- Escobar: The Deep State Vs. WikiLeaks
Authored by Pepe Escobar via The Strategic Culture Foundation,
The Made-by-FBI indictment of Julian Assange does look like a dead man walking. No evidence. No documents. No surefire testimony. Just a crossfire of conditionals…
But never underestimate the legalese contortionism of US government (USG) functionaries. As much as Assange may not be characterized as a journalist and publisher, the thrust of the affidavit is to accuse him of conspiring to commit espionage.
In fact the charge is not even that Assange hacked a USG computer and obtained classified information; it’s that he may have discussed it with Chelsea Manning and may have had the intention to go for a hack. Orwellian-style thought crime charges don’t get any better than that. Now the only thing missing is an AI software to detect them.
Assange legal adviser Geoffrey Robertson – who also happens to represent another stellar political prisoner, Brazil’s Lula – cut straight to the chase (at 19:22 minutes);
“The justice he is facing is justice, or injustice, in America… I would hope the British judges would have enough belief in freedom of information to throw out the extradition request.”
That’s far from a done deal. Thus the inevitable consequence; Assange’s legal team is getting ready to prove, no holds barred, in a British court, that this USG indictment for conspiracy to commit computer hacking is just an hors d’oeuvre for subsequent espionage charges, in case Assange is extradited to US soil.
All about Vault 7
John Pilger, among few others, has already stressed how a plan to destroy WikiLeaks and Julian Assange was laid out as far back as 2008 – at the tail end of the Cheney regime – concocted by the Pentagon’s shady Cyber Counter-Intelligence Assessments Branch.
It was all about criminalizing WikiLeaks and personally smearing Assange, using “shock troops…enlisted in the media — those who are meant to keep the record straight and tell us the truth.”
This plan remains more than active – considering how Assange’s arrest has been covered by the bulk of US/UK mainstream media.
By 2012, already in the Obama era, WikiLeaks detailed the astonishing “scale of the US Grand Jury Investigation” of itself. The USG always denied such a grand jury existed.
“The US Government has stood up and coordinated a joint interagency criminal investigation of Wikileaks comprised of a partnership between the Department of Defense (DOD) including: CENTCOM; SOUTHCOM; the Defense Intelligence Agency (DIA); Defense Information Systems Agency (DISA); Headquarters Department of the Army (HQDA); US Army Criminal Investigation Division (CID) for USFI (US Forces Iraq) and 1st Armored Division (AD); US Army Computer Crimes Investigative Unit (CCIU); 2nd Army (US Army Cyber Command); Within that or in addition, three military intelligence investigations were conducted. Department of Justice (DOJ) Grand Jury and the Federal Bureau of Investigation (FBI), Department of State (DOS) and Diplomatic Security Service (DSS). In addition, Wikileaks has been investigated by the Office of the Director of National Intelligence (ODNI), Office of the National CounterIntelligence Executive (ONCIX), the Central Intelligence Agency (CIA); the House Oversight Committee; the National Security Staff Interagency Committee, and the PIAB (President’s Intelligence Advisory Board).”
But it was only in 2017, in the Trump era, that the Deep State went totally ballistic; that’s when WikiLeaks published the Vault 7 files – detailing the CIA’s vast hacking/cyber espionage repertoire.
This was the CIA as a Naked Emperor like never before – including the dodgy overseeing ops of the Center for Cyber Intelligence, an ultra-secret NSA counterpart.
WikiLeaks got Vault 7 in early 2017. At the time WikiLeaks had already published the DNC files – which the unimpeachable Veteran Intelligence Professionals for Sanity (VIPS) systematically proved was a leak, not a hack.
The monolithic narrative by the Deep State faction aligned with the Clinton machine was that “the Russians” hacked the DNC servers. Assange was always adamant; that was not the work of a state actor – and he could prove it technically.
There was some movement towards a deal, brokered by one of Assange’s lawyers; WikiLeaks would not publish the most damning Vault 7 information in exchange for Assange’s safe passage to be interviewed by the US Department of Justice (DoJ).
The DoJ wanted a deal – and they did make an offer to WikiLeaks. But then FBI director James Comey killed it. The question is why.
It’s a leak, not a hack
Some theoretically sound reconstructions of Comey’s move are available. But the key fact is Comey already knew – via his close connections to the top of the DNC – that this was not a hack; it was a leak.
Ambassador Craig Murray has stressed, over and over again (see here) how the DNC/Podesta files published by WikiLeaks came from two different US sources; one from within the DNC and the other from within US intel.
There was nothing for Comey to “investigate”. Or there would have, if Comey had ordered the FBI to examine the DNC servers. So why talk to Julian Assange?
The release by WikiLeaks in April 2017 of the malware mechanisms inbuilt in “Grasshopper” and the “Marble Framework” were indeed a bombshell. This is how the CIA inserts foreign language strings in source code to disguise them as originating from Russia, from Iran, or from China. The inestimable Ray McGovern, a VIPS member, stressed how Marble Framework “destroys this story about Russian hacking.”
No wonder then CIA director Mike Pompeo accused WikiLeaks of being a “non-state hostile intelligence agency”, usually manipulated by Russia.
Joshua Schulte, the alleged leaker of Vault 7, has not faced a US court yet. There’s no question he will be offered a deal by the USG if he aggress to testify against Julian Assange.
It’s a long and winding road, to be traversed in at least two years, if Julian Assange is ever to be extradited to the US. Two things for the moment are already crystal clear. The USG is obsessed to shut down WikiLeaks once and for all. And because of that, Julian Assange will never get a fair trial in the “so-called ‘Espionage Court’” of the Eastern District of Virginia, as detailed by former CIA counterterrorism officer and whistleblower John Kiriakou.
Meanwhile, the non-stop demonization of Julian Assange will proceed unabated, faithful to guidelines established over a decade ago. Assange is even accused of being a US intel op, and WikiLeaks a splinter Deep State deep cover op.
Maybe President Trump will maneuver the hegemonic Deep State into having Assange testify against the corruption of the DNC; or maybe Trump caved in completely to “hostile intelligence agency” Pompeo and his CIA gang baying for blood. It’s all ultra-high-stakes shadow play – and the show has not even begun.
- Racist, Sexist "Diversity Disaster" Looming In AI Thanks To White Male Programmers
Sorry white males, you’ve done it again.
According to new research by New York University’s AI Now Institute, we may be in for a future of racist, mansplaining, sexist AIs which are “at risk of replicating or perpetuating historical biases and power imbalances,” reports The Guardian.
Examples cited include image recognition services making offensive classifications of minorities, chatbots adopting hate speech, and Amazon technology failing to recognize users with darker skin colors. The biases of systems built by the AI industry can be largely attributed to the lack of diversity within the field itself, the report said. –The Guardian
“The industry has to acknowledge the gravity of the situation and admit that its existing methods have failed to address these problems,” said report author Kate Crawford. “The use of AI systems for the classification, detection, and prediction of race and gender is in urgent need of re-evaluation.“
As the report notes, over 80% of AI professors are men, while ‘progressive’ Silicon Valley’s super-sexism isn’t helping either. Facebook’s AI research team, for example, is only 15% women. Microsoft’s stands at 10%. Nevermind that women comprise just 18% of computer science majors – which is the exact percentage of authors presenting their work at leading AI conferences.
Via Wired Big tech’s ‘overt racism’ is also on display – as just 2.5% of Google’s workforce is black, while Facebook and Microsoft are each at 4%. Could this be why Microsoft’s AI, Tay, turned into a raging Holocaust denier after “machine learning” from the internet over the span of 24 hours:
“Tay” went from “humans are super cool” to full nazi in <24 hrs and I'm not at all concerned about the future of AI pic.twitter.com/xuGi1u9S1A
— gerry (@geraldmellor) March 24, 2016
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Why is this happening? According to the report, it’s not the fact that far fewer women are entering computer science despite nearly 20 years of encouraging women to pursue STEM (Science, Technology, Engineering and Mathematics) majors. It’s issues with “the pipeline” – i.e. the industry (dominated by liberals) is racist and sexist.
Despite many decades of ‘pipeline studies’ that assess the flow of diverse job candidates from school to industry, there has been no substantial progress in diversity in the AI industry. The focus on the pipeline has not addressed deeper issues with workplace cultures, power asymmetries, harassment, exclusionary hiring practices, unfair compensation, and tokenization that are causing people to leave or avoid working in the AI sector altogether. –AI Now Institute
What recommendations does NYU have to save the world from mansplaining AI that don’t respect “historical imbalances”?
1. Publish compensation levels, including bonuses and equity, across all roles and job categories, broken down by race and gender.
2. End pay and opportunity inequality, and set pay and benefit equity goals that include contract workers, temps, and vendors.
3. Publish harassment and discrimination transparency reports, including the number of claims over time, the types of claims submitted, and actions taken.
4. Change hiring practices to maximize diversity: include targeted recruitment beyond elite universities, ensure more equitable focus on under-represented groups, and create more pathways for contractors, temps, and vendors to become full-time employees.
5. Commit to transparency around hiring practices, especially regarding how candidates are leveled, compensated, and promoted.
6. Increase the number of people of color, women and other under-represented groups at senior leadership levels of AI companies across all departments.
7. Ensure executive incentive structures are tied to increases in hiring and retention of underrepresented groups.
8. For academic workplaces, ensure greater diversity in all spaces
***
And remember, AI industry:
- Pushing Marijuana Legalization Across The Finish Line
Authored by Paul Armentano via Counterpunch.org,
After nearly a century of cannabis criminalization, U.S. voters — and a growing number of high-profile politicians — are demanding that marijuana policy move in a different direction.
One in five Americans now live in states where the adult, recreational use of marijuana is legal. And the majority of us reside someplace where the medical use of cannabis is legally authorized.
Many of these latter programs have been in place for the better part of two decades. And it’s plain to see the results have been better for public health and safety than criminal prohibition, because public and political support in for marijuana reform just keeps growing.
According to the latest national polling compiled by Gallup, 66 percent of U.S. adults — including majorities of Democrats, independents, and Republicans — believe that the adult use of marijuana should be legal.
Separate national surveys, such as the General Social Survey and the latest Pew poll, similarly show that public support for legalization is at a historic high.
Voters’ support for legalizing and regulating cannabis isn’t born out of a presumption that the plant is altogether harmless. To the contrary, society has long acknowledged that cannabis is a mood-altering substance with some risk potential — particularly for young people or among those with a family history of mental illness.
In fact, it’s precisely because marijuana use may pose potential risks that advocacy groups like NORML have long urged lawmakers to regulate it accordingly.
Such regulations already exist governing the use, production, and retail distribution of alcohol and tobacco — two substances that are far more dangerous and costly to society than the responsible adult use of cannabis.
The enforcement of these regulations, coupled with public awareness campaigns to educate consumers about these products’ health effects, have proven effective at reducing the public’s use of these two substances — particularly among U.S. teens.
Specifically, according to 2018 data compiled by the University of Michigan, lifetime use of cigarettes by young people has fallen 70 percent since the early 1990s and is now at a historic low. The lifetime use of alcohol is also at an all-time low, having fallen 49 percent during this same time period.
There is no legitimate reason not to apply these same tried-and-true principles to marijuana.
In Congress, a growing number of politicians are getting the message.
In the Senate, a bipartisan coalition of lawmakers recently introduced the Strengthening the Tenth Amendment Through Entrusting States (STATES) Act of 2019, which protects state-sanctioned marijuana-related activities from undue federal interference.
Broader federal reform bills, such as the Ending Federal Marijuana Prohibition Act and the Marijuana Justice Act, are also pending in the House, where lawmakers recently took steps to permit banks to legally affiliate with state-licensed marijuana businesses.
Among the growing field of Democratic presidential hopefuls, almost all are on record in support of legalizing adult use.
Yet despite these recent cultural and political shifts in opinion, marijuana legalization is not inevitable. These societal and legal changes only occur when advocates remain passionate and vigilant, and when they demand their elected officials to act. And the time for action is now.
The failures of marijuana prohibition are apparent and too large to any longer ignore. It’s time to move in another direction.
A pragmatic regulatory framework that allows for the legal, licensed commercial production and retail sale of marijuana to adults but restricts its use among young people — coupled with a legal environment that fosters open, honest dialogue between parents and children about cannabis’ potential harms — best reduces the risks associated with the plant’s use or abuse.
By contrast, advocating for the marijuana’s continued criminalization only compounds them.
A freer, healthier, and safer society awaits.
- Beto O'Rourke Campaign Loses Top Adviser And Her Deputy
Beto O’Rourke’s is down two aides – one of whom was a self-described “central part of” his 2020 campaign for president, according to BuzzFeed.
According to BuzzFeed News:
A top adviser to Beto O’Rourke, Becky Bond, has split with his campaign, an O’Rourke spokesperson confirmed.
Bond, a longtime progressive activist and organizer known for her work on O’Rourke’s 2018 Senate bid against Republican Ted Cruz, left the campaign along with her deputy Zack Malitz. Malitz worked closely with Bond on Sen. Bernie Sanders’ first presidential campaign in 2016.
It has yet to be seen if this will slow the momentum of the former Texas congressman who fantasized about murdering children and wrote weird furry poetry about a ball-buffing, butt-shining, ass-waxing cow that provides “milky wonder.”
The Song of the Cow, a poem by @BetoORourke aka Psychedelic Warlord, circa 1988 (via @WeldPond and @josephmenn) Not telling you who to vote for but this will be the national anthem if Beto wins. pic.twitter.com/HjV9JzxlZB
— Andy Greenberg (@a_greenberg) March 15, 2019
Perhaps they just didn’t connect with the skateboarding, dabbing, ex-hacker failing miserably with a “how do you do, fellow kids?” campaign to woo progressive voters. Or perhaps they were fired after O’Rourke recruited as his campaign manager veteran Democratic operative Jen O’Malley Dillon, who served in top leadership roles for Barack Obama in 2008 and 2012, according to BuzzFeed.
O’Rourke spokesman Chris Evans did not address the reasons for the departures, or whether Bond and Malitz left voluntarily – only that they worked for O’Rourke during his 2018 Senate race and served on a “temporary” one-month basis.
Evans said that Bond and Malitz, who worked for O’Rourke during the 2018 Senate race, only served as employees the campaign in a “temporary” one-month basis. Democratic operatives who have worked with Bond this year say she considered herself a central part of O’Rourke’s 2020 operation.
In a statement about her and Malitz’s departure to BuzzFeed News, Bond said it was “time for us to move on to other challenges.” –BuzzFeed
“Launching a presidential campaign without a big staff or even a campaign manager was no easy feat and it took everyone pitching in,” said Bond. “We’re proud to have been part of the team of deeply dedicated staff and volunteers who nearly pulled off a historic upset in the 2018 Texas Senate race and broke records launching Beto’s campaign for the presidency.”
Beto dabbing like Hillary Clinton According to Evans, the two remain “volunteers” for the O’Rourke campaign.
In short, BuzzFeed is reporting mixed messages following their departure, or downgrade, whichever the case may be.
“They were not only instrumental to the historic Texas Senate race but they agreed to help get us off the ground in this monumental undertaking of running a grassroots campaign for president in every part of the country,” said Evans in a Saturday statement. “Becky and Zack remain close friends of the campaign, and true to form, they have already joined our army of grassroots volunteers who are signing up for shifts and committing to electing Beto president.”
Bond is a well-known organizer in progressive circles, serving as political director of CREDO, a San Francisco-based activist group that aimed to push Obama to the left during his administration, before joining the Sanders campaign in 2016. On that race, she and Malitz helped build the Vermont senator’s “distributed organizing” program, which aimed to build volunteer leadership networks in areas of the country where the campaign lacked staff.
She and Malitz committed to support O’Rourke’s team in 2020 at a time when some progressives, including a handful of Sanders allies, were critical of the Texas congressman. Several of Sanders’ former advisors still work for O’Rourke. –BuzzFeed
Meanwhile, enjoy some of Beto’s poetry:
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- How To Explain Bitcoin To Your Friends & Family
Authored by Len Ruggiero via The Burning Platform blog,
Introduction:
EVERY new technological development throughout mankind’s recorded history has been met initially with derision, protest, incarceration, torture, death, and sometimes war. From the Catholic Church’s restraint of Galileo, who insisted that Copernicus was correct in his assertion that the sun was the center of the solar system, rather than the Earth as center, as was the position of the church at the time, to the invention of the printing press, which facilitated the French Revolution due to its ability to improve communication exponentially, to the personal computer, to Bitcoin, virtual reality, artificial intelligence, driverless electric vehicles, etc., technology advancement has always intimidated mankind when first introduced. Bitcoin is no exception.
Prediction:
Taking it to its logical conclusion, the adoption of Bitcoin as a store of value and a means of exchange will literally destroy the existing banking and financial system as we know it. It is inevitable. Nothing can stop Bitcoin. All current assets owned by people across the globe will become worthless. This will include assets owned by all levels of government, including, social security funds, and any other type of retirement fund. It makes no difference if the asset is measured in Dollars, Euros Yen, or Renminbi, the value of all current forms of assets will disappear, literally overnight.
So there will be world anarchy, we’ll retreat to the dark ages, everyone will be poor, and we’ll have to subsist off the land, or die. Right? Wrong. There will exist a fairly large group of Bitcoin Billionaires and Trillionaires, so called “whales,” in all the currently existing advanced economies of the world. These people will control all the power because they control Bitcoin.
There will be a meeting of these people. It will be like Bretton Woods all over again, but instead of politicians and bankers attending, it will be Bitcoin Billionaires and Trillionaires. They will declare a “New World Order.” Under the Bitcoin “New World Order”, a percentage of all Bitcoin in the world will be taxed at some agreed upon amount sufficient to replace the capital of every private individual, institution, and government around the globe with an amount equivalent to the pre-Bitcoin changeover. All countries will receive Bitcoin in an amount equivalent to local currency and people will continue to work as they do now.
I further predict this event will transpire within the next five years when the use of bitcoin by individuals and organizations becomes so widespread that local currencies will become unnecessary. The event will be similar to what is happening right now with the Petrodollar. China has declared it will begin using its currency rather than Dollars to buy its oil needs. Potentially, this could lead to China becoming the dominant world power in buying and trading of crude oil. It is currently the largest buyer of crude, which, coincidentally, is the largest traded commodity by Dollar volume.
I also predict that this event will cause all the world’s central bankers to establish their own form of bitcoin but that attempt will fail because Bitcoin by then will already be established as the gold standard, so to speak.
History:
If one reads, listens to, or watches the news, one will hear repeatedly that Bitcoin is a scam, that it will go bust, it will be put out of business by competing bank’s cybercurrencies, or that governments will stop it, etc. However, I happen to believe Bitcoin will prevail over all obstacles and I therefore boldly
(or perhaps stupidly), predict its future. In a remark attributed to Mark Twain, “Predictions are hard, especially about the future.”
On August 18, 2008, the domain name “bitcoin.org” was registered. In November that year, a link to a paper authored by Satoshi Nakamoto titled Bitcoin: A Peer-to-Peer Electronic Cash System was posted to a cryptography mailing list. Nakamoto implemented the bitcoin software as open sourcecode and released it in January 2009. The identity of Nakamoto remains unknown.
In January 2009, the bitcoin network came into existence after Satoshi Nakamoto mined the first ever block on the chain, known as the genesis block, for a reward of 50 bitcoins.
The name Satoshi Nakamoto is shrouded in mystery. It’s not known if it is a single person, a group of people or just a made up name. Whatever it is, it’s certainly prescient!
Public comments:
The potential, but real, threat of Bitcoin and the blockchain to the established financial order and to powerful financial elites, recently caused Jamie Dimon, CEO of J.P. Morgan, one of the world’s largest banks, to state that “…Bitcoin…is a fraud.”
But the man speaks with forked tongue. It’s a known fact that every bank in the world is frantically analyzing the blockchain upon which Bitcoin and over 1500 other cryptocurrencies are based because it will—and is already—changing the fundamental workings of the global financial system. This new technology threatens the well-being and very existence of every financial powerhouse and its beneficiaries because it brings a truly distributed, democratic process to the functioning of money as a system for the storage and exchange of value. However, only those who believe in Bitcoin will come out whole on the other side.
Dimon speaks from his position at the very top of the established financial and political power base. He speaks not to the point that Bitcoin is a fraud, but rather from outright fear of the ability of this new technology to literally destroy that system he represents. Without a shadow of doubt, he FULLYcomprehends Bitcoin’s and the blockchain’s threat to the current financial system. Fifty to a hundred years from now, his statement will be seen as akin to those made during the advent of the automobile.
Similarites to existing money as a store of value and means of exchange:
Bitcoin is fundamentally no different than our current global system of finance. Each country has its own form of currency which serves as a measure of value and means of exchange. Bitcoin, however, does not belong to any country. It belongs to its owners in a fully distributed manner.
All forms of money currently in existence in advanced economies are fiat, meaning they are backed by nothing. Until 1971 the U.S. dollar was backed by gold. As a result, the government could never print more money than the amount of gold stored in its vaults. This gold backing of the dollar also served to limit the amount of dollars that could be printed or coins minted. Thus the value of money could never decrease below the value of gold. Now the dollar’s backing exists only in the confidence and belief of people that money serves as a store of value and a means of exchange. Once people lose that confidence and belief, they will panic and there will be runs on banks as people seek to withdraw their money from their bank. This is exactly what happened in the U.S. before the Great Depression and also more recently in Cyprus.
In 1971, President Nixon removed gold as the backing behind the dollar. Since then, the price of dollars has been allowed to float freely like any other commodity on trading exchanges throughout the world. Each country’s central bank creates its money out of thin air by entering additional digital numbers in their computer ledgers. This so-called “money printing” has been proven time and time again throughout history to end in financial disaster. It is happening now, as we speak, in Zimbabwe and Venezuela.
Today, banks operate under what is known as the “fractional reserve system”. The U.S, Government requires that every bank hold in its vaults at least $50 million or $5% of its capital base. A simplified explanation of how the fractional reserve system works is that people deposit money into their bank and the bank is required to keep only 5% of that money in its vaults available for withdrawal by its owners. The bank is in the business of earning profits, so it turns around and loans 95% of its deposits to others in the form of loans or it may invest in financial instruments, such as government bonds, which pay a percentage of interest.
Value:
We must ask ourselves what the word “value” truly and fundamentally means. The fundamental value each individual offers in today’s global society is the ability to work if one is in the working age group. For that value we are paid a wage in the currency of the country in which we reside.
Again, Bitcoin is fundamentally no different. However one key difference is in the type of work that is performed to create value. The work that will be completed by Bitcoin to create value will not be physical or mental. Instead the work that will be performed and is currently performed is digital and virtual.
This digital and virtual work is made possible by a technology named the “blockchain.” The blockchain is a computer algorithm, akin to a mathematical puzzle, but infinitely more complex. The numbers in the algorithm (actually the ones and zeros of the program), stretch to an unimaginable length, nearing infinity. Each time an algorithm puzzle is solved, a new Bitcoin is produced
Furthermore, Bitcoin is limited in quantity to 20,000,000 Bitcoins, the maximum amount that will ever be produced. No central bank will be able to create more Bitcoin and thus inflate the currency. Bitcoin’s value will never be diminished because there are too many of them, the way there are too many dollars, Marks, or Zimbabwe Dollars, which ultimately leads to destructive inflation as in countries like Weimar Germany, Venezuela, and Zimbabwe.
The making, or “mining,” of Bitcoin is horrendously expensive, requiring vast networks of the most powerful computer servers to work incessantly, creating a Bitcoin approximately every ten minutes. Furthermore the servers create so much heat in their operation that they must be cooled at high expense to a point they can operate at their peak efficiency. This “mining” will continue until the maximum amount of 20,000,000 Bitcoin is reached. Each Bitcoin “miner” is free to keep or sell the Bitcoin they create.
The Blockchain:
The “blockchain” is a virtual ledger designed to track each and every Bitcoin as well as the creation and exchange of Bitcoin. The blockchain can be used in other digital applications as well, such as global supply chains,and financial transactions. The blockchain bookkeeping ledger is now virtual rather than residing on a computer or in a physical book into which accounting entries are made. Under all currently known technologies, the blockchain can never be hacked or compromised in any way, but that will undoubtedly change much sooner than most expect.
The virtual ledger is, in fact, a digital chain recording each transaction. This prevents any single transaction from ever being duplicated or changed, thus it provides security along with anonymity. This latter point presents a legitimate concern held by critics due to the fact Bitcoin can be used for illicit purposes without anyone knowing the better. At this point, there is no known antidote. But one could also argue that such activity takes place under the current system of currencies and there is no means to prevent it. However, it seems well within the realm of reason to expect that a virtual solution will indeed be found
Additional concerns:
In addition to the above mentioned concerns, investors say Bitcoin is nothing but the latest speculative investment, going all the way back to the Dutch Tulip Mania. They expect that a crash in price is inevitable. That will likely happen and, in fact, has already happened. No investment goes straight up, there are always up and down cycles.
Many believe another type of cryptocurrencies will replace Bitcoin, but there are no evident advantages to other cryptocurrencies under currently envisioned scenarios,
Another valid concern has recently been expressed, that 1000 people hold 40% of existing Bitcoin, socalled “whales.”. This concentration of power may allow those with evil intent to corner the market and control price. This very point confirms one point made in my prediction above, except that I would hope those whales would have honorable intentions to help mankind in a massively positive way.
- When Disruption Goes Horribly Wrong: MoviePass Loses 90% Of Subscribers
For those curious what happens to new normal “disruptors” when they run out of money and can no longer operate at a loss to capture market share (a favorite strategy for Silicon Valley and most “hot” names such as Tesla, Netflix, Uber, and in many ways, Amazon) look no further than MoviePass.
The company, which rose to prominence after allowing its members to watch a virtually unlimited number of movies for a very low monthly price, only to see its business model implode after it failed to “scale” and leverage its user base and quickly ran out of cash, has seen a deluge of users hitting the exits after it was forced to scale back the number of movies users could see each month. The embattled cinema-subscription provider has seen its subscriber number collapse by 90% from a peak of more than 3 million to just 225,000 in under a year, according to a report by Business Insider, which cited “internal data” even though the company declined to officially confirm the humiliating figures.
Last summer, when things were still running relatively smoothly, MoviePass claimed in June 2018 that it had signed up more than 3 million subs for its $9.95 monthly plan, which let customers see one movie every single day. However, that model quickly proved unsustainable as we previously reported, and MoviePass was forced to change that to a three-movies-per-month plan. So, last August MoviePass began to convert subscribers on annual subscription plans to the three-movies-per-month subscription plan, by giving annual subscribers the option to either cancel or refund their annual subscription or continue on the new three-movies-per-month subscription plan.
As it turns out, most canceled: over 90% of MoviePass’ prior subscribers were no longer interested in paying the same price for a service that offered dramatically scaled-backed terms.
Then, in an attempt to spark renewed membership interest, in March MoviePass introduced a refashioned “unlimited” plan, dubbed Uncapped, priced at $14.95 per month (or $119.4 per year), to again allow customers to see one movie daily, which however came with big caveats, described by MoviePass like this: “Your movie choices may be restricted due to excessive individual usage which negatively impacts system-wide capacity.”
It was too little too late, and as BI reports, MoviePass managed to sign up only about 13,000 new subscribers Uncapped launched in mid-March, a far cry from where it was a year ago.
It’s easy to grow sales and acquire subscribers with a negative variable margin. This suggests that @MoviePass’s value proposition can’t support a positive one (although financial viability concerns are also likely weighing on subscriber numbers). 1/https://t.co/4Zlzxpw1he
— Dan McCarthy (@d_mccar) April 20, 2019
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Meanwhile, the company’s liquidity struggles are only getting worse, and as of March 21, 2019, parent company Helios & Matheson Analytics only had $2.8 million in cash on hand and $13.1 million on deposit with its merchant and fulfillment processors related to subscription revenues.
In an attempt to give the melting ice-cube a few more months before pulling the plug, last month Helios and Matheson said it raised a $6 million new round of financing from “certain institutional investors,” which closed March 25, Variety reported. The company said it would use the $5.56 million net proceeds (after placement-agent fees) “to accelerate MoviePass’ product development, fine tune its subscription technology, and increase MoviePass Films’ investment in new films.”
Translation: the newly raised funds will be used to fund the company’s cash burn and delay its bankruptcy filing by a few months.
The only question is whether once MoviePass does file for Chapter 7 liquidation, will anyone go to prison. The answer may well be yes: last month, MoviePass, which hasn’t filed financial results since Q3 2018, announced it would restate historical results for the8 months ended Sept 2018, as a result of a cut in revenue for the first three quarters of 2018 restated to $198.3 million vs $204.9 million previously, which boosted the company’s operating loss from $320 million to $327.4 million for the same period. Separately, the New York Attorney General opened a securities-fraud probe into whether Helios and Matheson misled investors. Among other legal woes noted by Variety, MoviePass also is the target of a class-action lawsuit by subscribers claiming the the change in the “unlimited” plan was a deceptive “bait-and-switch” tactic.
The good news for investors: at least MoviePass’ painful lesson in what happens when the cash to fund “disruption” runs out, will come in relatively early, before the company could suck in far more capital. And while most other major disruptors will suffer the same fate once their generous VC or public capital backers lose the faith, the amount of capital involved there will be orders of magnitude higher. Until then, we eager look forward to even more unprofitable companies going public and proving that not only is the number of greater fools out there truly unprecedented, but that a sucker is indeed born every millisecond.
- China's Fake Numbers And The Risk They Pose For The Rest Of The World
Authored by John Rubino via DollarCollapse.com,
Not so long ago, London Telegraph’s Ambrose Evans-Pritchard was one of the handful of must-read financial journalists. He probably still is, but since he disappeared behind the Telegraph’s pay wall his work is invisible to non-subscribers, only emerging when a free outlet runs one of his stories.
That happened this morning when the Sydney Morning Herald carried his analysis of the financial Ponzi scheme that is China.
After taking on more debt in a single decade than any other country ever — in the process helping to pull the US and Europe out of the Great Recession — China recently shifted into an even higher gear, creating a world record amount of credit in the most recent reporting month.
And – more important for headline writers and money managers – it reported exactly the right amount of GDP growth.
This brings to mind a long-ago interview in which economist Nouriel Roubini asserted that China just makes its numbers up, frequently reporting GDP immediately after the end of the period being measured, something that even the US can’t do.
But it’s one thing to for the rest of us to suspect and/or assert that China is just giving the markets what they want to hear, and another thing to understand the implications and explain them coherently. Evans-Pritchard does this in his latest article.
Maximum vulnerability: China (and the world) are still in big trouble
China’s majestic and elegantly-stable GDP figures are best seen as an instrument of political combat.
Donald Trump says “trade wars are good and easy to win” if your foes depend on your market and you can break them under pressure.
He proclaimed victory when the Shanghai equity index went into a swoon over the winter. This is Trumpian gamesmanship.
It is in China’s urgent interest to puncture such claims as trade talks come to a head. Xi Jinping had to beat expectations with a crowd-pleaser in the first quarter. The number was duly produced: 6.4 per cent. Let us all sing the March of the Volunteers.
“Could it really be true?” asked Caixin magazine. This was a brave question in Uncle Xi’s evermore totalitarian regime.
Of course it is not true. Japan’s manufacturing exports to China fell by 9.4 per cent in March (year on year). Singapore’s shipments dropped by 8.7 per cent to China, 22 per cent to Indonesia, and 27 per cent to Taiwan. Korea’s exports are down 8.2 per cent.
The greater China sphere of east Asia is in the midst of an industrial recession. Nomura’s forward-looking index still points to a deepening downturn. “Those expecting a strong rebound in Asian export growth in coming months could be in for disappointment,” said the bank.
China’s rebound is hard to square with its own internal data. Simon Ward from Janus Henderson said nominal GDP growth – trickier to manipulate – is still falling. It dropped to 7.4 per cent from 8.1 per cent in the last quarter on 2018.
Household demand deposits fell by 1.1 per cent last month. This means that the growth rate of “true” M1 money is still at slump levels. It has ticked up a fraction but this is nothing like previous episodes of Chinese stimulus. It points towards stagnation into late 2019. “Hold the champagne,” he said. A paper last month by Wei Chen and Chang-Tai Tsieh for the Brookings Institution – “A Forensic Examination of China’s National Accounts” – concluded that GDP growth has been overstated by 1.7 per cent a year on average since 2006. They used satellite data to track night lights in manufacturing zones, railway cargo volume, and so forth.
“Local officials are rewarded for meeting growth and investment targets,” they said. “Therefore, it is not surprising that local governments also have an incentive to skew the statistics.”
Liaoning – a Spain-sized province in the north – recently corrected its figures after an anti-corruption crackdown exposed grotesque abuses. Estimated GDP was cut by 22 per cent. You get the picture.
Bear in mind that if China’s economy is a fifth or a quarter smaller than claimed it implies that the total debt ratio is not 300 per cent of GDP (IIF data) but closer to 400 per cent. If China’s growth rate is 1.7 per cent lower – and falling every year – the country is less able to rely on nominal GDP expansion whittling away the liabilities.
Debt dynamics take an ugly turn – just at a time when the working-age population is contracting by two million a year. The International Monetary Fund says China needs (true) growth of 5 per cent to prevent a rising ratio of bad loans in the banking system.
China bulls in the West do not dispute most of this. But they say that what matters is the “direction” of the data, and this is looking better. Stimulus is flowing through. It gained traction in March with an 8.5 per cent bounce in industrial output – though sceptics suspect that VAT changes led to front-loading. Suddenly the words “green shoots” are on everybody’s lips.
The thinking is that China will rescue Europe. Optimists are doubling down on another burst of global growth, clinched by the capitulation of the US Federal Reserve. It will be a repeat of the post-2016 recovery cycle.
Personally, I don’t believe this happy narrative. But what I do respect after observing late-cycle psychology over four decades – and having turned bearish too early during the dotcom boom – is that investors latch onto good news with alacrity during the final phase of a long expansion. A filtering bias creeps in.
So sticking my neck out, let me hazard that heady optimism will lead to a rally on asset markets until the economic damage below the waterline becomes clear.
Let us concede that Beijing has opened its fiscal floodgates to some degree over recent weeks. Broad credit grew by $US430 billion ($601 billion) in March alone. Business tax cuts were another $US300 billion. Bond issuance by local governments was pulled forward for extra impact. But once you strip out the offsets, it is far from clear that the picture for 2019 has changed.
Nor is it clear what can be achieved with more credit. The IMF said in its Fiscal Monitor that the country now needs 4.1 yuan of extra credit to generate one yuan of GDP growth, compared to 3.5 in 2015, and 2.5 in 2009. The “credit intensity ratio” has worsened dramatically.
I stick to my view that the US will slump to stall speed before China recovers. Europe is on the thinnest of ice. It has a broken banking system. It is chronically incapable of generating its own internal growth or taking meaningful measures in self-defence.
Momentum has fizzled out in all three blocs of the international system. We are entering the window of maximum vulnerability.
Lots of good data here – something notably lacking in most reporting on China’s “miracle.”
But the best — and scariest — single stat is the dramatic decline in the marginal productivity of debt. China, like the US, is getting progressively less bang for each newly-borrowed buck. There’s a point at which new borrowing doesn’t just product less wealth but actually destroys it. The US and China are heading that way fast, while Europe might be there already.
As Evans-Pritchard, notes, the result is “maximum vulnerability.”
- Gen Z Will Ditch Alcohol To Become The "Ultimate" Marijuana Consuming Generation
America’s newest generation is growing up in a marijuana environment that is unlike anything ever seen in the U.S.
Generation Z has never experienced an era where marijuana was looked upon as a “scourge”, or the source of extreme political ire – instead, they have only known an era where cannabis is being relentlessly pushed toward acceptance and legality. In fact, California voted to legalize medical marijuana in 1996, just one year before the eldest Generation Z consumers were born, according to Bloomberg.
Anna Duckworth, co-founder and chief content officer of Miss Grass, an online cannabis accessories shop and publication based in Los Angeles said:
“They’re growing up in a world where cannabis is completely normal. Everybody will know how to roll a joint and there won’t be any shame talking about it.”
Marijuana is already a big industry in the U.S. Sales have passed $10 billion as regulations have been rolled back and the industry only looks to be getting bigger. In fact, Generation Z consumers are twice as likely to use cannabis than they are to earn a steady paycheck. The generation looks poised to be chock full of marijuana consumers who will eventually embrace pot to unwind or treat ailments like insomnia and anxiety.
Bloomberg spoke to 21-year-old student Baruch Levin at UCLA, who said he waited until he was 18 to try smoking pot, worried about his father’s warnings that it would “make him dumb”. And when Gen Z wants to get high, there’s an app for that. Before 2018’s legalization, he had a friend who would get it for him using a medical card, but now he buys it for himself through the “Eaze” delivery app.
He says that there’s still some stigma attached to talking about marijuana use. “I think it will take one more generation. We grew up with the stigma from our parents,” he said.
The legal age to buy pot is typically 21, which means that only the top end of Gen Z (ages 7-22) are already part of the legal weed economy. But as each year passes, more consumers will be able to spark one up. Last year, Gen Z consumers accounted for more than 1% of marijuana sales in the legal market. But by 4/20 this year, at least three times more will be able to participate in the holiday.
And corporations are taking notice. In addition to widespread firms in Canada, where pot is now legal, there are also some multi-state operators in the U.S. that are among the most valuable pot companies in the world. Companies in the U.S. are “opening stores and cultivation facilities across the country in a race to develop national weed brands.”
Food and beverage companies like Coca-Cola and Conagra are also studying the industry, trying to find ways to market to Gen Z and include CBD, a compound that doesn’t have the psychoactive effects of marijuana with THC.
And it isn’t just Gen Z that’s embracing cannabis. In the last 2 decades, the percentage of Americans who support legalization has doubled – more than 60% now have access to some form of legal weed. Medical programs have even sprung up in conservative states like Utah and Oklahoma. Industry observers cite the ongoing conversation about the medical benefits of pot as a turning point for public perceptions of it. But just 7% of Baby Boomers use marijuana, a survey by Bloomberg and Morning Consult said.
Duckworth, of Miss Grass, often takes business meetings at a local dog park where she can spark a joint. She looks at it the same way she looks at meeting a client for a drink. That perception is going to continue to shape the industry, especially as younger Americans fall out of love with alcohol, and in love with cannabis. In fact, back in January, we highlighted how Americans were boozing less, forcing alcohol companies to scramble for booze alternatives.
According to John Dick, who runs the data and polling firm CivicScience, Americans are becoming more introverted, which fits well with embracing the cannabis lifestyle. Dick’s polling found “a strong correlation between Americans who had reported using CBD, the hemp-derived compound that doesn’t get you high, and survey respondents who said they would prefer to watch a movie at home, rather than go to the theater.”
He commented: “We’re realizing that deep down we’re introverts. You don’t need rocket science to figure out how that’s going to change things.”
Bethany Gomez, managing director of Brightfield Group, a cannabis research firm said: “It’s becoming much more palatable. It’s not crazy to think the usage rate could eventually be similar to alcohol.”
Angelica Bishop is a UCLA transfer student with a part-time job at a law firm and a 3.9 GPA who grew up in California. She is 23 and on the cusp of the Gen Z demographic. She says she gets high before philosophy class because pot helps her “think about things like existentialism without barriers.”
She concluded: “When it comes to alcohol I’m really turned off. If you drink too much you end up in the hospital with alcohol poisoning. If I smoke too much, I sleep really well.”
- Visigoth Reparations & 'Karate-Chopped' Testicles
Authored by Simon Black via SovereignMan.com,
Every week we highlight a number of important, and often bizarre stories from around the world that my team and I are closely following:
Cory Booker introduces reparations bill
Get ready for a slippery slope, because because Cory Booker just introduced a reparations bill in Congress.
The 2020 Presidential contender said, “this bill is a way of addressing head-on the persistence of racism, white supremacy, and implicit racial bias in our country… and propose solutions that will finally begin to right the economic scales of past harms…”
If that’s the route America wants to go, seems like they should start with Native Americans. After all, they were the first ones to be exterminated and have their land stolen. And, comparatively speaking, they’re at the bottom of the socioeconomic ladder.
While the rest of the US enjoys historically low unemployment, the unemployment rate on Indian Reservations often exceed 10%.
Native Americans also have the highest poverty rates of any ethnic group in the Land of the Free.
It also makes me wonder what standard politicians should apply to correct historic injustice–
Should the US government make reparation payments for killing countless Filipino civilians in the early 1900s during the armed occupation of the Philippines?
Or to descendants of Japanese-Americans who died in internment camps during World War II?
And, how far back should politicians go ?
Should the government of Mongolia make reparation payments to Ukrainians for murdering tens of thousands of people during the siege of Kiev in 1240?
Should descendants of the Visigoths have to give money to Italians for the sack of Rome in 410?
We doubt this bill will ever see the light of day. But it’s yet another striking indicator of what the Bolsheviks are thinking.
Supreme Court to hear case of TSA Agent who “Karate Chopped” a man’s testicles
The Transportation Security Administration (TSA) is already pretty legendary for touching passengers in intimate ways… and it often crosses the line.
In one important case, an airline captain was apparently given a swift ‘karate chop’ to his manhood during a TSA frisk back in 2016.
According to court documents, the TSA agent was irritated, and admitted that he deliberately struck the captain’s groin during the pat-down.
Federal law prohibits government agents from being sued in the performance of their duties– even if they commit assault and battery.
But the airline captain (James Linlor) sued anyway, on grounds that the TSA violated the 4th Amendment of the Constitution which protects against unreasonable searches.
This case is now going to the Supreme Court; and it will be an important one… because, if Linlor is victorious, it will establish a clear precedent that government agents can be sued when they cross the line.
Nashville, a key music capital, shutting down home music studio
Every year countless musicians descend upon Nashville to stake their claim on the country music scene.
With such massive demand, thousands of home recording studios flourish. But now the city is threatening them all.
Nashville bans home businesses from allowing clients in the home. This rule applies for anyone working from home, whether a hairdresser, massage therapist, or music producers.
But one man is suing.
Officials decided to shut down his home recording studio, threatening daily $50 fines and possible jail time if he refused. They even tried to force him to remove equipment from his home, submit to home inspections, and remove YouTube videos recorded in his studio.
The Institute for Justice will help him argue that the regulation is an unconstitutional restriction on his right to earn a living.
It is absurd that in a music capital like Nashville, the government claims the authority to prosecute musicians for recording a jam session in the wrong place.
Timing of IMF loan to Ecuador raises suspicions
Ecuador recently expelled Julian Assange, the founder of Wikileaks, from its embassy in London.
He had been living there with asylum since 2012, fearing extradition to the United States.
Assange helped leaked top secret information exposing US war crimes in the middle east. And last year it was revealed that the US indeed filed a sealed indictment against him.
Now he will be extradited to the Land of the Free to face charges related to computer hacking.
But the timing of Ecuador’s revocation of his asylum raises some suspicions.
Less than two months before Ecuador expelled Julian Assange from its embassy, it secured a $4.2 billion loan from the International Monetary Fund (IMF).
The last time the IMF gave a loan to Ecuador was 2016. That was only $364 million, and it was to help them rebuild after a devastating earthquake.
The USA is the largest shareholder in the IMF (and is known to use cash to exert international pressure).
The timing seems a little too perfect to be a coincidence.
And to continue learning how to ensure you thrive no matter what happens next in the world, I encourage you to download our free Perfect Plan B Guide.
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