Today’s News 15th October 2018

• F-16 Jets Explode After Mechanic Fires Cannon From Another Parked Jet In Bizarre Accident

  An almost unbelievable accident occurred at a Belgian military air base days ago which involved one F-16 jet destroying two others — all while stationary on the ground. 

  Stunning photos of the aftermath show a completely destroyed Belgian Air Force F-16 fighter and another severely damaged one after a third fired its M61A1 Vulcan 20mm cannon across the flight line while parked. “You can’t help thinking of what a disaster this could have been,” base commander Col. Didier Polome told a Belgian television news station in the aftermath.

  The incident happened last Friday at Florennes Air Base in Southern Belgium during routine maintenance of the jet that fired, and reportedly involved the crew servicing an F-16 accidentally triggering the heavy aircraft cannon.

  

  The Aviationist reports the following of what is being described as a “bizarre accident“: 

  Multiple reports indicate that a mechanic servicing the parked aircraft accidentally fired the six-barreled 20mm Vulcan cannon at close range to two other parked F-16s. Photos show one F-16AM completely destroyed on the ground at Florennes. Two maintenance personnel were reported injured and treated at the scene in the bizarre accident.

  The aircraft being serviced had just been refuelled and had its six barrel cannon loaded as it was being prepped for an afternoon training mission. 

  The impact of the 20mm bullets on the other aircraft, which the crew said was just out of eyesight, caused the jet that was struck to explode instantly, according to reports. 

  

  A report on the monitoring website F-16.net described that, “An F-16 (tail number FA-128) was completely destroyed while a second F-16 received collateral damage from the explosions. Two personnel were wounded and treated at the scene. Injuries sustained were mainly hearing related from the explosion.”

  Thick black smoke could be seen for miles around the area, to which scores of emergency personnel were immediately dispatched. 

  

  According to a defense analysis source, Belgium currently has 60 active F-16 aircraft, including 48 on duty for NATO.

  The Aviationist describes the exceedingly bizarre nature of the incident, which sounds like something one would see in an over the top Hollywood movie scene:

  The accident is quite weird: it’s not clear why the technician was working on an armed aircraft that close to the flight line. Not even the type of inspection or work has been unveiled. For sure it must have been a check that activated the gun even though the aircraft was on the ground: the use of the onboard weapons (including the gun) is usually blocked by a fail-safe switch when the aircraft has the gear down with the purpose of preventing similar accidents.

  But clearly there were no fail-safes that prevented this strange incident involving a hail of ground fire across a runway. 

  

  Scramble Magazine published the following photo showing how the aircraft are usually aligned, and delineated the angle of the cannon fire.

  

  Belgium’s Ministry of Defense announced it has launched a formal investigation into the incident. The F-16 fighters cost around $20 million a piece — so the price tag for Friday’s accident is going to be quite steep. 

  To our knowledge the incident was not caught on film, or at least it hasn’t been released to the public. 

  However, to visualize how devastating the 20mm Vulcan cannon is, especially at close range, here’s some test footage of the ultra-rapid aircraft mounted machine gun at work:

  

• NATO Coordinates Information War On Russia

  Via The Strategic Culture Foundation,

  The US, Britain and other NATO allies upped the ante this week with a coordinated campaign of information war to criminalize Russia. Moscow dismissed the wide-ranging claims as “spy mania”. But the implications amount to a grave assault recklessly escalating international tensions with Russia.

  

  The accusations that the Kremlin is running a global cyberattack operation are tantamount to accusing Russia of “acts of war”. That, in turn, is creating a pretext for NATO powers to carry out “defensive” actions on Moscow, including increased economic and diplomatic sanctions against Russia, as well as “counter” cyberattacks on Russian territory.

  This is a highly dangerous dynamic that could ultimately lead to military confrontation between nuclear-armed states.

  There are notably suspicious signs that the latest accusations against Russia are a coordinated effort to contrive false charges.

  First, there is the concerted nature of the claims. British state intelligence initiated the latest phase of information war by claiming that Russian military intelligence, GRU, was conducting cyberattacks on infrastructure and industries in various countries, costing national economies “millions of pounds” in damages.

  Then, within hours of the British claims, the United States and Canada, as well as NATO partners Australia and New Zealand followed up with similar highly publicized accusations against Russia. It is significant that those Anglophone countries, known as the “Five Eyes”, have a long history of intelligence collaboration going back to the Cold War years against the Soviet Union.

  The Netherlands, another NATO member, added to the “spy mania” by claiming it had expelled four members of Russian state intelligence earlier this year for allegedly trying to hack into the headquarters of the Organization for the Prohibition of Chemical Weapons (OPCW), based in The Hague.

  There then followed predictable condemnations of Russia from the NATO leadership and the European Union. NATO was holding a summit in Brussels this week. It is therefore plausible that the timing of the latest claims of Russian “malign activity” was meant to coordinate with the NATO summit.

  More sanctions against Moscow are expected – further intensifying tensions from already existing sanctions. More sinister were NATO warnings that the military alliance would take collective action over what it asserts are Russian cyberattacks.

  This is creating a “casus belli” situation whereby the 29 NATO members can invoke a common defense clause for punitive actions against Russia. Given the rampant nature of the claims of “Russian interference” and that certain NATO members are rabidly Russophobic, it is all too easily dangerous for cyber “false flags” to be mounted in order to criminalize Moscow.

  Another telltale factor is that the claims made this week by Britain and the other NATO partners are an attempt to integrate all previous claims of Russian “malign activity”.

  The alleged cyber hacking by Russia, it is claimed, was intended to disrupt OPCW investigations into the purported poison-assassination plot against Sergei Skripal, the former Russian spy living in Britain; the alleged hacking was also claimed to be aimed at disrupting investigations into alleged chemical weapons atrocities committed by the Syrian government and by extension Syria’s ally Russia; the alleged Russian hacking claims were also linked to charges of Olympic athletes doping, as well as “interference in US elections”; and even, it was asserted, Russia trying to sabotage investigations into the downing of the Malaysian civilian airliner over Ukraine in 2014.

  Up to now, it seems, all such wildly speculative anti-Russia narratives have failed to gain traction among world public opinion. Simply due to the lack of evidence to support these Western accusations. The Skripal affair has perhaps turned into the biggest farce. British government claims that the Kremlin ordered an assassination have floundered to the point of ridicule.

  It is hardly coincidence that Britain and its NATO allies are compelled to shore up the Skripal narrative and other anti-Russian narratives with the ramped up “global cyberattack” claims made this week.

  Photographs of alleged Russian intelligence operatives have been published. Potboiler indictments have been filed – again – by US law enforcement agencies. Verdicts have been cast by NATO governments and compliant news media of Russian state culpability, without Moscow being given a fair chance to respond to the “highly likely” claims. Claims and narratives are being accelerated, integrated and railroaded.

  It is well-established from the explosive disclosures by Edward Snowden, among other whistleblowers, that the American CIA and its partners have the cyber tools to create false “digital fingerprints” for the purpose of framing up enemies. Moreover, the vast cyber surveillance operations carried out by the US and its “Five Eyes” partners – much of which is illegal – is an ironic counterpoint to accusations being made against Russia.

  It is also possible in the murky world of all foreign states conducting espionage and information-gathering that attribution of wrongdoing by Russia can be easily exaggerated and made to look like a campaign of cyberattacks.

  There is a lawless climate today in the US and other Western states where mere allegations are cited as “proof”. The legal principle of being innocent until proven guilty has been jettisoned. The debacle in the US over a Supreme Court judge nominee is testament to the erosion of due process and legal standards.

  But what is all the more reprehensible and reckless is the intensification of criminalization of Russia – based on flimsy “evidence” or none at all. When such criminalization is then used to “justify” calls for a US-led naval blockade of Russian commercial oil trade the conditions are moving inevitably towards military confrontation. The blame for belligerence lies squarely with the NATO powers.

  A further irony is that the “spy mania” demonizing Russia is being made necessary because of the wholly unsubstantiated previous claims of Moscow’s malfeasance and “aggression”. Illusions and lies are being compounded with yet more bombastic, illusory claims.

  NATO’s information war against Russia is becoming a self-fulfilling “psy-op”. In the deplorable absence of normal diplomatic conduct and respect for international law, NATO’s information war is out of control. It is pushing relations with Russia to the abyss.

  

• Want To Boost Your Salary? Try Moving To Singapore

  Are you a diligent US-based worker who’s tired of watching inflation wipe out what little wage gains you’ve managed to scrape together over the past few years? Well, if you’re looking for a pay boost, but don’t want to go through all the trouble of finding another better-paying job, Bloomberg has a suggestion: Try moving to Singapore.

  

  According to HSBC’s annual Expat Explorer, 45% of expats reported earning more money working abroad than they did working in the US. For the average expat, moving abroad boosted their pay by 21%, with the highest-paying jobs found in the US, Singapore and Hong Kong.

  

  Expats living in Switzerland, notorious for its high cost of living, reported an annual income boost totaling $61,000. Salaries averaged $203,000 per year, twice the global level. 

  

  Meanwhile, Singapore was ranked best place to live and work for a fourth straight year, ahead of New Zealand, Germany and Canada, while Switzerland (probably because of the high cost of living mentioned above) ranked eighth.

  “Singapore packs everything a budding expat could want into one of the world’s smallest territories,” said John Goddard, head of HSBC Expat.

  Sweden won first place in the ‘family’ category, while New Zealand, Spain and Taiwan led the ‘experience’ category.

  If moving abroad has always been a personal dream, then HSBC can name myriad benefits – both financial and familial – that often accompany expat status. However, the report had its blemishes. For example, the survey of 22,318 people showed that women often trailed behind men in terms of the level of benefit they experienced. For example, relocating only boosted a woman’s income by 27%, compared with 47% for men (apparently, HSBC found, the fabled wealth gap exists outside the confines of the US).

  But the bank also found several justifications for this that had nothing to do with women being paid less for doing the same exact job. Just half the women surveyed worked full time, and the average level of education was lower for women than for men.

  

• Did Saudis, CIA Fear Khashoggi 9/11 Bombshell?

  Authored by Finian Cunningham via The Strategic Culture Foundation,

  The macabre case of missing journalist Jamal Khashoggi raises the question: did Saudi rulers fear him revealing highly damaging information on their secret dealings? In particular, possible involvement in the 9/11 terror attacks on New York in 2001.

  

  Even more intriguing are US media reports now emerging that American intelligence had snooped on and were aware of Saudi officials making plans to capture Khashoggi prior to his apparent disappearance at the Saudi consulate in Istanbul last week. If the Americans knew the journalist’s life was in danger, why didn’t they tip him off to avoid his doom?

  Jamal Khashoggi (59) had gone rogue, from the Saudi elite’s point of view. Formerly a senior editor in Saudi state media and an advisor to the royal court, he was imminently connected and versed in House of Saud affairs. As one commentator cryptically put it: “He knew where all the bodies were buried.”

  For the past year, Khashoggi went into self-imposed exile, taking up residence in the US, where he began writing opinion columns for the Washington Post.

  Khashoggi’s articles appeared to be taking on increasingly critical tone against the heir to the Saudi throne, Crown Prince Mohammed bin Salman. The 33-year-old Crown Prince, or MbS as he’s known, is de facto ruler of the oil-rich kingdom, in place of his aging father, King Salman.

  While Western media and several leaders, such as Presidents Trump and Macron, have been indulging MbS as “a reformer”, Khashoggi was spoiling this Saudi public relations effort by criticizing the war in Yemen, the blockade on Qatar and the crackdown on Saudi critics back home.

  However, what may have caused the Saudi royals more concern was what Khashoggi knew about darker, dirtier matters. And not just the Saudis, but American deep state actors as as well.

  He was formerly a media aide to Prince Turki al Faisal, who is an eminence gris figure in Saudi intelligence, with its systematic relations to American and British counterparts. Prince Turki’s father, Faisal, was formerly the king of Saudi Arabia until his assassination in 1975 by a family rival. Faisal was a half-brother of the present king, Salman, and therefore Prince Turki is a cousin of the Crown Prince – albeit at 73 more than twice his age.

  For nearly 23 years, from 1977 to 2001, Prince Turki was the director of the Mukhabarat, the Saudi state intelligence apparatus. He was instrumental in Saudi, American and British organization of the mujahideen fighters in Afghanistan to combat Soviet forces. Those militants in Afghanistan later evolved into the al Qaeda terror network, which has served as a cat’s paw in various US proxy wars across the Middle East, North Africa and Central Asia, including Russia’s backyard in the Caucasus.

  Ten days before the 9/11 terror attacks on New York City, in which some 3,000 Americans died, Prince Turki retired from his post as head of Saudi intelligence. It was an abrupt departure, well before his tenure was due to expire.

  There has previously been speculation in US media that this senior Saudi figure knew in advance that something major was going down on 9/11. At least 15 of the 19 Arabs who allegedly hijacked three commercial airplanes that day were Saudi nationals.

  Prince Turki has subsequently been named in a 2002 lawsuit mounted by families of 9/11 victims. There is little suggestion he was wittingly involved in organizing the terror plot. Later public comments indicated that Prince Turki was horrified by the atrocity. But the question is: did he know of the impending incident, and did he alert US intelligence, which then did not take appropriate action to prevent it?

  Jamal Khashoggi had long served as a trusted media advisor to Prince Turki, before the latter resigned from public office in 2007. Following 9/11, Turki was the Saudi ambassador to both the US and Britain.

  A tentative idea here is that Khashoggi, in his close dealings with Prince Turki over the years, may have gleaned highly sensitive inside information on what actually happened on 9/11. Were the Arab hijackers mere patsies used by the American CIA to facilitate an event which has since been used by American military planners to launch a global “war on terror” as a cover for illegal wars overseas? There is a huge body of evidence that the 9/11 attacks were indeed a “false flag” event orchestrated by the US deep state as a pretext for its imperialist rampages.

  The apparent abduction and murder last week of Jamal Khashoggi seems such an astoundingly desperate move by the Saudi rulers. More evidence is emerging from Turkish sources that the journalist was indeed lured to the consulate in Istanbul where he was killed by a 15-member hit squad. Reports are saying that the alleged assassination was ordered at the highest level of the Saudi royal court, which implicates Crown Prince MbS.

  Why would the Saudi rulers order such a heinous act, which would inevitably lead to acute political problems, as we are seeing in the fallout from governments and media coverage around the world?

  Over the past year, the House of Saud had been appealing to Khashoggi to return to Riyadh and resume his services as a media advisor to the royal court. He declined, fearing that something more sinister was afoot. When Khashoggi turned up in Istanbul to collect a divorce document from the Saudi consulate on September 28, it appears that the House of Saud decided to nab him. He was told to return to the consulate on October 2. On that same day, the 15-member group arrived from Riyadh on two private Gulfstream jets for the mission to kill him.

  Official Saudi claims stretch credulity. They say Khashoggi left the consulate building unharmed by a backdoor, although they won’t provide CCTV images to prove that. The Turks say their own CCTV facilities monitoring the front and back of the Saudi consulate show that Khashoggi did not leave the premises. The Turks seem confident of their claim he was murdered inside the building, his remains dismembered and removed in diplomatic vehicles. The two private jets left the same day from Istanbul with the 15 Saudis onboard to return to Riyadh, via Cairo and Dubai.

  To carry out such a reckless act, the Saudis must have been alarmed by Khashoggi’s critical commentaries appearing in the Washington Post. The columns appeared to be delivering more and more damaging insights into the regime under Crown Prince MbS.

  The Washington Post this week is reporting that US intelligence sources knew from telecom intercepts that the Saudis were planning to abduct Khashoggi. That implicates the House of Saud in a dastardly premeditated act of murder.

  But furthermore this same disclosure could also, unwittingly, implicate US intelligence. If the latter knew of a malicious intent towards Khashoggi, why didn’t US agents warn him about going to the Saudi consulate in Istanbul? Surely, he could have obtained the same personal documents from the Saudi embassy in Washington DC, a country where he was residing and would have been safer.

  Jamal Khashoggi may have known too many dark secrets about US and Saudi intel collusion, primarily related to the 9/11 terror incidents. And with his increasing volubility as a critical journalist in a prominent American news outlet, it may have been time to silence him. The Saudis as hitmen, the American CIA as facilitators.

  

• Scientists Freak Out Over Pandemic Potential Of Genetically Engineered Smallpox

  Following the release of a paper earlier this year which describes how researchers stitched together segments of DNA in order to revive horsepox – a previously eradicated virus, scientists have been flipping out over the possibility that bad actors may use the study as a blueprint to revive smallpox. 

  The disease killed an estimated 300 million people before the World Health Organization deemed it eradicated following a long vaccination campaign. Thus, the publication of a method for reviving a closely related disease has understandably raised some red flags within the scientific community, reports futurism.com. 

  

  Critics argue that the paper not only demonstrates that you can synthesize a deadly pathogen for what Science reported was about US$100,000 in lab expenses, but even provides a slightly-too-detailed-for-comfort overview of how to do it.

  Some of the horsepox scientists’ coworkers are still pretty upset about this. PLOS One’s sister Journal, PLOS Pathogens, just published three opinion pieces about the whole flap, as well as a rebuttal by the Canadian professors.

  Overall, everyone’s pretty polite. But you get the sense that microbiologists are really, really worried about someone reviving smallpox. –futurism.com

  Prior to its eradication, smallpox was primarily spread by direct and fairly prolonged face-to-face contact between people. Once the first sores appeared in the mouth and throat (the early rash stage), they were contagious until the last smallpox scab fell off. According to the CDC, “these scabs and the fluid found in the patient’s sores also contained the variola virus. The virus can spread through these materials or through the objects contaminated by them, such as bedding or clothing. People who cared for smallpox patients and washed their bedding or clothing had to wear gloves and take care to not get infected.”

  

  What would a smallpox bioterror attack look like? Via the CDC:

  Most likely, if smallpox is released into the United States as a bioterrorist attack, public health authorities will find out once the first person sick with the disease goes to a hospital for treatment of an unknown illness. Doctors will examine the person and use tools developed by CDC to figure out if the person’s signs and symptoms are similar to those of smallpox. If doctors suspect the person has smallpox, they will care for the person and isolate them in the hospital so that others do not come in contact with the smallpox virus. The medical staff at the hospital will contact local public health authorities to let them know they have a patient who might have smallpox.

  Local public health authorities would then alert public health officials at the state and federal level, such as CDC, to help diagnose the disease. If experts confirm the illness is smallpox, then CDC, along with state and local public health authorities, will put into place their plans to respond to a bioterrorist attack with smallpox.

  Kevin Esvelt, a biochemist at MIT, wrote on Thursday that the threat is so significant that “it may be wise to begin encouraging norms of caution among authors, peer reviewers, editors, and journalists.” 

  At present, we decidedly err on the side of spreading all information.

  Despite entirely predictable advances in DNA assembly, every human with an internet connection can access the genetic blueprints of viruses that might kill millions.

  These and worse hazards are conveniently summarized by certain Wikipedia articles, which helpfully cite technical literature relevant to misuse.

  Note the deliberate absence of citations in the above paragraph. Citing or linking to already public information hazards may seem nearly harmless, but each instance contributes to a tragedy of the commons in which truly dangerous technical details become readily accessible to everyone.

  Given that it takes just one well-meaning scientist to irretrievably release a technological information hazard from the metaphorical bottle, it may be wise to begin encouraging norms of caution among authors, peer reviewers, editors, and journalists. –PLOS

  Esvelt blamed the media for amplifying the negative potential of smallpox synthesis as well: 

  DNA synthesis is becoming accessible to a wide variety of people, and the instructions for doing nasty things are freely available online.

  In the horsepox study, for instance, the information hazard is partly in the paper and the methods they described.

  But it’s also in the media covering it and highlighting that something bad can be done. And this is worsened by the people who are alarmed, because we talk to journalists about the potential harm, and that just feeds into it. –MIT News

  The Canadian professors, meanwhile, shot back at their critics – arguing that smallpox was bound to be synthesized at some point anyway. 

  Realistically all attempts to oppose technological advances have failed over centuries.

  We suggest that one should instead focus on regulating the products of these technologies while educating people of the need to plan mitigating strategies based upon a sound understanding of the risks that such work might pose.

  In these discussions, a long-term perspective is essential. –PLOS

  In short, prepare for the Jurassic Park of deadly pathogens and their pandemic potential.  

  

• A Glimpse Beyond The Unipolar Moment

  Authored by Norman Ball via The Saker blog,

  “Potentially the most dangerous scenario would be a grand coalition of China, Russia and perhaps Iran, an ‘anti-hegemonic’ coalition, united not by ideology but by complementary grievances” —Zbigniew Brzezinski

  Are we reaching the penultimate and petulant back-end of the American Empire’s Unipolar Moment, a denouement hastened by a raft of sanctions regimes as imperiously doled out as they are laden with unconsidered paradox?

  

  Though the sun is prohibited from casting its light between them, Nation and Empire are not an organically indivisible formation. Indeed Americans, no less than others, should relish the prospect of a resumed, unalloyed nationhood after decades of Empire co-optation. Few Americans realize the skulking entity that looms in the shadows of their overrun and diminished formal institutions as being a separable imposition capable of (to use a Benjamin Netanyahu phrase) drying up and blowing away.

  Empire overlay is an uninvited and usurping agent bent on hostile, world-conquering aims to which America plays safe harbor and unwitting hostage in equal parts. Though the mode of exploitation varies, no nation on the world stage is left untouched by transnational exploitation.

  

  America, like all nations, is a boundaried fixity; whereas Empire despite travelling under the former’s name is a projective and extraterritorial expanse whose designs exceed the devise and interests of the nation-host itself. Invariably Empire doesn’t so much succumb to overreach as it overreaches the capacities of its nation-host; wrecking the balance sheet, debauching the currency, taxing the capacities of the deputized military and (most importantly as we shall see) sullying the conceptual coordinates so central to a nation’s actionable sense of self.

  Post-Empire, the nation-host suffers the aftermath of ruinous inflation or worse. Empire, a continuous organism, bides its time before alighting elsewhere. Thus unipolarity is an Empire project in the same manner a tapeworm mimics the appetites of its host, the afflicted nation being little more than a body-snatched, debt-amassing hostage-vessel.

  Daniel 2’s prophesied statue gives anthropic form (and thus systemic coherence) to Empire succession. Each empire ‘chapter’ pours into the next with corporeal fluidity, the respective statue material and animal totem befitting the situational needs of Empire in that historical moment. The anatomy suggests an eschatological continuum, hardly a severed procession of akimbo body parts. The purposeful succession of empires conducts human history to a terminus.

  Usury is the arithmetically ordained travel-partner or Empire. Indeed the latter is more Babylonian mystery than secular-geopolitical formation. Through it, all earthly power and wealth is to be gathered under one aegis until no nation can lay claim to an autonomous storehouse. The whole purpose of human history is demonic consolidation by the God of this World.

  In the same way, the events of the world prove less yielding to geopolitical analysis absent an explicit awareness of Paul’s Principalities or the slow-thighed onset of the Antichrist/Dajjal. As human history thins like gruel in the twilight, the spiritual backdrop moves inexorably to the fore.

  (Understanding the present moment demands continual oscillation between the world-beyond and the world-at-hand. So be it.)

  Sanctions negate the very notion of empiric expansion. Beneath all the bluster, continual recourse to a ‘remedy of retreat’ signals the exhaustion of Empire’s Pax Americana phase. Like medieval bleeding, the cure soon exceeds the lethality of the underlining disease.

  For the moment, America’s economic activity, 25% of the world’s GDP, is a big party to be dis-invited from. Furthermore, 70% of that GDP is buffered from international trade disruptions as it consists of internal consumption. (In China, for example, the figure is closer to 40%). When push comes to shove the US economy is sufficiently self-contained such that a protracted period of inwardness is a viable course of action.

  Joseph Micallef hardly overstate things trumpeting the arrival of American energy independence. One wonders how the Empire would coax the Nation to do its bidding absent the inducement of vulnerable overseas energy supplies. Of course this too argues for the end of the American phase of Empire:

  “U.S. energy independence is going to be a game changer in international affairs and will have far-ranging consequences. It will drive a reorientation of U.S. foreign policy as profound as that driven by American dependence on foreign oil in the second half of the 20th century.”

  While inconsistent with empiric expansion, sanctions and their threat can for a time inflict asymmetric damage on the sanctioned party –until some vague tipping point is reached.

  Midwives to a nascent neo-nationalist era, President Trump and his formidable trade team have been leveraging (some would say weaponizing) America’s economic primacy in order to redirect product origination and trade flows.

  For example the USMCA’s closing of the infamous NAFTA loophole or ‘trade toll’ will be a huge boon to US consumers and workers alike, not to mention an indirect trade assault on China which advantaged the loophole via finished goods assembly plants in Canada and Mexico. The so-called ‘regional vehicle content’ has been boosted from 62.5% to 75%.

  What are the implications of this USMCA provision alone? Lexicology explains:

  “Mexico and Canada are pushing for the smallest amount of North American parts in NAFTA automobile production. This means that Mexico and Canada can import the difference from China, Asia or Europe, finish the product with some basic assembly and then pass off the product to the American market- saving big money on tariffs for the original producing country in the process.”

  The necessity of a resurgent manufacturing base is being characterized (correctly) as a national security (if not even a national dignity) issue with implications far beyond the usual econometric equilibrations.

  What the world needs to understand is that the unacknowledged obverse of America First is Empire Never Again. America’s self-reclamation process on the trade front will be a boon for the planet. Re-nationalization is synonymous with ‘de-empirization’. As America reacquaints with nation-among-nations status, multipolar clusters will fill the void.

  America the Empire routinely pulls the wool over America the Nation’s eyes. One deft bit of corporatist misdirection (articulated through that multinational stalking horse, the US Chamber of Commerce) has been to assure Americans they could thrive as a service-sector economy.

  As nothing is gained alerting regular Americans to the divergent interests of Empire and Nation, the Empire is adept at posing as the Nation. (Besides, what people would knowingly seek empiric imprimatu anyway, a dubious appointment demanding more blood and treasure than it ever bestows?)

  Globalists would have us favorably envision a world where the US holds the edge in 2030 Powerpoint presentations while China captures the high-performance medical device and industrial robotics markets. As Yogi Berra might say, “all left-handers over here to flip charts, all right-handers over there to flip burgers.  The rest of you come with me.” Yes, but where to exactly, Yogi? The Argentine Paradox circa 1950?

  

  The same can be said for Made in China 2025, from a Chinese perspective of course. Geopolitical hegemony is the goal, economic nationalism the rallying cry for respective domestic audiences. No wonder trade wars metastasize into shooting wars. No less than everything is at stake.

  (Some expect that, with centuries of practice under its belt, the Chinese empire model, historically one of ebb-and-flow concentric flexibility, will improve upon the winner-take-all Western model. Time may tell.)

  Parsimonious when it comes to sharing the planet’s ill-gotten gains with its erstwhile nation-host (American real incomes peaked in 1973), Empire is all too willing both to off-load the debt burden and share the vainglory of its overseas military exploits.

  We seek evidence of the Heartland tiring of its conscription obligations, or that their nation’s subsidiary role has even dawned on the average American after nearly two decades of ruinously fruitless overseas campaigns. The enthusiastic reception afforded Clint Eastwood’s 2014 movie American Sniper —to belabor one cultural touchstone– is hardly a bullish indicator.

  In fact, the Nation still wraps itself in the Empire’s exploits with a patriotic vigor that obliges it to insist, against all evidence, that Iraq and Afghanistan were missions of existential import to the safeguarding of American neighborhoods. That this misprision persists is a powerful testament to the Empire’s ability to enforce and sustain a narrative steeped in false consciousness to which clarifying epiphanies must forever be kept at bay. In recent months scores of alt-media sources have been exiled from Youtube in veiled recognition of their counter-narrative incursions. The Empire cannot relinquish narrative hegemony. The most decisive conflicts are conceptual.

  Sartre famously called this insistent and externalized apparatus of persuasion America’s ‘implacable machine’. Eastwood, the Leni Riefenstahl of our time, fashions empire exploits into pastiches of Americana. This is pure propaganda. Empire is a rapaciously unnatural imposition. Rooted in no soil, it descends from above. Transnationalism sustains itself on grassroots alienation and collective misdirection.

  The Vineyard’s Saker indirectly acknowledges this differentiated two-headedness when he says, “Russia does represent an existential threat, not for the United States as a country or for its people, but for the AngloZionist Empire, just as the latter represents an existential threat to Russia.” He might just as easily have extended the empire threat to America itself. Where Saker offers daylight, Eastwood extends the darkness of a confused nation.

  It would surprise many Americans to know that their nation hosts one of the least democratically answerable national governments in the world (though far fewer would be surprised today than, say, two years ago). Trump, the exogenous usurper, is trying to reverse this expropriation of the country’s traditional Madisonian Institutions by the Security State’s Trumanite Network (what Michael Glennon calls our Double Government, the prior terminology being his).

  How did the empire accomplish this parallel sovereignty?

  The hijack occurred in two sizable chunks (the 1947 National Security Act and the USA Patriot Act of 2001). Yes, America has a divided government alright. Just not in the sense American civics classes define the concept.

  Moreover this sovereignty split occurred without benefit of referendum or Constitutional Convention. The division was assented to –and furtively institutionalized– over the ensuing post-WW2 decades by the nation’s elected leadership, the latter bartering away democratic self-determination and their own discretionary power for more attractive post-public sector career vistas.

  A further lubricant was mass fear, something the Security State excels at fanning. This is a toxic oroborus: fear rationalizes enhanced security measures, obliging it in turn to identify more threats and thus promulgate more fear.

  America’s captured political system (captured, in the main, by treasonous greed) perennially offers no material recourse away from Empire objectives. Carroll Quigley exposed the degradation of choice mounted by the two-party charade decades ago. His protestations fell on deaf ears.

  Then came Trump, arguably more detested by ‘Rino’ Republicans for helicoptering onto their half-acre of Quigleyan turf than the Democrats who openly shower their contempt upon him, aided by a not-so-secret confederation of Senior Executive Service (SES)personnel and an assorted Five Eyes gallery of International Men of Mystery.

  That new attention is being drawn to this fissure is a function of the Trumanites’ open rebellion against Trump’s subversive (Madisonian revivalist) presidency. Trump has forced the Deep State to the surface, a process that compels an explicit –and never before attempted– referendum on globalism, something the movement cannot possibly prevail on as the closest thing it possesses to a natural constituency is a beholden media, George Soros’ checkbook and a traitorous ruling class.

  These transnational Trumanites, the true empire-builders, seek geopolitical hegemony, (over)-employing trade sanctions as a tool towards that end. Whereas Trump, a businessman to his core, seeks only comparative advantage and level playing fields i.e. trade for its own sake. Trump has the inclinations of a competitor and possesses an abiding faith in the productive capacities of his fellow Americans. His America-first exertions are sincere.

  Despite a near-daily (and 92% negative) onslaught of CIA-Mockingbird anti-Trump vitriol, there is a dawning realization that the current President is as close to an anti-Empire crusader as any POTUS can possibly be, given the powerful institutional constraints (and Trumanite presence) he must work within. (The latter qualification cannot be emphasized enough.)

  Just this week in his essay ‘Trump Has Done More to Take On and Take Down the American Empire Than Any Other President’, Gareth Porter concedes, with the obligatory reluctance attending any favorable Trump assessment that, “…[despite] Trump’s multiple serious personal and political failings…[his] unorthodox approach has already emboldened him to challenge the essential logic of the US military empire more than any previous president.”

  Creditably, Porter manages to overcome his early subjectively-derived aversions with dispassionate analysis. More thinkers will follow. Trump will never inspire great wellsprings of affection. Yet shouldn’t likability deficits fall within the rehabilitative purview of Oprah Winfrey and her top shelf of gauzy sofa lens? History books are replete with highly eccentric, yet transformative, leaders. Who but the most media-besotted automatons really care?

  As for our beleaguered trading partners, the list of American pariahs (sanctioned and tariffed) grows by the month: China, Russia, Iran, Turkey come immediately to mind, obviously in varying modes and degrees. What happens should the EU (the world’s 2nd largest ‘economy’) continue to trade with Iran under a “special payments entity” arrangement despite US warnings? For the record, India has no plans to cease its Iranian oil purchases. This comes at the cost of American producers as will European demand absorbed by the onset of Nordstream 2.

  The US Department of Treasury’s Office of Foreign Assets Control (OFAC) maintains a list of sanctioned nations and programs.  It’s well worth a look.

  Weapon system defections present a knottier dilemma as military and trade considerations commingle. The Countering America’s Adversaries Through Sanctions Act (CAATSA) of 2017 addresses punitive measures and waiver procedures; a bill opposed, it must be said, by President Trump. Turkey, a NATO member, is taking delivery of the Russian S400 missile defense system, playing havoc with weapons (F35) inter-operability, among other things.

  Commenting on the likelihood that India will extract a waiver from the US for the purchase of a S400 system, Fort Russ’ Joaquin Flores suggests America’s quiet acquiescence may be the biggest news of all, indicative perhaps of a dawning realization in Washington that the sanction whip is losing its lash:

  “But the real signal here is that the US is willing to publicly also disclose that a waiver is possible…that in its gambit to shore up the empire and force countries to choose Atlanticism over Multipolarity, it will not by way of hubris or over-playing, engender the very multipolarity [it] presently work[s] against.”

  Flores surfaces the nub of the paradox: By waiving sanctions and allowing breakaways on a case-by-case basis, does unipolarity preserve itself by exception or compromise itself by non-inclusion? A contrary beast, this unipolarity.

  First of all, absolute power is an unnatural configuration if it isn’t a fairy tale altogether. Kenneth Waltz, one of the 20th century’s leading scholars on International Relations, recognized unipolarity as being among the most tenuous of international power arrangements.

  Fully consummated unipolarity contends with no nemesis at the gate, no rudely apparent countervailing force with which to remind itself that power consolidation is always an asymptotic function forever falling short of omnipotence. Whereas bipolarity increases overall system stability as each power has only the other to regard warily. A vigorous checkmate ensues. Like a two-headed Cerberus, power is affixed to one mode of action.

  In short, power is a distributed resource requiring a corner of contested ground upon which to construct an antithetical lever. One can calibrate power only in the context of someone else existing beyond one’s own locus of control.

  Until history fully resolves itself, the ascendant antithesis must germinate in a strange province that forever looms on the frontier of the prevailing thesis. In this way, ideas inhabit their own conceptually balkanized geographies.

  Is internal contradiction the ultimate empire-killer? In his 2013 essay, ‘The Inevitable Has Happened in Egypt’, Alastair Crooke surfaces a dialectical reality, in the context of that particular moment’s crisis, the Muslim Brotherhood’s massacre at the hands of Egyptian President al-Sisi. Speaking to the larger demise of the USSR and the lessons drawn, in Sunni circles, from its collapse, he observed:

  

  One has to think Crooke intended ‘omnipotence’ instead of ‘omniscience’. Beyond that, he captures the Hegelian primacy of ideas (as opposed to the brute accouterments of tanks, planes and automobiles) as being the first-order Empire battleground.

  As Flores suggests, the unipolar moment does have an antithetical nemesis. It exists, not for the moment at least, in the guise of a discrete nation-contender, but rather from amidst the inchoate forces of over-extension, hubris and internal contradiction.

  One way for unipolarity to hasten its own demise is to persist in the practice of briskly escorting bad actors out of the Big Tent. At some point a critical mass of delinquent nations finds itself on the outside-looking-in; to which a new inside and fresh synthesis are baptized. The formative institutions, structures and initiatives already exist: OBOR, BRI, BRICS, AIIB, SCO.

  The evolving role of the Shanghai Cooperative Organization (SCO) for example is on vivid exhibit his week with rather self-conscious pronouncements of multilateral cooperation, due no doubt to American trade frictions with key members Russia,  China and India. These are the formative orbits that can exert and accelerate gravitational tugs away from prevailing global governance models and power centers.

  Left untended, yawning internal contradictions lead to a strange and strident logic rooted in self-injury and geopolitical masochism: By shooting myself in the foot, I promise you will bleed to death. A spiritual forebear? Bob Dylan with ‘it’s alright Ma, I’m only bleeding.’

  Analyzed in myopic isolation, each sanction regime may indeed conform to a calculus of advantageously asymmetric bleeding. That is, Empire appears to crush each recalcitrant outlaw in serial procession.

  Yet how fully considered is the cumulative effect of a dozen rocks being hurled simultaneously at a Goliath convinced of his insuperable size? Death ensues at the instigation of a thousand Davids. Perhaps the Empire’s quant-model betrays a methodological flaw in its singular regard for each battle to the exclusion of the cumulative toll of mounting departures.

  Trumpism, the exuberant renewal of national self-confidence by a man who exudes it to the near-level of parody, obliquely acquiesces to the death of empire (without formally announcing it). Out of America’s re-acquaintance with itself springs a psychic reinvestment in the traditional facets of the American character, sublimated arguably since the Nixon Shock of 1970: enterprise, self-reliance, innovation and a can-do work ethic.

  For those who doubt the powerful emotional and psychic ramifications of the Trump renationalization, watch this steel worker tear-up at the realization he’s been rescued from oblivion. Work is a moral calling that instills purposeful existence. Trade merely extends that calling beyond a nation’s borders. Fellow Glaswegian Adam Smith was not a Wall Street economist running balance-of-payment Excel spreadsheets for the ‘grand’ purpose of sector fund allocations. He was a moral philosopher.

  The American people, most of them anyway, could have frankly gone to hell as far as the bankers were concerned. The enterprise costs (a productively idled and hollowed-out nation) proved fantastically exorbitant. No privilege accrued to the common man. Middle America became the Military Industrial Praetorian Guard hiring pool.

  Recalling Major General Smedley Butler (the bold-face mine):

  “War is a racket. It always has been.

  It is possibly the oldest, easily the most profitable, surely the most vicious. It is the only one international in scope. It is the only one in which the profits are reckoned in dollars and the losses in lives.”

  Sanctions betray the unipolar moment’s faltering grasp. They are the unacknowledged road back from Empire to Nation. The contracting enterprise puts the best face on what can only be deemed a mutually assented to rejection. For, equally, the sanctioned nation is declining its prescribed role within the Empire playbook. Thus sanctions better resemble a divorce stemming from mutually irreconcilable differences than a unilateral flash of Empire pique.

  Trump, almost certainly, is accepting of these geopolitical normalizations, which ultimately will entail the cessation of the US Dollar as reserve currency.

  Hegemony is succumbing to variegation. There are other globally-aware approaches. Pope Francis’ polyhedral globalism for example combines comparative advantage with the inherent dignity of each nation’s native culture. Monoculture is a Unipolar aim. Global economies-of-scale seek to arbitrage away –to flatten– indigenous human character. Uniqueness is the lumpy stew that bedevils rote, commodity pricing.

  The sanctioned nation makes a calculation that its interests are better served relinquishing the benevolent gaze of Washington. In so doing, it embarks on a path alone.

  But not so alone as to be lonely. Not anymore. Other diasporees have preceded it. As will a re-nationalized America in due course.

  

• "It's All About Space": Trump Says Russia And China Are Ahead Of US Space Force

  The US needs its own space force because China and Russia have already gotten a head start, but American ingenuity and the ability to make the “greatest rockets” in the world are right here at home, President Trump said at a rally in Richmond, Kentucky Saturday night.

  “Russia has already started, China has already started. They’ve got a start, but we have the greatest people in the world, we make the greatest equipment in the world, we make the greatest rockets, and missiles, and tanks, and ships in the world.” 

  He said his record $700bn+ military budget that would “fully rebuild the American military” and vaunted that creation of the Space Force, first announced last June, is already underway. 

  

  “You know it’s all about space. It’s all about space. Defense, offense, everything is going to soon be all about space,” Trump said before a packed audience in Kentucky.

  Based on details from comments made by Vice President Mike Pence in August, the US Space Force is set to become the sixth branch of the Military as well as to help ensure “American dominance in space” by 2020.

  Trump was echoing Pence’s prior emphasis, that moving forward on a US military space program is ultimately in response to other nations’ advances in the area. Pence had pointed out, for example, that Beijing’s People’s Liberation Army (PLA) Strategic Support Force is overseeing the developing and maintaining of the PLA’s space capabilities.

  

  In response to President Trump’s Saturday night remarks invoking Russia as having “already started” its program, Russian state-funded media channels were quick to respond that Moscow is not seeking the militarization of space. 

  RT News’ commentary on Trump’s statement included the following:

  The key difference is in the mission statements. The Russian ‘space force’ exists to “observe space objects, detect threats to Russia in space and from space, and counter them if necessary,” launch satellites for military and dual (military plus civilian) use, obtain satellite intelligence, as well as maintaining them in working order. In short, nothing any country with reasonable satellite-launching capability, including the US, doesn’t already do.

  

  Ultimately what Trump is proposing is of a different nature, seen in the following, according to RT:

  What Trump wants to do with his space force is to have the ability to “degrade, deny, disrupt, destroy, and manipulate adversary capabilities to protect US interests, assets, and way of life.”

  When Trump first shocked the world by announcing the program on June 18, he expressly said at the beginning of his comments that “we must have American dominance in space.” And followed with: “Very importantly, I am hereby directing the Department of Defense and Pentagon to immediately begin the process necessary to establish a Space Force as the Sixth Branch of the Armed Forces.”

  But there is evidence to suggest Trump’s words about a Russian leg up in military space capabilities are accurate. Per a recent report in Axios, “Russia has had sophisticated launch systems for decades, in addition to another that tracks objects more than 30,000 miles above the Earth, according to the CSIS 2018 Space Threat Assessment.”

  And further a separate February report from the Director of National Intelligence found that both China and Russia are working to develop anti-satellite weapons “that could blind or damage sensitive space-based optical sensors, such as those used for remote sensing or missile defense.”

  The Pentagon and Air Force have put estimates for the new Space Force at $8 billion and $13 billion, respectively. This includes initiating a new US Space Command by the end of this year. 

  But perhaps the more interesting question that remains is who will be picked by the White House to assume the title and awesome responsibility of “Commander of Space”?

  

• James Comey And The Unending Bush Torture Scandal

  Authored by James Bovard via The Future of Freedom Foundation,

  The vast regime of torture created by the Bush administration after the 9/11 attacks continues to haunt America. The political class and most of the media have never dealt honestly with the profound constitutional corruption that such practices inflicted. Instead, torture enablers are permitted to pirouette as heroic figures on the flimsiest evidence.

  

  Former FBI chief James Comey is the latest beneficiary of the media’s “no fault” scoring on the torture scandal. In his media interviews for his new memoir, A Higher Loyalty: Truth, Lies, and Leadership, Comey is portraying himself as a Boy Scout who sought only to do good things. But his record is far more damning than most Americans realize.

  Comey continues to use memos from his earlier government gigs to whitewash all of the abuses he sanctified. “Here I stand; I can do no other,” Comey told George W. Bush in 2004 when Bush pressured Comey, who was then Deputy Attorney General, to approve an unlawful anti-terrorist policy. Comey was quoting a line supposedly uttered by Martin Luther in 1521, when he told Emperor Charles V and an assembly of Church officials that he would not recant his sweeping criticisms of the Catholic Church.

  The American Civil Liberties Union, Human Rights Watch, and other organizations did excellent reports prior to Comey’s becoming FBI chief that laid out his role in the torture scandal. Such hard facts, however, have long since vanished from the media radar screen. MSNBC host Chris Matthews recently declared, “James Comey made his bones by standing up against torture. He was a made man before Trump came along.” Washington Post columnist Fareed Zakaria, in a column declaring that Americans should be “deeply grateful” to lawyers such as Comey, declared, “The Bush administration wanted to claim that its ‘enhanced interrogation techniques’ were lawful. Comey believed they were not…. So Comey pushed back as much as he could.”

  Martin Luther risked death to fight against what he considered the scandalous religious practices of his time. Comey, a top Bush administration policymaker, found a safer way to oppose the worldwide secret U.S. torture regime widely considered a heresy against American values: he approved brutal practices and then wrote some memos and emails fretting about the optics.

  Losing Sleep

  Comey became deputy attorney general in late 2003 and “had oversight of the legal justification used to authorize” key Bush programs in the war on terror, as a Bloomberg News analysis noted. At that time, the Bush White House was pushing the Justice Department to again sign off on an array of extreme practices that had begun shortly after the 9/11 attacks. A 2002 Justice Department memo had leaked out that declared that the federal Anti-Torture Act “would be unconstitutional if it impermissibly encroached on the President’s constitutional power to conduct a military campaign.” The same Justice Department policy spurred a secret 2003 Pentagon document on interrogation policies that openly encouraged contempt for the law: “Sometimes the greater good for society will be accomplished by violating the literal language of the criminal law.”

  Photos had also leaked from Abu Ghraib prison in Iraq showing the stacking of naked prisoners with bags over their heads, mock electrocution from a wire connected to a man’s penis, guard dogs on the verge of ripping into naked men, and grinning U.S. male and female soldiers celebrating the sordid degradation. Legendary investigative reporter Seymour Hersh published extracts in the New Yorker from a March 2004 report by Maj. Gen. Antonio Taguba that catalogued other U.S. interrogation abuses: “Breaking chemical lights and pouring the phosphoric liquid on detainees; pouring cold water on naked detainees; beating detainees with a broom handle and a chair; threatening male detainees with rape … sodomizing a detainee with a chemical light and perhaps a broom stick, and using military working dogs to frighten and intimidate detainees with threats of attack, and in one instance actually biting a detainee.”

  The Bush administration responded to the revelations with a torrent of falsehoods, complemented by attacks on the character of critics. Bush declared, “Let me make very clear the position of my government and our country…. The values of this country are such that torture is not a part of our soul and our being.” Bush had the audacity to run for reelection as the anti-torture candidate, boasting that “for decades, Saddam tormented and tortured the people of Iraq. Because we acted, Iraq is free and a sovereign nation.” He was hammering this theme despite a confidential CIA Inspector General report warning that post–9/11 CIA interrogation methods might violate the international Convention Against Torture.

  James Comey had the opportunity to condemn the outrageous practices and pledge that the Justice Department would cease providing the color of law to medieval-era abuses. Instead, Comey merely repudiated the controversial 2002 memo. Speaking to the media in a not-for-attribution session on June 22, 2004, he declared that the 2002 memo was “overbroad,” “abstract academic theory,” and “legally unnecessary.” He helped oversee crafting a new memo with different legal footing to justify the same interrogation methods.

  Comey twice gave explicit approval for waterboarding, which sought to break detainees with near-drowning. This practice had been recognized as a war crime by the U.S. government since the Spanish-American War. A practice that was notorious when inflicted by the Spanish Inquisition was adopted by the CIA with the Justice Department’s blessing. (When Barack Obama nominated Comey to be FBI chief in 2013, he testified that he had belatedly recognized that waterboarding was actually torture.)

  Comey wrote in his memoir that he was losing sleep over concern about Bush-administration torture polices. But losing sleep was not an option for detainees, because Comey approved sleep deprivation as an interrogation technique. Detainees could be forcibly kept awake for 180 hours until they confessed their crimes. How did that work? At Abu Ghraib, one FBI agent reported seeing a detainee “handcuffed to a railing with a nylon sack on his head and a shower curtain draped around him, being slapped by a soldier to keep him awake.” Numerous FBI agents protested the extreme interrogation methods they saw at Guantanamo and elsewhere, but their warnings were ignored.

  Comey also approved “wall slamming” — which, as law professor David Cole wrote, meant that detainees could be thrown against a wall up to 30 times. Comey also signed off on the CIA’s using “interrogation” methods such as facial slaps, locking detainees in small boxes for 18 hours, and forced nudity. When the secret Comey memo approving those methods finally became public in 2009, many Americans were aghast — and relieved that the Obama administration had repudiated Bush policies.

  When it came to opposing torture, Comey’s version of “Here I stand” had more loopholes than a reverse-mortgage contract. Though Comey in 2005 approved each of 13 controversial extreme interrogation methods, he objected to combining multiple methods on one detainee.

  The Torture Guy

  In his memoir, Comey relates that his wife told him, “Don’t be the torture guy!” Comey apparently feels that he satisfied her dictate by writing memos that opposed combining multiple extreme interrogation methods. And since the vast majority of the American media agree with him, he must be right.

  Comey’s cheerleaders seem uninterested in the damning evidence that has surfaced since his time as a torture enabler in the Bush administration. In 2014, the Senate Intelligence Committee finally released a massive report on the CIA torture regime — including death resulting from hypothermia, rape-like rectal feeding of detainees, compelling detainees to stand long periods on broken legs, and dozens of cases where innocent people were pointlessly brutalized. Psychologists aided the torture regime, offering hints on how to destroy the will and resistance of prisoners. From the start, the program was protected by phalanxes of lying federal officials.

  When he first campaigned for president, Barack Obama pledged to vigorously investigate the Bush torture regime for criminal violations. Instead, the Obama administration proffered one excuse after another to suppress the vast majority of the evidence, pardon all U.S. government torturers, and throttle all torture-related lawsuits. The only CIA official to go to prison for the torture scandal was courageous whistleblower John Kiriakou. Kiriakou’s fate illustrates that telling the truth is treated as the most unforgivable atrocity in Washington.

  If Comey had resigned in 2004 or 2005 to protest the torture techniques he now claims to abhor, he would deserve some of the praise he is now receiving. Instead, he remained in the Bush administration but wrote an email summarizing his objections, declaring that “it was my job to protect the department and the A.G. [Attorney General] and that I could not agree to this because it was wrong.” A 2009 New York Times analysis noted that Comey and two colleagues “have largely escaped criticism [for approving torture] because they raised questions about interrogation and the law.” In Washington, writing emails is “close enough for government work” to confer sainthood.

  When Comey finally exited the Justice Department in August 2005 to become a lavishly paid senior vice president for Lockheed Martin, he proclaimed in a farewell speech that protecting the Justice Department’s “reservoir” of “trust and credibility” requires “vigilance” and “an unerring commitment to truth.” But he had perpetuated policies that shattered the moral credibility of both the Justice Department and the U.S. government. He failed to heed Martin Luther’s admonition, “You are not only responsible for what you say, but also for what you do not say.”

  Comey is likely to go to his grave without paying any price for his role in perpetuating appalling U.S. government abuses. It is far more important to recognize the profound danger that torture and the exoneration of torturers pose to the United States. “No free government can survive that is not based on the supremacy of the law,” is one of the mottoes chiseled into the façade of Justice Department headquarters. Unfortunately, politicians nowadays can choose which laws they obey and which laws they trample. And Americans are supposed to presume that we still have the rule of law as long as politicians and bureaucrats deny their crimes.

  

• Shocktober's Not Over – McElligott Sees More "Rolling Minsky Moments" As "Pseudo-Stability" Unravels

  Just before last week’s interest-rate driven market selloff entered its most acute phase, we cited CTA positioning data from Nomura showing that systematic funds had not yet begun the painful process of deleveraging as certain “triggers” had not yet been met. But shortly after this commentary from Nomura’s cross-asset strategist Charlie McElligott had been distributed to Nomura’s clients, the selling pressure intensified, busting through trigger levels in a way that only exacerbated what became the most intense selloff in SPX since February (and the biggest for NDX since Brexit).

  With markets creeping higher again after Wednesday’s furious selloff, McElligott chimed in with an update to Nomura’s positioning models that incorporated this latest break. As of Wednesday’s close, McElligott acknowledged that the Nomura Quant Strategies CTA model was indicating that these systematic sellers had reduced down to “43% Long” from “100% Max Long” 1 week ago, resulting in an estimated $88BN in one day selling on the one day move from “97% Long”, the positioning at the start of Wednesday’s session, all the way down to “43% Long.”

  

  With his audience clamoring for more guidance about what, exactly, triggered the market wreck of this past week, McElligott made a brief appearance Thursday afternoon on the MacroVoices podcast, where he got “philosophical” during an interview with Erik Townsend and Patrick Ceresna, arguing that this week’s equities driven selloff actually had a deeper “macro origin.”

  Again, if I’m really stepping back and talking almost more philosophically, it’s the bigger picture here is that a higher real interest rate environment is resetting term premiums. And, with that, the cost of leverage, cross-asset correlations, asset price valuation – all of these constructs built into the post-crisis quantitative easing era are now ripe to tip over.

  And we’re seeing these rolling Minsky moments as the pseudo-stability of lower interest rates, flatter curves, and suppressed volatility breeds instability through the leverage. And the leverage that’s had to have been deployed on strategies over the past few years as yield was chased. And that’s what we’re coming out of right now.

  As McElligott explains, the market tantrum that was apparently triggered by the return of the bear steepener trade in long-term rates during the preceding week, is ultimately a factor of the “pseudostability” that has characterized market flows during the post-GFC era. As a result, investors can expect these “rolling Minsky moments” – instances where selloffs rapidly intensify as both systemic and discretionary bids evaporate – to become increasingly common.

  

  Fortunately for discretionary managers struggling to meet their P&L targets, this systematic selling has mostly subsided for now, as the market rebound (which really continued on Friday) moved these funds further away from the next big deleveraging target.

  So, with that 2,719 level that you spoke about, was the next deleveraging point per our projections in the S&P for the futures to close below that level. It’s not a one touch, but to close below that level would see our current S&P position break down from what went into the day as a 43% long. And, as of one week ago, that was 100% max long. If we were to have closed below 2,719 today, that would have then taken us down to just 9% net long. And would have triggered an additional selling of $57 billion S&P futures.

  As an aside, McElligott explained that selling, for now, has been concentrated in the CTA universe, as risk party funds – that other favorite market scapegoat – are typically much slower to move, and thus will take more time to react to the breakdown in the equity-bond correlation.

  So our model looks at windows from two weeks, to one month, to three month, to six month, to one year. And we see the different transitions and the different signals generated across those buckets for various asset classes. But when the bond equities correlation breaks down, as it is currently right now, people will jump to the risk parity side of the equation, which, per our construct, is a much slower moving vehicle.

  Ours, particularly, uses a two-year window. So there is a little bit of false attribution in my mind currently within the institutional marketplace as far as trying to pin responsibility on the risk parity community, when, in my mind, the much more powerful short-term force in the market are CTAs.

  Of course, any discussion of how options traders react to these vertiginous downdrafts like what happened last week would be remiss if it ignored the role played by gamma-hedging options dealers. And while JPM’s Marko Kolanovic, who failed to predict last week’s blowup, said that this type of hedging played an outsize role in the selloff, McElligott warned that dealers could crash the market if SPX were to hold below 2,750, which would leave dealers dangerously out of position.

  We saw an enormous jump day over day with the S&P futures options and SPY ETF options cumulative, both delta and gamma, on the day. So SPX net delta moves down $460 billion. That’s a 0.1 percentile move since 2013. The day prior, that net delta was negative $55 billion. So just impossible, almost nine times growth over the course of the day with regards to how much delta was kicked off for sale from the options community yesterday in just SPX and SPY.

  And what that means from the delta side of things is that – and this is as of yesterday’s numbers – but S&P gamma is now at $24 billion per 1% move plus or minus. And those big strikes there are 2,800 and 2,750. And I think, judging by today’s spasms where it looked like we were going to break out, and then it looked like we were going to break down, and it looked like we were going to break out, and then it looked like we were going to break down, those levels kept us pretty well pinned.

  But the danger here is that, on a close below that pretty heavy open interest line of 2,750, the more we start slipping below, the further out of position the short gamma is. And the more it slips, the more you have to sell to stay hedged. And that’s always the danger of the options market.

  Looking ahead, the most pressing question on every investors’ mind is whether this week’s selloff was merely another dip to buy, or the beginning of the long-awaited shift away from the QE paradigm into a pre-recessionary QT mode. For what it’s worth, McElligott is optimistic that the market could hold up a little while longer, as discretionary managers have taken the opportunity to shrink their positions over the past few weeks, sapping demand for hedges and allowing them more leeway to get back in at a better price. 

  Meanwhile, the two-week blackout period for corporate buybacks is almost over. Just as it did during the Feb. 5 blowup, the evaporation of the corporate bid often contributes to more price instability. And while some corporations have managed to circumvent these rules via ASRs, once the corporate buyer returns in earnest, McElligott expects they will provide an added bulwark against the type of market chaos witnessed last week.

  I want to be as black-and-white on this as possible, and totally clear. If there was going to be a period of pullback with this tape, it was going to come in this two-week window where we are at peak buyback blackout. And that is absolutely where we are right now. The vast majority of S&P sub-industry levels are at effectively 100% blackout as of this week. Now, 10B5-1 plans allow corporates to buy outside of the blackouts, but with a number of limiting factors there. The bottom line: There still is a reduction in net corporate flow.

  That is a critical facilitator allowing this risk-off trade to really proliferate. And, just like February 5, this move was precipitated for macro purposes. This isn’t purely a sentiment trade. This certainly is negligibly about trade wars.

  However, another looming risk is the evaporation in demand for long bonds, which sent long-term rates moving higher earlier this month. As McElligott noted, much of this selling could be attributed to a mysterious foreign trader, which begs the question: Has the PBOC stepped up liquidations of its Treasury positioning (to be sure, the yuan has continued to weaken, which suggests that any selling by China has likely been relatively muted)? And if so, is China deliberately trying to crash the US equity market?

  Now, the market can go two ways. If people are really getting nervous with regards to another October volatility shock, and if people start taking chips off the table, because these stocks that have been most affected – all these momentum longs, all these gross tech stocks – if that starts bleeding into retail, then, yes, this could very well perpetuate. I do think the other angle here is that there has been a massive seller of the US long-bond contract in the market the past few weeks. And there are a number of folks fearing that it could be somebody – an entity overseas – that would really cause the fixed income world to further wobble.

  If we see the long end continue to sell off and the curve continue to bear-steepen, I think all bets are off and equities could absolutely continue trading lower. I personally believe that we are seeing de-risking now. And the de-risking is actually seeing money flow back into Treasuries.

  In McElligott’s view, traders trying to mitigate their exposure to equity risk should revive the bid for long-dated Treasurys. But if yields continue moving higher, all bets are off…

  Listen to the interview with McElligott below. It begins at the 59 minute mark:

  

  

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