- Solar Storm Will Strike Earth Tonight, "Weak Power Grid Fluctuations" Possible
Authored by Mac Slavo via SHTFplan.com,
The NOAA Space Weather Prediction Center forecasts an aurora could light up the sky above areas in the United State including Michigan and Maine. A solar storm, which occurred Monday, is expected to strike Earth tonight.
On Monday, the sun spit out a slew of charged particles in a moderate solar flare. These particles are now making their way towards Earth. The planet’s magnetic field will block most of the particles, but some will make it into Earth’s atmosphere. The particles collect at the north and south poles and interact with atmospheric gases to create the aurora borealis or the Northern Lights. And some say this show could be quite spectacular.
Solar flares have been known to cause power grid failures, but it looks like we’ll only get the light show this time. Although a grid failure is possible, it is unlikely.
According to Seeker, the forecast calls for a high probability of a G-1 or “minor” storm, which could strengthen to a G-2 or “moderate” storm depending on how the stream of particles hit the Earth. Geomagnetic storms are ranked on a scale, with G at the bottom, R in the middle, and S as the most severe. Forecasts now say the particles will give our planet a glancing blow.
Although this storm has been categorized as “G-1,” which means it is minor, it could still cause some havoc down on Earth. Solar flares and particle ejections are associated with sunspots — dark areas on the sun’s surface — that host intense magnetic activity. As the magnetic fields in a sunspot cross, NASA stated, this can cause a sudden energy explosion, also known as a solar flare. This sends radiation out into space, and that radiation can be hurled toward the Earth.
G1-level storms, such as Monday’s, may affect migratory animals, and can cause “weak power grid fluctuations.”
The barrage of particles may even have a minor impact on satellites. A gird failure would almost immediately fling the United States into a state of panic, and it’s always good to be prepared just in case. But it doesn’t look like there will be any serious damage to the power grid because of this storm as of right now.
- Visualizing The The Rising Speed Of Technological Adoption
Technological progress is not the only thing rising at an exponential rate.
Visual Capitalists’s Jeff Desjrdins points out that the rate at which newly commercialized technologies get adopted by consumers is also getting faster, too.
In the modern world, through increased connectivity, instant communication, and established infrastructure systems, new ideas and products can spread at speeds never seen before – and this enables a new product to get in the hands of consumers in the blink of an eye.
VISUALIZING TECHNOLOGICAL ADOPTION
Today’s dynamic chart comes to us from Our World in Data, and it allows you to compare the adoption rates of new technologies over the period of more than a century.
In addition to the technologies you’ll find embedded on the initial chart above, you can also use the “Add technology” tab of the chart (bottom left) to list up to 40 tech data series on the chart in total. This allows you to gauge adoption rates for everything from color televisions to washing machines, while giving you an idea of the trajectory of many common technologies today.
A BLAST FROM THE PAST
To get the full impact of the chart, it’s worth removing more modern technologies like smartphones, social media, tablets, cellular phones, and the internet from the list.
Here’s a look at adoption rates for the household appliances and products today that we would consider pretty essential, over a period of more than 120 years:
The telephone was invented in 1876, but it wasn’t until a century later that landlines reached a saturation point in households.
For this to happen, massive amounts of infrastructure had to be built and network effects also needed to accumulate to make the product worthwhile for consumers. Further, the telephone suffered from the “last-mile problem”, in which the logistics get tougher and more expensive as end-users get hooked up to a network.
As a result, it wasn’t until the 1960s that 80% of U.S. households had landlines in them.
NEW ADOPTION SPEEDS
Now, here’s a chart with many older technologies removed – keep in mind that the x axis has changed to a much shorter timespan (~65 years):
Microwaves, cell phones, smartphones, social media, tablets, and other inventions from the modern era all show fast-rising adoption rates. Standing out most on the chart is the tablet computer, which went from nearly 0% to 50% adoption in five years or so.
Why do newer technologies get adopted so quickly? It seems partly because modern tech needs less infrastructure in contrast with the water pipes, cable lines, electricity grids, and telephone wires that had to be installed throughout the 20th century.
However, it also says something else about today’s consumers – which is that they are connected, fast-acting, and not afraid to adopt the new technologies that can quickly impact their lives for the better.
- The World Embraces Debt At Exactly The Wrong Time
Authored by John Rubino via DollarCollapse.com,
Self-destruction usually happens in stages.
At first there’s a binge in which the thrill outweighs the sense of transgression. This is usually followed by remorse, acknowledgement of risks, and an attempt to reform.
But straight-and-narrow is exhausting, and because of this is frequently just temporary, eventually giving way to a kind of capitulation in which the addict drops even the pretense of self-control.
2018 is apparently the year in which the world enters this final stage of its addiction to debt. Wherever you look, leverage is soaring as governments, corporations and individuals just give up and embrace the idea that borrowing is no longer a necessary evil, but simply necessary. Some recent examples:
China January new loans surge to record 2.9 trillion yuan, blow past forecasts
(Reuters) – China’s banks extended a record 2.9 trillion yuan ($458.3 billion) in new yuan loans in January, blowing past expectations and nearly five times the previous month as policymakers aim to sustain solid economic growth while reining in debt risks.
Net new loans surpassed the previous record of 2.51 trillion yuan in January 2016, which is likely to support growth not only in China but may underpin liquidity globally as major Western central banks begin to withdraw stimulus.
Corporate loans surged to 1.78 trillion yuan from 243.2 billion yuan in December, while household loans rose to 901.6 billion yuan in January from 329.4 billion yuan in December, according to Reuters calculations based on the central bank data.
Outstanding yuan loans grew 13.2 percent in January from a year earlier, also faster than an expected 12.5 percent rise and compared with an increase of 12.7 percent in December.
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Total US household debt soars to record above $13 trillion
(CNBC) – Total household debt rose by $193 billion to an all-time high of $13.15 trillion at year-end 2017 from the previous quarter, according to the Federal Reserve Bank of New York’s Center for Microeconomic Data report released Tuesday.
Mortgage debt balances rose the most in the December quarter rising by $139 billion to $8.88 trillion from the previous quarter. Credit card debt had the second largest increase of $26 billion to a total of $834 billion.
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Trump’s budget balloons deficits, cuts social safety net
(Chicago Tribune) – President Donald Trump unveiled a $4.4 trillion budget plan Monday that envisions steep cuts to America’s social safety net but mounting spending on the military, formally retreating from last year’s promises to balance the federal budget.
The president’s spending outline for the first time acknowledges that the Republican tax overhaul passed last year would add billions to the deficit and not “pay for itself” as Trump and his Republican allies asserted.
Trump’s plan sees a 2019 deficit of $984 billion, though White House Budget Director Mick Mulvaney admits $1.2 trillion is more plausible after last week’s congressional budget pact and $90 billion worth of disaster aid is tacked on. That would be more than double the 2019 deficit the administration promised last year.
source: tradingeconomics.com
So far, the financial markets are responding pretty much according to script:
US bonds sell off on inflation scare
(CNBC) – U.S. government debt yields hit session highs Wednesday after the government reported inflation in January rose more than expected.
The yield on the benchmark 10-year Treasury note jumped to 2.882 percent as of 10:03 a.m. ET. It hit a four-year high of 2.902 percent on Monday. The yield on the 30-year bond was last seen higher at 3.146 percent. Bond yields move inversely to their prices.
Schwab’s Kathy Jones argued that the latest reading could mean that the yield on the benchmark 10-year note could test 3 percent in the next few months.
———————–
Gold Gains $20 On Stock Market Volatility, Weakening U.S. Dollar
(Kitco) – Gold prices are posting sharp gains of around $20 an ounce in late-morning action Wednesday. A volatile day in the U.S. stock market is helping to boost safe-haven gold. U.S. stock indexes were poised to open the U.S. day session modestly up, but then dropped sharply in the immediate aftermath of a hotter-than-expected U.S. consumer inflation report. Since then the stock indexes have bounced back above unchanged. Meantime, the U.S. dollar index has lost good early gains to trade lower on the day, and that is also helping out the precious metals market bulls. April gold was last up $21.10 at $1,351.40.
Does the end of this process have a name? Yes, a really scary one: “crack-up boom.”
From Investopedia:
What is a ‘Crack-Up Boom’
A crack-up boom is the crash of the credit and monetary system due to continual credit expansion and price increases that cannot be sustained long-term. Often, banks will attempt to prevent a crack-up boom by halting credit expansion, which ends up backfiring and yielding the same results that the boom would have caused. Both scenarios result in an economic depression when the bubble finally bursts and the economic system crashes.
How Does It Happen?
When the economy is down, one way to give it a temporary revival is to feed extra money into the system – AKA economic stimulus. Providing people with credit makes them feel richer and more inclined to spend their money, which in turn feeds more money into the system. When people spend money, they tend to want to continue this trend and continue to buy, despite the fact that their extra cash isn’t coming from actual savings. The problem comes when the government continuously pours more and more money into the system and the actual economy beneath the false expansion cannot keep up.
Feeding money into the economy is a quick way to give it a short-term boost, but this practice isn’t sustainable over the long term. If credit expansion continues without limit, prices continue to rise until they reach the point at which the entire system collapses because it can no longer sustain itself. People can no longer afford the high prices, so credit must expand even more to accommodate these prices, which pushes them even higher.
What Type of Economy Can Be Hit by a Crack-Up Boom?
A crack-up boom is something that can only happen in an economy that relies on paper money rather than the gold standard, or electronic systems of monetary transaction rather than physical. In a gold standard economy, interest rates cap out at around 3 to 6%, since credit is based on actual saved money, instead of being adjustable depending on the circumstances. However, in a system that revolves around paper money, more cash can be printed at any time and introduced into the system. This affects the value of each dollar and affects the prices of market commodities. When the government introduces into the economy money that doesn’t really exist (in the form of false credit) it’s only a matter of time before the economy is damaged, even if the original intention was to boost it.
- Chinese New Year Will See Billions Of Digital Cash Gifts
As the world’s biggest migration begins, over a billion people are expected to celebrate Chinese New Year tomorrow.
Many have been preparing for the celebrations for days and, as Statista’s Niall McCarthy notes, a key aspect of the holiday involves people cleaning their homes, a tradition called “sweeping the dust” which symbolizes the removal of misfortune and the welcoming of something new.
When all of the cleaning is finally complete, homes are decorated with posters and red lanterns before revellers enjoy spectacular fireworks and firecrackers.
Technology is playing an increasingly important role in the world’s biggest party with red envelopes or hóngbāo central to the festivities.
In China and other Southeast Asian societies, a red envelope is a monetary gift exchanged during holidays or special occasions.
Over the past couple of the years, the tradition has gone digital with Tencent and Alibaba both offering virtual red envelopes.
You will find more infographics at Statista
The digital version has caught on and last year, the number exchanged on WeChat was an impressive 46.6 billion – the equivalent of 33 envelopes full of cash for every person in China.
That’s a huge increase on 2016 when the red envelope count came to 8 billion.
- The Genius Of Trump's Food Stamp Proposal: You're Not Supposed To Like Being On Welfare
Incentives.
If I was on food stamps, I wouldn’t like this either… I think that’s the point.
If you can’t afford to buy your own food and you need the government to provide it for you, then you get it on the government’s terms.
That’s usually what happens when someone else is supplying your needs.
Don’t like it? Take every available action to get off food stamps and achieve independence, at which point you can buy whatever you want at the grocery store with your own money that you earned.
Until then, enjoy your Harvest Box:
Under the USDA America’s Harvest Box proposal, all Supplemental Nutrition Assistance Program (SNAP) participating households receiving $90 per month or more in benefits will receive a package of nutritious, 100-percent U.S. grown and produced food. Approximately 16.4 million households, or about 81 percent of SNAP households would be impacted by this proposal.
The amount of food received per household would be scaled to the overall size of the household’s SNAP allotment, ultimately representing about half of their benefits. SNAP participants would receive domestically-sourced and produced food in lieu of a portion of their SNAP benefits.
USDA would utilize a model similar to that currently used to distribute USDA Foods to other nutrition assistance programs to provide staple, shelf-stable foods (such as shelf-stable milk, juice, grains, ready-eatcereals, pasta, peanut butter, beans, canned meat, poultry or fish, and canned fruits and vegetables) to SNAP households at approximately half the retail cost.
This proposal creates a new approach to nutrition assistance that combines retail-based SNAP benefits with delivery of USDA America’s Harvest Boxes supporting the President’s leadership on Buy American. This proposal is cost-effective, enhances the integrity of SNAP, and provides for states’ flexibility in administration of the program.
The remainder of the household’s benefits will still be provided via the current Electronic Benefit Transfer card.
The Department of Agriculture estimates the change would save taxpayers $129 billion over 10 years by switching to defined packages that would presumably have a predictable, consistent cost. I’m guessing it would actually save a lot more than that precisely because people would hate being restricted to the Harvest Boxes, and at least a significant percentage of them would respond to the added incentive to improve their situations.
And of course, I’m sure part of the idea here is that people can’t trade or sell their food stamps or find some clever way to use them to get booze, cigarettes, drugs, etc.
Yes, the government would be picking out your food for you. Yes, that would be frustrating and no fun.
The point of food stamps is not to treat you to gourmet meals. It’s to prevent you from starving to death while you get out of the trouble you’ve gotten yourself in, whether that takes the form of unemployment, underemployment or some other type of financial mess. We want you to have food. We want you to live. But if you want the kind of food you prefer, that’s going to require you to earn your own money and buy it.
That is not an unreasonable proposition. You’re not supposed to like dependence on the government. You’re supposed to want to get off it as quickly as you can. If you get stuck with the Harvest Box and you still don’t make the changes necessary to improve your life, well . . . at least you’re saving the rest of us some money.
- Brandon Smith: Central Banks Will Let The Next Crash Happen
Authored by Brandon Smith via Alt-Market.com,
If you have been following the public commentary from central banks around the world the past few months, you know that there has been a considerable change in tone compared to the last several years.
For example, officials at the European Central Bank are hinting at a taper of stimulus measures by September of this year and some EU economists are expecting a rate hike by December. The Bank of England has already started its own rate hike program and has warned of more hikes to come in the near term. The Bank of Canada is continuing with interest rate hikes and signaled more to come over the course of this year. The Bank of Japan has been cutting bond purchases, launching rumors that governor Haruhiko Kuroda will oversee the long overdue taper of Japan’s seemingly endless stimulus measures, which have now amounted to an official balance sheet of around $5 trillion.
This global trend of “fiscal tightening” is yet another piece of evidence indicating that central banks are NOT governed independently from one another, but that they act in concert with each other based on the same marching orders. That said, none of the trend reversals in other central banks compares to the vast shift in policy direction shown by the Federal Reserve.
First came the taper of QE, which almost no one thought would happen. Then came the interest rate hikes, which most analysts both mainstream and alternative said were impossible, and now the Fed is also unwinding its balance sheet of around $4 trillion, and it is unwinding faster than anyone expected.
Now, mainstream economists will say a number of things on this issue — they will point out that many investors simply do not believe the Fed will follow through with this tightening program. They will also say that even if the Fed does continue cutting off the easy money to banks and corporations, there is no doubt that the central bank will intervene in markets once again if the effects are negative. I would say that this is rather delusional thinking based on a dangerous assumption; the assumption that the Fed wants to save markets.
When mainstream economists argue that the Federal Reserve could conceivably keep low interest rates and stimulus going for decades if necessary, they often use the example of the Bank of Japan as some kind of qualifier. Of course, what they fail to mention is that yes, the BOJ has spent decades increasing its balance sheet which now sits at around $4.7 trillion (U.S.), but the Fed exploded its balance sheet to around $4.5 trillion in only eight years. That is to say, the Fed inflated a bubble as large if not larger than the Bank of Japan in less than half the time.
Frankly, the comparison is idiotic. And clearly according to their own admissions, the Fed is not going to be continuing stimulus measures anyway. People cling to this fantasy because they WANT to believe that the easy money party will never end. They are sorely mistaken.
I have been battling this delusion for quite some time. When I predicted that the Fed would taper QE, I received a predominantly negative reaction. The same thing occurred when I predicted the Fed would begin hiking interest rates. Now, I’m finding it rather difficult to break through the narrative that the Fed will intervene before the next crash takes place.
There is something so intoxicating about the notion that central banks will stop at nothing to prop up stock markets and bond markets. It generates an almost crazed cult-like fervor in the investment world; a psychedelic high that makes financial participants think they can fly. Of course, what has really happened is that these people have jumped off the roof of their overpriced condo; they think they are flying but they are really falling like a brick weighted down with stupidity.
Former Fed chairman Janet Yellen upon exiting her position stated:
“If stock prices or asset prices more generally were to fall, what would that mean for the economy as a whole?”
“I think our overall judgment is that, if there were to be a decline in asset valuations, it would not damage unduly the core of our financial system.”
Yellen also said when asked about high stock prices:
“Well, I don’t want to say too high. But I do want to say high. Price/earnings ratios are near the high end of their historical ranges…”
“Now, is that a bubble or is too high? And there it’s very hard to tell. But it is a source of some concern that asset valuations are so high.”
Since the middle of last year, the Fed has been calling the stock market overpriced and “vulnerable.” This rhetoric has only become bolder over the past several months. Dallas Fed president Robert Kaplan dismissed concerns over the affect rate hikes might have on markets and hinted at the potential for MORE than the three hikes planned for 2018. The Dow fell 666 points that same day.
New York Fed’s Bill Dudley shrugged off concerns over recent volatility, saying that an equity rout like the one that occurred in recent days “has virtually no consequence for the economic outlook.”
Jerome Powell, the new Fed chairman, has said while taking the chair position that he will continue with the current Fed policy of rate hikes and balance sheet reductions, and reiterated his support for more rate hikes this past week (while the mainstream media hyperfocused on his lip service promise to watch stock behavior closely). This indicates once again that it does not matter who is at the wheel of the Fed, its course has already been set, and the Chairman is simply there to act as the ship’s parrot mascot. The Fed is expected to raise interest rates yet again in March.
Now, all the evidence including the Fed’s surprise balance sheet reduction of $18 billion in January shows that at least for now, the central bank no longer cares about stocks and bonds.
In the meantime, 10 year Treasury Yields are spiking to the ever present danger level of 3% after a hotter than expected inflation report, and the dollar index is plunging. Showing us perhaps the first signs of a potential stagflationary crisis.
Bottom line – markets are not long for this world if yields pass 3% and the falling dollar provides yet another excuse for faster interest rate hikes. More rate hikes means eventually cheap loans will become expensive loans.
My question is, if the Fed is not going to feed cheap fiat into banks and corporations to fuel stock buybacks, then WHO is going to buy equities now?
What about corporations? Nope, not going to happen. With corporate debt skyrocketing to levels far beyond that seen just before the 2008 crash, there is no chance that they will be able to sustain stock buybacks without aid from the Fed.
What about retail investors? I doubt it. Retail investors are the primary pillar boosting stocks at this stage in the game, but as we saw during the panic last week, it is unlikely that retail investors will maintain hands strong enough to refrain from selling at the first sign of trouble. They do tend to hastily jump back into markets to buy every dip because for many years this simplistic strategy has worked, but if the Fed continues to back away from stimulus and we seen a few more incidences like the 1,000+ point drops of recent days, investor conditioning will be broken, and blind faith will be replaced by doubt.
What about the American consumer? Will consumer profits boost companies and give them and they stock shares a solid foundation? I can barely write that question without laughing out loud. There was a time (it seems like so long ago) when company innovation and solid business strategies actually meant something when it comes to equities. Those days are over. Now, everything is based on the assumption of central bank intervention, and as I already noted, central banks are pulling the plug on life support.
Beyond that, U.S. consumers are now buried in historic levels of personal debt.
What about the Trump administration’s latest $1.5 trillion infrastructure plan? Will this act as a kind of indirect stimulus program picking up where the Fed left off? Unlikely.
Perhaps if such a plan had been implemented eight years ago in place of the useless bank bailouts and TARP, it might have made a difference. Though, a similar strategy did not work out very well for Herbert Hoover. In fact, many of the Hoover-era infrastructure projects were not paid off for decades after initial construction. Hoover was also a one term Republican president that oversaw the beginning of the Great Depression.
The system is too far into debt and too far gone for infrastructure spending to make any difference in the economic outcome. Add to that the fact that Treasury yields are liable to continue their upward trajectory due to the increased deficit spending, putting more pressure on stocks.
Interestingly, Trump’s budget director has even admitted that the plan will lead to even faster increases in interest rates, and Fed officials have been using this as a partial rationale for why they plan to continue cutting off stimulus measures.
I think anyone with any sense can see the narrative that is building here. The Federal Reserve is going to let markets crumble in 2018. They are going to continue raising interest rates and reducing their balance sheet faster than originally expected. They will not step in when equities crash. And, they don’t really need to. Trump continues to set himself up as the perfect scapegoat for a bubble implosion that had to happen eventually anyway. Now, the central banks can sufficiently avoid any blame.
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- Mueller Flips Third Witness In Russia Probe
Just hours after NBC News reported that former White House Chief Strategist Steve Bannon met with Special Counsel Robert Mueller and his team multiple times to answer questions for “20 hours” this past week, CNN dropped the first serious bombshell in the investigation.
According to CNN, Mueller is about to flip Paul Manafort’s former No. 2 man, Rick Gates – though it’s unclear what Gates’ role will be, or what evidence Mueller has on him.
Rick Gates
The effort is under seal, so the details aren’t available, but a few days ago it was reported that Gates was working with a new lawyer who, speculation had it, would be more amenable to striking a plea deal.
Former Trump campaign adviser Rick Gates is finalizing a plea deal with special counsel Robert Mueller’s office, indicating he’s poised to cooperate in the investigation, according to sources familiar with the case.
Gates has already spoken to Mueller’s team about his case and has been in plea negotiations for about a month. He’s had what criminal lawyers call a “Queen for a Day” interview, in which a defendant answers any questions from the prosecutors’ team, including about his own case and other potential criminal activity he witnessed.
Gates’ cooperation could be another building block for Mueller in a possible case against President Donald Trump or key members of his team.
Once a plea deal is in place, Gates would become the third known cooperator in Mueller’s sprawling probe into Russian interference in the 2016 presidential election. It would also increase the pressure to cooperate on Gates’ co-defendant Paul Manafort, Trump’s former campaign chairman, who has pleaded not guilty to Mueller’s indictment and is preparing for a trial on alleged financial crimes unrelated to the campaign. Gates pleaded not guilty on October 30 alongside Manafort.
“Nobody (who’s charged) goes in to provide incriminating information to the government unless it’s part of plea negotiations,” said a criminal defense attorney who represents a witness in the case. In a Queen for a Day interview, a defendant can typically admit to crimes with little additional consequences, unless he or she lies.
After the interview, there’s a very small chance a defendant could turn back toward fighting the charges, according to several lawyers who specialize in federal criminal cases.
Gates probably didn’t work close enough with Trump to have direct knowledge of misdeeds, but Gates could be valuable in pressuring Manafort to roll on his former boss. Gates’ deal will likely be announced in the coming days, and could also coincide with the filing of new, tax related charges that could increase the amount of prison time he could face. Right now, he’s facing up to 10 years.
The White House sees little sign that Gates’ cooperation could pose any risk to the President. “There’d be no anxiety here” if Gates cooperated with Mueller in exchange for a plea deal, one White House official said.
It’s still unclear what Gates, who outlasted Manafort in the campaign and later worked on the Trump inaugural efforts, could share that would be of value to the Russian collusion investigators, outside the Manafort case. The value of what a defendant says factors into the plea negotiation as both sides finalize the deal.
After an interview, prosecutors typically investigate the information a defendant provides. They then negotiate the defendant’s ultimate charges or potential sentence.
Gates’ plea deal could be announced in the next few days, given that he’s asked a judge for an extension until Wednesday to discuss his in-flux legal representation.
At the same time, investigators with the special counsel’s office are preparing to file new charges against him, according to people familiar with the probe. The additional charges are tax-related, these people say, which could increase the fines and prison time Gates faces in court. More charges are also being prepared against Manafort related to his work before he joined the Trump campaign, according to another source familiar with the case.
The threat of new charges could be used in the negotiation to pressure Gates into cooperating and pleading. With his current set of eight charges, Gates could face 10 or more years in prison if found guilty.
The options in a criminal case are “either trial or plea,” said Brian Stolarz, a white collar lawyer who specializes in federal cases.
“You have to have the heart, the stomach and the wallet to proceed with the trial.”
Gates’ decision to cooperate shouldn’t come as a surprise to the White House; developments in his case would suggest that his lawyers haven’t been preparing for a trial, CNN said.
Several developments of the past months have pointed to Gates pursuing a different path than a trial – from Gates’ lack of focus in court on fighting the charges to his financial situation at home.
His court case since then has barely focused on trial preparations, which Judge Amy Berman Jackson noted in court on Wednesday as she urged the lawyers to set a trial date.
Gates’ legal team quibbled over his bail terms and house arrest for more than two months after his indictment. Recently, they’ve been focused on a question of who will represent him in court. The three trial lawyers who took on Gates’ case shortly after his indictment asked to part ways with their client on February 1. The legal team drama culminated in two long sealed hearings in front of the judge last week and on Wednesday. The two-and-a-half hours spent on that topic suggest the lawyers’ situation with Gates is more complicated than a typical attorney changeover.
Interestingly, one reason Gates may be cooperating is because he’s received little support from GOP donors who were supposed to help with legal fees…
Working separately from Gates’ trial lawyers is the well-known Washington defense attorney Thomas Green. Green, who has known Mueller personally for years, is negotiating Gates’ plea deal, according to people familiar with the case. He has visited the special counsel’s office multiple times in the last several weeks. Green appeared with Gates yesterday in court, but is not handling his trial situation.
…
The judge has already acknowledged that Gates could not show he had $5 million in assets to secure his bail. His financial situation is further hampered by assets he would have to forfeit to the government if found guilty of money laundering charges. A complex criminal case such as this could cost a defendant more than a million dollars in legal fees, especially if he were to go to trial, according to several people familiar with the legal industry.
The stress has taken a toll on Gates’ young family, who have urged him to do what is necessary to conclude these proceedings, a source said. Gates lives in Richmond, Virginia, with his wife and four children.
Gates traveled with Trump, so he could’ve been privy to some misdeeds, but it’s unlikely. Mueller has already flipped George Papadopoulos – a former adviser of questionable influence during the campaign who reportedly offered to set up a meeting between the Trump campaign and a representative of the Russian government – and former National Security Adviser Michael Flynn.
Now we await more details about what Mueller had on Gates…
- Home Prices Hit Record Highs In Two-Thirds Of US Cities As Manhattan Rents Collapse
Even as sellers in high-end markets like Manhattan, London and Greenwich, Conn. are being forced to pull their inventory from the market because of a paucity of offers (this despite the “wealth effect” that one might’ve expected to arise from rallies in stocks and bitcoin), home prices in two-thirds of US cities climbed to record highs during the fourth quarter as developers’ preoccupation with luxury housing has left buyers in mid-priced markets battling it out for a record-low supply of listings…
Prices for single-family homes climbed 5.3% from a year earlier nationally, reaching a peak in 64% of metropolitan areas, according to the National Association of Realtors. Of the 177 regions in the group’s survey, 15% had double-digit price growth, up from 11% in the third quarter.
Meanwhile, Bloomberg claims the steadily improving job market has helped drive prices higher (we imagine the flood of money-creation by central banks also had something to do with it).
Here’s Bloomberg:
Home values have grown steadily as the improving job market drives demand for a scarcity of properties on the market. While prices jumped 48 percent since 2011, incomes have climbed only 15 percent, putting purchases out of reach for many would-be buyers.
The consistent price gains “have certainly been great news for homeowners, and especially for those who were at one time in a negative equity situation,” Lawrence Yun, the Realtors group’s chief economist, said in a statement. “However, the shortage of new homes being built over the past decade is really burdening local markets and making homebuying less affordable.”
Sales of previously owned homes, including single-family houses and condos, increased 4.3% to a seasonally adjusted rate of 5.62 million in the fourth quarter, the Realtors said. At the end of December, only 1.48 million existing homes were available for sale, 10.3% less than a year earlier.
Predictably, the most expensive markets were in densely populated coastal areas where job growth and wealth creation since the financial crisis have largely clustered…
The most expensive markets were San Jose, California, where the median price was $1.27 million, followed by San Francisco, the Irvine, California, area, Honolulu and San Diego.
The San Jose area had a 26 percent increase in prices, the biggest of any region, followed by Reno, Nevada, and the Putnam/Dutchess County area, north of New York City. The biggest decline was in Glens Falls, New York, where prices dropped almost 12 percent. Cumberland, Maryland, and Elmira, New York, followed.
In a demonstration of the extent to which the correlation between the most expensive urban markets and the rest of the country (a trend that will no doubt be exacerbated by the Trump tax plan, which caps SALT deductions) landlords in Manhattan, one of the country’s most expensive rental markets, were forced to slash rents to their lowest levels in 2014 as a massive flood of new supply swamped the market.
- China's Rapid Military Modernization Is "Remarkable," Set To Challenge West On Several Fronts
China’s rapid military modernization is “remarkable,” and is no longer merely “catching up” with the West, reports the International Institute for Strategic Studies in their annual report on global military capabilities.
“China’s emerging weapons developments and broader defence-technological progress mean that it has become a global defence innovator” says Dr. John Chipman, Director-General and Chief Executive of the London-based think tank.
Of note, Chipman points out that China’s Chengdu J-20 low-observable combat aircraft is set to challenge America’s “monopoly on operational stealthy combat aircraft.” As we reported yesterday, the J-20 is rumored to have already been deployed to the South China Sea along with several of China’s Su-35s, to take part in a joint combat patrol over the region, according to the Chinese Ministry of Defense whose release did not mention the J-20.
A spokesman for the People’s Liberation Army (PLO), Shen Jinke, said that the J-20 would “help the air force better shoulder the sacred mission of safeguarding national sovereignty, security and territorial integrity,” adding that the air force was in the middle of a modernization program in order to fight enemies on all fronts.
The IISS report also notes that China’s expanding array of advanced guided-weapons projects, such as the PL-15 extended range air-to-air missile which could enter service this year. “This weapon appears to be equipped with an active electronically scanned array radar, indicating that China has joined the few nations able to integrate this capability on an air-to-air missile,” reports Chipman.
Also of concern is China’s ambitions at sea, as Beijing continues its ever-expanding fleet.
Since 2000, China has built more submarines, destroyers, frigates and corvettes than Japan, South Korea and India combined. To put this further into perspective, the total tonnage of new warships and auxiliaries launched by China in the last four years alone is significantly greater than the total tonnage of the French navy. –IISS
Moreover, China’s navy is deploying further from home, including Europe, while their base in the Eastern African country of Djibouti will enable more naval deployments.
China’s military computing technology is also rapidly growing, as vast resources have been sunk into “extremely high-performance computing and quantum communications,” which, along with their weapons advancements and overall defense capabilities mean the country is no longer merely “catching up” with Western progress.
All of these developments have meant a rising defense budget, which has been pegged to GDP growth at 6-7% since 2016:
While China’s rapid military advances are significant, all is not lost for the West, which will need to remain agile and adaptable:
Western governments still have it in their power to maintain an edge. Their military forces will need to be agile and adaptable, better at working with partners inside and outside government, and able to make flexible use of technological developments. Some governments in the West will look to ‘leap-ahead’ technologies to augment and deliver military power.
Chipman concludes that Western states need to plan for responses to persistent competition, and stresses the importance of “anticipating and detecting ambiguous as well as proximate threats.” This means more than just better defense and better weapons; societies need to be made more psychologically resilient, “and resistant to attempts to erode their cohesion and will in peacetime as well as war.”
Translation; Despite our current military superiority, the West needs to solve the man-child epidemic, solidify alliances, and prepare to show the enemy our war faces at a moment’s notice – lest we lose what our ancestors so bravely fought for.
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