaited answers about the hack. Namely: How did hackers infiltrate Mt. Gox? Exactly how long did Karpeles wait to disclose the theft to the public. Mt. Gox subsequently said it had found 200,000 of the missing bitcoins – where were they, who found them, and how?

    And, most importantly: Were any Mt. Gox employees complicit in the theft?
     

  • CFPB Makes It Easier For Customers To Sue Banks

    The Consumer Financial Protection Bureau just made it easier for ordinary citizens to sue banks by restricting how they can use mandatory arbitration to block class-action lawsuits, according to Bloomberg. But the decision – inspired by a 2015 investigative series in the New York Times about how US companies, particularly credit card companies and payday lenders, abuse the practice – likely won’t stay on the books for long. As the LA Times writes:

    It's all but certain that Republican lawmakers in control of the House and Senate will move quickly to overturn the rule as part of their ongoing efforts to cripple the consumer-watchdog agency and create a more business-friendly regulatory landscape.”

    Clauses requiring arbitration to settle disputes are inserted routinely in contracts for credit cards, payday loans and other financial products. They typically prevent consumers from filing lawsuits or banding together in class actions.

    "Arbitration clauses in contracts for products like bank accounts and credit cards make it nearly impossible for people to take companies to court when things go wrong," CFPB Director Richard Cordray said in a statement.

     

    “These clauses allow companies to avoid accountability by blocking group lawsuits and forcing people to go it alone or give up. Our new rule will stop companies from sidestepping the courts and ensure that people who are harmed together can take action together.”

    From the time they formally receive the ruling, lawmakers have 60 legislative days to overturn the bureau’s decision. Republicans have been using the Congressional Review Act, a little-known provision, to undo more than a dozen Obama-era regulations during the closing days of his presidency, including the CFPB’s plans to implement tougher standards for prepaid debit cards.

    “As a matter of principle, policy and process, this anti-consumer rule should be thoroughly rejected by Congress,” Representative Jeb Hensarling, the Texas Republican who leads the House Financial Services Committee, said in a statement.

    Congress isn’t the only body that’s skeptical of the ruling: In an unusual move, the head of a key banking regulator wrote to Cordray to raise concerns about it. Keith Noreika, the acting Comptroller of the Currency, asked that the CFPB share data used to develop its arbitration rule, according to a letter dated Monday that was obtained by Bloomberg.

    “We would like to work with you and your staff to address the potential safety and soundness implications of the CFPB’s arbitration proposal,” Noreika said in the letter. “That is why I am requesting the CFPB share its data.”

    Noreika cited a section of the Dodd-Frank Act that gives the Financial Stability Oversight Council – a panel of regulators headed by the Treasury secretary – power to set aside any CFPB rule that can be shown to put the safety of the wider financial system at risk.

    However, studying the fairness of arbitration clauses appears to be well within the bureau’s remit: Dodd-Frank says the CFPB "may prohibit or impose conditions or limitations on the use" of arbitration clauses if it determines that restricting such provisions "is in the public interest and for the protection of consumers,” according to the LA Times.

    During its study, the CFPB found that hundreds of millions of contracts include arbitration provisions and that companies have used the clauses to keep fights out of court almost two-thirds of the time. Very few consumers even consider bringing individual actions against financial-service providers in court or in arbitration.

    Despite the rule’s near-certain erasure, Christine Hines, legislative director for the National Assn. of Consumer Advocates, told the LA Times that the CFPB isn’t thumbing its nose at Republican lawmakers who have insisted for years that the agency is a rabid regulatory pit bull in need of either a very short leash or a trip to a farm.

    “The agency has to continue doing its job,” she said, “even though there are very anti-consumer people in power.”

    Other consumer advocates echoed that sentiment.

     

    “The rule will help to combat the culture of companies profiting from charging illegal fees and committing other crimes against their customers,” said Rohit Chopra, senior fellow at the Consumer Federation of America.

     

    Said Lisa Donner, executive director of Americans for Financial Reform: “The consumer agency’s rule will stop Wall Street and predatory lenders from ripping people off with impunity, and make markets fairer and safer for ordinary Americans.”

    The new rule will cover new agreements for products such as credit cards, auto loans, credit reports and even mobile phone services that provide third-party billing. Companies can still include arbitration clauses in contracts, but they must state that those can’t be used to stop individual consumers from joining class-action cases.

    According to Bloomberg, it is also possible that industry groups will sue to overturn the CFPB rule. Groups including the US Chamber of Commerce have said arbitration is a valuable tool to prevent frivolous, expensive lawsuits that often don’t do much to benefit borrowers. Meanwhile, consumer advocates say restricting arbitration clauses will deter bad actors and force companies to reconsider certain activities because consumers will be more inclined to sue.

  • Paul Craig Roberts Warns Of "Ever More Official Lies" From The US Government

    Authored by Paul Craig Roberts,

    The false reality constructed for Americans parallels perfectly the false reality constructed by Big Brother in George Orwells’ dystopian novel 1984.

    Consider the constant morphing of “the Muslim threat” from al-Qaeda to the Taliban, to al-Nusra, to ISIS to ISIL, to Daesh with a jump to Russia. All of a sudden 16 years of Middle East wars against “terrorists” and “dictators” have become a matter of standing up to Russia, the country most threatened by Muslim terrorism, and the country most capable of wiping the United States and its vassal empire off of the face of the earth.

    Domestically, Americans are assured that, thanks to the Federal Reserve’s policy of quantitative easing, that is, flooding the financial markets with newly printed money that has driven up the prices of stocks and bonds, America has enjoyed an economic recovery since June of 2009, which must be one of the longest recoveries in history despite the absence of growth in median real family incomes, despite the growth in real retail sales, despite the falling labor force participation rate, despite the lack of high value-added, high productivity, high wage jobs.

    The “recovery” is more than a mystery. It is a miracle. It exists only on fake news paper.

    According to CNN, an unreliable source for sure, Jennifer Tescher, president and CEO of the Center for Financial Services Innovation, reports that about half of Americans report that their living expenses are equal to or exceed their incomes. Among those aged 18 to 25 burdened by student loans, 54% say their debts are equal to or exceed their incomes. This means that half of the US population has ZERO discretionary income. So what is driving the recovery?

    Nothing. For half or more of the US population there is no discretionary income there with which to drive the economy.

    The older part of the population has no discretionary income either. For a decade there has been essentially zero interest on the savings of the elderly, and if you believe John Williams of shadowstats.com, which I do, the real interest rates have been zero and even negative as inflation is measured in a way designed to prevent Social Security cost of living adjustments.

    In other words, the American economy has been living on the shrinkage of the savings and living standards of its population.

    Last Friday’s employment report is just another lie from the government. The report says that the unemployment rate is 4.4% and that June employment increased by 222,000 jobs. A rosy picture. But as I have just demonstrated, there are no fundamentals to support it. It is just another US government lie like Saddam Hussein’s weapons of mass destruction, Assad’s use of chemical weapons against his own people, Russian invasion of Ukraine, and so forth and so on.

    The rosy unemployment picture is totally contrived. The unemployment rate is 4.4% because discouraged workers who have not searched for a job in the past four weeks are not counted as unemployed.

    The BLS has a second measure of unemployment, known as U6, which is seldom reported by the presstitute financial media. According to this official measure the US unemployment rate is about double the reported rate.

    Why? the U6 rate counts discouraged workers who have been discouraged for less than one year.

    John Williams counts the long term discouraged workers (discouraged for more than one year) who formerly (before “reforms”) were counted officially. When the long term discouraged are counted, the US unemployment rate is in the 22-23 percent range. This is borne out by the clear fact that the labor force participation rate has been falling throughout the alleged “recovery.” Normally, labor force participation rates rise during economic recoveries.

    It is very easy for the government to report a low jobless rate when the government studiously avoids counting the unemployed.

    It is an extraordinary thing that although the US government itself reports that if even a small part of discouraged workers are counted as unemployed the unemployment rate is 8.6%, the presstitute financial media, a collection of professional liars, still reports, in the face of the government’s admission, that the unemployment rate as 4.4%.

    Now, let’s do what I have done month after month year after year. Let’s look at the jobs that the BLS alleges are being created. Remember, most of these alleged jobs are the product of the birth/death model that adds by assumption alone about 100,000 jobs per month. In other words, these jobs come out of a model, not from reality.

    Where are these reported jobs? They are where they always are in lowly paid domestic services. Health care and social assistance, about half of which is “ambulatory health care services,” provided 59,000 jobs. Leisure and hospitality provided 36,000 jobs of which 29,300 consist of waitresses and bartenders. Local government rose by 35,000. Manufacturing, once the backbone of the US economy, provided a measly 1,000 jobs.

    As I have emphasized for a decade or two, the US is devolving into a third world workforce where the only employment available is in lowly paid domestic service jobs that cannot be offshored and that do not pay enough to provide an independent existence. This is why 50% of 25-year olds live at home with their parents and why there are more Americans aged 24-34 living with parents than living independently.

    This is not the economic profile of a “superpower” that the idiot neoconservatives claim the US to be. The American economy that offshoring corporations and financialization have created is incapable of supporting the enormous US debt burden. It is only a matter of time and circumstance.

    I doubt that the United States can continue in the ranks of a first world economy. Americans have sat there sucking their thumbs while their “leaders” destroyed them.

  • Former DOJ Official: Trump Jr. Didn't Commit a Crime

     

    Content originally published at iBankCoin.com

    Unfortunately, the smoking gun evidence of Trump Jr. meeting with a Russian lawyer isn’t a crime, according to Robert Driscoll, former Deputy Assistant Attorney General and Chief of Staff, Civil Rights Division, U.S. Department of Justice.

    This man’s integrity and mastery of the law cannot and will not be repudiated. All of you crackpot internet lawyers need to shut up and take those nooses that were made for Trump Jr. and save them for Comey. More on that in a minute.

    “I think people will make hay over the willingness to have the meeting. At the end of the day, it’s still very vague as to what statuary violations there would be. Collusion, in and of itself, isn’t a crime. There would need to be conspiracy to violate another law. And so this notion that there was a meeting, it may be politically unpalatable, but it’s certainly not a crime to say ‘ok I’ll listen.’ If you wanted to piece together a legal theory of criminal activity… I haven’t seen anything, other than esoteric campaign finance theories that don’t make a lot of sense.”

    On the matter of Comey, inquiring minds want to know why he was seen walking into the NY Times building on June 22nd, 2017. The official story was Comey’s attendance of nice charity event. But that easily could’ve been arranged by the Times as a cover to meet with him.


    Disgraced Former FBI Head, James Comey, heading into NY Times, most likely in tow with Rod Goldstone emails
     
    While everyone is fixated on the contents of the Trump Jr. emails, which of course are important, I think more energy should be directed into finding out who leaked them. After all, these leaks are far more serious than the Wikileaks that the democrats bemoan over. They were used in an effort to derail a reviled and corrupt Presidential candidate, whereas these leaks are meant to destroy and take down a sitting President. The implications of the latter could have profound effects, including loss of life, should the schemes bear any fruit.

    Enter Ben Wittes, Senior Fellow at the Brookings Institution, a close friend of James Comey.

    Shortly after Comey got fired, Wittes told CNN’s Anderson Cooper that Comey ‘had a story to tell’ and that the President should be scared.

    I want you to pay attention to the following timeline, illustrated beautifully by Zerohedge.

    On May 16th, Wittes tweeted this, just before the contents of Comey’s memo contents were leaked to the NY Times.

    //platform.twitter.com/widgets.js

    He did it again on May 18th, just before a story broke that said Comey asked AG Sessions to not leave him alone with Trump.

    //platform.twitter.com/widgets.js

    Then on June 23rd, just 1 day after Comey was seen entering the NY Times building, Wittes, aka Mr. Tick, tweeted this gem.

    //platform.twitter.com/widgets.js

    Today, following Trump Jr. published the Goldstone emails, Wittes gloated with a “Boom” tweet.

    //platform.twitter.com/widgets.js

    Perhaps he’s just a shitposter and this is all one big odd coincidence. Or, on the maniacal side, he’s a sociopath who cannot help but attract attention to himself by blurting out cryptic messages to his sycophantic fans regarding illegal intelligence leaks.

    Your call.

  • The Most And Least Popular U.S. Senators

    According to a new poll by Morning Consult, the most popular senator in the U.S. is independent and once presidential candidate Bernie Sanders.

    As Statista's Martin Armstrong points out, voters in his state of Vermont have given him a net approval rating of 54 percent – 75 percent saying they approve of the job he is doing, 21 percent saying they disapprove.

    Infographic: The Most and Least Popular U.S. Senators | Statista

    You will find more statistics at Statista

    At the other end of the scale is Republican Jeff Flake, who with 37 percent approval and 45 percent disapproval is sitting on a minus 8 percent net rate in Arizona.

    The Grand Canyon State is generally unhappy with its Senators – John McCain has a net rating of minus 4 percent.

  • Welcome To Donald Trump's Very Own Big, Fat, Ugly Bubble

    Authored by David Stockman via The Daily Reckoning,

    The overwhelming source of what ails America economically is found in the Eccles Building. During the past three decades the Federal Reserve has fostered destructive financial mutations on Wall Street and Main Street.

    Bubble Finance policies have fueled an egregious financial engineering by the C-suites of corporate America. This bubble has skyrocketed to the tune of $15 trillion of stock buybacks, debt-fueled mergers deals and buyouts of the last decade.

    The Fed fostered a borrowing binge in the household sector after the 1980s. It eventually resulted in Peak Debt and $15 trillion in debilitating debts on the homes, cars, incomes and futures of what used to be middle class America.

    It also led politicians down the path of free lunch fiscal policy. By monetizing $4.2 trillion of Treasury and GSE debt during the last three decades, the Fed numbed the US economy from effects of crowding out and rising interest rates that would have come from soaring government deficits. This left the public sector impaled on Peak Debt.

    Ever since Alan Greenspan launched Bubble Finance in the fall of 1987, public debt outstanding has increased by nearly 9 times. Measured against national output, the Federal debt ratio has risen from 47% to 106% of GDP.

    These actions have stripped-mined balance sheets and cash flow from main street businesses. The Fed has stifled economic growth while delivering multi-trillion windfalls into the hands of a few thousand speculators on Wall Street.

    These rippling waves of financial mutation are why the US economy is visibly failing and why vast numbers of citizens in Flyover America voted for Donald Trump for president.

    Ironically, even as he stumbled to his victory on November 8, Trump barely recognized that the force behind all the economic failure that he railed against was the nation’s rogue central bank.

    Only when it occurred to him that Janet Yellen was doing everything possible to insure Clinton’s victory did he let loose an attack on the Fed. In his famous warning, he leveled that America was threatened by a big, fat, ugly bubble.

    Unfortunately, there was never even a hint of policy content behind this campaign statement. It said nothing of a coherent plan to liberate the American economy from the nation’s central bank.

    When Wall Street launched a phony Trump Reflation trade during the wee hours of election night, the Donald forgot all about the great bubble. In fact, he quickly embraced it as a sign that investors were enthusiastically embracing Trump-O-Nomics.

    No new arrival in the Oval Office was ever more mistaken. The gambling halls of Wall Street were a clear and present danger to his presidency, but Trump had only a small window of time for a counter-strategy.

    He needed to quickly puncture the bubble, not embrace it; and his first, second and third actions on the economic policy front should have been to clean house at the Fed. He should have named names and insured that the current Fed incumbents get the blame when the inflated stock and bond markets finally implode.

    All the tools were there. The Fed had three vacancies out of seven seats on the Board, and he could have cleared more by demanding the resignation of Janet Yellen and Stanley Fischer from day one.

    Instead, the Donald got off-track from the get-go with aiming his efforts against immigrants and refugees; nonsense about the Mexican border; and the hideously bloated Pentagon budget.

    While all of that was bad, the Donald’s fatal error was delegating economic policy to Wall Street errand boys. Trump handed economic power to Steve Mnuchin, Wilbur Ross and Goldman Sachs’ next-in-line gatekeeper to Washington, Gary Cohn.

    These characters are a slap-in-the-face to the populations in the rust belts which elected him.

    At the end of the day, the lines of demarcation are crystal clear. The Fed is Wall Street’s angel and Main Street’s enemy.

    The Donald has ended up handing the keys to economic policy to a cabal of Wall Street operators, who have wasted six months doing nothing on the central banking file.

    Mnuchin has even toyed publicly with the idea that Yellen might be reappointed because she has done a “good job”.

    You cannot talk about reappointing Janet Yellen and making the American economy great again in the same sentence.

    To do so is to voluntarily take ownership of the very big, fat ugly bubble that has brought so much hardship to Flyover America.

    Yesterday’s announcement of an appointment to one of the Fed vacancies leaves nothing to the imagination.

    After finally announcing a candidate for a job which will determine whether American capitalism can even survive, the Trump White House picked the absolute worst candidate available. Trump named Randall Quarles, a veritable creature of the Wall Street/Washington establishment, as his nominee for vice chairman for supervision at the Federal Reserve.Randy Quarles is the former Under Secretary of the Treasury in the George W. Bush Administration. Before founding Cynosure, Mr. Quarles was a longtime partner of The Carlyle Group, one of the world’s largest private equity firms.

    In addition to his record as a successful investor, he has long experience at the highest levels of the international financial architecture, having represented the U.S. for many years in the G7, G20, and Financial Stability Forum, and having served the U.S. as Executive Director of the International Monetary Fund, Executive Director of the European Bank for Reconstruction and Development, and as a member of the Board of Directors of the Overseas Private Investment Corporation.

     

    Earlier in his career, Mr. Quarles spent many years working as a partner at the Wall Street law firm of Davis Polk & Wardwell, where he was the co-head of the firm’s Financial Institutions Group and advised on transactions that included a number of the largest financial sector mergers ever completed.

     

    Do not take comfort from the fact that Quarles mimics the Hoover Institution’s version of economics. The notion that it’s fine to intrude deeply into the mainspring of capitalism in the financial markets and distort all financial asset prices, but it should be done based on formulaic rules rather than “data-dependent” policy discretion.

    Quarles has professed an affinity for the Taylor Rule, a Rube Goldberg policy contraption invented by one of Milton Friedman’s disciples, and named for himself.

    It should be clear to anybody not drinking the Fed’s kool-aid, that it is impossible to accurately measure the Fed’s goals for unemployment and inflation on which the massive $4.4 trillion balance sheet is premised.

    How else do you account for the rampant gains in the cost of living plaguing Flyover America that the BLS neglects to even measure? This measure has caused those members of the Fed working in the Eccles Building to pursue even higher levels of inflation.

    During the first 14 years of this decade the Fed claimed price levels rose by only 31.7% when everything households in Flyover America were buying to survive had inflated by multiples – in some case 100-300%.

    How can there be “full-employment” at 4.4% unemployment claimed by the BLS and the Fed’s monetary central planners, when there are 103 million adults without jobs?

    What Randal Quarles brings to the table is a vision of anti-market monetary central planning that is far worse than what has already brought American capitalism to its knees.

    The Donald now owns the Bubble and has left his Presidency and the American economy squarely in harms’ way.

    There is no doubt that they are bubble blind and have no understanding of the rampant speculation and driven risk-taking their policies have unleashed in the casino. Even Barron’s last cover story made it clear that robo-machines, ETF’s and other forms of passive “investing,” have set the markets up for a thundering crash.

    Needless to say, the Fed is only now beginning to apprehend the train-wreck that lies dead ahead. Thus, the June FOMC minutes were grasping for something dimly worrisome:

    According to the minutes, some FOMC members acknowledged that “equity prices were high when judged against standard valuation measures.”  Some are even “concerned that subdued market volatility, coupled with a low equity premium, could lead to a buildup of risks to financial stability.”

    Do ya think?

    Does the Donald have a clue?

  • 5 Charts That Explain Just How Screwed Your State Is

    We’ve spent a lot of time of late discussing the precarious financial positions of states like Illinois, Connecticut and New Jersey which each suffer from their own myriad of financial threats including massive budget deficits, monstrous unfunded pension liabilities, pending debt downgrades, etc.  In case you’ve missed those notes, here is a recap for your amusement:

    Of course, while Illinois gets all the bad press for being the undisputed champion of the “worst state in the union” honor, there are many other “up and comers” (yes, we’re looking at you California with your massive unfunded pension obligation) aggressively vying for the title.

    In fact, the Mercatus Center at George Mason University (GMU) has recently compiled a fairly comprehensive study, based on a number of objective financial metrics, ranking the 50 U.S. states according to their overall fiscal condition.  Among other things, GMU analyzed the following metrics:

    • Cash solvency.  Does a state have enough cash on hand to cover its short-term bills?
    • Budget solvency. Can a state cover its fiscal year spending with current revenues, or does it have a budget shortfall?
    • Long-run solvency. Can a state meet its long-term spending commitments? Will there be enough money to cushion it from economic shocks or other long-term fiscal risks?
    • Service-level solvency. How much “fiscal slack” does a state have to increase spending if citizens demand more services?
    • Trust fund solvency. How large are each state’s unfunded pension and healthcare liabilities?

    All of which resulted in the following ranking map. 

    Ironically (which, in case it weren’t brutally obvious, we mean in the most sarcastic way possible), the resulting map looks eerily similar to the 2016 electoral college map with the Democrat-leaning states on the bottom end of the “fiscal condition” ranking and Republican-leaning states making out a bit better, on a relative basis.

     

    Maybe it’s just coincidence…then again, maybe promising every entitlement under the sun to your residents without a clue as to how to finance those entitlements is a really bad idea over the long term…just a thought.

    But it’s not just the overall ranking where the conservative states seemed to fare better. 

    In terms of “cash solvency” (ability to meet short-term funding requirements), 8 of the 10 worst states were all blue states.

     

    Of course, the lack of near-term solvency plaguing America’s liberal states isn’t for a lack of trying to aggressively over tax their residents…

     

    Meanwhile, on net unfunded pension obligations (with liabilities discounted at the risk-free rate), the mix between red and blue states was more equal on the bottom end of the spectrum even though California’s massive $900 billion obligation is roughly 3x that of the next worst state of Illinois.  Even more staggering is the fact that the aggregate unfunded state pension liabilities total over $5 trillion…and that doesn’t count local and federal pension obligations.

     

    And the coup de grâce, when it comes to the ability of the states to meet their long-term spending obligations, literally 12 of the 13 worst states in the union are controlled by Democrats and voted Democrat in the 2016 presidential election…which is even more amazing when you realize that only 19 states voted Democrat in the 2016 election in aggregate.

     

    Perhaps it’s time to admit that liberal economic policies, which can be summarized as higher taxes and higher entitlement spending, may not be working all that well?

  • Baltimore Citizens Urge "Nobody Kill Anybody" Ceasefire At The Start Of August

    Authored by Alastair Williamson via Squawker.org,

    Breaking story out of Baltimore City, Maryland, where a citizen ceasefire is being issued by the community for August 04, 2017 through august 06, 2017.

    The ‘no violence for 72-hours’ or ‘nobody kill anybody’ campaign comes at a time where the city is spiraling out of control. According to WJZ, “Baltimore struggles with a record high murder rate, and those in power are desperate for solutions”.

    In April, Baltimore’s Mayor asked Federal Agencies including the Bureau of Alcohol, Tobacco, Firearms and Explosives and Federal Bureau of Investigation for help before entering the rough summer months.

    The Federalization of Baltimore is nothing new and perhaps it’s the new trend for America’s crumbling inner cities.

    Alastair Williamson describes the ceasefire in Baltimore City, Maryland, along with taking us on a journey through two recent gun violence scenes in the highest homicide rate area in the United States. The mainstream media is not allowed to show you this, because it destroys their narrative.

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