- Banks Ponder Vault Cash In Response To Negative Rates: Lending Reality In A Nutshell
Submitted by Michael Shedlock via MishTalk.com,
Under guise of preventing fraud the ECB voted to kill the €500 note.
Fraud was not the real reason. The real reason was to make it more difficult for banks to store physical cash to avoid negative interest penalties… but it's not working.
Cash Under the Mattress
Please consider Banks Seek Cheap Way to Store Cash Piles as Rates Go Negative.
The idea of keeping piles of cash in high security vaults may sound like something from an old movie plot, but some banks and insurers have recently started considering the idea as interest rates sink below zero across much of Europe.
After the European Central Bank’s most recent rate cut in March, private-sector banks are paying what amounts to an annual levy of 0.4 per cent on most of the funds they keep at the eurozone’s 19 national central banks. This policy, which has cost banks around €2.64bn since ECB rates became negative in 2014, is intended to spark economic growth by giving banks the incentive to lend money out to businesses instead of holding on to it.
European central bankers say they could cut rates again should economic conditions worsen, but private bankers and insurers are already thinking of creative ways to avoid those charges altogether.
One way is by turning the electronic money they keep at central banks into cold, hard cash. Munich Re has experimented successfully with storing a double-digit million sum of euros in cash at what the insurer describes as a manageable cost. A few other German banks, including Commerzbank, the country’s second-biggest lender, have also considered taking the step. But when a Swiss pension fund attempted to withdraw a large sum of money from its bank in order to store it in a vault, the bank refused to provide the cash, according to local media reports.
If this practice becomes widespread, it would have big economic implications. If banks are not paying central bank interest charges, then they will not be as affected by further official interest rate cuts. They therefore would not be spurred to lend out more money.
Lending Reality
- Lending is a function of the willingness and ability of banks to lend, and the willingness of creditworthy (or deemed by the bank as creditworthy) borrowers to take on loans. Banks can make mistakes in regards to credit worthiness as they did in the housing bubble, but if banks believe they will be paid back (or bailed out by rising asset prices), enough to compensate for the risk of lending, they will lend.
- Capital impaired banks cannot or will not lend, regardless of what stress tests show.
- It is impossible for banks to lend excess reserves in a way that reduces excess reserves except to another bank that is short of reserves and needs them. Otherwise, loans just get redeposited somewhere. It’s the size of central bank balance sheets that has created the massive pile of excess reserves.
- If banks aren’t lending, they are either capital impaired or they do not have creditworthy customers willing to borrow.
- Negative interest rates add to banks expenses, eating at bank profits, making them less likely to lend.
Counterproductive Central Bank Actions
It’s a mystery why central banks think making banks more unprofitable will spur lending, especially when excess reserves cannot be lent. To top it off, Low interest rates punish savers who have less money to spend than they would have at higher interest rates.
For further discussion please see Self-Defeating Central Bank Interest Rate Policies.
- Why You Should Ignore Federal Reserve Policy Statements in Your Wealth Preservation Strategy
Later today, at 2PM New York time, US Federal Reserve bankers will release minutes from their last meeting and traders may move some markets sharply in a knee-jerk reaction to what is contained in these minutes, but don’t let any irrational responses to Federal Reserve bankers steer your focus away from reality. I’ve been discussing the absurdity of planning an investment and wealth preservation strategy around Federal Reserve banker policy statements for a long time now. Just check out my entry here from nearly a year ago, in which I discussed how Federal Reserve bankers absurdly rehashed the same statement for six straight years without ever stating anything new, and then in 2015, started placing interest rate hikes on the table again, but again, absurdly have since issued identical statements with slightly different language that virtually state nothing. Just visit their website and pull any of the archived statements from the past two years and you will encounter, in every statement, language that discusses “possible” interest rate hikes if sufficient progress has been demonstrated in the US economy towards their realized and expected objectives of “full employment and 2% inflation”.
If the Fed Reserve bankers really desired (1) fundamental growth in the economy, (2) sustainable stock market growth instead of artificial bubbles comprised of grossly distorted stock prices, (3) inflation that was really 2% or lower, and (4) anything close to full employment (none of which exist by the way), they would have voluntarily dissolved themselves in 1913 and let free markets set interest rates instead of artificially manipulating interest rates for Machiavellian purposes ever since. In fact, I also posted commentary a year ago about how one can insulate oneself against falling victim to the lies of Central Bankers in their production of absurd “official” inflation and unemployment rates. In any event, in the absence of the liberating dissolution of Central Banks worldwide and allowing free market interest rates to exist, if Fed Reserve bankers were sincere about any of their proclaimed objectives of low inflation, full employment, sustainable economic growth, etc., they would have needed to start raising interest rates many moons ago. But they haven’t.
In terms of silver and gold assets, we were consistent last year in stating that prices would continue to fall all year after a January spike to $1,308 an ounce gold and $18.50 an ounce silver, and because of our year-long negative outlook on gold and silver in 2015, we entered and quickly exited after short runs higher, and we were still able to return a positive, healthy 31.6% yield on our junior gold and silver mining stocks in our Platinum portfolio despite huge losses in the HUI gold bugs index of more than 50% from January 2015 to January 2016. In fact, you can follow this link to see how I warned back then, after the January gold and silver spike in 2015, that “even though gold [was] above $1211 an ounce now and silver ha[d] risen 1.96%…don’t get too excited, because Western bankers [were] waiting nearby to hammer gold back below $1,200 again later [that] month.“ However, unlike last year, I have been likewise consistent in our belief that this year would produce a year-long rising gold and silver price trend, and instead of selling all gold and silver price spikes, as I advocated in 2015, I believe that all dips in PM asset prices should be bought this year, even those dips that may be created by absurd Central Banker policy statements.
For example, this past June, I explicitly stated that “much higher gold and silver prices [were] still ahead” and immediately after I wrote that article, in less than two weeks, gold surged 8.4% and and silver rocketed higher by 23.5%. Since then, both PMs have been consolidating in price, but whereas it was my belief in 2015 that all price spikes in gold and silver stocks should be sold, it is my belief that in 2016, all dips in gold and silver stocks should be bought. In fact, I reiterated this belief in this 26 July article I released after gold had fallen $67 an ounce in and silver had fallen $1.87 an ounce that month, by stating that the fall in gold and silver prices back then would “prove to be just a temporary lull in a strong continuing uptrend” that started at the end of last year, and discussed, how gold and silver stocks were still in a state of undervaluation last month. (In fact, you may visit that link to see that 18 of the stocks in our Platinum portfolio have surged by 100% to 400%+ by mid-year this year and also that we were able to duplicate similar returns in our Platinum junior mining stock portfolio in 2010. Despite this, we still feel that the largest gains in this asset class are ahead of us, after maintaining a negative outlook on the same asset class for all of 2015.)
In conclusion, even if the Federal Reserve bankers raise interest rates again at some point in the future, as the title of my article states, we have traveled well beyond the point of no return for a long time now regarding interest rate policy solutions, and any knee-jerk reactions of immediate falling gold and silver prices in response to more hollow “hawkish” Federal Reserve minutes or even too-little, too-late, actual small interest-rate increases should be completely disregarded, with all eyes kept firmly on the big picture of the inevitable continuing fiat currency purchasing power destruction. No matter if Central Bankers raise interest rates or not in the future, they have firmly set the course for further and inevitable fiat currency purchasing power destruction, and this should be the unwavering focus of one’s wealth preservation strategy.
About SmartKnowledgeU: To learn when to buy the dips that develop during this continuing gold and silver price uptrend for all gold and silver assets, including gold and silver stocks, consider our Crisis Investment Opportunities newsletter and our Platinum Membership. Special 24-hour flash sale, today only. Visit smartknowledgeu.com for more details about discount Coupon Codes, valid today only, on our annual retail Crisis Investment Opportunities Membership, Limited Edition Platinum Membership, and full Platinum Membership.
- How The Globalists Will Attempt To Control Populations Post-Collapse
Submitted by Brandon Smith via Alt-Market.com,
There is an interesting disconnect with some people when discussing the concept of global centralization. Naturally, the mind reels in horror at the very idea, because many of us know, deep down at our core, that centralization is the root of tyranny. We know that when absolute power is granted into the hands of an elite few over the lives of the masses, very bad things happen. No small group of people has ever shown itself trustworthy, rational, empathic or wise enough to handle such a responsibility. They ALWAYS screw it up, or, they deliberately take advantage of their extreme position of influence to force a particular ideology on everyone else.
This leads to resistance, resistance leads to sociopolitical crackdown and then great numbers of people are imprisoned, enslaved or even murdered. This leads to even more resistance until one of two possible outcomes emerges — chaos and revolution or complete totalitarianism and micro-managed collectivism.
There is no way around this eventual conflict. As long as the centralists continue to pursue total power, men and women will gather to fight them and the situation will escalate. The only conceivable way that this fight could be defused is if the elites stop doing what they do. If they suddenly become enlightened and realize the error of their ways, then perhaps we could escape the troubles unscathed. Or, if those same elites all happen to meet an abrupt end and their influence is neutralized, then the world might have a chance to adjust and adapt in a more organic fashion.
Unfortunately, there are people who refuse to believe that a fight is unavoidable. They desperately want to believe there is another way, and they will engage in an amazing display of mental gymnastics in order to justify this belief.
First, I think it is important to note that I have always argued that the globalists will eventually fail in their pursuit. I find that some folks out there misinterpret my position when I outline the strategies of globalists and they assume I am presenting global centralization as a “sine qua non.” I do not argue that the elites will win the fight, I only argue that there is no way to avoid the fight.
Those that want to know my views on why globalist defeat is a certainty can read my article The Reasons Why The Globalists Are Destined To Lose.
The rhetorical question always arises: “How could the globalists ever hope to secure dominance over the entire world; isn’t that an impossible task?”
I believe according to my knowledge of history and human psychology that it IS an impossible task, but that is NOT going to stop the globalists from trying.
This is what the cynics just don’t seem to grasp; we are dealing with a group of narcissistic psychopaths organized around a cult ideology and with nearly unlimited resources at their fingertips. These people think they are rising man-gods, like the Egyptian pharaohs of old. They cannot be persuaded through superior logic or emotional appeal. They will not be deterred by mass activism or peaceful redress. They only understand one thing — the force of arms and the usefulness of lies.
Such people are notorious for taking entire civilizations down with them rather than ceding their thrones. It is foolish to plan a response to them on the assumption that a fight can be avoided. When I say that the globalists are “destined to lose,” this is predicated on my understanding that a certain percentage of human beings will always have an inherent capacity for resistance to tyranny. The globalists will be defeated because there is no way to quantify every single threat to their utopian framework. As long as people continue to fight them, physically and with information, regardless of the personal cost, their weaknesses will be found and they will fall.
This will not be accomplished, however, without considerable sacrifice.
When I talk about "collapse", I am talking about a process. Collapse is not an singular event, it is an ongoing series of events. The U.S. has, for example, been in the middle of a collapse since 2008. The end of this collapse will come when the final economic bubble propping up our system has burst and the process of rebuilding begins. The most important questions is, WHO will do the rebuilding? The globalists with their power agenda, or common people seeking freedom and prosperity?
I have outlined in numerous articles the reality that an ongoing destabilization of large portions of the global economic framework will be used by the elites as leverage to convince the public that greater centralization is necessary, including global economic management through the IMF and BIS, a global currency using the IMF’s Special Drawing Rights as a bridge and global governance through the United Nations or a similar body not yet developed. This plan is becoming more and more openly discussed by globalists within the mainstream media. It’s hardly a secret anymore.
Many people will undoubtedly support this centralization out of fear of instability. That said, many people will also refuse to support it.
Here is how I believe, according to historical precedence and the globalist’s own writings, that they will attempt to assert global centralization post-collapse and enforce compliance.
Resource Management And Distribution
As I point out in many of my articles on the necessity for localism, without ample food, water and shelter self-maintained by groups of like minded citizens, no resistance can be mounted against a centralizing force. If you cannot supply your own logistics, then you must resort to stealing them from the enemy. Obviously, it is less risky to supply yourself if possible.
Post-collapse, when rule of law in many places has broken down and resources can no longer be transferred safely from region to region, the name of the game will be control of necessities and the producers of necessities. This is also used by totalitarians when the danger of unrest is present. A prime example of this method in action was the Stalinist consolidation of the Soviet Union.
The fact is, successful rebellions in occupied nations tend to grow in rural surroundings. Cities are often strongholds for totalitarians because they offer more means of surveillance, a more passive population and, once taken over, they are easier to secure and defend. I call this the “green zone doctrine;” the use of locked down cities as pivot points to launch attacks on rural people.
Stalin used this very model, sending troops from controlled cities to plunder resources from outlying farming communities. He then stored these supplies for “redistribution;” the people deemed most useful to the regime were fed, the people deemed not useful or potential threats were not fed. In the end, Stalin killed off many potential rebels simply by denying them food production or food access.
The elites do not need to own every inch of ground in order to launch an effective campaign of martial law. All they need to do is own key cities through surveillance technology and troop presence, then use these cities as staging grounds to confiscate resources in surrounding areas from people they do not like. If you think the government would not pursue that kind of tactic in the U.S., I highly suggest you look into Executive Order 13603, signed by Barack Obama in 2012. This order gives the president authority during a “national emergency” to take any private property or resources if it is deemed “necessary to national defense.”
It should be noted that starvation as a weapon has been extremely useful for the elites in the past.
The Malaysian Model Of Control
If the elites are anything, they are rather predictable. This is because they have a habit of consistently using strategies that have worked for them before. In my article When The Elites Wage War On America, This Is How They Will Do It, I examine the writings of Council On Foreign Relations member Max Boot on methods for quelling insurgencies. In the U.S., insurgency is a given post-collapse. The only question is whether it will be a large insurgency or a small one.
I do not hold out much hope for most of the rest of the world in terms of generating a useful rebellion. Most citizens in Europe and Asia are unarmed and untrained. Any resistance in these regions will be very small and cell structured if it is going to survive.
The methods Max Boot describes tend toward larger threats to the establishment. Boot mentions specifically the great success by the British in Malaysia from 1948-1960 against highly effective communist guerillas and terrorists. This success can be attributed to several factors:
1) The British used large-scale concentration camps to separate production centers from rebel influence. These were massive camps surrounded by barbed wire fences and guard towers, primarily used to house farmers and other workers and their families. This stopped the guerillas from hiding among the working class and recruiting from them. This follows the “green zone doctrine” I described above.
2) The British implemented a sophisticated identification system for all Malaysian citizens including fingerprinting. They then set up numerous checkpoints across the country at which citizens had to produce their paperwork. Anyone who did not have their papers was held on suspicion of being an insurgent. The rebels in Malaysia attempted to counter this by forcefully taking over busy buildings and buses, then burning everyone’s IDs. This would not be a very effective tactic in a digitized world where identification is accomplished through advanced biometrics.
3) Instead of fielding massive lumbering military brigades in a useless effort to cover large stretches of ground, the British used spies and informants to locate rebel strongholds, then sent special forces units in to neutralize them. Again, they did not need to control every inch of ground; they used military assets wherever the rebels were, then left. Their goal was not to control a lot of ground, but to kill rebels. The British used considerable brutality in their efforts, including a mobile gallows that traveled the country, and the public display of rotting corpses to strike fear in the insurgency.
4) The political elites in Britain fought the psychological war by offering promises of peace and prosperity to the Malaysian commoners if they supported the effort against the insurgency. They did not necessarily need to follow through on these promises, all they needed to do was create a few examples of reward for cooperation, and sell this to the public in a convincing manner. Once enough of the population was in the hands of the British, the insurgency lost supply resources and also had to worry about informants.
Technology Grid For Tyranny
Malaysia was an example of a competent strategy to uproot insurgents, but there were also many failures and pitfalls. The elites are trying to mitigate any future unknown quantities when fighting against rebellions through the use of new technologies.
The green zone doctrine could only be successful today with the use of biometric surveillance. Restriction of movement could be accomplished, but only in cities with extensive surveillance grids. The insurgents of a post-collapse future would be hard pressed to infiltrate or exfiltrate from a green zone with currently available facial recognition, gait and walk recognition, retina and thumbprint scanning, etc. Facial recognition has even gone into the realm of thermal imaging; cameras can use the unique heat signature from blood vessels within the human face to identify a person from a relative distance. Make-up and prosthetics would not counter this. Thermal masking would be the only solution.
Beyond that, an insurgency would have to be technologically savvy. Cyber warfare would have to be integral to their methodology. This is not something any other rebellion in history has had to deal with.
An Uneducated And Bumbling Insurgency
The globalist’s strategy to trigger economic and social chaos, then lock down certain regions and offer centralization as a solution to the population, is far easier to accomplish when the opposition they face lacks insight, patience, planning and initiative.
The British were partially successful in Malaysia because the guerillas were ignorant of public perception. While they were effective and ruthless fighters, their viciousness resulted in lack of public support. Though wide public support is not needed for victory, it certainly helps.
Multiple revolutions against Stalin’s power, some of them very large, were put down because of poor planning. Rebels massed sizable forces in tight areas, such as a single mountain or mountain ranges. Stalin simply dropped poisonous gasses on insurgents that had put all their eggs in one basket and forgot to stockpile gas masks. It is vital to recognize that in a post-collapse world governments and elites may no longer be subject to public scrutiny, and are thus free to act as maliciously as they want. All contingencies have to be considered.
Rebels in the Soviet Union also had a bad habit of ignoring logistics. Many were armed with mismatched rifles and a rainbow selection of ammunition instead of arming all their men with the same rifle and the same ammo for redundancy. Rebellions have been lost in the past merely because the fighters armed with too wide an array of weapons ran out of enough ammo to feed any of them.
Insurgents have also historically suffered from an inability to strike the leadership centers of the empires they fought. Primarily because they did not know who the real leadership was. Only in our modern era do we have the information available to identify the elites and their organizations. Globalists are often very vocal today in media about who they are and what they want. This is why the elites seek to make the next insurgency the LAST insurgency. Never before have they been so vulnerable.
I believe the globalists will use their standard strategy of disinformation and division first to acquire centralization, but eventually they will turn to a Stalin/Malaysian model for control on the ground. I will have to save the specific counter-strategies to these tactics for another article. Some of them I probably cannot legally discuss at all. The most important thing to remember, though, is that the globalists’ job is harder than our job. They have to control people, property, resources, and mass psychology. They have thousands of variables to take into account, and thousands of situations that could go wrong.
All we have to worry about is our own local organization, our own moral compass, our own survival and removing the top globalists from the picture.
- Subprime Auto Loans Go Mainstream: Exposing The Shady Practices For "Everyday" Americans
While the pending subprime auto loan bubble pop is nothing new for our readers, it may be a shocking revelation for the average American who would fall victim of these scams. British comedian John Oliver has prepared a video that places in evidence the rampant fraud that currently takes place in the auto lending sector. The similarities between this industry and the mortgage industry pre-2007 are striking.
The video compiles some of the current TV ads for the segment, including one from Viers Auto Sales, that should strike fear down your spine. Even a clown can get approved.
While the Obama administration has created the Consumer Financial Protection Bureau, we have yet to see any action from them or other social justice warriors like Elizabeth Warren on cracking down on these predatory practices.
Some of the video highlights include:
- A woman asking for a maximum $3,000 car loan ends up on the hook for a $13,000 loan (paying ~30% interest).
- A car who leaves her baby in the car, and then gets her car repossessed with said baby inside.
- A 2003 Kia Optima car that gets loaned and repossessed at least 8 times, each times valued at 2-3x its previous estimate.
- Approximately 31% of subprime auto loans are currently non-performing
Evidently, we have learned nothing from the 2008 crisis.
- Brazil Escalates: Authorities Pull 2 US Olympic Swimmers From Rio Flight
It appears Brazilian officials are not simply going to let this one go. With Ryan Lochte reportedly back in the US (and teammate James Feigen unaccounted for) following the Brazilain judge's search-and-seizure warrant, CNN reports that two fellow swimmers involved in the alleged robbery – Jack Conger and Gunnar Bentz – were removed by Brazilian authorities on Wednesday night from their flight before it departed Rio de Janeiro to the United States, according to US Olympic Committee spokesman Patrick Sandusky.
As a reminder, Lochte, a gold-medal winner, said his wallet was stolen as he and three of his American teammates — Bentz, Conger and James Feigen — were returning to Rio’s Olympic Village in a taxi. They said they were robbed by men posing as police officers, adding that the group initially didn’t contact the U.S. Olympic Committee because they were “afraid (they’d) get in trouble.” The story made quick waves Sunday, especially after Lochte, 32, detailed the alleged encounter on the “Today” show. Lochte’s account has come under increased scrutiny since then. Embarrassed Rio police said they have found little evidence to support the accounts, and a police source said they are unable to find the taxi driver or witnesses.
Multiple sources told NBC Sports that Conger and Bentz cleared security and were in their seats on the plane when authorities came on to the aircraft shortly before takeoff and removed the swimmers.
They are being held at the airport but are being treated well and cordially, the sources said.
Authorities have indicated they don't want to hold the swimmers long, but do want to know what happened during the early morning robbery, the sources said.
"We can confirm that Jack Conger and Gunnar Bentz were removed from their flight to the United States by Brazilian authorities," U.S. Olympic Committee spokesman Patrick Sandusky said. "We are gathering further information."
Lochte's lawyer Ostrow said Lochte gave police a statement as representatives from the U.S. State Department, United States Olympic Committee and the FBI observed. Lochte signed the statement to attest to its truthfulness, Ostrow said.
Police have not asked Lochte for more information, and they did not ask him to remain in Brazil, Ostrow said.
"They never said, 'Stay around,'" Ostrow said. "Otherwise, I would have advised Ryan to stay."
He accused Brazilian authorities of trying to "save face" after allowing the incident to become "a circus."
* * *
Of course, if one were truly wearing their tin foil hat, one might wonder if this is somehow retribution for Washington's alleged hand in Rousseff's downfall…
- Dr. Drew Pinsky Says He Is "Gravely Concerned" About Hillary Clinton’s Health
Submitted by Joseph Jankowski of PlanetFreeWill
Board-certified medicine specialist and TV personality Dr. Drew Pinsky has come out and said that he is “gravely concerned” about presidential candidate Hillary Clinton’s health, pointing out that treatment she is receiving could be the result of her bizarre behaviors.
Appearing on KABC’s McIntyre in the Morning, Pinsky said he and his colleague Dr. Robert Huizenga became “gravely concerned….not just about her health but her health care,” after analyzing what medical records on Hillary had been released.
Pinsky pointed out that after Clinton fainted and fell in late 2012, she suffered from a “transverse sinus thrombosis,” an “exceedingly rare clot” that “virtually guarantees somebody has something wrong with their coagulation system.”
“What’s wrong with her coagulation system, has that been evaluated?” asked Dr. Drew.
Dr. Drew, known as “America’s most trusted physician,” added that the “weird” medication Clinton has been receiving could be exacerbating her health problems.
“So the very medicine doctors are using may be causing this problem and they’re using an old fashioned medicine to treat it – what is going on with her health care?” asked Pinsky.
Pinsky described the situation as “bizarre,” and said that Hillary’s medical condition was “dangerous” and “concerning”.
Dr. Drew also went on to add that it was a sign of “brain damage” when Hillary had to wear prism glasses after her fall.
Although the Clinton Campaign has said that the controversy over Hillary’s health has been debunked and while the media feverishly attempts to paint any questioning of the medical condition of the Democratic party’s nominee as a “conspiracy theory,” it certainly says something when “America’s most trusted physician,” who regularly appears on mainline television, comes out and says he is deeply concerned about Hillary.
- Obama Lied: New Details Confirm $400 Million Given To Iran Was Indeed "Hostage Ransom"
For the self-described "most transparent administration ever" it appears keeping the lies straight is becoming harder and harder. Having slammed the press, Donald Trump, and anyone who dare mention the "lack of logic" in paying a $400 million ransom for 4 Iran hostages, WSJ reports that Treasury officials have confirmed that Obama lied and in fact, the tightly scripted exchange of cash was specifically timed to the release of several American prisoners held in Iran. Trump was right again.
As a reminder, The Hill reported that, President Obama chastised the press for their coverage of the payment, noting that the deal with Iran was announced months ago as part of a larger diplomatic settlement.
"This wasn’t some nefarious deal," Obama said.
“It’s been interesting to watch this story surface,” the president said. “Some of you may recall, we announced these payments in January. Many months ago. There wasn’t a secret, we announced them to all of you.”
"What we have is the manufacturing of outrage on a story that we disclosed in January,” he added later.
"The notion that we would somehow start now in this high-profile way, and announce it to the world, even as we’re looking in the faces of other families whose loved ones are being held hostage and say to them, ‘we don’t pay ransom,’ defies logic," Obama said.
Defies logic indeed – because having slammed the press for suggesting this was a "ransom payment," we discover that is exactly what The Justice Department warned…
In his remarks, the president didn’t mention the objections raised by his own appointees within the Justice Department, where, according to people familiar with the discussions, many officials raised alarms that the timing of the cash payment would look like ransom. (via WSJ)
The head of the national security division at the Justice Department was among the agency’s senior officials who objected to paying Iran hundreds of millions of dollars in cash at the same time that Tehran was releasing American prisoners, according to people familiar with the discussions.
John Carlin, a Senate-confirmed administration appointee, raised concerns when the State Department notified Justice officials of its plan to deliver to Iran a planeful of cash, saying it would be viewed as a ransom payment, these people said. A number of other high-ranking Justice officials voiced similar concerns as the negotiations proceeded, they said.
The U.S. paid Iran $400 million in cash on Jan. 17 as part of a larger $1.7 billion settlement of a failed 1979 arms deal between the U.S. and Iran that was announced that day. Also on that day, Iran released four detained Americans in exchange for the U.S.’s releasing from prison—or dropping charges against—Iranians charged with violating sanctions laws. U.S. officials have said the swap was agreed upon in separate talks.
The objection of senior Justice Department officials was that Iranian officials were likely to view the $400 million payment as ransom, thereby undercutting a longstanding U.S. policy that the government doesn’t pay ransom for American hostages, these people said. The policy is based on a concern that paying ransom could encourage more Americans to become targets for hostage-takers.
Of course, the denials kept on coming from The White House. However, as The Wall Street Journal now reports, new details of the $400 million U.S. payment to Iran earlier this year depict a tightly scripted exchange specifically timed to the release of several American prisoners held in Iran, based on accounts from U.S. officials and others briefed on the operation…
U.S. officials wouldn't let Iranians take control of the money until a Swiss Air Force plane carrying three freed Americans departed from Tehran on Jan. 17, the officials said.
Once that happened, an Iranian cargo plane was allowed to bring the cash back from a Geneva airport that day, according to the accounts.
President Barack Obama and other U.S. officials have said the payment didn’t amount to ransom, because the money was owed by the U.S. to Iran as part of a longstanding dispute linked to a failed arms deal from the 1970s. U.S. officials have said that the prisoner release and cash transfer took place through two separate diplomatic channels.
But the handling of the payment and its connection to the release of the Americans have raised questions among lawmakers and administration critics.
…
One of the Americans released in January as part of the prisoner exchange, a Catholic pastor named Saeed Abedini, said he and other American prisoners were kept waiting at Mehrabad airport for more than 20 hours from Jan. 16 to the morning of Jan. 17.
He said in an interview that he was told by a senior Iranian intelligence official at the time that their departure was contingent upon the movements of a second airplane.
Just as Trump had suggested (before oddly retracting his suggestion), the exchange did take place and as the BBC reported. a video did indeed exist of the events, referring to a documentary called "The Rules of the Game" which was broadcast on Iranian state TV in February. In the clip, one can see shots of an airport are accompanied by commentary which references 17 January in Tehran's Mehrabad Airport.
Specifically, the video shows a loaded crate, partially blurred out, which allegedly shows the money in question.
And another version:
A translation of the commentary with the pictures, per BBC, reads as follows.
"Early hours of 17 January 2016, Mehrabad Airport (Tehran), $400m cash was transported to Iran by an airplane.
"A little bit later, part of the interest money was also paid to Iran, and the US government made a commitment to pay the rest of Iran's money."
While it is not clear if this is intended to be a literal description or whether the shots are just general views of the airport.
The video is shown below, and the pettets of cash appear at the 11:00 mark.
The video It can also be found on YouTube, and was also hosted and discussed by MEMRI tv at one point, and was also in a BBC Journalist twitter feed. Here are the links to the short and the full version of the Iranian Documentary. Finally here is another version.
It is unclear where Donald Trump might have caught the clip of the video, and whether or not the cash disclosed is what Iran claims it is (in light of the WSJ revelations it is very likely that this is indeed the alleged payment in question) but the footage was widely discussed several months ago when the hostages were released. The Iranian TV ran it with a title “The Rules of The Game." It was released on BBC TV during a segment discussing the release of the prisoners.
In other words, it did exist.
* * *
So to summarize – Obama lied; the administration did indeed make a $400 million in exchange for the release of four hostages (if it walks like a ransom, and talks like a ransom, it is a ransom), and Trump was right.
Finally, this is far from over, as The Wall Street Journal concludes, Republican lawmakers have charged that the $400 million payment equated to a ransom paid by the White House to gain the release of the Americans.
Republican leaders said they are preparing to hold hearings on the $400 million transfer once Congress returns from its summer break in September. Rep. Sean Duffy (R., Wis.), chairman of a House investigative body, sent letters to the Justice and Treasury Departments, as well as the Federal Reserve, on Aug. 10 requesting all records related to the Iran exchange.
Mr. Duffy asked Attorney General Loretta Lynch to identify all “persons within the Department authorizing or otherwise taking steps to carry out the payment.”
Obama administration officials have confirmed that they have paid the remaining $1.3 billion to Iran as part of the settlement reached in January on the failed arms deal. This marked the interest accrued over the past 37 years on the original $400 million paid by Iran. U.S. officials, however, have refused to disclose how the Obama administration made this additional payment. Lawmakers are seeking to determine whether this money was also paid in cash or if the Treasury Department was able to wire it electronically.
- Ford Announces Plans To Self-Destruct Starting In 2021
Ford CEO, Mark Fields, sat down with Bloomberg to discuss plans to introduce a completely autonomous car by 2021. The only real problem we see with that plan is that it pretty much ensures their own demise. That said, they're pretty much doomed anyway so might as well go for it.
The company said it plans to have a fully autonomous vehicle — no steering wheel, no gas or brake pedals — available by 2021 for ride-hailing services.
“We see the autonomous car changing the way the world moves once again,” Chief Executive Officer Mark Fields said today at Ford’s research lab in Palo Alto, California. “They address a whole host of safety, social and environmental issues.”
Like Alphabet Inc.’s Google, Ford will skip the interim steps of driver-assisted technology as a way to evolve toward full autonomy. Its plan to deploy self-driving cars in ride-hailing and ride-sharing fleets is similar to what General Motors Co. aims to do with Lyft Inc. Ford’s 2021 scheduled start matches BMW’s ambitious timeframe.
“We believe in our plan that taking the driver out of the loop is really important,” Fields said in an interview with Bloomberg Television. The automaker couldn’t find a sensible way through the “no-man’s land” — determining exactly when a robotic car should to try to re-engage a human driver in an emergency.
So what do we mean when we say an autonomous car pretty much ensures Ford's demise? To be clear, we're not specifically targeting Ford…the whole auto industry is in serious trouble when truly autonomous driving arrives. Below is a little math to help illustrate the point.
Right now there are roughly 250mm light-duty passenger cars on the road in the U.S. (that's about 1 car per driving age person, btw, which is fairly astounding by itself). American's travel roughly 3 trillion miles per year in aggregate which which means that each car travels an average of 12k miles per year. Now if you assume the average rate of travel is 45 miles per hour then you'll find that each car is implied to be on the road for an average of about 45 minutes per day. That's a capacity utilization of about 3% (see table below for quick math).
A 3% capacity utilization ratio is, needless to say, fairly terrible. We don't imagine too many CFOs would model capital allocation decisions based on a 3% capacity utilization for fixed assets. That said, individuals are forced to underwrite car purchases to a 3% capacity utilization because they have no choice. People have to get to work and 100% reliance on public transit options as just not feasible for most people in this country.
That is, until the arrival of completely autonomous vehicles. The problem with mass transit is that people still need a car to get back and forth to the train station or bus stop. The problem with Ubers/Taxis is that they're expensive for daily use due primariliy to the labor overhead that's built into your per mile rate. But fully autonous vehicles solve both those problems. Now, people will have the option of a vehicle at their beck and call without having to fund the upfront capital cost of a purchase and/or the per unit human capital costs inherent in taking an Uber. In other words, the per mile rental rate of a fully autonomous car should be competed down to a level that provides an adequate return solely on the cost of the vehicle…no wages, no benefits, none of the typical hassles associated with employing people. Or, said another way, taking an Uber is going to get really freaking cheap.
But the best part is that capacity utilization with fully autonomous cars can skyrocket driving per unit costs even lower for passengers. For example, when you drive to work right now your car sits there all day until you drive home. In the autonomous car world, that car will drive you to work then go pick up multiple other poeple to do the same thing. Now, if capacity utilization doubles from just 3% to 6% all of sudden half the number of cars are required in the US which means annual SAAR goes from ~17mm to ~8.5mm…which means Ford and GM likely find themselves in another bailout situation.
So goodluck with that fully autonomous car. We wish you the best.
- "Weak" Walmart Security Enables Rampant Crime-Wave, Costs Taxpayers $5 Billion
You don’t have to search that hard on the internet to find an endless supply of stories and videos about violent crimes and/or ludicrous behavior at Walmart stores around the country.
Who can forget the recent meth lab discovered under a Walmart parking lot in Amherst, NY?
ICYMI: Meth lab found under Walmart parking lot https://t.co/KyRWYeYV7f pic.twitter.com/aclQVg8h0h
— WYFF News 4 (@wyffnews4) August 13, 2016
Or the recent hostage situation in Amarillo, TX that left Mohammad Sadegh Moghaddam dead…
WATCH: New video from the Amarillo Walmart hostage situation shows the eerie last moments of the suspect’s life https://t.co/aar48QbyIq
— ABC 7 Amarillo (@ABC7Amarillo) July 7, 2016
Or the 3 Florida Walmart employees that now face murder charges after subduing a shoplifter in the parking lot who subsequently died…
Three Florida Walmart employees are facing charges after subduing a shoplifting suspect who later died. #KOBI5Newshttps://t.co/bX028JpQbs
— KOBI-TV NBC5 News (@KOBITV) August 3, 2016
In fact, more than 200 violent crimes, including kidnappings, stabbings, shootings, and murders, have occurred at Walmarts across the country this year, or about one a day. According to Bloomberg, turns out the level of criminal activity is forcing police officers to spend a fairly substantial portion of their time at Walmarts. That’s a burden many officers and public servants say is the direct result of Walmart scrimping on their own security expenditures and instead outsourcing those obligations to taxpayer funded police forces. According to one Police Department in Tulsa:
The call log on the store stretches 126 pages, documenting more than 5,000 trips over the past five years. Last year police were called to the store and three other Tulsa Walmarts just under 2,000 times. By comparison, they were called to the city’s single Target store 44 times. Most of the calls to the northeast Supercenter were for shoplifting, but there’s no shortage of more serious crimes, including five armed robberies so far this ear, a murder suspect who killed himself with a gunshot to the head in the parking lot last year, and, in 2014, a group of men who got into a parking lot shootout that killed one and seriously injured two others.
His squad’s sergeant, Robert Rohloff, a 34-year police veteran who has to worry about staffing, budgets, and patrolling the busiest commercial district in Tulsa, says there’s nothing funny about Walmart’s impact on public safety. He can’t believe, he says, that a multibillion-dollar corporation isn’t doing more to stop crime. Instead, he says, it offloads the job to the police at taxpayers’ expense. “It’s ridiculous—we are talking about the biggest retailer in the world,” says Rohloff. “I may have half my squad there for hours.”
Meanwhile, Target stores in Tulsa don’t have the same problem. The difference, of course, being that Targets are typically located in strip malls and actually spend money on store security.
“Target doesn’t have these problems,” says Ferguson. “Part of it may be the lower prices at Walmart or where Walmart is located, but when I walk into Target I see uniformed security or someone walking around up front. You see no one at Walmart. It just seems like an easy target.”
Meanwhile, experts say the security issues at Walmart have a simple to fix but would come at the detriment of operating margins…leaving many to question whether Walmart is intentionally ignoring a dangerous environment to preserve margins
Flickinger says getting dramatic results wouldn’t be complicated. It would just cost a lot. He, like many other Walmart watchers, thinks McMillon is heading in the right direction with the changes he’s making, including spending $2.7 billion on higher wages and training to boost morale and attract higher-caliber employees. It just isn’t nearly enough, he says. He estimates the number of crimes at Walmart’s U.S. stores could be halved with the addition of 250,000 part-time employees on top of the more than 1 million full-time and part-time retail workers the company already has. Even that much new hiring wouldn’t get the company to the number of employees per square foot it had in 2006. The cost would be about $3.25 billion a year, or about a quarter of Walmart’s profit last year of $14 billion.
Security experts say there’s another way to reduce crime: Hire much more security, including more off-duty, uniformed police. At $35 an hour, a typical rate in many cities, 12 hours of police coverage a day would cost each store about $150,000 a year. Multiply that by the company’s 3,500 Supercenters—the largest stores and the sites of most of the serious crime—and it would cost half a billion dollars a year.
Despite calls for Walmart to step up internal security efforts from police departments and city councils across the country, many have found Walmart’s response to be “lacking” to say the least. So Dennis Buckley, mayor of Beech Grove, Indiana, decided to take a different tactic force Walmart into action after being embarrassed by a video recorded at his local store that immediately went viral (see below):
Enraged by the circus atmosphere around the video, he denounced Walmart on Facebook and in the local media. “The Beech Grove Walmart is NOT a good corporate partner,” he posted. The YouTube video “was embarrassing to the City of Beech Grove and the people who live in our beautiful city. Walmart should be ashamed of itself once again for failing to control the people who enter their store.”
While Dennis’ public shaming got him a quick meeting with Walmart executives nothing really changed for his local store in the long run. With Walmart being able to offload $3-$4 billion of annual security expenses to taxpayers we suspect that not much is going to change anytime soon.
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