- NATO's Real Purpose: Welfare For The Military-Industrial Complex
NATO’s Real Purpose: Welfare For The Military-Industrial Complex
Authored by Alastair Crooke via The Strategic Culture Foundation,
Kevin Baron, editor of Defense One (a leading US defence publication, funded by the defence industry) explains his anxieties about NATO’s future:
“NATO’s external threats, and internal leaders’ divisions are not what worries me the most … I expected panelists I spoke with over the past month to raise familiar issues … but I was surprised by their serious concern about the very fabric of the alliance: ‘This time it’s different’, many insist: “The philosophy on which this whole institution is built is profoundly challenged,” opined journalist Bobby Ghosh of Bloomberg Opinion (“in our pre-summit conversation at IISS”). [Emphasis added].
“His point was – that if leaders such as Trump and Erdogan continue to cosy-up to Russia – then what’s the purpose of this Cold War-era alliance? That’s a fair point. But I believe NATO’s biggest threat [comes from] its own inward-turning electorates. To global security leaders, from think tanks to the secure ‘tank’ inside the Pentagon, NATO is an essential organization and tool for the West’s ‘way of life’. It’s not even a question … Those leaders believe: How could anyone want to harm that?”.
Yet that is exactly what is happening. Political leaders no longer want (or can afford, politically) to go where US Defence Establishment points.
“Perhaps the biggest threat to the alliance” Baron suggests, is precisely “the gap between those political leaders – and the national security community [sic] leaders, gathering on the side lines, begging to be heard.”
President Macron appeared to pinpoint this gap exactly, when he said, “what we are currently experiencing is the brain death of NATO”. Some observers saw this as Macron grandstanding, as he seeks to seize the political leadership of Europe from a fading, Chancellor Merkel (which to an extent, he probably was). But the attention-grabbing point, more likely, was intended to underscore how the world has changed: Both France and Germany are experiencing grave internal political protest, as Europe’s economies slow.
The EU needs to re-position geo-politically, Macron asserts, “and secondly, we need to reopen a strategic dialogue with Russia – which without being naïve – will take time,” Macron said this week.
Strategic dialogue? Why? Maybe because Trump does not view the EU as either a close friend, or as trade partner in good standing? Trump puts it straight: the EU is worse than China (in stealing America’s ‘lunch’), and Trump is threatening the EU with a harsh tariff war.
Such an eventuality – such hostility towards Europe – was unimaginable when Europe was founded as a subsidiary ‘liberal empire’, within the US global orbit. The unquestioned EU premise, had been of ‘uncle’ America, always being ‘there’, in case of difficulties. This is no longer true – and shocking it is, for EU élites.
And, as America’s radically financialised, max-pressure assault across the globe – with its prime focus on a tech Cold War with China – unfolds, the EU sees itself becoming the unhappy ‘piggy-in-the middle’ of this ‘war’. Expected to give fealty to America as usual, but in want of China and Russia as its trading partners, too.
Macron thinks Europe therefore, will need added strategic diplomatic strength – hence the notion of Europe partnering Russia. (Macron probably two-facedly, suggests to Trump that this – putative splitting of Russia from China, by Europe – is in the US interest, too).
It won’t work. Russia well understands Macron’s game (but would be happy to play Macron and Merkel along, towards a lifting of EU sanctions on Russia).
But more than this, what Macron is proposing is the re-positioning of Europe. Europe, he suggests, must have its own ‘clout’; its own separate global leverage – and this means European military clout. NATO essentially is ‘welfare’ for the US Military Industrial Complex, in his view. Why not spend that 2% of EU GDP with European manufacturers (especially French ones), he muses, and have some military clout of Europe’s own.
So Bobby Ghosh is somehow right when he says that it is “the philosophy on which this whole institution [NATO] is built, [that is being] profoundly challenged”. It is not just NATO – though – it is rather, the whole ‘constellation’ of Washington consensus institutions. For those (IMF, World Bank, etc.), are being challenged too. (Albeit from a completely different angle):
France’s finance minister said last week that the post-war international monetary order needed to be reinvented, or become increasingly dominated by China. “The Bretton Woods order as we know it has reached its limits,” Bruno Le Maire said. “The alternative we have is now clear – either we reinvent Bretton Woods; or it risks losing relevance, and eventually disappearing”. Whilst Bretton Woods had defined the international economic order of the second half of the 20th century; the first part of this century may be defined by China’s New Silk Road project. “And Chinese standards – on state aid, on access to public procurements, on intellectual property – could become the new global standards”.
But that is only the half of it: these fora, David Stockman (President Reagan’s former Budget Director) writes, are but:
“Washington fostered fig leaves designed to legitimize and provide ‘multilateral’ sanction for the Empire’s projects of global hegemony. Indeed, they are actually the vital glue which cements the bipartisan consensus in favour of Washington’s interventionist foreign policy.
“This multilateralist scam originated during the Cold War when there was at least a modicum of justification for the Empire’s imperial pretensions. But after the Berlin Wall fell in 1989 … it was multilateralism which enabled the reprise of Empire … [and] provided the fig leaf of cover and sanction for Washington’s imperial ventures, that fueled the rise of the bipartisan ‘War Party’ on the banks of the Potomac. Still [today], the Achilles Heel of the Imperial City is [its] pretense of global leadership and multi-lateral blessing for what amounts to a rogue regime of superpower hegemony.”
The post-WWII, Washington consensus was, from the outset, a political design that evolved in response to the Woodstock era into something of a counter-revolutionary (neo-liberal) project, designed to weaken the populist forces of organised labour: “It would nip in the bud what, at that time, were revolutionary movements in much of the developing world — Mozambique, Angola, China etc. — but also a rising tide of communist influences in countries like Italy and France and, to a lesser degree, the threat of a revival of that in Spain”.
“Even in the United States, trade unions had produced a Democratic Congress that was quite radical in its intent. In the early 1970s they, along with other social movements, forced a slew of reforms and reformist initiatives which were anti-corporate: the Environmental Protection Agency, the Occupational Safety and Health Administration, consumer protections, and a whole set of things around empowering labour even more than it had been empowered before.
“So in that situation there was, in effect, a global threat to the power of the corporate [élite] and therefore the question was, “What to do? …”
“[The challenge was to keep US corporations profitable]. One way was to open up immigration. In the 1960s, for example, Germans were importing Turkish labour, the French Maghrebian labour, the British colonial labour. But this created a great deal of dissatisfaction and unrest.
“Instead they chose the other way — to take capital to where the low-wage labour forces were. But for globalization to work you had to reduce tariffs and empower finance capital, because finance capital is the most mobile form of capital. So finance capital and things like floating currencies became critical to curbing labour.
“At the same time, ideological projects to privatize and deregulate, created unemployment. So, unemployment at home; and offshoring, taking the jobs abroad; and a third component: technological change (deindustrialization through automation and robotisation): That was the strategy to squash labour.
“It was an ideological assault, but also an economic assault [writes Professor David Hervey].
It was Paul Volcker, the former Federal Reserve chief who died last week, who finally decided that the working man or woman needed to pay the price of the Fed’s victory in stemming inflation. He explicitly aimed at breaking the power of organised labour, and just after being appointed as Fed Chair declared: “The standard of living of the average American has to decline”.
When looking at the trend of median real wage stagnation in the US and Europe – something now broadly acknowledged as the root cause of most of Europe’s socio-economic and political problems, and of our distorted markets – all this started with Volcker.
This (the economic stagnation and the incremental impoverishment of the 60%) is at the root of their complaint, when Europeans, such as Le Maire, lump NATO, together with the whole Washington consensus institutions, as being obsolescent (and lying, as it were, at the root of their domestic crises).
When the US recession began during the Great Financial Crisis of 2008, Ben Bernanke (the then Fed Chair) thought that low interest rates and massive money printing would lead to lending and spending that would restore growth. But those policies did not result in growth, which requires productive investment (from savings) to increasingly accumulate. Instead rather, it eviscerated private savings (low or negative interest rates).
The Germans have been warning about this for years – and now Germany is plainly in recession – and the CDU’s coalition partner, the SPD, consequently has taken a sharp turn to the left in response – threatening the viability of Merkel’s government.
The bottom line: the NATO disquiet is not just because the US wants to prioritize competition with Russia and China over counterterrorism, or that NATO now seeks to address China’s military rise. Though these policies would place Europe in an invidious position strategically, as well as vis-à-vis trade with both powers, but because the entire Washington consensus is blowing up – politically – in the Europeans’ face.
The underlying, ideological political project (of a ‘liberal’ global order), fuelled and furthered by radical money ‘printing’ as an integral to the project, has produced nothing other than asset bubbles, amidst protests against neo-liberalism spreading across the globe.
NATO leaders will say they did not print the money. True. But Stockman is quite correct when he says that NATO is part and parcel of the multilateral institutional ‘scam’ which has legitimised, enabled, and encased the underlying, financialised hegemony project.
The paradox is that originally conceived as a counter-revolutionary tool to smother ‘60s and ‘70s radicalism, neo-liberalism has pushed the pendulum so far towards élite interests, that it has succeeded in birthing a new era of protest and radicalism. Well, what goes around comes around.
Tyler Durden
Tue, 12/17/2019 – 02:00 - What Everyone Is Missing About The Afghanistan Papers
What Everyone Is Missing About The Afghanistan Papers
Authored by Darius Shahtahmasebi via TheMindUnleashed.com,
If you need more proof that lawmakers in the U.S. couldn’t care less about America’s woeful commitment to human rights abroad – or even care about the public who vote them into office – look no further than the recent Afghanistan papers and the reaction to the publications from Congress.
According to the Washington Post, the outlet had obtained 2,000 pages of notes from interviews with more than 400 generals, diplomats, and other officials directly involved in the war. The documents showed that U.S. officials were lying about the progress being made in Afghanistan, lacked a basic understanding of Afghanistan, were hiding unmistakable evidence that the war had become unwinnable, and wasted close to $1 trillion in the process.
Barely a few hours following the Post’s publication, Congress rewarded the Pentagon for its stellar efforts with a $22 billion budget increase. How can we as a society justify this?
One stand-out statistic—among the many concerning ones—is the fact that before the U.S. invasion the Taliban had almost completely put to bed Afghanistan’s illicit opium trade. Since the U.S. invasion, combined with $9 billion in U.S. funding for anti-opium programs, the Taliban is not only stronger than it ever was but sits cemented in a country that now supplies 80 percent of the world’s opium.
I can’t help but think this was done on purpose.
Still, it would be worth re-thinking our outrage over the Afghanistan papers and determining what exactly it is we are outraged about. Are we simply angry because top U.S. officials lied to us about the fact they weren’t winning the war, making it a less worthwhile venture? If the U.S. were winning the war, spending $1 trillion in the process, killing record numbers of civilians, ramping up night raids to terrorize local populations, committing war crimes left right and center, would that suddenly make it all okay? As long as the war is being won, right?
The truth is, like most wars the U.S. finds itself prosecuting; this was yet another war based entirely on lies and misconceptions—right from the outset. As Marjorie Cohn, professor at Thomas Jefferson School of Law and president of the National Lawyers Guild famously said:
“The UN Charter is a treaty ratified by the United States and thus part of U.S. law. Under the charter, a country can use armed force against another country only in self-defense or when the Security Council approves. Neither of those conditions was met before the United States invaded Afghanistan. The Taliban did not attack us on 9/11. Nineteen men—15 from Saudi Arabia—did, and there was no imminent threat that Afghanistan would attack the U.S. or another UN member country. The council did not authorize the United States or any other country to use military force against Afghanistan. The U.S. war in Afghanistan is illegal.”
If that was the case in 2001, how this war has continued for close to another two decades begins to beggar belief. In that time, the consequences for the Afghan civilian population has been catastrophic.
In February of 2010, a NATO night raid conducted in a village in the Paktia province of Afghanistan left seven civilians dead, including two pregnant women. NATO tried to spin the raid as an attack on a compound festering with “militant activity,” but this quickly fell apart thanks to a British reporter, Jerome Starkey, who had already reported that this was a false narrative.
The compound actually belonged to an anti-Taliban policeman trained by the United States. At the time, the family had gathered to celebrate the naming of a newborn son. In order to cover the tracks of their reckless decision to execute unarmed civilians, the American troops used knives to dig out the bullets from the bodies of the pregnant women killed.
This is the kind of activity that trillions of dollars of U.S. taxpayer money has been paying for on a regular basis. More than 775,000 troops have served in Afghanistan, with 2,300 U.S. personnel deaths. Not to mention that the U.S. has not been fighting there alone, and has had assistance not just from NATO, but from so-called peaceful states like New Zealand as well (who have been accused of committing war crimes, too).
Yes, we should be outraged that officials lied about the prospects of success. But we should primarily be disturbed that they first and foremost lie in order to push our countries into these wars in the first place, killing countless innocent civilians over and over again.
We can’t let this recent publication obscure itself into nothingness. The recent reaction from Congress is a giant middle finger designed to tell you that (a) there will never be anything you can do about it and (b) they simply don’t care how you feel.
Democracy at its finest from the world’s leading propagator of democratic values.
Tyler Durden
Mon, 12/16/2019 – 23:50 - Hong Kong Airport Passenger Volumes Crash To Decade Lows Amid Socio-Economic Chaos
Hong Kong Airport Passenger Volumes Crash To Decade Lows Amid Socio-Economic Chaos
Who in their right mind would travel to Hong Kong these days? Six months of violent protests and a deepening recession have transformed the city into a chaotic mess. Mainland Chinese, corporations, and tourists are abandoning the city, reflected in the latest plunge of airport passenger and air freight data.
Hong Kong International Airport reported on Sunday that passenger volume in November was down 16.2% Y/Y, the most significant decline since 2009, when volumes fell 18.7% Y/Y, reported Reuters, citing a Civil Aviation Department statement.
In the last three months, passenger volume fell 12% Y/Y as violent protests have kept many away from the city.
The statement said some of the most significant drops in passenger volumes came from mainland China and Southeast Asia.
Hong Kong International Airport is the largest airport in the world for cargo and is used as an economic bellwether for the global economy.
With passenger volumes slipping and air fright cargo shipments dropping, the global economy could stumble into 2020.
The statement said flight trips dropped 8.3% Y/Y in November. Cargo throughput for the month fell 3.4% Y/Y to 450,000 tons.
The air freight slowdown has prompted airport officials to offer a 20% reduction to terminal handling fees for freight forwarders, in a bid to stoke new business.
The Air International Air Transport Association (IATA) said airlines could start slashing passenger capacity in 1Q20. If the passenger downturn persists through spring, commercial flights could be cut by summer.
The social unrest has been ongoing for six months and has forced the city’s economy into a recession, affecting its largest sector: tourism.
Business receipts of tourism, convention, and exhibition services plunged 27.8% Y/Y in Q3, the worst drop since the SARS epidemic in 2003.
With no end in sight for the protests and a recession that is expected to deepen into 1H20, the time to rebuild business confidence in the city could take years, or in some respects, never — since China now wants to make Macau its next Hong Kong.
Tyler Durden
Mon, 12/16/2019 – 23:30 - Judge Denies Flynn's Requests For Exculpatory Information, Case Dismissal
Judge Denies Flynn’s Requests For Exculpatory Information, Case Dismissal
Authored by Peter Svab via The Epoch Times,
A federal judge has denied requests by Lt. Gen. Michael Flynn to prompt the government to give him information he deems exculpatory and to dismiss the case against him.
District Court Judge Emmet Sullivan sided with the government in arguing that Flynn was already given all the information to which he was entitled. The judge also dismissed Flynn’s allegations of government misconduct, noting that Flynn already pleaded guilty to his crime and failed to raise his objections earlier when some of the issues he now complains about were brought to his attention.
“The sworn statements of Mr. Flynn and his former counsel belie his new claims of innocence and his new assertions that he was pressured into pleading guilty,” Sullivan said in his Dec. 16 opinion (pdf).
Flynn, former head of the Defense Intelligence Agency, pleaded guilty on Nov. 30, 2017, to one count of lying to the FBI. He’s been expected to receive a light sentence, including no prison time, after extensively cooperating with the government on multiple investigations.
In June, he fired his lawyers and hired former federal prosecutor Sidney Powell, who has since accused the government of misconduct, particularly of withholding exculpatory information or providing it late.
Powell has argued that Flynn’s previous lawyers had a conflict of interest because they testified in a related case against Flynn’s former business partner. Flynn had previously told the court he would keep the lawyers despite the conflict, but Powell said prosecutors should have asked the judge to dismiss the lawyers anyway. Sullivan disagreed, saying Flynn failed to show a precedent that the prosecutors had that obligation.
Powell also said the government had no proper reason to investigate Flynn in the first place and that it had set up an “ambush interview” with the intention of making Flynn say something it could allege was false.
Sullivan disagreed again and said that previously, with the advice of his former lawyers, Flynn never “challenged the conditions of his FBI interview.”
Flynn was interviewed by two FBI agents, Joe Pientka and Peter Strzok, on Jan. 24, 2017, two days after he was sworn in as President Donald Trump’s national security adviser.
The prosecutors argued that the FBI had a “sufficient and appropriate basis” for the interview because Flynn days earlier told members of the Trump campaign, including soon-to-be Vice President Mike Pence, that he didn’t discuss with the Russian ambassador the expulsion of Russian diplomats in late December 2016 by then-President Barack Obama.
Flynn later admitted in his statement of offense that he asked, via Russian Ambassador to the U.S. Sergei Kislyak, for Russia to only respond to the sanctions in a reciprocal manner and not escalate the situation.
The FBI was at the time investigating whether Trump campaign aides coordinated with Russian 2016 election meddling. No such coordination was established by the probe, which concluded more than two years later under then-special counsel Robert Mueller.
Powell argued that whatever Flynn told Pence and others in the transition team was none of the FBI’s business.
“The Executive Branch has different reasons for saying different things publicly and privately, and not everyone is told the details of every conversation,” she said in a previous court filing.
“If the FBI is charged with investigating discrepancies in statements made by government officials to the public, the entirety of its resources would be consumed in a week.”
Powell said Flynn’s answers to the agents weren’t “material,” meaning relevant to the FBI investigation of election meddling.
Sullivan, however, thought otherwise, using a broader description of the investigation.
The bureau, he said, probed the “nature of any links between individuals associated with the [Trump] Campaign and Russia” and what Flynn said was material to it.
The description Sullivan used appears to omit the context of the probe, which focused specifically on the Russian election meddling.
Tyler Durden
Mon, 12/16/2019 – 23:10 - Chinese Crypto Scammers Helped Inspire Recent Bitcoin Market Carnage
Chinese Crypto Scammers Helped Inspire Recent Bitcoin Market Carnage
If you’re hoping to make money shorting bitcoin this holiday season, you might be in luck: Analysts say the price of a bitcoin is set to fall even further as the perpetrators of a massive Chinese crypto scheme dump their ill-gotten gains.
Several of the participants in the $2 billion PlusToken scheme are dumping crypto from anonymous accounts. The sales are believed to be the reason fro bitcoin’s 50% drop since its peak in late June, which was around the time that some of the perpetrators of PlusToken were arrested in China.
Unfortunately, Chinese authorities didn’t manage to nab them all, and a team of analysts at the blockchain consultancy Chainalysis are warning that the fallout isn’t over yet, according to Bloomberg.
The largest cryptocurrency is likely to remain under pressure as perpetrators of the estimated more than $2 billion PlusToken scandal dump coins to cash out, the New York-based firm said Monday in the wake of a five-month investigation that continues to track the tokens as they filter through various blockchain ledgers.
Bitcoin has tumbled almost 50% from its 2019 peak in late June, when Chinese authorities arrested multiple suspects in the pyramid scheme that promised returns as high as 600% and guaranteed that investors would be rewarded for inviting new members. Since that time, market observers have often pointed to possible sales tied to PlusToken suspects not in custody as one of many reasons for price declines.
According to Chainalysis, PlusToken conspirators have already sold 25,000 bitcoins, and it’s believed another 20,000 (worth nearly $142 million at current prices). The coins are spread across some 8,700 anonymous bitcoin wallets.
“That’s certainly something to consider when you are thinking about where the price is going, at least in the short term.” Kim Grauer, senior economist at Chainalysis said in a phone interview. “It could be, according to our research, continued downward pressure.”
It’s just the latest example of a ‘whale’ (market parlance for a player with a huge amount of coins) impacting the market in a way that almost smells like manipulation. Remember the “highly suspicious” price action from last month? Like we said, it’s just another example of a fairly common phenomenon.
Chainalysis believes the illictly gotten PlusToken coins are being sold via coin shuffling services like Wasabi Wallet, or via private, “OTC” transactions with trading desks that have agreed to help them launder their money, for a fee.
Tyler Durden
Mon, 12/16/2019 – 22:50 - Did The Supreme Court Just Pull The Rug Out From Under Article Of Impeachment?
Did The Supreme Court Just Pull The Rug Out From Under Article Of Impeachment?
Authored by Alan Dershowitz, op-ed via The Hill,
The decision by the Supreme Court to review the lower court rulings involving congressional and prosecution subpoenas directed toward President Trump undercuts the second article of impeachment that passed the House Judiciary Committee along party lines last week.
That second article of impeachment charges President Trump with obstruction of Congress for refusing to comply with congressional subpoenas in the absence of a final court order. In so charging him, the House Judiciary Committee has arrogated to itself the power to decide the validity of its subpoenas, as well as the power to determine whether claims of executive privilege must be recognized, both powers that properly belong with the judicial branch of our government, not the legislative branch. The House of Representatives will do likewise, if it votes to approve the articles, as is expected to occur on Wednesday.
President Trump has asserted that the executive branch, of which he is the head, need not comply with congressional subpoenas requiring the production of privileged executive material, unless there is a final court order compelling such production. He has argued, appropriately, that the judicial branch is the ultimate arbiter of conflicts between the legislative and executive branches. Therefore, the Supreme Court decision to review these three cases, in which lower courts ruled against President Trump, provides support for his constitutional arguments in the investigation.
The cases that are being reviewed are not identical to the challenged subpoenas that form the basis for the second article of impeachment. One involves authority of the New York district attorney to subpoena the financial records of a sitting president, as part of any potential criminal investigation. The others involve authority of legislative committees to subpoena records as part of any ongoing congressional investigations.
But they are close enough. Even if the high court were eventually to rule against the claims by President Trump, the fact that the justices decided to hear them, in effect, supports his constitutional contention that he had the right to challenge congressional subpoenas in court, or to demand that those issuing the subpoenas seek to enforce them through court.
It undercuts the contention by House Democrats that President Trump committed an impeachable offense by insisting on a court order before sending possibly privileged material to Congress. Even before the justices granted review of these cases, the two articles of impeachment had no basis in the Constitution. They were a reflection of the comparative voting power of the two parties, precisely what one of the founders, Alexander Hamilton, warned would be the “greatest danger” of an impeachment.
House Democrats should seriously consider dropping this second article in light of the recent Supreme Court action. In fairness, this development involving the high court occurred after Democrats on the House Judiciary Committee made up their minds to include obstruction of Congress as an impeachment article. Yet the new circumstances give some Democratic members of Congress, who may end up paying an electoral price if they support the House Judiciary Committee recommendation, meaningful reason for voting against at least one of the articles of impeachment.
It would be a smart way out for those Democrats. More important, it would be the right thing for them to do. It would be smart and right because, as matters now stand, the entire process smacks of partisanship, with little concern for the precedential impact which these articles could have on future impeachments. If a few more Democrats voted in a way that would demonstrate greater nuanced recognition that, at the least, the second article of impeachment represents an overreach based on current law, it would lend an aura of some nonpartisan legitimacy to the proceedings.
The first article goes too far in authorizing impeachment based on the vague criterion of abuse of power. But it is the second article that truly endangers our system of checks and balances and the important role of the courts as the umpires between the legislative and executive branches under the Constitution. It would serve the national interest for thoughtful and independent minded Democrats to join Republicans in voting against the second article of impeachment, even if they wrongly vote for the first.
Tyler Durden
Mon, 12/16/2019 – 22:30 - Iran Alleges "Terror" Plot As Drug-Laced Cake Scare Impacts Food Industry
Iran Alleges “Terror” Plot As Drug-Laced Cake Scare Impacts Food Industry
Tyler Durden
Mon, 12/16/2019 – 22:10 - Secret Deep State Demands: The FBI Wants Consumers' Credit Data
Secret Deep State Demands: The FBI Wants Consumers’ Credit Data
Authored by Mac Slavo via SHTFplan.com,
The Federal Bureau of Investigation has secretly demanded access to a whole bunch of consumer credit information and data. Recently revealed documents prove that the FBI wants access to troves of financial information from the nation’s largest credit agencies.
According to a report by Tech Crunch, this is a regular thing for the FBI. The government agency regularly uses these legal powers (known as national security letters) to compel credit giants to turn over non-content information, such as records of purchases and locations, that the agency deems necessary in national security investigations. But these letters have no judicial oversight and are typically filed with a gag order, preventing the recipient from disclosing the demand to anyone else; including the target of the letter.
Since the law changed (lawmakers changed it to protect themselves and the government at large) in 2015 in the wake of the Edward Snowden disclosures that revealed the scope of the U.S. government’s surveillance operations, recipients have been allowed to petition the FBI to be cut loose from the gag provisions and publish the letters with redactions. Only a few tech companies, including Facebook, Google, and Microsoft, have disclosed that they have ever received one or more national security letters.
While tech companies have often reported to their users when government agencies have demanded their information, credit companies have not. Most of these major data collectors have failed to publish their figures altogether.
Three lawmakers — Democratic senators Ron Wyden and Elizabeth Warren, and Republican senator Rand Paul — have sent letters to Equifax, Experian, and TransUnion, expressing their “alarm” as to why the credit giants have failed to disclose the number of government demands for consumer data they receive.
“Because your company holds so much potentially sensitive data on so many Americans and collects this information without obtaining consent from these individuals, you have a responsibility to be transparent about how you handle that data,” the letters said. “Unfortunately, your company has not provided information to policymakers or the public about the type or the number of disclosures that you have made to the FBI.” –Tech Crunch
It still isn’t known just how many demands credit agencies have gotten of the 500 million the FBI has made since they were given the power to access our data in 2001. The New York Times reported that the national security letters to credit agencies were a “small but telling fraction” of the overall half-million FBI-issued demands made to date.
Other banks and financial institutions, as well as universities, cell service, and internet providers, were also the targets of national security letters, the documents revealed.
The senators have given the agencies until December 27 to disclose the number of demands each has received.
Tyler Durden
Mon, 12/16/2019 – 21:50 - Japan's Biggest Banks Are Having Second Thoughts About Lending To SoftBank After WeWork Debacle
Japan’s Biggest Banks Are Having Second Thoughts About Lending To SoftBank After WeWork Debacle
If we’ve learned anything about Masayoshi Son, the eccentric Japanese billionaire behind SoftBank, over the past few months, it’s that Japan’s most famous business clearly has trouble differentiating between luck and skill.
This, as Professor Scott Galloway explained yesterday, is a common problem in the world of Venture Capital: In Galloway’s estimation, many investors exemplify what’s called the Dunning-Kruger effect. This posits that dumb people are too stupid to know they are dumb, allowing them to remain colossally overconfident. The effect also includes people who mistakenly believe their expertise in one area translates into expertise in another area or all areas.
This is probably one of the many concerns running through the minds of Son’s longtime Japanese bankers, as they reevaluate their ties with one of their most important clients, Bloomberg reports.
And who can blame them? All together, Japan’s biggest banks have billions of dollars in exposure to SoftBank. And now, the firm is returning to its financiers for another round of lending, but this time, it’s coming in the wake of the company’s most embarrassing year on record.
SoftBank has had an almost singularly terrible year. The company has had problems with more than a dozen investments, with the biggest flops being WeWork and Uber, though WeWork, which is now the subject of an anxiety-provoking turnaround plan following an emergency lifeline loan from its biggest backer for more than $6 billion, stands out as a particularly massive and predictable disaster (if only Masa read Zero Hedge…).
There’s now plenty of evidence to suggest that SoftBank’s investment process is deeply flawed. Even Son himself has said he decided to invest after talking to CEO/Svengali Adam Neumann for 20 minutes. He committed billions of dollars of both SoftBank money and money from his now infamous Vision Fund. After one 20 minute face-to-face meeting. How is that even legal?
SoftBank’s latest fuck-up hit the financial press in Monday’s edition of the Financial Times. Oyo, one of SoftBank’s biggest bets, is facing backlash in China, where a letter signed last week by 172 hoteliers across China accuses the company of imposing “unclear bills and arbitrary deductions” and threatens legal action if their complaints aren’t swiftly resolved, which sounds…ominous.
(This chart courtesy of Barron’s)
That’s a huge problem, because Oyo’s valuation jump in a funding round closed over the summer helped provide some respite to SoftBank as Oyo’s valuation doubled to $10 billion.
Masayoshi Son
And after investors balked at WeWork’s IPO because of the hilariously non-standard governance issues, Neumann, who tried to engineer things so that his family would control WeWork for “the next 300 years” was pushed out with a massive golden parachute, which was like adding insult to injury.
The banks that SoftBank has approached for its next big loan would see their total exposure to SoftBank climb to $15 billion if they decided to back the deal. These banks include most of the usual suspects: Mitsubishi UFJ, Sumimoto and Mizuho.
SoftBank reportedly met with all three on Nov. 26 to discuss the credit facility, according to BBG’s anonymous sources. WeWork executives reportedly went over their plans to save the company with their bankers. This is important, as several bankers have reportedly told BBG that they would be hesitant to continue lending to SoftBank unless it can develop a credible turnaround strategy for WeWork.
Among all the SoftBank investing blunders that led to this, the near-collapse of WeWork looms largest in bankers’ imaginations.
“Japanese banks have provided loans in part because of Son’s management power and capability,” said Kazumi Tanaka, an analyst at DZH Financial Research Inc. “The WeWork issue has chipped away at one of the elements that convinced them” to back Son, Tanaka said.
At the end of the day, we doubt the Japanese banks will pass on SoftBank, and this is why: Son is still one of the biggest fish in Asia’s second-largest economy.
But just in case, it appears Masa is playing it safe by beginning to diversify his banking business across the Pacific. To wit, Goldman is reportedly arranging a $1.75 billion line of credit as part of WeWork’s rescue package. SoftBank is listed as the primary borrower in that deal, and who knows? Perhaps Goldman is betting on Son and is trying to steal his business away from its Japanese rivals.
Another reason it will be difficult for Son’s bankers to pass up another loan: With the Japanese economy as starved for yield as it is, SoftBank’s credit rating is BB+, which is a notch below investment grade. In other words, “Japanese banks may be getting more concerned, but they still have to provide more support,” said business school professor and former investment banker Michiaki Tanaka.
Tyler Durden
Mon, 12/16/2019 – 21:30 - Democrats, Deficits, & Whistling Past The Graveyard
Democrats, Deficits, & Whistling Past The Graveyard
Authored by Lance Roberts via RealInvestmentAdvice.com,
I was stunned by a recent article from Marshall Auerback via The Nation entitled “Why Democrats Need To Stop Worrying And Love The Deficit.”
“Delivering on big progressive ideas like Medicare for All and the Green New Deal will never happen until Democrats get over their fear of red ink.”
While the article is long, winding, and a convoluted mess of ideas, the following is the all you really need to read:
The perceived problem:
“In an environment increasingly characterized by slowing global economic growth, businesses are understandably hesitant to invest in a way that creates high-quality, high-paying jobs for the bulk of the domestic workforce. The much-vaunted Trump corporate “tax reform” may have been sold to the American public on that basis, but corporations have largely used their tax cut bonanza to engage in share buybacks, which fatten executive compensation but have done nothing for the rest of us. At the same time, private households still face constraints on their consumption because of stagnant wages, rising health care costs, declining job security, poorer employment benefits, and rising debt levels.
Instead of solving these problems, the reliance on extraordinary monetary policy from the Federal Reserve via programs such as quantitative easing has exacerbated them. In contrast to properly targeted fiscal spending, the Federal Reserve’s misguided monetary policies have fueled additional financial speculation and asset inflation in stock markets and real estate, which has made housing even less affordable for the average American.”
The Non-Solution
According to Mr. Auerback is the solution is simple:
“Democrats should embrace the ‘extremist’ spirit of Goldwater and eschew fiscal timidity (which, in any case, is based on faulty economics). After all, Republicans do it when it suits their legislative agenda. Likewise, Democrats should go big with deficits—as long as they are used for the transformative programs that progressives have long talked about and now have the chance to deliver.”
This is essentially the adoption of Modern Monetary Theory (MMT), which, as discussed previously, is the assumption debt and deficits “don’t matter,” as long as there is no inflation.
“Modern Monetary Theory is a macroeconomic theory that contends that a country that operates with a sovereign currency has a degree of freedom in their fiscal and monetary policy, which means government spending is never revenue constrained, but rather only limited by inflation.” – Kevin Muir
However, the solution isn’t really a solution.
Mr. Auerback suggests the Democrats should go big with deficits to fund the “transformative programs” they have long talked about. These programs are, as we know, socialistic from government-run healthcare to more social welfare, to free college.
The problem is that these progressive programs lack an essential component of what is required for “deficit” spending to be beneficial – a “return on investment.”
This was a point addressed by Dr. Woody Brock previously in “American Gridlock;”
Country A spends $4 Trillion with receipts of $3 Trillion. This leaves Country A with a $1 Trillion deficit. In order to make up the difference between the spending and the income, the Treasury must issue $1 Trillion in new debt. That new debt is used to cover the excess expenditures but generates no income leaving a future hole that must be filled.
Country B spends $4 Trillion and receives $3 Trillion income. However, the $1 Trillion of excess, which was financed by debt, was invested into projects, infrastructure, that produced a positive rate of return. There is no deficit as the rate of return on the investment funds the “deficit” over time.
There is no disagreement about the need for government spending. The disagreement is with the abuse and waste of it.
John Maynard Keynes’ was correct in his theory that in order for government “deficit” spending to be effective, the “payback” from investments being made through debt must yield a higher rate of return than the debt used to fund it.
Currently, the U.S. is “Country A.”
The programs that Mr. Auerback suggests the Democrats pursue with deficit spending, only exacerbate the current problem. According to the Center On Budget & Policy Priorities, roughly 75% of every current tax dollar goes to non-productive spending. (The same programs the Democrats are proposing.)
To make this clearer, in 2018, the Federal Government spent $4.48 Trillion, which was equivalent to 22% of the nation’s entire nominal GDP. Of that total spending, ONLY $3.5 Trillion was financed by Federal revenues, and $986 billion was financed through debt.
In other words, if 75% of all expenditures go to social welfare and interest on the debt, those payments required $3.36 Trillion of the $3.5 Trillion (or 96%) of the total revenue coming in.
Currently, because of corporate tax cuts, a slowing economic environment, and weak wage growth, tax revenues have declined as federal expenditures have surged.
The result of unbridled fiscal largesse is a surging deficit that must be met by growing debt issuance.
Debt Begets Debt
There used to be an actual debate between “Austerity” and “Spending.” Conservatives in Government used to at least talk a “good game” about cutting spending, budgeting, and debt reduction. Now, that is no longer the case as during the past several Administrations, both “conservative” and “liberal” have opted for more “fiscal largesse.”
The irony is that increases in debt only lead to further increases in debt as economic growth must be funded with further debt. As this money is used for servicing debt, entitlements, and welfare, instead of productive endeavors, there is no question that high debt-to-GDP ratios reduce economic prosperity over time. In turn, the Government tries to fix the “economic problem” by adding on more “debt.” The Lowest Common Denominator provides more information on the accumulation of debt and its consequences.
Another way to view the impact of debt on the economy is to look at what “debt-free” economic growth would be. In other words, without debt, there has been no organic economic growth.
For the 30-year period, from 1952 to 1982, the economic surplus fostered a rising economic growth rate which averaged roughly 8% during that period. Today, with the economy expected to grow at just 2% over the long-term, the economic deficit has never been greater. If you subtract the debt, there has not been any organic economic growth since 1990.
What is indisputable is that running ongoing budget deficits that fund unproductive growth is not economically sustainable long-term.
Whistling Past The Graveyard
Let me be clear.
As Dr. Brock notes, deficit spending can be beneficial when the debt is used in a productive manner. The U.S. has the labor, resources, and capital for a resurgence of a “Marshall Plan” which could foster the development of infrastructure with high rates of return on each dollar spent.
However, that isn’t what Mr. Auerback, the Democrats, are suggesting or offering. The Government has already delved into the MMT pool over the last 40-years spending trillions bailing out banks, boosting welfare support, supporting Wall Street, and reducing corporate tax rates, which all have a negative rate of return.
The results have been disappointing, and suggesting that more of the same will produce a different result is the precise definition of “insanity.”
In the meantime, the aging of the population continues to exacerbate the underfunded problems of Social Security, Medicare, and Medicaid, which is roughly $70 trillion and growing. It is simply a function of demographics and math.
As Dr. Brock noted:
“Mathematics and Sex create performance anxiety in men – because you can’t fake the outcome of either.”
Two recent studies show the problem clearly.
Demographics is an easy problem to see and mathematically calculate. The ratio of workers per retiree, as retirees are living longer (increasing the relative number of retirees), and lower birth rates (decreasing the relative number of workers), present a massive headwind to economic solvency.
The Institute for Family Studies, published a report showing the decline in the fertility ratio to the lowest levels since 1970,
With fertility rates low, the future “support-ratio” will continue to be a problem.
The second, and more immediate, problem is the vastly underfunded savings of the “baby boomer” generation heading into retirement. To wit:
” Anxiety over retirement and how to support oneself after calling it a career is impacting many Americans. A recent poll found that one in three adults has less than $5,000 in retirement savings.”
This is simple math.
Currently, 75.4 million Baby Boomers in America—about 26% of the U.S. population—have reached or will reach retirement age between 2011 and 2030. A vast majority of them are “under saved” and primarily unhealthy.
This combination ensures the demand on the health care system, along with Medicaid and Medicare, will increase at a rate faster than it can supply. Bankruptcy, without substantive changes, is inevitable.
Of course, it isn’t just the social welfare and healthcare system that is effectively “broken,” but the economic model itself.
The current path we are on is unsustainable. The remedies being applied today is akin to using aspirin to treat cancer. Sure, it may make you feel better for the moment, but it isn’t curing the problem.
Unfortunately, the actions being taken have been repeated throughout history as those elected into office are more concerned about “satiating the mob with bread and games” rather than suffering the short-term pain for the long-term survivability of the empire.
In the end, every empire throughout history fell to its knees under the weight of debt and the debasement of their currency.
As Dr. Brock suggests – it is truly “American Gridlock” as the real crisis lies between the choices of “austerity” and continued government “largesse.”
One choice leads to long-term economic prosperity for all, the other doesn’t.
“Today we are borrowing our children’s future with debt. We are witnessing the ‘hosing’ of the young.”
Tyler Durden
Mon, 12/16/2019 – 21:10 - Capesize Shipping Rates Plunge To Six Month Low, Weighs Down Baltic Index
Capesize Shipping Rates Plunge To Six Month Low, Weighs Down Baltic Index
Another downward slide in dry bulk shipping known as Capesize — vessels with a capacity of more than 100,000 deadweight tons, has been seen on Monday morning with rates hitting six-month lows. The slide in Capesize rates has weighed on the overall Baltic Exchange index.
The Capesize index slid 4.9%, to 2,334, its lowest since June 21.
The Baltic index, which tracks rates for Capesize, Panamax and Supramax vessels that transport dry bulk commodities, dropped 3% on Monday.
The largest US-listed Capesize companies, Golden Ocean and Star Bulk, recently outlined demand issues for Capesize vessels in separate earnings calls in late November.
The plunge in Capesize rates is mainly a demand issue, both shippers warned, originating from Brazil, Australia, and China.
“The main drivers of Capesize rates are Chinese iron-ore imports from Australia and Brazil. Since the route from Brazil is triple the distance versus the trip from Australia, it soaks up three times as many Capes to carry the same volume,” said FreightWaves.
According to Birgitte Ringstad Vartdal, CEO of Golden Ocean, “at the start of the fourth quarter, it looks like [Brazilian iron-ore miner] Vale is struggling a bit with its production system and there has also been a lot of early rain in Brazil. Vale has reduced its guidance for the fourth quarter and has guided a moderate production level in the first quarter.”
“In the spot market, we see ships on the Australia-China route being fixed constantly, every day, but we see a lack of volume on the Brazil-China route,” she added, noting that this “should reduce the number of vessels that are willing to ballast toward Brazil.”
Persistent weakness in Capesize rates on specific shipping lanes to and from Brazil, Australia, and China, indicates that the global economy is still losing momentum and a giant rebound in which equity markets have already priced in might be fantasy. We don’t discount that the worldwide economy could stabilize in early 2020, but the idea of a massive rebound in economic growth is unlikely at the moment.
Tyler Durden
Mon, 12/16/2019 – 20:50 - We Are In The Midst Of The Worst Drug Crisis In American History
We Are In The Midst Of The Worst Drug Crisis In American History
Authored by Michael Snyder via TheMostImportantNews.com,
There has never been a time in our history when more Americans have been on drugs. According to the most recent government numbers, 24.6 million Americans have used an illegal drug within the last 30 days. Of course the number of Americans taking legal drugs is actually far, far higher.
According to Bloomberg, 46 percent of all Americans have taken at least one legal pharmaceutical drug within the last 30 days. In most instances, those legal drugs have been prescribed by doctors with the intention of helping people, but sometimes legal drugs are even more addictive than illegal drugs are. In particular, opioids have destroyed countless American lives over the past decade, and in so many cases those that got addicted originally got them legally. Today, Americans consume approximately 80 percent of the total global supply of opioids, and it is a major national crisis. But even if we were able to get rid of all the opioids, we would still be the most drugged up nation on the entire planet. We have become a nation of addicts, and the self-destructive path that we are on does not have a positive ending.
Whenever I come across a story about a really crazy crime that someone has committed, it almost always involves drugs. For example, just check out this doozy from West Virginia…
A stripper has been convicted of beheading her boyfriend’s disabled Star Wars-obsessed son after having sex with him. Roena Cheryl Mills, 43, was last Thursday found guilty of the first-degree murder of 29 year-old Bo White at a house in Lerona, West Virginia, in April 2018. Mills – who has the phrase ‘special kinda crazy’ tattooed across her chest – reportedly targeted Bo after having sex with him in return for drugs.
The stronger the addiction, the more desperate addicts become to get their next fix.
And very desperate people do very desperate things.
One of the first things that you will notice when drugs start taking over an area is that crime goes way up. Addicts are always looking for a way to fund their lifestyles, and retailers all over the nation are being hit particularly hard right now.
In fact, Home Depot is specifically blaming “the opioid crisis” for the epidemic of theft that they have been witnessing…
The company said organized criminals are stealing millions of dollars’ worth of goods from it and other retailers and storing the merchandise in warehouses. The theft, which retailers call shrink, has gotten so bad that it will narrow Home Depot’s operating profit margins next year, executives said during a meeting with analysts and investors.
“This is happening everywhere in retail,” Chief Executive Officer Craig Menear said. “We think this ties to the opioid crisis, but we’re not positive about that.”
Each year, doctors issue approximately 300 million prescriptions for pain medications.
That number is way, way too high, and so many Americans end up as addicts.
There has been an effort to educate the American people about these drugs in recent years, but most of us still don’t realize how incredibly dangerous they can be.
Sadly, the number of Americans dying from opioid overdoses continues to steadily grow…
More than 61,300 people in the U.S. died from drug overdoses in 2017, up from the previous year’s record of 54,800. (See the graphic.) That’s more than the number of Americans who died in the Vietnam War. And it’s happening every year.
Opioids are directly or indirectly responsible for about 70 percent of those overdose deaths.
If you can believe it, the number of Americans dying from drug overdoses has actually more than doubled since 2010.
So many people never would have imagined that their doctors would prescribe them something that is highly addictive and highly dangerous, and once you are hooked it can be exceedingly difficult to escape.
The New York Times has said that what we are facing is “the worst drug crisis in American history”, and for once I actually agree with the New York Times.
I have mostly focused on opioids so far in this article, but there are so many other classes of drugs that are also a massive problem in the U.S. right now.
In fact, federal officials are telling us that meth “is making a big comeback” in this country…
Meth producers in Mexico are cranking up the speed of production, and the drug is making a big comeback in the U.S.
“Across the country, it’s probably still the largest problem we have in America,” Derek Maltz, former head of the Drug Enforcement Administration’s (DEA) Special Operations Division, told Yahoo Finance. ”The Mexican cartels… they make it at levels that we’ve never seen before. So business is booming, the country’s addicted, and it’s really, really out of control.”
“We’re talking super labs,” another former DEA agent, Kevin Hartmann, told a local TV station in Texas. “Super labs that can produce multi hundred kilograms of methamphetamine.”
Meth is insanely addictive, and it will literally take over your life once you open the door.
When asked about her multi-year addiction, one opioid addict described it this way…
Erika Haas calls it “the pull.”
When Haas was 24, her doctor prescribed OxyContin for back pain. She quickly progressed to heroin – and then to methamphetamines. Now 30 and in recovery, she described the grip that meth had over her for more than five years.
“It’s like God tells you that if you take another breath, your children will die,” she said, shaking her head and trying to hold back tears. “You do everything you can not to take a breath. But eventually you do. That’s what it’s like. Your brain just screams at you.”
Thanks to decades of border security neglect, the big Mexican drug cartels are able to pump drugs into this country at a staggering rate.
And now they have apparently come up with a new form of meth that is stronger and cheaper than before…
Primarily imported from Mexico by major drug traffickers, “meth 2.0” is stronger, cheaper and far more plentiful than the old home-cooked variety. And with historic levels of funding from the federal government focused exclusively on fighting opioid addiction, states and counties are scrambling to find resources to combat this most recent drug plague.
Law enforcement officials are doing the best that they can to fight back, but without sufficient border security it is often a losing battle.
In South Dakota, they recently came up with a new slogan to show that they are trying to fight back: “Meth. We’re on it.”
A lot of people got a good laugh out of that, but unfortunately that slogan accurately describes what is happening in community after community all across the United States.
The ancient Greeks used the word “pharmakeia” to describe the mystical pull that these sorts of drugs can have on people. This is a crisis that just seems to get bigger with each passing year, and it is one of the primary causes for the social decay that we see all around us.
Those that have been snared by these drugs need our love and compassion, because they are truly victims of a relentless war against our nation. So many lives have already been destroyed, and we desperately need our politicians on the national level to start taking this threat a whole lot more seriously.
Tyler Durden
Mon, 12/16/2019 – 20:30 - PGIM's Hunt Warns Of "Zombie" Future For Asset Management
PGIM’s Hunt Warns Of “Zombie” Future For Asset Management
PGIM’s Chief Executive Officer David Hunt spoke with Bloomberg Television on Monday and warned that a zombie apocalypse is set to invade the asset-management industry with at least 80% of firms achieving “zombie” status in the 2020s.
“We have never seen such a disparity between winners and losers,” Hunt said during the interview. “The vast majority of firms, if you’re just doing public equities, you’re just doing fixed income, you’re struggling. You’re in outflows, and we don’t see that changing anytime soon.”
Hunt’s outlook for the industry is rather bleak. He said asset managers have been accustomed to decades of high fees, wide margins, and big salaries.
Institutional clients are now demanding lower fees and have allocated money to fewer and fewer asset managers in the last decade. This trend alone threatens to leave managers behind who are underperforming and don’t offer products that offer a wide range of investment exposure.
He said the quick rise of passive investing had crushed portfolio managers of active equities.
“If you don’t have the performance, you can’t charge the kind of historical fees that you had,” said Hunt, adding that, “If you’re a benchmark-hugging firm, you’re going to be replaced with passive, and so you deserve.”
Here’s Hunt’s view on the three business models that will thrive in the 2020s: indexing funds such as BlackRock Inc., boutique firms with a concentration in private equity, and multi-asset investors with an international reach.
PGIM is the investment arm of insurer Prudential Financial, has an AUM of approximately $1.3 trillion.
Hunt and his team focus on public fixed income, real estate debt, and equity/private credit. He expects PGIM to expand more into private equity secondaries and added that his firm wouldn’t be diving into passive products: “We attract really good people, we have a real meritocracy, we support people who have contrarian points of view, sometimes for years, and we encourage people to have non-consensus views,” Hunt said. “We’re oriented toward active outperformance, and we don’t want to dilute that culture.”
Hunt’s warning could signal that a consolidation wave could strike the industry in the early 2020s.
Tyler Durden
Mon, 12/16/2019 – 20:10 - The Best And Worst Oil Predictions Of 2019
The Best And Worst Oil Predictions Of 2019
Authored by Julianne Geiger via OilPrice.com,
There’s nothing like wild volatility to destroy the integrity of those high-end bankers and analysts who are brave enough to make oil price predictions year in and year out.
But the forecasting nightmare doesn’t stop them, even at the worst of times.
In the final month of last year, banks and analysts were brave enough to divulge their predictions for 2019.
At that time, the second year of the OPEC agreement was coming to a close; the U.S. had re-imposed sanctions on Iran four months earlier with waiver extensions; and the average price of a Brent barrel for December was changing hands at $56.50, compared to the month earlier average of $65.20. WTI averaged $49 in December 2018. OPEC had agreed to cut production again for 2019.
So who should we look for when it’s time to forecast what oil prices will do in 2020? That depends on their track record the last time around.
Here are some of the best and worst oil price predictions of 2019:
The World Bank
For 2019, the World Bank was one of the first on the scene to provide its outlook in late 2018.
The Bank said the most important factor for 2019 would be OPEC, specifically the lack of spare production capacity among OPEC members. This lack of oil production capacity would provide “limited buffers” should there be a sudden shortfall in the supply of oil “raising the likelihood of oil price spikes in 2019.”
While WB acknowledged that the world was currently in a state of oversupply, it could swing the other way quickly. In the first month of 2019, the World Bank conservatively predicted that Brent would average $67 per barrel for the year—a $2 per barrel decrease from its June 2018 predictions for 2019. The WB was quick to add that the “uncertainty around this forecast is high.”
How did they do? Aside from needlessly worrying the market with OPEC’s lack of capacity, it turns out their prediction was a bit high. The average price of the Brent barrel in Q1 2019 was $63.30; for Q2 it was $68.30, and Q3 at $61.90. November’s average was $62.70.
Citi
Citi’s forecast for 2019, also made in December 2018, was more sober-minded, with the bank predicting that Brent would average $60 for the year. It, too, predicted a volatile market for the next year, largely because the U.S., Russia, and Saudi Arabia—the top three oil producers in the world–all had different views as to what that perfect oil price should be. The bank also predicted that oil production in the United States would continue to offset much of what OPEC would cut—a prediction that turned out to be close to reality: US production has increased 1.2 million bpd this year—precisely what OPEC agreed to cut.
How did they do? Not terrible. Its primary range was for Brent to trade between $55 and $65 per barrel–a generous $10 price range. Even with that big range, oil sat above $65 for the better part of February through May.
Bank of America Merrill Lynch (BAML)
Also in mid-December 2018, BAML took a stab at making Brent price predictions, forecasting that oil would resume its path back up to $70 average in 2019, with a potential for higher prices in Q2. Similar to Citi and World Bank, BAML said that oil prices would be volatile.
How did they do? It’s hard to argue with the fact that oil indeed appears to be trending upward, which could be interpreted as “resuming its path back up to $70″. And Q2 was in fact higher, with oil prices actually surpassing $70 for a time in April and May.
However, BAML lost a bit of credibility in our book when it hedged its forecast by saying that “the only certainty is uncertainty.” BAML hedged further in April when it said oil prices had a higher chance of hitting $100 than what the market consensus was, due to OPEC supply cuts, a slowdown in US shale, and IMO 2020 regulations.
BAML further watered down its predictions in August when it said oil could fall to $30 or $40 should China decide to import substantial amounts of oil from Iran, despite the US sanctions.
The EIA
A month after Citi, WB, and BAML ponied up their predictions, the EIA came out with its own. Its prediction for 2019, provided in its January 2019 Short Term Energy Outlook, was that Brent would average $61 per barrel. Around this time, specifically at the start of the year, Brent was trading at $53.80 and WTI was trading at $45.41.
How did they do? Not half bad. Brent traded at an average of $61.90 for the 3rd quarter 2019, and November’s average was $62.70—less than $2 off per barrel for a prediction made 11 months ago in a volatile market.
That’s it for the predictions made at the start of the year. But other predictions along the way, armed with a half a year or more of actual data, are noteworthy as well.
FX Empire: Using adaptive dynamic learning (ADL), FX Empire predicted in July of this year that oil prices would rotate between $47 and $64 between July and October, before falling in November and December to a range between $45 and $50. FX Empire said it could actually dip below $40 by the end of 2019, or in early 2020.
How did they do? FX Empire’s ADL appears to be pretty far off the mark. This CL=F is today trading at $59.42, nearly $20 higher than it’s sub-$40 prediction for the end of the year.
Goldman Sachs’ Jeff Currie: In October, Currie, head of Goldman’s commodity research, warned that oil prices could fall as low as $20 per barrel for WTI if oversupply were to result in full storage facilities. With nowhere to put it, explains Currie, the price of oil would fall dramatically as production would have to crash. However, crude oil inventories in the United States are not dramatically up, and are almost even-steven with this time last year, down a total of 1.41 million barrels over the last 50 weeks. Global oil inventories are a different story, though. In Currie’s defense, he did say that there was a less than 50% chance of oil falling below $20 barrel.
How did they do? By our math, that 50% hedge would have made Goldman correct either way.
IEA: Piggybacking off Goldman’s October forecast for the oil-inventory-pocalypse, the IEA’s Fatih Birol said that these low prices would force the US to cut production, resulting in a price hike once again. In July, the IEA predicted that slowing oil demand would cap oil prices, and keep them from moving too much higher. At the time, Brent was trading at $63.01, with WTI trading at $56.18.
How did they do? With Brent trading on December 12 at $64.47, the $1.50 increase comfortably falls within the not-too-much-higher range, so we’d say the IEA’s prediction was spot on.
Analyst Poll: In August, Reuters polled 51 economists and analysts, who thought Brent would average $65.02 in 2019. At the time, Brent had averaged $65.08, so the $65.02 wasn’t stepping out on a long limb.
How did they do? Wisely, the analysts cited the US-China trade dispute and risk of an economic slowdown as the reason for its new forecast, which was down from $67.47 for the month before. Still, the price prediction was a bit high.
RBC Capital Markets: RBC’s Helima Croft in May suggested that Brent could top $80 over the summer due to Iranian tensions.
How did they do? RBC got it partially right. Iran tensions did indeed escalate. Iran repeatedly made threats to close Hormuz, drone strikes attacked Saudi Aramco’s oil infrastructure, and Iran seized a British oil tanker and held onto it for months. Still, prices didn’t get anywhere near $80. But this isn’t your daddy’s oil market. A year or two ago, tensions in the Middle East—especially ones that are more than just threats, would have sent oil prices soaring. But the market is today permanently spooked with the trade war negotiations with China and slow oil demand growth, meaning these geopolitical risks no longer pack the same punch.
Iran: In June, a top military aide to Iran’s Supreme Leader issued a prediction which was really more of a warning: that the first bullet fired in the Persian Gulf would push oil prices above $100 per barrel. At the time, oil was trading at $61.67.
How did they do? Not well. Things did heat up in the Gulf, and bullets—many of them—have been fired over the last month after major fuel protests in Iran. There were also drone strikes over Saudi Arabia that did significant damage to oil infrastructure, which took offline over 5 million bpd. Still, oil got nowhere near $100.
Eurasia Group: Henry Rome, a senior analyst at political risk consultancy Eurasia Group, agreed that these same Iranian tensions could push prices above $100, and a major confrontation with Iran “would likely” send prices above $150.
How did they do? Even worse than Khamenei’s military aide.
WSJ Poll: At the end of April, a week or so after the US announced that it would not extend the waivers to buyers of sanctioned Iranian oil, WSJ-polled analysts expected Brent to average $70 per barrel in 2019—an increase of $2 per barrel from its previous poll a month earlier.
How did they do? Oil was already trading at $70 at the time of their prediction, so it wasn’t really a huge leap of faith at the time. Still, prices failed to get any higher than that for the remainder of the year, rendering their prediction in the far-too-high category.
Tyler Durden
Mon, 12/16/2019 – 19:50 - "You Should Go To Fuc*in' Jail": Chaos Ensues As Schiff Accused Of 'Treason' At California Event
“You Should Go To Fuc*in’ Jail”: Chaos Ensues As Schiff Accused Of ‘Treason’ At California Event
A Glendale, California town hall event hosted by Rep. Adam Schiff (D-CA) became less than civil on Saturday, after hecklers accused the House Intelligence Committee chairman of “treason” and being a “liar,” according to the Los Angeles Times.
As Schiff began speaking, a man and two women held up signs reading,”Don’t Impeach.” When they were asked to take down the signs, they refused. -LA Times
Around a dozen Trump supporters attended the event to discuss the House’s recent recognition of the Armenian Genocide. Scattered throughout the audience, the protesters began yelling “Liar!” at the de facto ringleader of House Democrats’ efforts to impeach President Trump.
After some aggressive shushing from Schiff supporters, the audience members yelling at Schiff removed their jackets, revealing pro-Trump shirts. One of them then said, “you should go to fuckin’ jail … you will be going to jail, for treason.”
“This man is a fuckin’ liar!” shouted another.
Watch:
The outburst lasted around 15 minutes, before the event continued. Three Glendale police officers were present, and no arrests or injuries were reported.
The event was organized by the Armenian National Committee of America — Western Region to thank the U.S. House of Representatives for recently passing a resolution affirming its recognition of the Armenian genocide and celebrating the U.S. Senate’s passage of the resolution.
The measure’s passage is considered a rebuke to Trump, who had sought its delay, and to Turkish President Recep Tayyip Erdogan, who had lobbied the White House to block the designation. The Turkish government disputes that a genocide took place.
Erdogan, in an Oval Office visit last month, warned of dire consequences for the Washington-Ankara relationship if the “genocide” term were to be formalized. The Senate resolution declared it U.S. policy “to commemorate the Armenian Genocide through official recognition and remembrance” and “reject efforts to enlist, engage, or otherwise associate the United States government with denial of the Armenian Genocide or any other genocide.” -LA Times
“I was grateful for the opportunity to share in the community’s celebration of the historic passage of the Armenian Genocide resolution in both the House and Senate, and thankful for the recognition of the efforts of so many people who made this day possible,” Schiff said in a statement following the event.
“Unfortunately, some came to the event with the intent to disrupt, but the Armenian community has had to overcome far greater challenges along the road to recognition than to be deterred by a few angry voices.”
There are more than just a few, from what we gather.
Tyler Durden
Mon, 12/16/2019 – 19:30 - Can Democrats Read Minds?
Can Democrats Read Minds?
Authored by Sharyl Attkisson , op-ed via The Hill,
In following the Democrats’ impeachment effort, I have listened to both sides with an open mind, tried to do some original research, and put a lot of thought into the arguments and claims.
If what the Democrats allege is true, it’s disturbing, indeed.
Democrats claim President Trump is corrupt and that he abused his power, primarily because he called the new president of Ukraine and demanded that he find dirt on a Trump political rival — Democratic presidential candidate Joe Biden — to bolster Trump’s chances of winning the 2020 presidential election. The U.S. president acted solely in his own personal political interest, they say, and selfishly sacrificed the nation’s interest.
Furthermore, Democrats say, what Trump held out as leverage — a quid pro quo — was U.S. taxpayer-funded military aid to Ukraine. They say people died while Ukraine waited for this critical aid, and that it was released only when Trump realized he was in trouble and under investigation. And finally, they say Trump held up a White House meeting with the Ukrainian president until he would commit to announcing an investigation into Biden, in a very public interview with CNN. It’s bribery. Treason. Impeachable.
The issue I have is that to prove their points, Democrats require us to believe they can read minds.
President Trump said nothing about a quid pro quo during the phone call in question. He didn’t threaten to hold up aid or a White House meeting. But Democrats say that’s exactly what he meant.
President Trump didn’t make any expressions of demands in the call. But Democrats say that’s what he meant.
President Trump didn’t mention the 2020 election or political dirt on the call. He spoke of getting to the bottom of any 2016 foreign election interference under the Obama administration, as Democrats and Republicans have pressed him to do. On the call, Trump spoke of his desire for Ukraine to investigate corruption and whether the Bidens may be connected to any of it. This, said Trump, particularly concerned Joe Biden’s public admission that he demanded a Ukrainian prosecutor be fired and threatened to hold up U.S. taxpayer-funded aid unless it happened within hours. (Biden says the prosecutor wasn’t working hard enough to investigate corruption; Biden’s critics say there was a conflict of interest because the prosecutor was investigating the energy company where Biden’s son was paid to sit on the board.)
But Democrats say something different than what was said was actually in President Trump’s mind: He was secretly attempting to impact the 2020 campaign. Trump didn’t mention 2020 but, Democrats say, he meant 2020 in his own mind. Trump didn’t allude to political dirt but, they say, that’s exactly what Trump was thinking about.
Some of the Democrats’ witnesses stated that Trump likely wanted Ukraine’s president to publicly announce a corruption investigation to hold his feet to the fire because the Ukrainians have a habit of committing to one thing but doing another. But Democrats insist Trump had something else in his mind: Trump wanted the public announcement to embarrass and use against Biden in the 2020 campaign.
The president of Ukraine has publicly stated, and put in writing, that he felt no pressure from President Trump. But Democrats say the opposite is true. After all, they can read minds.
President Trump explicitly stated in a private conversation with one of the Democrats’ witnesses that he wanted “no quid pro quo.” But the mind-reading Democrats know Trump meant the opposite; Trump did want a quid pro quo.
Though Ukrainian experts say a holdup of U.S. aid would not have impacted their ability to fight the Russians, since they manufacture their own lethal weapons (and sell a lot to other countries), the Democrats can read minds: They say people died because of the delay.
Seeming to disprove the Democrats’ allegations on their face, the Ukrainian president made no public announcement of a corruption investigation on CNN, but the U.S. aid was released anyway. Yet Democrats say they know that President Trump released the aid only because he knew at that point that Congress was investigating him.
And it’s not just Democrats.
Each of the Democrats’ witnesses also drew conclusions about President Trump, his supposedly corrupt motivations and thought processes, that would require them to read minds. (Most of them said they’d neither met nor spoken to Trump.)
Lastly, Democrats can read Joe Biden’s mind, too. They know that when Biden insisted on the firing of the prosecutor investigating his son’s company, that his son didn’t factor into the decision.
Democrats could be correct on all counts.
But I think that from a practical standpoint, it’s difficult to prosecute a serious case based almost solely on the idea that you claim to know what the other guy was thinking.
Tyler Durden
Mon, 12/16/2019 – 19:10 - 750 Billion Reasons Why Goldman Is Rooting For Greta Thunberg's Success
750 Billion Reasons Why Goldman Is Rooting For Greta Thunberg’s Success
Having lost much of its central banker incubation skills over the past decade, and handing over the crown of Wall Street’s most profitable trading desk to Morgan Stanley, in recent years Goldman Sachs has been best known for enabling and profiting wildly from Malaysia 1MDB criminal fraud, which culminated with the arrest of former Malaysia PM Razak, but not before Goldman made billions in illicit profits from selling bonds offered by the country’s sovereign wealth fund.
And while Goldman is still waiting to learn its criminal and civil fate, and more importantly, how many billions it will have to pay Malaysia/the DOJ to put its 1MDB fraud in the rearview mirror, the company – which a decade ago was hoping to make billions from aggressively entering the carbon credit/offset market as profiled delightfully in Matt Taibbi’s “The Great American Bubble Machine” – is already scheming how to profit from the latest round of anti-climate change euphoria, conveniently spawned by a 16-year-old child with Asperger’s Syndrome.
On Monday, Goldman Sachs said it will provide $750 billion in financing, advisory services and investments for initiatives that fight climate change, as well as those that foster economic opportunities for under-served people over the next decade. What Goldman did not say is that it will pocket a generous commission, somewhere in the 3-5% ballpark, by peddling “green” products to naive investors (including central banks) who have fallen for the whole ESG virtue signalling charade.
The bank also updated its internal environmental policy framework to rule out providing financing to any new projects that will drill for oil in the Arctic or that create new thermal coal plants or new thermal coal mines. Of course, the destructive consequences of the bank’s involvement in the 1MDB scandal would be quietly excluded from this virtuous charade.
Ironically, Goldman’s policy changes come just as the United Nations concludes a conference that failed to ramp up efforts to combat global warming, according to Reuters.
Goldman CEO David Solomon announced the plans in an editorial in the Financial Times, where he wrote that there is “a powerful business and investing case” for the bank to take steps to address climate change and the growing worldwide opportunity gap. Very powerful: having failed to make almost any money from the bank’s last foray into carbon tax and cap-and-trade, Goldman is now seeking to directly appeal to fellow fake virtue signalers, who in turn will hope to extract capital from naive investors pursuing the oh so noble goal of only investing in green, renewable, and “clean” (whatever that means) projects. Goldman’s bottom line, assuming a blended 3% commission on the $750BN in financial services it sells to gullible clients, works out to about $22.5 billion – a “powerful business case” indeed.
Additionally, Goldman emphasized that it will not pass up any significant amount of revenue as a result of the $750 billion commitment and the ban on financing certain drilling and coal activities. A Goldman Sachs executive said on a call with reporters that the bank has not financed any projects like those in recent memory. However, since US shale producers, most of whom are funded by the ultra-generous US junk bond market, are hardly losing sleep, it only means that other, less “virtuous” banks will be delighted to pocket a far higher commission by stepping into the “dirty” market where ESG virtue signalers now refuse to tread.
And speaking of drilling and coal activities, the bank said it has a rigorous due-diligence process that takes into consideration, among other things, impacts on endangered species and indigenous populations, the executive said.
The $750 billion commitment will be deployed in several ways, including by investing in and advising companies to take steps to reduce their carbon emissions and become more sustainable, the bank said. For example, earlier this year Goldman worked with Italian electricity company Enel to raise $1.5 billion through a bond offering that linked the investments to Enel’s commitment to increase its renewable energy base by 25% before 2022.
Translation: Goldman made about $15 million selling a bunch of bonds to a bunch of “green” liberals managing other liberals’ money. Because when central banks have taken over the market and Goldman’s own trading desk is shrinking quarter after quarter, and when the coming negative rates will make Goldman’s recent investment into retail banking a disaster, one can always make money betting on liberal guilt, and nobody knows this better than Goldman Sachs… and Greta Thunberg.
And just in case Thunberg falls short of sparking the next major revenue driver on Wall Street, there is always the Fed. On Monday, the San Fran Fed published a paper titled “The Economics of Climate Change: A First Fed Conference” in which the authors concluded that “the economic consequences of climate change are likely to be substantial and will require responses from a wide range of policy institutions”. More importantly, they will make tens of billions in revenue for such idealistic, progressive, “green” organizations as Goldman Sachs.
* * *
In parting, we remind readers what Matt Taibbi wrote about “the great vampire squid wrapped around the face of humanity” almost a decade ago: “From tech stocks to high gas prices, Goldman Sachs has engineered every major market manipulation since the Great Depression — and they’re about to do it again.” Fast forward ten years when, with the help of Greta, Goldman is about to do it all over again.
Tyler Durden
Mon, 12/16/2019 – 18:50 - Is The Death Of 'Wokesterism' Upon Us?
Is The Death Of ‘Wokesterism’ Upon Us?
Authored by James Howard Kunstler via Kunstler.com,
An Expulsion Of Demons
Is there any saving the Democratic Party? This wretched concatenation of ill-will, bad faith, false witness, and sore-loserdom lurches from one defeat to the next like some mindless monster from an ancient fable of ruin, seeking a final spectacular spasm of self-annihilation. Let’s face it: only an exorcism will do, some spiritual emetic to induce the projectile vomiting of all that borscht the monster has swallowed.
The “progressive” (not) Resistance took two body-blows last week, one foreign and one domestic.
-
Its cousin in Britain, the Labor Party, led by the red-headed stepchild of a Marxist-Jihadi chimera, Jeremy Corbyn, got such an unexpected and mighty thrashing at the hands of BoJo that it virtually dissolved into a little puddle of bile on the floor of parliament. Corbyn was a piece of work, a cheerleader for Hezbollah and other enemies of western civ, with a zealous antipathy to economic reality, spreading the virus of identitarian Wokesterism that has infected Britain like a plague of yore. Surely the American Dems noticed how that went down.
-
The Horowitz report also staggered the monster lurching across America, though it took a few days to absorb the blow of countless incriminating details in the fine print. UkraineGate maestro Adam Schiff went on TV Sunday to declare that he had been “unaware” of abuses in the FISA warrant process. Gee, ya think? We are left to wonder who exactly pulled the wool over his goggle-eyes. In fact, his self-unawareness extends to virtually every utterance flying out of his pie-hole since 2016. The IG report left the FBI and DOJ in such a shambles of criminal odor that it dispelled all the narrative curses conjured by sorcerers in the news media for three years running. And as everyone in the country knows now, the IG report is hardly the end of the story. Mr. Horowitz labored under — as they say — an extremely narrow purview that will not constrain the legal audit to come.
Meanwhile, the impeachment dumbshow put on by hobgoblin Jerrold Nadler enters a most interesting zone of suspense this week as fate propels it towards a floor debate and then a vote by the whole house on Wednesday or Thursday. That’s a lot of time for members to reflect on the message sent to the voters by last week’s IG report — namely, that the investigative arms of government are so deeply corrupt and malicious that only fools and cads will go along with their findings, and that the distrust extends to the committees in congress who swallowed all that seditious malfeasance in pursuit of impeachment. That might give the vapors to enough congresspersons in swing districts to bring the actual floor vote for impeachment up short. If the case against General Michael Flynn is dismissed as it should be by the IG’s report of broad prosecutorial misconduct — and possibly at any moment now — that could seal the deal against an impeachment vote.
How much ignominy can they endure? Have they not grasped the reality that the Mueller investigation failed? That it appears to have been only one part of a larger criminal enterprise to defraud the public? That the Resistance was just an effort to cover up swales of wickedness in a greater swamp of government-gone-rogue? And now, to come to this: two articles of impeachment so transparently empty that they look like windows into vacated soul of the Democratic Party.
And now consider all this vectoring into the catastrophe that the Democratic primary has become heading into election 2020. Joe Biden? Really? Are they serious? He left a slime trail as wide as the DC Beltway around his doings as Veep, with enough video evidence to make the College of Cardinals weep for his post-mortal prospects. Elizabeth Warren and Bernie Sanders might be moved to study up on what just happened in the UK election, and weigh how US voters might be disposed to another four-year beat-down with the cudgels of inclusion and diversity plus the shady blandishments of free everything. And what else can you show me? Mayor Pete and Cory Booker, two pieces of defective merchandise cluttering up the showroom?
This solemn holiday may be the Democrat Party’s last chance to avoid suicide. They need to have a conversation with someone on the cosmic hotline, come to the realization that they’ve truly hit bottom now and must, as Rep Devin Nunes suggested Sunday to his colleague Adam Schiff, sign into rehab.
Tyler Durden
Mon, 12/16/2019 – 18:30 -
- US Secretly Expelled Chinese Officials Who Breached 'Sensitive' Virginia Facility
US Secretly Expelled Chinese Officials Who Breached ‘Sensitive’ Virginia Facility
The United States quietly expelled two Chinese Embassy officials from the country after a September incident in which they were caught entering a sensitive US military facility in Virginia.
According The New York Times, at least one is believed to be an intelligence officer under diplomatic cover. Interestingly, the officials’ wives were accompanying them when they drove onto to the as yet unidentified military facility, and the group actually attempted to flee military personnel pursuing them.
They were reportedly apprehended after fire trucks blocked their path, according to the report. Their subsequent expulsion by US authorities marks the first time Chinese diplomats suspected of espionage have been booted from the country in over three decades. The last such episode happened in 1987.
File image of Naval Station Norfolk, via Yelp. Multiple sensitive military and government facilities are in the area, and it’s as yet unknown exactly which site was breached. The Times report says the strange incident is part of a broader pattern of “bolder” efforts by Chinese diplomatic personnel to infiltrate government and research facilities:
The episode in September, which neither Washington nor Beijing made public, has intensified concerns in the Trump administration that China is expanding its spying efforts in the United States as the two nations are increasingly locked in a geopolitical and economic rivalry. U.S. intelligence officials say China poses a greater espionage threat than any other country.
In recent months, Chinese officials with diplomatic passports have become bolder about showing up unannounced at research or government facilities, American officials said, with the infiltration of the military base only the most remarkable instance.
The incident resulted in the State Department imposing stricter travel regulations on Chinese diplomatic personnel in the US, resulting in a protest from Beijing.
This included new requirements for the embassy to notify US authorities anytime a meeting with US or state officials is arranged, or anytime a visit to a government or educational facility will take place.
Chinese Embassy in Washington D.C., via Getty Images. Beijing has for years imposed even stricter requirements on US personnel in China. And we can only imagine the outrage and major ‘international incident’ headlines which would ensue if Americans did the same inside China, based on the following further details of the September incident:
The Chinese officials and their wives drove up to a checkpoint for entry to the base, said people briefed on the episode. A guard, realizing that they did not have permission to enter, told them to go through the gate, turn around and exit the base, which is common procedure in such situations.
But the Chinese officials instead continued on to the base, according to those familiar with the incident. After the fire trucks blocked them, the Chinese officials indicated that they had not understood the guard’s English instructions, and had simply gotten lost, according to people briefed on the matter.
Military personnel said they were skeptical of the “gotten lost” excuse, and suspected they were conducting an experimental breach of the base’s security.
The report only identified the location as being near Norfolk, Virginia, and as housing Special Operations forces. One such base in the area described includes the headquarters of the Navy’s elite SEAL Team Six; however, it’s as yet unconfirmed the precise facility which was breached.
Tyler Durden
Mon, 12/16/2019 – 18:10
Digest powered by RSS Digest
Saving...![<!–[if IE 9]><![endif]–>](https://i0.wp.com/www.zerohedge.com/s3/files/inline-images/Norfolk.jpg?ssl=1){kind=link}
![<!–[if IE 9]><![endif]–>](https://i0.wp.com/www.zerohedge.com/s3/files/inline-images/chinese%20embassy.jpg?ssl=1){kind=link}