Apr 18

Today’s News 18th April 2018

  • Tech Firms Promise To Fight Back Against Government Spying

    In an announcement ostensibly meant to put Russian and Chinese hackers on notice – but we imagine is truly intended to reassure wary foreign customers that American cloud computing firms wont’ turn their data over to the NSA – 31 tech titans from around the world (but mostly the US) have signed on to a set of principles stipulating that they will not help any government – including the US deep state – mount cyberattacks or cyberespionage against “innocent civilians and enterprises from anywhere,” the New York Times reported.

    The publication of these principles follows a first-of-its-kind joint condemnation on Monday from American and British officials that placed the blame for nefarious cyberactivity squarely on Russia’s shoulders.

    Here’s Reuters:

    The Cybersecurity Tech Accord, which vows to protect all customers from attacks regardless of geopolitical or criminal motive, follows a year that witnessed an unprecedented level of destructive cyber attacks, including the global WannaCry worm and the devastating NotPetya attack.

    The principles are intended to be the cornerstone of an eventual “Geneva Convention for the Internet” that would strictly limit how governments can conduct cyberespionage and cyberwarfare.

    On Monday, American and British officials issued a first-of-its-kind joint warning about years of cyberattacks emanating from Russia, aimed not only at businesses and utilities but, in some cases, individuals and small enterprises. The warning was only the latest in a series about Russian threats to elections and electoral systems.

    But thanks to some of the documents stolen by former NSA contractor Edward Snowden, the public understands that the US is extremely guilty of browbeating tech firms into cooperating with its intelligence agencies, according to the New York Times.

    Perhaps as important, none of the signers come from the countries viewed as most responsible for what Brad Smith, Microsoft’s president, called in an interview “the devastating attacks of the past year.” Those came chiefly from Russia, North Korea, Iran and, to a lesser degree, China.

    ….

    The impetus for the effort came largely from Mr. Smith, who has been arguing for several years that the world needs a “digital Geneva Convention” that sets norms of behavior for cyberspace just as the Geneva Conventions set rules for the conduct of war in the physical world. Although there was some progress in setting basic norms of behavior in cyberspace through a United Nations-organized group of experts several years ago, the movement has since faltered.

    Mr. Smith said over the weekend that the first move needed to come from the American companies that often find themselves acting as the “first responders” when cyberattacks hit their customers. “This has become a much bigger problem, and I think what we have learned in the past few years is that we need to work together in much bigger ways,” Mr. Smith said in an interview. “We need to approach this in a principled way, and if we expect to get governments to do that, we have to start with some principles ourselves.”

    Microsoft played a central role in trying to extinguish the WannaCry attack last year that struck the British health care system and companies around the world. The Trump administration, along with several other Western governments, later blamed that attack on North Korea. Last summer the NotPetya attack struck Ukraine, crippling systems throughout the country. Iran is suspected in a recent attack on a Saudi petrochemical plant.

    Yet not all governments are likely to embrace the “Cybersecurity Tech Accord” in part because the principles it espouses can run headlong into their own, usually secret efforts to develop cyberweapons.

    According to Microsoft President Brad Smith, who led efforts to organize the alliance, several high-profile cyberattacks from 2017 demonstrated the need for the technology sector to “take a principled path toward more effective steps to work together and defend customers around the world,” per Reuters. Microsoft and – how’s this for irony? – Facebook are leading the project.

    While the accord promised to establish new formal and informal partnerships within the industry and with security researchers to share threats and coordinate vulnerability disclosures, several major US tech companies including Amazon, Apple, Alphabet and Twitter didn’t sign on. And for those that did, Reuters notes that “it was not clear whether any companies would change their existing policies as a result of joining the accord.”

    With this in mind, will the CTA ensure that US tech firms will do everything in their power to rebuff not only hackers but intelligence agencies like the CIA and NSA?

    Or is this essentially a marketing ploy for the US cloud-computing industry?

  • The Neocons' Real Plan For Syria Emerges From The Lack Of Rubble

    Authored by Tom Luongo,

    I told you over the weekend that Trump’s presidency was over.  As a practical matter it is.  His yielding to his ‘advisors’ on every foreign policy issue makes it clear that he can’t or won’t stand up to the relentless pressure to do what his instincts tell him.

    This morning’s article at the Deep State Washington Post paints a very clear picture of what the situation is.  The advisors whose loyalties are dubious run the show.  Their thinking has not evolved one whit from previous administrations.

    Remember what Russian President Vladimir Putin always says, “Presidents change. Policies do not.”

    Case in point they manipulated Trump into over-reacting to the Skripal poisoning by ousting 60 Russian diplomats, even though Trump clearly wanted to match Germany and France.

    The United States, they explained, would be ousting roughly the same number of Russians as its European allies — part of a coordinated move to punish Moscow for the poisoning of a former Russian spy and his daughter on British soil.

    “We’ll match their numbers,” Trump instructed, according to a senior administration official. “We’re not taking the lead. We’re matching.”

    The next day, when the expulsions were announced publicly, Trump erupted, officials said. To his shock and dismay, France and Germany were each expelling only four Russian officials — far fewer than the 60 his administration had decided on.

    You can almost see the evil glee on the part of the WaPo writer and Trump’s staffers who misled him into signing an order they knew he disagreed with.

    And this is why Trump is not president currently.  This is not the first time he’s been backed into a bad decision by the nest of vipers in his administration.

    And he won’t be until he removes the worst people from his cabinet.  Unfortunately, the trend on that front is definitely not our friend.

    Tillerson out. Pompeo promoted.  McMaster out (who was awful), John Bolton in (who is worse).

    So, now that the WaPo is writing victory lap articles for the the Deep State in neutering Trump, let’s talk about where this is headed in regards to this weekend’s attack on Syria.

    Target: Iran

    I’ll get right to the point.  This attack was all about the long-game of taking down Iran.

    Israel is desperate to prevent Iran from remaining in Syria after the war is over. And with good reason.  That’s the prime motivation for their actions.  But, on top of that is the need or the desire to always go farther, to take more than they should and use U.S. assets to achieve those goals which are in no one’s best interests, including Israel’s.

    Because despite the rhetoric spewing forth from Lil’ Miss AIPAC, Nikki Haley, a failed state in Syria is not good for Israel.  A beaten and cowed Russia is not good for the world.  And yet, that is exactly the policy that wing of the Trump administration is pushing him to pursue.

    Now, if they can’t get that because Gen. James Mattis isn’t a moron, then the next best thing is to prolong the war in Syria for as long as possible.  Why?

    To bleed Iran white.  To fight a war it can’t afford and keep its best military units and commanders bound down in Syria and not have them return home to help maintain order.

    Events in April are happening quickly.  First, Iran bans the use of dollars internally.  And, predictably, the Iranian Riyal blows up versus the dollar.  Second, the U.S. pushes for much stricter sanctions on both Russia and Iran.

    Iranians can’t get dollars and are, again, being cut off from international trade as sanctions create even more uncertainty on the ground there.

    At the same time, President Rouhani’s economic reforms are, at best, slow to improve things.  This was the source of the protests that rocked the nation in December, which U.S. and Saudi NGOs tried to fan into a revolution.  Russia is finding it harder to move money around internationally and the U.S. is putting massive pressure on Europe not to do business with Iran.

    However, the Italians blocked even stricter sanctions on Iran, so the revolt in Europe is gaining strength.  And that’s going to become a bigger part of this narrative as 2018 barrels ahead.

    The goal, of course, is to foment an overthrow of the current Iranian government through external pressure.  And Iran’s support of Syria is a pressure point in that campaign now.

    The Empire Strikes Back

    The U.S. claims this strike was to end Assad’s future use of chemical weapons, which the Russians say they have irrefutable proof didn’t even occur this time.

    That’s the story being sold to what’s left of Trump’s base, the MAGA-drones who can’t accept that he’s not actually running the country despite his public persona to the contrary.

    By prolonging the war you bleed out an already bleeding Iranian economy and treasury.  This is why, I think, the U.S. is hell-bent on staying in Syria even though Assad has, for all intents and purposes, won.

    The strikes from this weekend were intended to do much more damage than they did.  The U.S. Military’s presser on Friday after the attack was purposeful disinformation.  They only admitted to attacking three sites, all of which were empty and obliterated.

    But what about the airstrikes on no less than four Syrian airfields, including Al-Shairat (again)?

    No mention of those.

    Because they didn’t succeed.

    Now, certainly salt this report to taste but there is a major kernel of truth uncovered by it.  The U.S. intended to knock out a major portion of the Syrian Air Force with this strike and failed spectacularly.

    Assad’s air force has been one of the most effective parts of the war against the insurgents in Syria.  They are doing what the U.S. leadership says is their goal in Syria, to end the threat of ISIS.

    So, it makes less than zero sense for them to then attack Syrian air fields to show Assad it will not accept his using chemical weapons in doing so.

    Something doesn’t add up.  And, of course, we’ve known this from the beginning, but now the Russians and Syrians are providing proof of these inconsistencies if only the American people will engage with them.

    If the U.S. didn’t do this to just knock out Syria’s CW capability then it must have had a much, much larger goal.

    And that goal is Iran.

    War Without End

    The hope is that Syria will go on long enough and cost the Iranians enough that it will destabilize the country and force an overthrow of the Mullahs. 

    There comes a point where guns meet butter.

    This strategy is consistent with the thinking of the Neocon/Deep State trolls in charge at the White House.  It makes sense strategically to a guy like Mattis who knows Syria cannot become a truly failed state lest the entire region go off the rails, but at the same time wants a much different Iran.

    Putin and Xi will not play along with this and will move to strengthen Iran’s money situation through increased oil revenue.  The Saudis’ pushing this escalation behind the scenes will put them in a bind when China finally says, “Nope. Not paying for your oil with dollars anymore. In fact, we’re not buying oil from you period.”

    At that point the real chaos is unleashed.  Never forget that the Russians can withstand lower oil prices better than any producer.  China is the marginal buyer of Saudi oil and the Saudis are becoming less important to them by the day.

    Trump was forced to voice in his speech on Friday an overt plea to Putin to give up his alliance with China and Iran, abandon Syria and some of his transgressions will be forgiven.

    Trump didn’t believe those words anymore than I did, but watching him confirmed for me that he knows there will not be peace any time soon.  That he’s not up to the task of resisting the pressure.

    Just as I said this weekend to the dismay of many, including myself.  What it revealed was that no matter who wins, the world loses.

    *  *  *

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  • Chinese Stocks Slump To 2018 Lows As LatAm Markets Soar

    Authored by Steven Vannelli via Knowledge Leaders Capital blog,

    Last night the China Shanghai CSI 300 index fell a bit more than 1.6%, taking out February lows and setting a new YTD low for the index. This is important since the global equity markets have a very high correlation to Chinese stocks. In the chart below, I compare our KLSU Americas Index (top 85% of developed market cap, USD) to the China CSI 300 Index (in USD). With a correlation in excess of 80%, this suggests that Chinese stocks explain a little more than two-thirds of the movement in developed Americas stocks.

    The stats are similar if we compare Chinese stocks to developed Europe and Asia. Developed Asia is already at YTD lows, so this move in Chinese stocks may confirm a downside breakout.

    Turning to the emerging markets, there are a couple interesting divergences. In the chart below, I show our KLSU EM EMEA Index (top 85% of market cap, in USD) compared to Chinese stocks. While the correlation is bit lower, the trend seems to be the same, with stocks breaking down.

    Emerging Asia has by far the highest correlation to Chinese stocks, suggesting the moves in EM Asia are overwhelmingly dominated by the performance of Chinese stocks.

    Emerging Latin America is the real outlier here. Not only is the correlation the lowest among all DM/EM regions, our KLSU EM Americas Index is up over 7% YTD (in USD), making it the best performing region in the world equity markets.

    Perhaps the performance of Chinese and EM Americas stocks can be explained by the rise in oil prices. In the charts below, I show a few of the JP Morgan Government Bond Indexes of various Latin American countries (in USD). Performance is highly positively correlated to oil prices in Chile, Colombia and Brazil.

    All of this adds up to a growing preference for EM Americas stocks and bonds as oil prices march upward. For those that may not be able to access Latin American bonds directly, the Van Eck JP Morgan EM Local Currency Bond ETF (EMLC) could make sense.

    Today EMLC may make more sense than the iShares Bloomberg Barclays EM Local Bond ETF (EBND) because it has a much higher weighting to Latin American countries.

    The EBND also has a much higher weighting to Asian bonds, which brings us back to the observation that Asian stocks are making new lows while Latin American stocks and bonds are making new highs.

  • "Once Upon A Time; Long, Long Ago, Truth Was Important…"

    Authored by Paul Craig Roberts,

    I wonder how many people, not just Americans but those in other countries, have come to the conclusion that the United States today is a less free and less aware society than the societies in the dystopian novels of the 20th century or in movies such as The Matrix and V for Vendetta.

    Just as people in the dystopian novels had no idea of their real situation, few Americans do either.

    What are we to make of the extraordinary war crimes committed by the United States in the 21st century that have destroyed in whole or part seven countries, resulting in millions of dead, maimed, orphaned, and displaced peoples? Consider, for example, the latest Washington war crime, the illegal attack on Syria. Instead of protesting this illegality, the American media egged it on, cheering impending death and destruction.

    During the entirety of the 21st century, Israel, Washington’s only ally—as contrasted with the European, Canadian, Australian, and Japanese vassal states of Washington’s empire—has continued with Washington’s support, protection, and encouragement the genocide of the Palestinian people. Essentially, all that is left of Palestine is a ghetto concentration camp known as Gaza which is routinely bombed by Israel using weapons and money supplied by Washington. When a bombing of Gaza is announced, God’s Chosen People take their lawn chairs and picnics up on a hill overlooking Gaza and applaud as the Israeli military murders women and children. This is America’s only ally.

    The crimes committed by the US and Israel are horrific, but meet with little opposition. In contrast, an alleged attack in which 70 Syrians are alleged to have died sets in motion the wheels of war. It makes no sense whatsoever. Israel routinely bombs Syrian targets, killing Syrians, and the US arms and supports the “rebels” that the Obama regime sent to overthrow Assad, resulting in large numbers of dead Syrians. Why all of a sudden do 70 Syrians matter to Washington?

    According to the Washington authorities, or to the presstitutes’ reports of their statements, two or three alleged Syrian chemical weapons facilities were destroyed by Washington’s missile attack.

    Before…

    After…

    Think about this for a minute. If Washington bombed or sent missiles into chemical weapons facilities, a vast cloud of lethal gas would have been released. The civilian casualties would be many times higher than the claimed 70 victims of Assad’s alleged and unsubstantiated chemical attack used as the pretext for the Trump regime’s war crime against Syria. There is no evidence whatsoever of these casualties.

    Had there been casualties, Washington’s attack would obviously be a far greater crime than the chemical attack that Washington used as cover for its own crime. Yet the American presstitutes are crowing over the lesson that America has taught Syria and Russia. Apparently, the American media consists of such immoral or moronic hirelings that the presstitutes are unable to comprehend that an attack by Washington on Syrian chemical weapons plants, if such actually existed, is the equivalent of an attack on Syria with chemical weapons.

    As I wrote yesterday, when I was a Wall Street Journal editor, if Washington had just announced that it had bombed the chemical weapons facilities of another country in punishment for that country’s alleged use of a chemical weapon, the Journal’s reporters were sufficiently intelligent to ask where are the victims of Washington’s chemical attack on that country?

    Are there thousands of dead people from the chemical gas released by Washington’s attack? Are the hospitals of the country over-filed with the injured and dying?

    If a reporter had brought to us a story that was nothing but a Washington press release claiming obviously impossible happenings, we would have told him to go look again and ask the obvious questions. Today the NY Times and Washington Post put the unsubstantiated report on the front page.

    Today reporters no longer have to check sources, because there is no longer journalism in America. When the Clinton regime in compliance with the Deep State that made the Clintons super-rich permitted 90% of the independent and diverse US media to be concentrated in the hands of six political companies, that was the end of journalism in America. All we have now is a propaganda ministry that lies for a living. Anyone in American journalism who tells the truth is either immediately fired or in the case of Tucker Carlson at Fox News is set upon by outside presstitutes in an effort to force Fox to replace him. I wonder how long before some woman pops up and claims Tucker Carlson sexually harassed her.

    As far as I can tell, the United States is now a police state in which all information is controlled and the population is trained to believe the propaganda or be accused of lack of patriotism and consorting with terrorists and Russians.

  • And America's Richest Zip Code Is…

    The most exclusive zip code in America isn’t where you’d think it is.

    It’s not in Connecticut’s Fairfield County – famous for being a haven for old-money WASPs and, increasingly, America’ nouveau riche. It’s not Berkeley or Palo Alto or some other piece of the Bay Area, where economic inequality is among the worst in the country.

    Instead, it’s in South Florida, not far from Miami. The place is called Fisher Island, and with an average income of $2.5 million – beating the second-richest zip code by $1 million – it’s the wealthiest zip code in the country, according to recently released IRS data that was reviewed and analyzed by Bloomberg. The study included more than 22,000 eligible zip codes.

    The average income in Fisher Island, zip code 33109, was $2.5 million in 2015, according to a Bloomberg analysis of 2015 Internal Revenue Service data. That’s $1 million more than the second-place spot, held by zip code 94027 in Silicon Valley, also known as the City of Atherton on the San Francisco Peninsula. The area’s neighbors include Stanford University and Menlo Park, home to Facebook and various tech companies. While the IRS data only provide the averages of tax returns, which can be skewed by outliers, Fisher Island is the only zip code in the Bloomberg analysis where more than half of all tax returns showed an income of over $200,000.

    Fisher Island stands out for several reasons. For example, not only is it the highest earning zip code in the US, but it’s also an outlier in Bloomberg’s list because nearly all the other top spots are occupied by zip codes in the Greater New York metro area or the Bay Area. It’s also notable for its thematic consistency.

    Fisher

    Typically high cost of living makes wealthy zip codes inaccessible to poorer individuals and families. But not only is this true of the zip code’s property values, it’s also true for another reason: Fisher Island is surrounded by water and it’s extremely difficult for outsiders to travel there.

    Chart

    Palm Beach (home of  President Trump’s Mar-a-Lago club) and Naples were the only other two Florida zip codes that made the top 20. Meanwhile, certain suburbs of Seattle, Philadelphia, Chicago and Boston also ranked high on the list.

    Many of the taxpayers living on Fisher Island were able to carve out more in itemized deductions from their tax bill than most Americans can affthan Taxpayers on Fisher Island also managed to carve out an average of $448,100 in itemized deductions last spring when they were settling up with Uncle Sam.

    Still, Fisher Island’s deductions were smaller than the average deduction for high net worth individuals across the US – though BBG attributed this to the fact that Florida doesn’t have an income tax, so Fisher Island residents have less to deduct.

    The zip code that took the most advantage of tax deductions in 2015 was 94301 in Palo Alto, California, where the average deduction was $491,600. Fisher Island had smaller average deductions relative to its income size than other zip codes and that’s likely because Florida has no income tax, so its residents can’t take deductions from that category. On the other hand, California has a top marginal income tax rate of 13.3 percent, the highest in the country.

    But deductions for the very wealthy could look a lot different this year because of the new tax cut legislation, according to Falanga.

    Deductions for state and local income tax have been curtailed to a maximum of $10,000. Before the new legislation, these deductions were unlimited. Limits on charitable contribution deductions have increased to 60 percent of gross income from 50 percent. That is just for cash contributions and does not include foundations, stocks, or artwork, which have different hurdles, said Falanga.

    Of course, residents of wealthy zip codes across the US are about to take a financial hit from President Trump’s tax overhaul plan because many of these areas are situated in blue states with high local taxes. The Trump tax plan dramatically curtailed deductions for state and local taxes, imposing a cap of $10,000 when previously these deductions had been unlimited.

    But here’s another advantage for Fisher Island is it’s in reliably low-tax Florida.

    “I haven’t seen them change, but they have been curious about what’s going on,” Falanga said. “And to a certain extent, some of them will be paying more.”

    But one thing is for certain: Whatever the impact is, it will be much less impactful than it will be for residents of other tony enclaves like – for example – Greenwich, Conn., where the tax law and shifting tastes are creating some of the most adverse market conditions since the financial crisis.

    With that in mind, we wouldn’t be surprised to see an exodus of HNW snowbirds making the journey as a move to sunny Florida looks increasingly appealing by the day.

  • Employee Of Bombed Syrian Research Site Says No Chemicals Released Is Proof None Existed

    Authored by Mac Slavo via SHTFplan.com,

    An employee of the chemical research center which was bombed by the United States, the United Kingdom, and France says that no chemicals were released during the strike that leveled the building. 

    That’s incredibly important proof that no chemical weapons were actually there, he said.

    Said Said, an engineer at the Scientific Research Center facility, told RT Arabic that the very fact that no chemicals were released during the strike should serve as evidence that no chemical weapons program was run at the site.

     “You can see for yourself that nothing has happened. I’ve been here since 5:00 a.m. No signs of weapons-grade chemicals,“ he said.

    The researcher said he had worked at the facility for decades, and it used to develop medicine and household chemicals.

    Before…

    After…

    The West is alleging Bashar al-Assad, Syria’s leader used chemical weapons on civilians to justify military attacks on Damascus and Homs.  But interestingly enough, those strikes occurred the day before international investigators were scheduled to arrive to conduct a thorough inspection of the site. 

    The Organization for the Prohibition of Chemical Weapons (OPCW) had visited the site several times and never found any traces of banned chemicals. Since Syria joined the Chemical Weapons Convention under a deal brokered by Russia and the US in 2013, the UN chemical watchdog repeatedly confirmed its full compliance with its obligations to dismantle and remove its chemical stockpiles. In June 2014, the OPCW declared Syria free of chemical weapons.

    On April 12, even US Secretary of Defense James Mattis told the House Armed Services Committee that the US government does not have any evidence that sarin or chlorine was used, that he was still looking for evidence. Yet the bombing happened anyway.

    “We even provided them [OPCW] with a special place where they could collect and pack test samples taken during the inspection,” Said told RT. The inspectors would stay in the rooms on the upper floor and use the laboratory equipment, and the staff was “cooperating with them completely.”

    Being a civilian research center, the staff did not believe it would be identified as the primary target for an attack. “As we work in civilian pharmaceutical and chemical research, we did not expect that we would be hit,“ Said told AFP. The allegations that that Barzeh was an integral part of Syria’s chemical program were “totally incorrect,” he stressed, speaking to CBS News.

    Reports by the UN’s chemical watchdog, the latest of which was filed just a month ago, suggest Said is correct, and there are no chemical weapons at the facility.  The report on the first inspection that was conducted between February 26  and March 5, 2017, says that “the inspection team did not observe any activities inconsistent with obligations under the Convention,“ noting that Damascus had provided unimpeded access to the inspectors “to all selected areas.”

    The follow-up inspection, carried out in November, did not find any incriminating evidence either. The March 2018 report reiterates: “As stated in previous reports, all of the chemicals declared by the Syrian Arab Republic that were removed from its territory in 2014 have now been destroyed.”

  • The Death Of Retail Real Estate Continues: 77MM Sq.Ft Of Shopping Space Closed In 2018 Already

    Retail real estate carnage is going to continue this year with no signs of slowing up, as Bloomberg reported this morning that over 77 million square feet of retail real estate has closed this year and that 2018 will easily pass 2017’s record of 105 million square feet closed. The latest example was the fall of the once massive Toys ‘R’ Us name:

    The fall of the Toys “R” Us chain, with more than 700 U.S. stores, shows how much retail real estate has changed in just the last decade. When KKR & Co., Bain Capital, and Vornado Realty Trust took over the company in 2005, the buyers justified the $7.5 billion price, in part, because of the supposedly valuable properties that came with the deal.

    If there was ever to be any silver lining to the complete carnage in the retail real estate space, it was the argument that has been perpetuated over the last decade or so: despite retail stores closing, the real estate would eventually be worth something.

    This argument was made by real estate investment trusts as well as activist investors and analysts who tried to put a positive spin on the death of brick and mortar retail. Now, with more space freeing up, the bid under former retail property is at ask of falling off as supply is starting to get far ahead of demand:

    Real estate can put a floor under the value of a retailer and make it easier for the company to borrow. Maybe a particular store concept doesn’t work out as consumers’ tastes change, but in that case, investors can always sell the land and buildings to someone with a better plan. Long-term leases can be similarly valuable. But what if the problem isn’t that a particular store is out of fashion, but that consumers are just shopping less at brick-and-mortar retailers in general? As more storefronts empty, the valuation floor will look wobblier.

    This pace of closings puts 2018 on pace to pass 2017’s record of 105 million square feet of retail space closed:

    At last count, U.S. store closures announced this year reached a staggering 77 million square feet, according to data on national and regional chains compiled by CoStar Group Inc. That means retailers are well on their way to surpassing the record 105 million square feet announced for closure in all of 2017.

    It doesn’t look like the pace of these closings is going to slow anytime soon, either:

    And with shifts to internet shopping and retailer debt woes continuing, there’s no indication the shakeout will end anytime soon. “A huge amount of retail real estate in the U.S. is going to meet its demise,” says James Corl, managing director and head of real estate at private equity firm Siguler Guff & Co. Property owners will “try to re-let it as a gun range or a church—or it’s going to go back to being a cornfield.”

    So goes one set of stores, as go others. Despite the fact that the U.S. still has some of the most square footage of shopping space per person, there isn’t enough being spent at these locations to make them worth it:

    Even though retailers have been retreating for years, the country still has about 24 square feet of shopping space per person, many times more than any other developed nation, according to research firm Green Street Advisors. Consumers aren’t spending enough offline to support such a generous amount. Vacancies are headaches for landlords, of course, but they also have a mushrooming effect. People may steer clear of a mall that has lost an anchor tenant or has an abundance of “for lease” signs in smaller spaces. Deserted big-box stores, their facades naked and parking lots barren, can spread a sense of blight for blocks around. Who wants to open a business next to a place that’s gone out of business?


    The article finishes by pointing out that companies like Amazon and Whole Foods have still seen success using a brick-and-mortar retail concept. It’s possible that the space is simply just downsizing and becoming more efficient instead of disappearing entirely. Regardless, there seems to be a long runway to go in terms of retail real estate freeing up over the next couple of years. The trend of internet versus department stores also remains anything but encouraging. 

    And the outlook, with overlevered companies and lack of a serious bid under property prices, continues to look grim. Retailers are not going to be able to refi or recapitalize in ways necessary to try and grab onto lifelines. As the sector continues to collapse it’s going to be harder and harder to try and engineer turnarounds – this could lead to a self fulfilling prophecy of accelerating turmoil and collapse for the industry:

    But not every deserted retail property can be turned into a gym, theater, or boutique outlet of a tech company. That reality will weigh on any investor thinking about scooping up a struggling chain with real estate assets today—especially buyers in private equity, who borrow heavily to finance their deals. “Retailers cannot support large debt loads,” says Perry Mandarino, head of restructuring at B. Riley FBR, an investment bank that’s worked on retail liquidations. “Add to that the possibility of a decrease in the value of other collateral, such as real estate, and the successful execution of a retail-leveraged buyout may be almost impossible.”

    Almost a year ago to the day, we reported on retail closing setting up to hit a scorching pace in 2017. The narrative for 2018 stays the same, only worse. In early 2017 we pointed out the astonishing fact that “Barely a quarter into 2017, year-to-date retail store closings had already surpassed those of 2008.” 

    We asked in early 2017 if Amazon was assured of becoming the world’s first trillion-dollar stock, perhaps hitting the milestone even before Apple? Here is how the two names have fared since then:

    The race is on.

    Others have given up waiting for a recovery that seems always out of reach and are settling into what appears to be the new normal – but regardless, 2018 is setting up to, one again, break new ground in misery for retail real estate. 

  • 5 Fast Facts About The Federal Judge In Michael Cohen's Case (And Why Trump Should Be Worried)

    Submitted by Ann of The Political Insider

    Federal Judge Kimba Wood will be overseeing the court case against President Donald Trump’s personal lawyer, Michael Cohen. Here are five facts about Judge Wood – and why Trump should be very worried.

    1. She was President Bill Clinton’s pick for Attorney General in 1993

    President Bill Clinton nominated Wood to become the first female Attorney General. In fact, Wood was hand-picked by Hillary Clinton, who had been asked to submit a list of possible nominees for her husband’s consideration. However, Wood withdrew from the nomination after the White House learned about her brief time as a Playboy Bunny – and that she employed an illegal alien as a nanny. Further, Wood actually helped the nanny to illegally remain in the country by paying taxes for her.

    2. She trained as a Playboy Bunny

    The daughter of a U.S. Army career officer and speechwriter, Wood spent much of her childhood and young adulthood in Europe. While studying at the London School of Economics in the 1960s, she trained for a few days as a croupier at a Playboy Bunny casino, but quit because “she thought the gig was silly.” Nevertheless, the job would haunt her in her later career and played a role in costing her the position of Attorney General.

    3. She had an extramarital affair that earned her the nickname the “Love Judge”

    Wood might be a judge, but her personal past indicates that her moral scruples are lacking. In 1995 at the age of 51, Wood began an affair with married multimillionaire Wall Street financier Frank Richardson. The affair was uncovered by Richardson’s wife when she found passionate passages written about Wood in Richardson’s diary. The tryst earned Wood the nickname the “Love Judge” during Richardson’s divorce trial. Wood married Richardson in 1999.

    4. She officiated George Soros’s wedding

    Wood officiated the 2013 wedding of notorious liberal billionaire George Soros. At the time, Soros was 83 and his bride, Tamiko Bolton, was 42. Numerous prominent liberals attended the wedding, including House Minority Leader Nancy Pelosi and then-California Lt. Gov. Gavin Newsome. In lieu of wedding gifts, the couple asked that donations be made to several organizations including Planned Parenthood and Global Witness, an environmental activist group.

    5. She doesn’t believe in attorney-client privilege

    During Cohen’s hearing on Monday, Wood forced Cohen to expose the identity of a previously unnamed client. That client turned out to be none other than Fox News host Sean Hannity, who maintains that he only asked Cohen for legal advice as a friend and never retained or paid him for any legal services.

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    As many people have pointed out, you couldn’t make this stuff up if you tried.

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    Has the deep state ever been more obvious than it is now?

  • Mattis Wanted Congressional Approval Before Syria Strike, Was Overruled By Trump

    Confirming our report from Friday, Defense Secretary Jim Mattis favored a more cautious approach to the Syria situation but was overruled by President Trump as well as other notable neocons interested in an immediate strike – including brand new National Security Advisor John Bolton, administration officials told the New York Times.

    Mr. Mattis pushed to get congressional authorization, according to people with knowledge of the internal debate. In several White House meetings last week, he underscored the importance of linking military operations to public support — a view Mr. Mattis has long held.

    …

    Mr. Trump, the officials said, wanted to be seen as backing up a series of bellicose tweets with action, but was warned that an overly aggressive response risked sparking a wider war with Russia.

    Friday night’s limited strikes on three targets, which lasted under two minutes, were the compromise. –NYT

    Bolton and Mattis were said to be duking it out over the Syria strikes on Friday – with Mattis and the Chairman of the Joint Chiefs of Staff Dunford reportedly “concerned with managing escalation and preventing blowback on US troops,” while John Bolton is known for getting very excited at the prospect of a good ole’ fashioned regime change

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    In the end, Mattis prevailed in limiting the Friday night strikes to three targets which would avoid hitting Russian troops stationed at various military facilities throughout Syria. Democratically elected Syrian President Bashar al Assad moved fighter jets to said installations before the US-led strike, which also included the participation of the United Kingdom and France to give it an air of legitimacy.

    Administration officials say that Trump wanted to hit Syria hard enough to appear aggressive, but not so hard that it would prompt Russia to engage in combat.

    “The combined American, British and French response to these atrocities will integrate all instruments of our national power — military, economic and diplomatic,” said Trump in a national address while the strikes were underway. “We are prepared to sustain this response until the Syrian regime stops its use of prohibited chemical agents.”

    That said, the Pentagon said no more strikes are in the works. “This is a one-time shot,” Mattis said on Friday after the attack was launched, suggesting that the airstrikes were “a very strong message to dissuade” President Bashar al-Assad of Syria from using chemical weapons against his own people.

    “He just wants the big show,” said Obama Admin assistant Secretary of Defense, Derek Chollet. “So Mattis was probably pushing on an open door.” More from the NYT:

    Mr. Mattis is particularly concerned about overextending the American military in Syria. He does not want the United States to veer from its stated policy of focusing only on the fight in Syria against the Islamic State — and avoid delving into the country’s seven-year civil war.

    Russian forces and Iranian militias have helped Mr. Assad remain in power against Syrian opposition fighters who accuse him of a brutal siege against the country.

    “The strike was really just enough to cover the president politically, but not enough to spark a war with the Russians,” said two-tour Iraq war veteran Jon Soltz, chairman of liberal veterans group VoteVets. “It was clear the military had tight constraints on the operation, and that everybody in the military seemed to know that except the president.”

    As the New York Times points out, Mattis is down one major ally in the West Wing with the departure of former NatSec Advisor H.R. McMaster, who would routinely defer to the Defense Secretary – a retired four-star Marine general. Enter John Bolton – a war hawk and notorious neoconservative who never saw a middle eastern nation he didn’t want to bomb – for the most part. Mattis greeted Bolton for the first time by asking him if he was in fact the “devil incarnate.”

    Mr. Mattis is widely viewed by global leaders as the strongest and perhaps most credible voice on foreign policy in an administration that has been rocked by firings and resignations among senior presidential advisers. The recent exits of both General McMaster and Rex W. Tillerson as secretary of state has focused more attention on Mr. Mattis’s role in the cabinet. –NYT

    On Tuesday, Mattis publicly disputed claims that last weekend’s limited strikes amounted to little more than a fireworks show.

    “The French, the United Kingdom, the United States, allies, all NATO allies, we worked together to maintain the prohibition on the use of chemical weapons,” Mr. Mattis said at the Pentagon. “We did what we believe was right under international law, under our nation’s laws.”

    “And I hope that this time, the Assad regime got the message,” said Mattis.

    Based on images of Syrians dancing in the street after the weaker than expected airstrikes… 

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    … and protesting the US-led strikes in Damascus right now, and the fact that the cleanup crew at the destroyed Barzah chemical weapons Research facility didn’t need protective clothing to sift through the rubble, the message is loud and clear; the West needs to get it’s act together before bombing a sovereign nation based on crappy – or even worse, fabricated intel.

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