- Crypto Nightmare: 97% Of South Korean Exchanges Are At Risk Of Going Bankrupt
Crypto Nightmare: 97% Of South Korean Exchanges Are At Risk Of Going Bankrupt
South Korean regulators have launched strict rules for cryptocurrency startups and crypto traders, and this has forced many Koreans to list and or trade on foreign exchanges. As a result, the majority of domestic exchanges are at risk of imploding, reported BusinessKorea.
An increasing amount of South Korean blockchain startups are listing on foreign exchanges than domestic ones. International exchanges have introduced South Korean won for crypto to fiat-involved transactions without real-name accounts, and this move has attracted cryptocurrencies projects in the country to list on oversea exchanges.
BusinessKorea said Binance Labs, headquartered in the European Union, has added the won feature to its platform to attract cryptocurrency projects from South Korea.
Medibloc and Temco, are two Korean blockchain projects that are expected to list on foreign exchanges.
Crypto experts tell BusinessKorea that Korean blockchain companies are desperately trying to list in foreign markets because domestic cryptocurrency exchanges are faltering.
One reason for the souring conditions of domestic exchanges is that hundreds of smaller ones cannot open real-name virtual accounts, which means, traders cannot convert digital assets into fiat, or won.
The country’s four largest exchanges, Upbit, Bithumb, Coinone, and Korbit, allow traders to swap digital assets for fiat. Still, traders have to use their legal name on the account as part of Anti-Money Laundering regulations enacted in 1Q18. Crypto traders tell BusinessKorea that investors cannot benefit from anonymity, one of the fundamental characteristics of cryptos, so many have shied away from the major exchanges in the country.
As per strict regulations, crypto traders have said, transaction volumes on domestic exchanges have collapsed. Only five South Korean exchanges rank in the world’s top 100 exchanges in terms of transaction volume.
BusinessKorea warned: “It is no exaggeration to say that 97 percent of domestic exchanges are in danger of going bankrupt due to their low volume of transactions.”
And it seems the dominos have already started to fall.
South Korea’s Prixbit cryptocurrency exchange declared it would cease operations in early August. The founder of the company said: “Due to negative internal and external influences, management difficulties could not be overcome and the normal operation became impossible.”
San Fransico-based software entrepreneur Frank Marcantoni said as long as regulators in South Korea continue to intervene in domestic crypto markets with more stringent regulation(s), crypto firms will continue an exodus to foreign exchanges. He added, tighter regulations, as per what BusinessKorea said, would likely result in more exchange failures in 2020.
Tyler Durden
Mon, 10/14/2019 – 02:45 - France: More Death To Free Speech
France: More Death To Free Speech
Authored by Guy Milliere via The Gatestone Institute,
On September 28, a “Convention of the Right” took place in Paris, organized by Marion Marechal, a former member of French parliament and now director of France’s Institute of Social, Economic and Political Sciences. The purpose of the convention was to unite France’s right-wing political factions. In a keynote speech, the journalist Éric Zemmour harshly criticized Islam and the Islamization of France. He described the country’s “no-go zones” (Zones Urbaines Sensibles; Sensitive Urban Zones) as “foreign enclaves” in French territory and depicted, as a process of “colonization”, the growing presence in France of Muslims who do not integrate.
Zemmour quoted the Algerian writer Boualem Sansal, who said that the no-go zones are “small Islamic Republics in the making”. Zemmour said that a few decades ago, the French could talk freely about Islam but that today it is impossible, and he denounced the use of the “hazy concept of Islamophobia to make it impossible to criticize Islam, to reestablish the notion of blasphemy to the benefit of the Muslim religion alone…”
“All our problems are worsened by Islam. It is a double jeopardy…. Will young French people be willing to live as a minority on the land of their ancestors? If so, they deserve to be colonized. If not, they will have to fight … [T]he old words of the Republic, secularism, integration, republican order, no longer mean anything … Everything has been overturned, perverted, emptied of meaning.”
Zemmour’s speech was broadcast live on LCI television. Journalists on other channels immediately accused LCI of contributing to “hate propaganda”. Some said that LCI should lose its broadcasting license. One journalist, Memona Hinterman-Affegee, a former member of France’s High Council of Audiovisual Media (Conseil supérieur de l’audiovisuel), the body that regulates electronic media in France, wrote in the newspaper Le Monde:
“LCI uses a frequency which is part of the public domain and thus belongs to the entire nation … LCI has failed in its mission and lost control of its program, and must be sanctioned in an exemplary manner”.
The journalists of Le Figaro, the newspaper employing Zemmour, wrote a press release demanding his immediate dismissal. Calls heard on most radio and television stations for a total boycott of Zemmour stressed that he had been condemned several times for “Islamophobic racism”.
Alexis Brézet, the managing editor of Le Figaro, said that he expressed his “disapproval” to Zemmour and reminded him of the need for “strict compliance with the law”, but did not fire him. SOS Racisme, a left-wing movement created in 1984 to fight racism, launched a campaign to boycott companies publishing advertisements in Le Figaro and said that its aim was to coerce the management of the newspaper to fire Zemmour. The mainstream RTL radio station that employed Zemmour decided to terminate him immediately, saying that his presence on the air was “incompatible” with the spirit of living together “that characterizes the station”.
A journalist working for RTL and LCI, Jean-Michel Aphatie, said that Zemmour was a “repeat offender” who should not be able to speak anywhere and compared him to the anti-Semitic Holocaust denier Dieudonné Mbala Mbala:
“Dieudonné is not allowed to speak in France. He must hide. That is fine, since he wants to spread hatred. Éric Zemmour should be treated the same way.”
Caricatures were published depicting Zemmour in a Waffen SS uniform. Another journalist, Dominique Jamet, apparently not seeing any problem comparing a Jew to a Nazi, said that Zemmour reminded him of Hitler’s Minister of Propaganda, Joseph Goebbels. On the internet, death threats against Zemmour multiplied. Some posted the times Zemmour takes the subway, what stations, and suggested that someone push him under a train.
The French government officially filed a complaint against Zemmour for “public insults” and “public provocation to discrimination, hatred or violence”. The investigation was handed over to the police. Someone in France accused of “public provocation to discrimination, hatred or violence” can face a sentence of one year in prison and a fine of 45,000 euros ($50,000).
Whoever reads the text of Zemmour’s speech on September 28 can see that the speech does not incite discrimination, hatred or violence, and does not make a single racist statement: Islam is not a race, it is a religion.
Zemmour’s speech describes a situation already discussed by various writers. Zemmour is not the first to say that the no-go zones are dangerous areas the police can no longer enter, or that they are under the control of radical imams and Muslim gangs who assault and drive out non-Muslims. Zemmour is not the only writer to describe the consequences of the mass-immigration of Muslims who do not integrate into French society. The pollster Jerome Fourquet, in his recent book, The French Archipelago, points out that France today is a country where Muslims and non-Muslims live in separate societies “hostile to each other”. Fourquet also emphasizes that a growing number of Muslims living in France say they want to live according sharia law and place sharia law above French law. Fourquet notes that 26% of French Muslims born in France want to obey only Sharia; for French Muslims born abroad, the figure rises to 46%. Zemmour merely added that what was happening is a “colonization”.
Zemmour had been hauled into court many times in the recent past and has had to pay heavy fines. On September 19, he was fined 3,000 euros ($3,300) for “incitement to racial hatred” and “incitement to discrimination”, for having said in 2015 that “in countless French suburbs where many young girls are veiled, a struggle to Islamize territories is taking place”.
In a society where freedom of speech exists, it would be possible to discuss the use of these statements, but in France today, freedom of speech has been almost completely destroyed.
Writers other than Zemmour have been hauled into court and totally excluded from all media, simply for describing reality. In 2017, the great historian Georges Bensoussan published a book, A Submissive France, as alarming as what Zemmour said a few days ago. Bensoussan, in an interview, quoted an Algerian sociologist, Smaïn Laacher, who had said that “in Arab families, children suckle anti-Semitism with their mother’s milk”. Laacher was never indicted. Bensoussan, however, had to go to criminal court. Although he was acquitted, he was fired by the Paris Holocaust Memorial, which until then had employed him.
In 2011, another author, Renaud Camus, published a book, The Great Replacement. In it, he talked about the decline of Western culture in France and its gradual replacement by Islamic culture. He also noted the growing presence in France of a Muslim population that refuses to integrate, and added that demographic studies show a birth rate higher in Muslim families than in non-Muslim ones.
Immediately, commentators in the media accused Camus of “anti-Muslim racism” and called him a “conspiracy theorist”. His demographic studies were omitted. He had never mentioned either race or ethnicity, yet was nonetheless described as a defender of “white supremacism” and instantly excluded from radio and television. He can no longer publish anything in a French newspaper or magazine. In fact, he has no publisher at all anymore; he has to self-publish. In debates in France, he is referred to as a “racist extremist,” and credited with saying things he never said. He is then denied the possibility of answering.
The difference between Eric Zemmour and Georges Bensoussan or Renaud Camus is that Zemmour had published books that became best sellers before he talked explicitly about the Islamization of France.
Those who have destroyed the careers of other writers for stating unfashionable facts have been doing their best to condemn Zemmour to the same fate. So far, they have not succeeded, so they have now decided to launch a major offensive against him. What they clearly want his personal destruction.
Zemmour is not only risking a professional ban; like many other writers being silenced by an intolerant “lynch mob”, he is risking his life.
Almost no one shows any interest in defending him, just as no one defended Georges Bensoussan or Renaud Camus. Defending someone accused of being a “racist” implies the risk of being accused of being a “racist” too. Intellectual terror now reigns in France.
A few days ago, the writer and philosopher Alain Finkielkraut said that suggesting that “Islamophobia is the equivalent of yesterday’s anti-Semitism” is scandalous. He said that “Muslims do not risk extermination” and that no one should “deny that today’s anti-Semitism is Arab Muslim anti-Semitism.” He added that France is moving from a “muzzled press to a muzzling press that destroys free speech”.
France, wrote Ghislain Benhessa, a professor at the University of Strasbourg, is no longer a democratic country and gradually become something very different:
“Our democratic model which was based on the free expression of opinions and the confrontation of ideas is giving way to something else … Relentless moral condemnations infect the debates and dissenting opinions are constantly deemed ‘nauseating’, ‘dangerous’, ‘deviant’ or ‘retrograde’, and therefore the elements of language repeated ad nauseam by official communicators will soon be the last words deemed acceptable. Lawsuits, charges of indignity and proclamations of openness are about to give birth to the evil twin of openness: a closed society.”
On October 3, five days after Zemmour’s speech, four police employees were murdered in Paris police headquarters by a man who had converted to Islam. The murderer, Mickaël Harpon, had gone every week to a mosque where an imam, who lives in a no-go zone ten miles north of Paris, made radical remarks. Harpon had been working at police headquarters for 16 years. He had recently shared on social networks a video showing an imam calling for jihad, and saying that “the most important thing for a Muslim is to die as a Muslim”.
Harpon’s colleagues said that he had been delighted by the 2015 jihadist attacks in France in 2015, and said they had reported “signs of radicalization” to no avail. The government’s first reaction had been to say that the murderer was “mentally disturbed” and that the attack had no connection with Islam. French Minister of the Interior Christophe Castaner simply stated that there had been “administrative dysfunctions,” and acknowledged that the killer had access to files classified “secret”.
A month before that, on September 2, an Afghan man who had the status in France of a political refugee, slit the throat of a young man and injured several other people in a street in Villeurbanne, a suburb of Lyon. He announced that the fault of those he killed or injured was that they did “not read the Koran”. The police immediately stated that he was mentally ill and that his attack had nothing to do with Islam.
Soon in France, no one will dare to say that any attack openly inspired by Islam has any connection with Islam.
Today, there are more than 600 no-go zones in France. Every year, hundreds of thousands immigrants coming mainly from Muslim countries, settle in France and add to the country’s Muslim population. Most of those who preceded them have not integrated.
Since January 2012, more than 260 people in France have been murdered in terrorist attacks, and more than a thousand wounded. The numbers may increase in the coming months. The authorities will still call the attackers “mentally ill”.
Tyler Durden
Mon, 10/14/2019 – 02:00 - Margolis: More "Stupid Wars" In Syria
Margolis: More “Stupid Wars” In Syria
Authored by Eric Margolis via LewRockwellc.om,
More war in wretched Syria. Half the population are now refugees; entire cities lie shattered by bombing; bands of crazed gunmen run rampant; US, French, Israeli and Russian warplanes bomb widely.
Now, adding to the chaos, President Donald Trump has finally given Turkey, NATO’s second military power, the green light to invade parts of northeastern Syria after he apparently ordered a token force of US troops there to withdraw.
You will find more infographics at Statista
This, of course, puts the Turks in a growing confrontation with the region’s Kurds, who have occupied large swaths of the area during Syria’s civil war. The Kurdish militia, known as YPG (confusingly part of the so-called Free Syrian Army), is armed, lavishly financed and directed by the CIA and Pentagon.
Most Kurdish forces are deployed along the line of the former Berlin-Baghdad railway, a major source of warlike tensions before World War I. Interestingly, Turkey’s president, Recep Tayyip Erdogan, was making a state visit to blood enemy Serbia when the Turkish offensive kicked off.
Turkey calls the Kurdish militias ‘terrorists’ and links them to the original Kurdish resistance movement PKK which is on the US and Turkish black list. I covered the brutal conflict in eastern Anatolia (southern Turkey) between the Turkish Army and Kurdish militias known as ‘peshmerga.’ If the US can brand Syrian and Iraqi groups ‘terrorists,’ why can’t the Turks do their own terrorist branding? After all, Syria, Lebanon and Iraq are in their backyard.
You will find more infographics at Statista
The US media is fiercely anti-Turkish because Ankara is seen as somewhat pro-Palestinian. Israel is a bitter foe of Turkey’s Erdogan. One rarely reads anything positive about Turkey or its leader. Not very many western readers even know that since the early 1500’s, Syria was part of the Ottoman Empire, the predecessor of modern Turkey. So were Iraq, Palestine, today’s Israel, Saudi Arabia, and Yemen.
Most important, Iraq’s vast oil fields used to belong to the Ottoman Empire until the British Empire grabbed them at the end of World War I. France seized Syria and Lebanon. Both former imperial powers are still mucking around today in the region and have the gall to criticize Turkey’s involvement in neighboring Syria.
The United States has zero historic interest in the region. US troops in Syria appear to have come from the US garrison in Iraq, which, as VP Dick Cheney hoped, would become a central US military base for the entire Mideast. The Washington war party is moaning that Trump has ‘betrayed’ the Kurds. Their unofficial head, Sen. Lindsey Graham, is demanding more war in Syria – the same warrior senator who dodged the Vietnam War by joining the National Guard as a lawyer.
The Kurds have been used and betrayed since 1918. They always seem to get the short end of the stick. The old Kurdish saying, ‘no friends but the mountains,’ is painfully true. Washington does not want to get involved in a new Kurdish state carved out of Syria or Iraq even though Israel is pushing it hard to further splinter the Mideast. Iraq’s and Syria’s oil deposits are still a powerful lure for imperial-minded powers.
Trump rightly calls the fracas in Syria ‘a stupid war.’ But many pro-war forces play on this tired, confused president who has gotten himself deep into the Syrian morass, a problem of largely American but also Turkish making. Ironically, former president Barack Obama foolishly authorized America’s effort to overthrow Syria’s Assad government under the guise of a phony civil war. This was one of the few Obama policies that Trump chose to follow. The neophyte president was unwilling or unable to prevent the deep state in Washington from encouraging the war.
The region in question is hardly the beating heart of Syria. It looks large on the map but is mostly desert and scrub, dotted by miserable little villages with Arab or Kurdish populations. Turkey, which has over 2 million Syrian refugees, is eager to begin repatriation of this massive burden created by its policy errors and the western powers.
In the middle is the scattered debris of the short-lived ISIS caliphate. Russia, which is selling Turkey its very capable S-400 anti-aircraft system, is watching with delight as old allies Turkey and the US split.
Even Trump knows how important Turkey is to the NATO alliance. A rupture between Washington and Ankara could see the vital US bases at Incirlik and Adana thrown out of Turkey. That’s why Trump needs to tread carefully.
Tyler Durden
Sun, 10/13/2019 – 23:30 - California's New 'Red Flag' Gun Law So Extreme ACLU Deems "Significant Threat To Civil Liberties"
California’s New ‘Red Flag’ Gun Law So Extreme ACLU Deems “Significant Threat To Civil Liberties”
California adopted 15 firearms-related bills last Friday, including a controversial ‘red flag’ gun confiscation law which adds co-workers, employers and educators to the list of who can file a gun violence restraining order on those they say are a danger to themselves and others. Currently, only law enforcement and immediate family members can apply to temporarily confiscate peoples’ firearms. Most of the new laws take effect January 1, according to the LA Times.
Signed by Gov. Gavin Newsom (D) after being vetoed twice by his Democratic predecessor Jerry Brown (who said that educators can work through family members or law enforcement if a restraining order is required), the gun confiscation bill is so broad that the ACLU said it “poses a significant threat to civil liberties” since guns can be seized from owners before they have an opportunity to contest the requests, and those making the requests may “lack the relationship or skills required to make an appropriate assessment,” NBC San Diego reports.
All that’s needed for a co-worker or educator to file a complaint is to have had “substantial and regular interactions” with gun owners, along with permission from their employers or school administrators. Those seeking the orders will be required to file a sworn statement outlining their concerns.
The author of the bill, Democratic Assemblyman Phil Ting of San Francisco, said that “With school and workplace shootings on the rise, it’s common sense to give the people we see every day the power to intervene and prevent tragedies,” citing a recent study which found that 21 mass shootings may have been prevented by a gun restraining order.
Meanwhile, a companion bill signed by Newsom and written by Democratic Assemblywoman Jacqui Irwin of Thousand Oaks allows gun violence restraining orders to last one and five years, though gun owners would be allowed to petition the state to get their guns back earlier. In another Ting-authored companion bill, gun owners who agree to voluntarily surrender their firearms can notify the court via a form, vs. a hearing which Ting says wastes time and resources.
The National Rifle Association (NRA)’s Amy Hunter, meanwhile, said of another bill signed on Friday (SB 61) which prohibits Californians from buying more than one semiautomatic rifle per month, and bans the sale of such rifles to those younger than 21: “This bill places burdens on law-abiding residents,” adding “It will not make anyone safer.”
Republican state legislators criticized the one-gun-a-month bill, as well as the state’s failure to remove guns from the thousands of felons and the severely mentally ill as they are already empowered to do so.
“Instead we continue to do more and more legislation that interferes with the law-abiding citizen’s right to own and possess firearms, which is their constitutional right to do,” said Yuba City Republican Assemblyman James Gallagher (LA Times).
According to the Times, other bills signed Friday by Newsom will:
- Allow those subject to a gun-violence restraining order to submit a form to the court voluntarily relinquishing their firearm rights
- Require firearm packaging to contain a warning statement on suicide prevention
- Mandate that county sheriffs who issue licenses for concealed weapons charge a fee covering the cost of vetting the applicant, thus eliminating the current $100 cap on fees
- Prohibit gun shows at the Del Mar Fairgrounds in San Diego County
- Require, starting in 2024, that the sale of components used to build a firearm — often used to build untraceable “ghost guns” — be carried out through a licensed vendor.
Tyler Durden
Sun, 10/13/2019 – 23:05 - "From Constitution… To Algorithms"
“From Constitution… To Algorithms”
Via Jim Quinn’s Burning Platform blog,
Comment from Aldous Huxley:
For those too ignorant or too full of cognitive dissonance here is a short understanding for ya…
It is Saturday morning and I like to wake up early so I had set my iPhone alarm to wake me at 5am. (Apple now knows what time i woke). I grab my iPhone and head to the kitchen and turn the coffee maker on (it wirelessly informs several other kitchen appliances, Alexa and my iPhone denotes this too). I open the fridge (it sends a signal to other kitchen appliances and my iPhone) and to grab a few items. Yogurt, orange juice, some blueberries. When I shut the fridge door the RFID signal on the packages I took out were read by the fridge so it knows what was removed and at what time. Now apple and others know, with near certainty who was up, rummaging in the fridge and what they took out. (Ok I think you get the point of “breakfast in the new age” so let’s move on. )
I go to my closet and grab blue jeans a button down shoes belt. Each has an RFID from the retail location I purchased as does my cleaners who placed a very small RFID barcode on each garment for tracking purposes. Both these signals are tracked by my iPhone, wifi signals, kitchen appliances etc. The kitchen appliances are still snooping on me so they can sell my activity tracking information to other retailers. Seems if you purchased a microwave for hundreds of dollars you should get a huge discount if they informed you they were going to spy on you and sell your activity or at least offer a choice of no spying. Seems every single thing I buy, with MY hard earned money, is now making money OFF ME. But I digress.
Anyway, I head out to the basement and every door has a sensor from my home security. It can track every door that opens and infrared movement. It tracks me via door openings going to the basement and the motion sensor follows my every move. I open my safe grab my gun and head to my vehicle. With the fridge, microwave, coffee maker, doors and motion sensors, iPhone, Alexa and numerous other things now tracking me, my car now gets involved. The hands free portion of my entertainment system recognizes me and my voice. The car starts and the little black box, gps, phone system are all on me like a bloodhound. I am tracked to every location I go, every traffic signal camera, and every light I stop at. Every song I listen too whether sad or upbeat is denoted, filed, logged. I pass near businesses and all my data is shared with them and to their own security cameras. Yet, here I am thinking nobody knows where I am, where I am going, what I am listening to, what I am thinking, or what I am about to do.
I was truly enjoying my weekend and looking forward to spending quality time with my wife and kids.
Over the past week, a stressful week at that, I needed some quite relaxing woods time. I had decided to go for a short hike. I had brought my gun because it was coyote-mating season and they can get aggressive. As I was driving down the nearly abandoned country road I see blue lights in my rear view mirror. I pull over. A loud speaker comes on and demands I throw the gun out of the car and step out slowly. I have done nothing wrong and do not understand and certainly do not want to scratch up my $7,500 .22 nearly rusted revolver. I have a permit and am not a threat.
So I decided to open the door and the last thing I remember before being shot to death was loud banging.
* * *
The ensuing investigation and media narrative was they “knew” I had a stressful week and was planning on hurting, someone, or myself. That I had chosen to “die by cop” instead. Even though the sweet note I had left my wife and kids stating I was going hiking and will bring my revolver just in case because coyotes were in abundance since hunting was outlawed and how much I loved them and looked forward to picking them up in a few hours to go to the local town fair. Well, that was all but ignored and explained away. It did not fit the narrative that guns are evil and people that own them have them or even like them are borderline unstable at a minimum.
What nobody was asking is how did the officer “know” I had a gun? “Why” did the officer feel I was a threat at that time due to a stressful week? Amongst any other questions at all.
It did not matter, I was dead, my family lost, kids life changed forever and my reputation as a gun wielding mad man will forever follow my family and negatively affect them until they die. When others see this example, they will all, like rank and file, stiffen up and toe the line of compliance for surely they do not want a similar situational issue or outcome because they all deep down realize they are being tracked but they ignore it because Clash of Clans is just so addictive and gives you something to do for the 38 seconds you must be alone in public while waiting on friends to park their car.
Welcome to your new life and country controlled by algorithms vs the Constitution. Hope you really get a full mouthful of it, so much in fact it makes you sick. You deserve it all.
Tyler Durden
Sun, 10/13/2019 – 22:40 - "Compromise Or Genocide": Putin's 'Deal Of The Century' Rapidly Unfolding In Syria
“Compromise Or Genocide”: Putin’s ‘Deal Of The Century’ Rapidly Unfolding In Syria
“Putin is capitalizing on the chaotic retreat of the US and Turkey’s brutality toward the Kurds in order to assert Russia’s leadership,” Syria analyst Joshua Landis observed of a newly published Vladimir Putin interview. “He contrasts how Russia has stood beside its beleaguered ally, Syria, while the US has abandoned both its allies, the Kurds and the Turks,” Landis added.
Putin said in the interview: “Syria must be free from other states’ military presence. And the territorial integrity of the Syrian Arab Republic must be completely restored.”
Given this weekend’s rapidly unfolding events, with state actors Turkey and the Syrian Army squaring up on front lines, Russia’s role in all this is probably still the greatest unknown, but what do we know at this point?
File image via Reuters Precisely one week since Trump first unveiled a US troop exit from northeast Syria while essentially giving a green light to invading Turkish forces, events are unfolding at blistering speed, possibly toward a major Syrian Army clash with pro-Turkish forces, and no doubt toward a complete and final American withdrawal from Syria altogether.
Currently Syrian Army convoys — including tanks and artillery — have begun deployment to northern Syrian battlefronts at a moment US troops have been confirmed in retreat. Syrian state media affirmed that Damascus is set to “confront a Turkish aggression” on Syrian territory, after what appears to be a major deal struck between Damascus and the main US-backed Syrian Kurdish groups.
Reuters revealed on Sunday that Damascus and the Kurdish-led Syrian Democratic Forces (SDF) have been in direct negotiations, with crucial Russian participation. “The source close to the Syrian government said meetings between the SDF and Damascus had taken place before and after the latest Turkish offensive,” according to the report.
PUTIN: ¨Syria must be free from other states military presence and the and territorial integrity the Syrian Arab Republic must be completely restored. ¨#Syria #Kurds #Turkey #OperationSpringPeace pic.twitter.com/xhYxAM38hN
— ivan (@ivan8848) October 12, 2019
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And hours before it was announced Sunday that an initial deal has been reached, resulting in Syrian Army deployment to currently Turkish-besieged northern cities, the SDF’s top commander Mazloum Abdi wrote in a Foreign Policy op-ed:
“We know we would have to make painful compromises with Moscow & Assad if we go down that road. But if we have to choose between compromises and the genocide of our people, we will surely choose life.”
Abdi noted that Washington’s betrayal is two-fold: not only did the Pentagon retreat at the most crucial moment, but ordered its Kurdish proxy force to weaken its own defenses (not to mention that Washington had long actively thwarted negotiations with Damascus).
“At Washington’s request, we agreed to withdraw our heavy weapons from the border area with Turkey, destroy our defensive fortifications, and pull back our most seasoned fighters. Turkey would never attack us so long as the U.S. government was true to its word with us” — implying that Washington threw the Kurds to the wolves in a worsened state.
“We are now standing with our chests bare to face the Turkish knives,” the SDF’s top commander concluded. “Syria has two options: a religious sectarian and ethnic bloody war if the United States leaves without reaching a political solution, or a safe and stable future—but only if the United States uses its power and leverage to reach an agreement before it withdraws,” Abdi explained.
“Two questions remain: How can we best protect our people? And is the United States still our ally?” It appears that question has been answered, given the SDF has invited in the Syrian Army.
SDF’s Mazloum writing hours before announcement: “We know we would have to make painful compromises with Moscow & Assad if we go down that road. But if we have to choose between compromises and the genocide of our people, we will surely choose life” 💔https://t.co/B9uOHI5sZa
— Josie Ensor (@Josiensor) October 13, 2019
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Again given how fast all of this has played out, a number of pundits and analysts questioned: are we witnessing a Putin-brokered ‘deal of the century’ unfold?
We explained late last week that there are a number of signs suggesting this is the case, noting that Moscow had begun organizing “reconciliation talks” between Syria and Turkey, in what would truly be an unprecedented development, given President Erdogan’s long-time position that Turkey won’t negotiate with Damascus so long as Assad is in power, after the two cut diplomatic relations in 2012.
But Russian Foreign Minister Lavrov recently confirmed as much saying, “Moscow will ask for start of talks between Damascus and Ankara”.
Putin’s timing for such potential deal-making couldn’t have been better, given that:
- A US ground retreat from the border area means Washington now has little active leverage over the situation (Trump has said he desires regional powers to sort it out).
- Syria’s beleaguered Kurds now see Damascus as the only option for survival (and thus Syria’s ally Russia).
- Turkey is now at odds with all major Western and regional powers over ‘Operation Peace Spring,’ is also hated in international media, and thus will be more sensitive to reputational damage.
- Turkey is now under a human rights and war crimes microscope.
- For many reasons, especially the recent S-400 deal and F-35 hold-up, US-Turkey relations are currently at their lowest point, with threat of new US sanctions on Ankara looming.
- With Washington ceding the driver’s seat, all of the above means Putin alone can “check” Erdogan’s actions.
Putin Planning “Deal Of The Century” Between Syria & Turkey As US Exits https://t.co/yD4JFrfHwx
— zerohedge (@zerohedge) October 10, 2019
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Just ahead of this weekend’s rapidly developing Syria events, Reuters reported that Putin is positioned to be the only voice with “positive” relations with Turkey, able to “limit” Erdogan’s ambitions inside Syria:
In a phone call with Turkish President Tayyip Erdogan before the operation against U.S.-allied Kurdish fighters, Russian leader Vladimir Putin, an ally of Syrian President Bashar al-Assad, made clear he hoped the incursion would be limited in time and scale, the sources said.
“If he [Putin] manages to fix this it would be considered a major political victory,” commented Andrey Kortunov, head of the Russian International Affairs Council, as cited in the report. “Putin could argue that the Americans failed to sort this out but we managed it, which implies our approach to the conflict is more efficient than our geopolitical opponents,” he added.
And one senior former Russian diplomat confirmed to Reuters further that, “If Turkey limits its operation to a 30-mile security zone inside Syria and conducts a quick operation, Russia is likely to tolerate it.”
And even CNN now reluctantly admits that:
Russia is already by far the strongest foreign power operating in Syria, and President Vladimir Putin has allied himself with Syrian President Bashar al-Assad, throwing the full weight of the Russian military behind the Syrian Army.
Now, a planned Turkish operation to “clear” Kurdish forces from the Northeastern Syrian border zone could give Putin a chance to expand Russian influence — to the alarm of US hawks.
Likely, the outcome to the current escalation unfolding in northeast Syria will also determine the outcome to final and still festering Idlib problem — an issue which presents further opportunity for Putin and Erdogan to find common ground.
Meanwhile, the Quincy Institute’s Trita Parsi perhaps put it best in saying, “Assad appears to be coming in to fight on the side of the Kurds against Erdogan. The heads of Washington pundits, who love to reduce geopolitical fights into battles between good and evil, will explode…”
Tyler Durden
Sun, 10/13/2019 – 22:15 - Galloway: "What Quakes Are To California, Softbank Is To Real Estate Unicorns"
Galloway: “What Quakes Are To California, Softbank Is To Real Estate Unicorns”
Authored by Scott Galloway via No Mercy/No Malice blog,
Unicorn Feces
Season 1, Episode 1: SoftBank and Real Estate
Last night I met up with friends at Soho House, a members-only club. I’ve always wanted to be a member, and have several friends who’ve offered to sponsor me. But the thought of being rejected for membership by a club where all my friends are members is damage my ego couldn’t endure. So, no membership for the dawg. As a guest, I’ll have a nice meal and a couple Maker’s and Gingers (i.e., 5). I’ll then go home and decide the smart thing to do would be a preemptive strike against my member-like hangover, so I’ll ingest 32 ounces of water, 3 Advil, and a hit of my dosist sleep vape. I’ll then watch the last 2 episodes of Succession and get 4-5 hours of sleep.
Thursday. Night. In. NYC.
I’m going on Barron’s TV (yep, that’s a thing) Friday morning to discuss Tesla (which I believe is overvalued), Amazon, and Apple. As I don’t rave about the stock, on the subway back I’ll learn via Twitter (where technology meets hate) that I’m an idiot, not a real professor, and hard to look at, from handles that are some version of @Teslalong. I’m fairly certain there are more fake Twitter handles managed by Tesla longs than the GRU.
Note: If it sounds strange that I’ll be going on TV possibly still drunk, keep in mind the show is broadcast on Fox. Most of their anchors seem high when they broadcast.
I’ll also avoid making any important decisions Friday. When I have a member/guest hangover, my judgment is impaired. This poor judgment is predictable and can be reverse-engineered to a pattern: alcohol, marijuana, lack of sleep. So, where else could we apply pattern recognition to predict what might happen in the markets?
I know, let’s talk about WeWork.
The pattern of tectonic plates grinding: SoftBank, real estate, red flags. Where else can we discern the kind of plate collision that leads to an earthquake? (Note: especially proud of the seismology metaphor in the previous sentence.) Btw, best movie involving a guy who could predict earthquakes? Phenomenon.
What earthquakes are to California, SoftBank is to real estate unicorns:
Compass
Business model
- Use technology to pair top brokers with home buyers
Yogababble
- “To help everyone find their place in the world.”
Funding
- SoftBank investment: $600 million
- Total funding: $1.6 billion
- Valuation: $6.4 billion
Differentiation
- Proprietary technology and 19% of non-broker employees work in “technology”
- Highest Glassdoor rating (4.3) for real estate companies
- Has acquired 14 other brokerages
Feces (red flags)
- Yogababble
- C-Suite turnover is a sh*tshow: includes the CFO, COO, CMO, CTO, CPO, General Counsel, Head of Product, VP of Product, and VP of Communications
- Capital masking as growth (some brokers receive entire commission, with nothing going to Compass, for their first 8 deals)
Summary/prediction: Strategy makes sense, and they are buying real assets. The SoftBank effect (drunk capital) likely means they have overpaid. Value will decline, but not implode, making it one of SoftBank’s better real estate investments.
OYO
Business model
- Buy or franchise run-down hotels, fix up, train staff, and take a commission (25-30%)
Yogababble
- “To offer tasteful spaces, whenever you need them, at unbeatable prices.”
Funding
- SoftBank investment: ~$1 billion
- Total funding: $1.6 billion
- Valuation: $10 billion on $200 million in revenues (50x revs)
Differentiation
- Improving fallow assets (old/out of date hotels)
- No global player for budget hotels
- Uses a tech platform to help hotel partners with distribution
Feces (red flags)
- Bought Hooters Casino in Las Vegas for $135 million (sold for $54 million 4 years ago, signal of overpaying)
- Leadership: Ritesh Agarwal — 25, first venture
- Lightspeed Ventures and Sequoia Capital getting out of dodge: selling 50% of their stake for $1.5 billion
- SoftBank (and founder) putting money in: Ritesh Agarwal invests $700 million in latest $1.5 billion fundraising round with Softbank helping to fund the remainder
- SoftBank has been a lead investor in every round since 2015 (smoking own supply)
- Reviews = sh*t
Summary/prediction: OYO feels like the WeWork of budget hotels with red flags the size of Days Inns. A 25-year-old founder and SoftBank is a toxic mix. Yes, the Zuck and Bill Gates founded their firms at the same age, but it’s a bad strategy to assume your CEO is the next Zuck/Gates. Founders buying additional shares is a good sign, unless you are 25 and borrowing against your existing shares to buy more. That means he’s hugely committed and immature.
Lightspeed and Sequoia also have too much capital and are under pressure to deploy additional money in portfolio firms where they’ve negotiated pro-rata investment rights for subsequent rounds. With OYO, they not only passed, but having the full inside information and observing the CEO, they’ve decided to sell shares. Customer feedback is awful, and customer acquisition does not appear to be scaling. Here. We. Go.
Opendoor
Business model
- iBuying: sell your house to Opendoor in less than 24 hours in all-cash deal; firm collects service charge, resells house, and offers financing to a captive market
Yogababble
- “To empower everyone with the freedom to move.”
Funding
- SoftBank investment: $400 million
- Total funding: $1.3 billion in equity and $3 billion in debt
- Valuation: $3.8 billion
Differentiation
- Provide immediate cash to homeowners
- Hugely inefficient market ripe for disruption
- Compelling value proposition (liquidity in traditionally illiquid asset class)
Feces (red flags)
- Management and board have little real estate experience
- The risks of iBuying are substantial in a downturn
- Can algorithms replace nuance of valuation in real estate?
Summary/prediction: A compelling value proposition in a market that’s hugely dislocated/inefficient. Without knowing average hold/margin on properties, difficult to assess. In absence of this data, feels like a levered bet on US real estate market.
* * *
The Bigger Story
The business story of the month is WeWork’s meltdown. The bigger story will be SoftBank’s Vision Funds impairment. Earlier this year, we predicted the 2019 IPO unicorn class would lose money — YTD it’s up 5%, vs. 13% in 2018 and 94% in 2017. The 2020 story will be a 50%+ decline in the value of privately traded unicorns. The world is not as impressed with Silicon Valley as Silicon Valley is with itself.
An 11-year expansion, cheap capital, and investors chasing a Facebook/Google high have resulted in an environment that is not “different this time.” People love WeWork and Uber as I loved Pets.com and Urban Fetch. A 60-pound bag of dog food and a pint of Ben & Jerry’s delivered next day/hour for less than cost was awesome, except for shareholders. Value is a function of growth and margins. Many/most of today’s unicorns have deployed massive capital to achieve the former while not demonstrating the patience or skill to achieve the latter. Record deficits during full employment are irresponsible, as is capital-driven growth meant to create the illusion of innovation.
There is also a bigger fault line. In 1999 I was 34 and running an e-commerce incubator (Brand Farm) backed by GS, JPM, and Maveron. I mistook my good fortune — being born a white male in sixties California — for talent. My money/success was a virtue that gave me license to demonstrate poor character and a lack of empathy. The market had a swift and effective immune response to my ailment.
There is, again, an epidemic of hubris that has rendered the Unicorn Industrial Complex a hot zone.
The good news? The antidote is imminent.
Tyler Durden
Sun, 10/13/2019 – 21:50 - "It's Not A Game When It's Real-Life" – China's Social Credit System
“It’s Not A Game When It’s Real-Life” – China’s Social Credit System
In an attempt to imbue trust, China has announced a plan to implement a national ranking system for its citizens and companies. Currently in pilot mode, the new system will be rolled out in 2020, and go through numerous iterations before becoming official.
While the system may be a useful tool for China to manage its growing 1.4 billion population, Visual Capitalist’s Katie Jones notes that it has triggered global concerns around the ethics of big data, and whether the system is a breach of fundamental human rights.
Today’s infographic looks at how China’s proposed social credit system could work, and what the implications might be.
The Government is Always Watching
Currently, the pilot system varies from place to place, whereas the new system is envisioned as a unified system. Although the pilot program may be more of an experiment than a precursor, it gives a good indication of what to expect.
In the pilot system, each citizen is assigned 1,000 points and is consistently monitored and rated on how they behave. Points are earned through good deeds, and lost for bad behavior. Users increase points by donating blood or money, praising the government on social media, and helping the poor. Rewards for such behavior can range from getting a promotion at work fast-tracked, to receiving priority status for children’s school admissions.
In contrast, not visiting one’s aging parents regularly, spreading rumors on the internet, and cheating in online games are considered antisocial behaviors. Punishments include public shaming, exclusion from booking flights or train tickets, and restricted access to public services.
Big Data Goes Right to the Source
The perpetual surveillance that comes with the new system is expected to draw on huge amounts of data from a variety of traditional and digital sources.
Police officers have used AI-powered smart glasses and drones to effectively monitor citizens. Footage from these devices showing antisocial behavior can be broadcast to the public to shame the offenders, and deter others from behaving similarly.
For more serious offenders, some cities in China force people to repay debts by switching the person’s ringtone without their permission. The ringtone begins with the sound of a police siren, followed by a message such as:
“The person you are calling has been listed as a discredited person by the local court. Please urge this person to fulfill his or her legal obligations.”
Two of the largest companies in China, Tencent and Alibaba, were enlisted by the People’s Bank of China to play an important role in the credit system, raising the issue of third-party data security. WeChat—China’s largest social media platform, owned by Tencent—tracked behavior and ranked users accordingly, while displaying their location in real-time.
Following data concerns, these tech companies—and six others—were not awarded any licenses by the government. However, social media giants are still involved in orchestrating the public shaming of citizens who misbehave.
The Digital Dang’an
The social credit system may not be an entirely new initiative in China. The dang’an (English: record) is a paper file containing an individual’s school reports, information on physical characteristics, employment records, and photographs.
These dossiers, which were first used in the Maoist years, helped the government in maintaining control of its citizens. This gathering of citizen’s data for China’s social credit system may in fact be seen as a revival of the principle of dang’an in the digital era, with the system providing a powerful tool to monitor citizens whose data is more difficult to capture.
Is the System Working?
In 2018, people with a low score were prohibited from buying plane tickets almost 18 million times, while high-speed train ticket transactions were blocked 5.5 million times. A further 128 people were prohibited from leaving China, due to unpaid taxes.
The system could have major implications for foreign business practices—as preference could be given to companies already ranked in the system. Companies with higher scores will be rewarded with incentives which include lower tax rates and better credit conditions, with their behavior being judged in areas such as:
-
Paid taxes
-
Customs regulation
-
Environmental protection
Despite the complexities of gathering vast amounts of data, the system is certainly making an impact. While there are benefits to having a standardized scoring system, and encouraging positive behavior—will it be worth the social cost of gamifying human life?
Tyler Durden
Sun, 10/13/2019 – 21:25 -
- Hedge Fund CIO: There’s So Much Going Wrong, So Many Manipulations, That I Don’t Trust Anything Right Now
Hedge Fund CIO: There’s So Much Going Wrong, So Many Manipulations, That I Don’t Trust Anything Right Now
Submitted by Eric Peters, CIO of One River Asset Management
Here We Go Again
“Here we go again, right near the highs, people bearish,” said the CIO. “It’s not that they’re explicitly short, I don’t know anyone who is, it’s more that they’re hedged, underweight,” he continued. “The economy is slowing, geopolitical risks keep rising, but there are so many things to worry about that the Fed remains in play – now they’re restarting QE while assuring us it’s anything but QE – and no one can afford to miss another leg higher,” he said. “The irony is that the worst possible thing for this market would be a pause in the bad news.”
Told You So
“If I wound the clock back and told you this is where we’d be,” said the CIO, “Impeachment inquiry, trade war, slowing economies, renewed easing, rising wages, shrinking margins – you’d have said the S&P 500 would be trading at 2000.” The S&P closed at 2970. “And if I told you the Iranians and Saudis would be in a hot war, you’d have said oil would be $100.” WTI crude oil is $55. “Typically, this would mean stocks will break higher, but there’s so much going wrong, and so many policy manipulations, that I don’t trust anything right now.”
Last TradedA few weeks back, when the whistleblower blew, betting website odds of Trump completing his 1st term plunged from 84% to 71% (last traded at 69%). Biden’s odds of being the Dem nominee fell from 26% to 22% (last traded 23%). Odds of Warren being the Dem nominee jumped from 41% to 51% (last traded 47%). Odds of a Dem presidency win in 2020 remained broadly unchanged at 58% (last traded 55%). Dem retention of the House was steady at 75% (last traded 75%). Republican hold of the Senate was unchanged at 68% (last traded 65%).
PollsAccording to Nate Silver’s FiveThirtyEight, public support for impeachment/removal rose 2 points this week to 48.8% (with 43.6% not in support). 58% support an impeachment inquiry while 38% don’t support an inquiry. 53.7% disapprove of Trump and 42.1% approve. Fox News reported 51% of voters want Trump impeached and removed from office (+9% jump from July). 40% do not want him impeached/removed (All these polls were taken before Giuliani’s Ukrainian business associates were arrested, and before Giuliani came under investigation.)
Pop Culture“Like the NBA, we welcome Chinese censors into our homes and hearts,” read the faux apology from South Park (the only TV I watch). Its creators mocked Chinese censorship, human rights abuses, hypocrisy. A backlash against China’s communist party dictatorship is going mainstream in US pop culture, supercharging our conflict. Beijing erased South Park from its internet. “We too love money more than freedom and democracy. Xi doesn’t look like Winnie the Pooh at all. Long live the great Communist Party of China. May the autumn’s sorghum harvest be bountiful. We good now China?”
Tyler Durden
Sun, 10/13/2019 – 21:00
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