Today’s News 23rd February 2018

• USA, USA, USA: America's 4G Network Is Ranked 62nd 'Best' In The World (Behind Macedonia)

  The United States takes pride in being a technological leader in the world. Companies such as Apple, Alphabet, IBM, Amazon and Microsoft have shaped our (digital) lives for many years and there is little indication of that changing anytime soon.

  But, as Statista’s Felix Richter notes, when it comes to IT infrastructure however, the U.S. is lagging behind the world’s best (and many of its not-so-best), be it in terms of home broadband or wireless broadband speeds. According to OpenSignal’s latest State of LTE report, the average 4G download speed in the United States was 16.31 Mbps in Q4 2017.

  

  You will find more infographics at Statista

  That’s little more than a third of the speed that mobile device users in Singapore enjoy and ranks the U.S. at a disappointing 62nd place in the global ranking.

  

  While U.S. mobile networks appear to lack in speed, they are on par with the best in terms of 4G availability. According to OpenSignal’s findings, LTE was available to U.S. smartphone users 90 percent of the time, putting the United States in fifth place.

  

• Paul Craig Roberts Rages "Russiaphobia Is Out Of Control"

  Authored by Paul Craig Roberts,

  As has been made perfectly clear, Mueller’s “indictment” of 13 Russians and 3 companies is just another hoax.

  Robert Mueller discredited himself and his orchestrated Russiagate investigation today (Friday, February 16, 2018) with his charges that 13 Russians and 3 Russian companies plotted to use social media to influence the 2016 election. Their intent, Mueller says, was to “sow discord in the US political system.”

  What pathetic results to come from a 9 month investigation!

  And as Moon of Alabama explained:

  The published indictment gives support to our long held believe that there was no “Russian influence” campaign during the U.S. election. What is described and denounced as such was instead a commercial marketing scheme which ran click-bait websites to generate advertisement revenue and created online crowds around virtual persona to promote whatever its commercial customers wanted to promote. The size of the operation was tiny when compared to the hundreds of millions in campaign expenditures. It had no influence on the election outcome.

  The indictment is fodder for the public to prove that the Mueller investigation is “doing something”. It distracts from further questioning  the origin of the Steele dossier. It is full of unproven assertions and assumptions. It is a sham in that none of the Russian persons or companies indicted will ever come in front of a U.S. court.

  All Mueller has found is a click-bait commercial marketing scheme that had nothing to do with election interference.

  Why is Mueller comfortable bringing a transparently false indictment?

  The answer is, as Glenn Greenwald makes clear, that Mueller knows there are large numbers of warmongering politicians and media whores who will seize on the fake indictment as proof that Russia has “committed an act of war equivalent to Pearl Harbor and 9/11.”

  The fact that what Mueller has indicted is only a click-bait marketing scheme will never be mentioned by politicians and presstitutes shouting the military/security complex’s slogan that “Russia must be punished.”

  Greenwald supplies the names of some of these reckless and irresponsible people who are willing to bring on war with their rants: politicians Hillary Clinton, John McCain, Jeanne Shaheen, Jerry Nadler, Marco Rubio—indeed almost all of Congress—Clinton aides such as Philippe Reines and John Podesta, and the legions of presstitutes such as Karen Tumulty, David Frum, Chuck Todd, Tom Friedman—indeed, the entirety of the print and TV media with the exceptions of Tucker Carlson and Pat Buchanan.

  *  *  *

  When a country armed to the teeth with nuclear weapons and overwhelmed by its own exceptionalism and indispensability has political and media lunatics equating a click-bait commercial marketing scheme with Pearl Harbor, that country is a recipe for the end of the world.

  *  *  *

  Note: Two presstitutes at Bloomberg, Lauren Etter and Ilya Arkhipov think that filming disadvantaged Americans in order to cast the US in a bad light is the same as interfering in the presidential election, and they think that a Russian food caterer is heading a Russian disinformation campaign.

  This shows how utterly stupid the US media is. The entire article is based on nothing, just what some people say they think. Prigozhin’s business is a bait-click marketing scheme. What the utterly dishonest Mueller and the presstitutes are doing is turning a click-bait marketing scheme into an election interfering scheme. The only way this “indictment” could succeed in a court would be if no evidence could be presented, only Mueller’s absurd “indictment.”

  Mueller’s “indictment” is not meant to go to court. It is just a propaganda device, and that is how the presstitutes are using it.

  

  As Glenn Greenwald reports, three CNN “journalists” had to resign for their fake news “Russia threat” stories.

  In actual fact, the entirely of the US print and TV media should have to resign.

  

• Beijing To New York In 2 Hours: Chinese Researchers Reveal Hypersonic Plane

  The era of hypersonic tech has arrived. Unbeknownst too many, a race for hypersonic aircraft and weapons has flourished among global superpowers (China, Russia, and the United States), who realize that the first to possess these technologies will revolutionize their civilian and military programs.

  In Beijing’s bid for the first place, Chinese researchers have revealed a novel design for an ultra-fast plane they say will be able to take dozens of people and tonnes of cargo – “anything from flowers to bombs, and likewise, passengers could be tourists or military special forces” – from Beijing to New York in about two hours.

  The plane would travel around 6,000km/h (3,700mph) or about five times faster than the speed of sound, according to the team, which is also “involved in China’s top-secret hypersonic weapons programme,” according to the South China Morning Post. Today’s current journey from Beijing to New York depending on the jet stream is roughly 13 to 14 hours. An 80% reduction in travel time is a game changer for civilian aviation, but also a red flag if the aircraft is converted into a hypersonic heavy bomber.

  

  “It will take only a couple of hours to travel from Beijing to New York at hypersonic speed,” head of hypersonic research Cui Kai wrote in a paper this month in Physics, Mechanics and Astronomy, published by Science China Press.

  The team said they had tested a scaled-down prototype of the hypersonic plane in a wind tunnel at the Chinese Academy of Sciences in Beijing. Researchers carried out aerodynamics evaluations on the aircraft pushing it to 8,600km/h (5343 mph) and discovered it performed exceptionally well, with low drag and high lift.

  Cui and his crew, who hail from the academy’s Key Laboratory of High-Temperature Gas Dynamics, under the Institute of Mechanics, have dubbed their hypersonic plane the “I-plane” (so far Apple has not launched a trademark infringement suit against the team’s “I-Plane”). The South China Morning Post explains the “name comes from the shadow cast by the aircraft on the ground – in the shape of a capital “I” – when it is bearing down like a dive-bomber.”

  

  The South China Morning Post discussed why the radical design of the I-Plane is a game changer for aeronautical engineering but stresses the aircraft is still in the experimental stage and many years out from actual development.

  With two layers of wings, the I-plane design resembles that of biplanes used during the first world war. The earliest type of aircraft, most biplanes disappeared after the 1930s as plane designers pursued higher speeds and fuel efficiency.

  Fast-forward to 2018, and China’s latest hypersonic vehicle features lower wings that reach out from the middle of the fuselage like a pair of embracing arms. A third flat, bat-shaped wing meanwhile extends over the back of the aircraft.

  The researchers said this biplane design means the aircraft will be able to handle significantly heavier payload than existing hypersonic vehicles that have a streamlined shape and delta wings.

  At extremely high speeds, they said the double layer of wings works together to reduce turbulence and drag while increasing the aircraft’s overall lift capacity.

  The amount of lift generated by the new hypersonic vehicle was about 25 per cent that of a commercial jet of the same size, according to the study. That means an I-plane as big as a Boeing 737 could carry up to five tonnes of cargo, or 50 passengers. A typical Boeing 737 can carry up to 20 tonnes of cargo or around 200 passengers.

  While Cui’s design has provided an answer to the aerodynamic configuration problem encountered by previous hypersonic plane models, many issues still need to be tackled for this to move beyond the conceptual stage.

  All known hypersonic vehicles being developed worldwide are still in the experimental stage because of the many technological challenges that exist, and none of them can take passengers yet.

  Existing hypersonic vehicles – such as the US Air Force’s X-51 Waverider and China’s WU-14 hypersonic glide vehicle – have capacity for just a small, lightweight payload such as a compact nuclear warhead. This has severely limited the application of the technology.

  Travelling at hypersonic speed will also generate a huge amount of heat, possibly exceeding 1,000 degrees Celsius (1,800 Fahrenheit), and if that heat cannot be insulated or dispersed effectively, it could prove fatal. Although researchers have found potential solutions to this problem – such as using heat-resistant materials and a liquid-cooling system to push the heat out – this aspect again is still experimental.

  The I-plane, however, could be a game changer, according to a Chinese aircraft designer working on military research who said Cui’s team also worked on the development of China’s most advanced hypersonic weapons, so the tests would likely move from wind tunnel to open field.

  He added that the hypersonic vehicle could potentially be used to transport anything from flowers to bombs, and likewise, passengers could be tourists or military special forces.

  “We’re talking about something like a hypersonic heavy bomber,” he said. The paper has sent ripples through the hypersonic research community, he added. “It’s a crazy design, but somehow they’ve managed to make it work,” the researcher said.

  The project reflected China’s ambition to overtake the US on developing new strategic weapons, according to the researcher.

  “This will require original rather than knock-off designs,” he said, adding that the I-plane was part of a new family of aircraft in development that had not been reported until now. “It could lead to a huge step forward in hypersonic technology,” he said.

  China has tested various types of hypersonic vehicles over the Gobi Desert in recent years, some capable of reaching 10 times the speed of sound.

  It is also building the world’s fastest wind tunnel to simulate hypersonic flight at speeds of up to 12 kilometres per second (or 43,200km/h). At such velocity, a Chinese hypersonic vehicle could reach the west coast of the United States in less than 14 minutes.

  * * *

  Last Wednesday, Admiral Harry Harris, who heads the military’s Pacific Command, warned lawmakers  that, “China’s hypersonic weapons development outpaces ours … we’re falling behind.”

  “We need to continue to pursue that and in a most aggressive way to ensure that we have the capabilities to both defend against China’s hypersonic weapons and to develop our own offensive hypersonic weapons.”” Harris added.

  And so, perhaps for the first time since World War II, as a radical, game-changing new military technology arrives, it is not the US that is at the forefront.

  For those unfamiliar, below is a documentary by the Rand Corporation on the dangers and opportunities of hypersonic weapons.

  

• "Deeply Misguided" New York Times Writer Calls For Financial Firms To Block Gun Sales

  Authored by Mike Krieger via Liberty Blitzkrieg blog,

  What Sorkin is suggesting is more of the same, although perhaps with worse consequences. If banks take action where policymakers do not or cannot, they are essentially putting themselves above the law. And if banks start playing that role, where does it end?

  What if, for example, banks and credit card companies decided to stop processing payments for any retail purchase of cigarettes? After all, cigarettes are demonstrably bad for all consumers, and secondhand smoke can harm innocent people. Should banks step in to help protect society at large?

  Or what if banks decided to stop processing payments for abortion clinics because they believed the practice was immoral? Is it fair for financial institutions to make abortion effectively illegal? What if President Trump called on financial firms to cut off access to environmental groups he believed were delaying projects that could bring jobs to local economies? Maybe banks should freeze Colin Kaepernick’s checking account until he stops kneeling during the national anthem?

  Many of these examples are extreme, but you get my point. Just because banks can be used to have a dramatic impact on our society doesn’t mean they should be.

  – From the American Banker piece: Call for Bank Crackdown on Gun Sales Is Deeply Misguided

  Even in today’s world replete with plutocrat public relations masquerading as journalism, it’s rare to encounter an article simultaneously pandering, authoritarian, childish and dumb. Nevertheless, I found one, and it was unsurprisingly published in The New York Times.

  The title of the piece more or less says it all, How Banks Could Control Gun Sales if Washington Won’t, but let’s go ahead and examine some of the author’s suggestions in greater detail.

  For instance:

  Here’s an idea.

  What if the finance industry — credit card companies like Visa, Mastercard and American Express; credit card processors like First Data; and banks like JPMorgan Chase and Wells Fargo — were to effectively set new rules for the sales of guns in America?

  Collectively, they have more leverage over the gun industry than any lawmaker. And it wouldn’t be hard for them to take a stand.

  PayPal, Square, Stripe and Apple Pay announced years ago that they would not allow their services to be used for the sale of firearms.

  If Visa and Mastercard are unwilling to act on this issue, the credit card processors and banks that issue credit cards could try. Jamie Dimon, chief executive of JPMorgan Chase, which issues credit cards and owns a payment processor, has talked about how he and his bank have “a moral obligation but also a deeply vested interest” in helping “solve pressing societal challenges.” This is your chance, Mr. Dimon.

  Let me interrupt your regularly scheduled programming for a quick moment to remind you of JP Morgan’s post-financial crisis criminal track record. Via Wall Street on Parade:

  

  Now back to The New York Times article…

  And here’s a variation on the same theme: What if the payment processing industry’s biggest customers — companies like McDonald’s, Starbucks, Apple, Amazon, AT&T, CVS and others that regularly talk about “social responsibility” — collectively pressured the industry to do it? There’s a chance that some of the payment processors would stop handling gun sales. Perhaps their voices would help push one of the banks to step out and lead?

  Is all of this a pipe dream? Maybe, but I spent the last 72 hours calling and emailing a handful of chief executives to discuss these ideas. None wanted to speak on the record, because it’s a hot-button topic. But all applauded the idea and some said they had already been thinking about it. A few, I discovered later, called their peers to begin a conversation. 

  Critics of using the finance industry to influence gun sales might argue that such a move would be discriminatory against gun retailers. But gun sellers are not a protected class, like age, race, gender, religion or even political affiliation. This would be a strictly commercial decision.

  That last line is a good example of why Andrew Ross Sorkin writes nonsense for The New York Times as opposed to say running a financial services company. If he thinks this would be a smart commercial decision, versus a potentially catastrophic one, he might want to get out of his bubble world for a couple of moments.

  Although there’s a concerted effort to have the public believe otherwise, there’s simply no national consensus on this issue at all — even after the recent Florida shooting. As The Hill recently reported:

  Fewer Republicans now support a ban on assault weapons than they did nearly two decades ago, according to a Washington Post/ABC News poll released Tuesday.

  The number of independents who support such a ban has also dropped starkly since 1999, according to the survey.

  Only 29 percent of Republicans said they would back a ban on assault weapons in the U.S., while 45 percent of independents said the same. That’s down significantly from 1999, when more than 7 in 10 Republicans and independents supported the prohibition.

  A solid majority of Democrats – 71 percent – still supports such a proposal.

  The Washington Post/ABC News poll was conducted following the shooting at Marjory Stoneman Douglas High School in Parkland, Fla., roughly 25 miles northwest of Fort Lauderdale. That attack left 17 people dead and 14 injured…

  Overall, about half of Americans support a ban on assault weapons, according to the new Washington Post/ABC News poll, compared with 46 percent who oppose such a ban. That shows little change from 2016, when 51 percent support a prohibition on assault weapons.

  There simply isn’t overwhelming national support for more gun control. As such, if the mega banks that wrecked the economy a decade ago and consumed massive bailouts to survive, decided to use their power to shadow legislate it will not go over well. I can promise you that much.

  While media coverage might make you think everyone is yelling for gun control, here’s some more of what we learned from The Washington Post poll:

  

  

  

  If we’re looking for some kind of national consensus, it appears to be centered around the view that mental health issues lie at the core of mass shooting events. Any bank CEO foolish enough to start a fight and ban customers from buying what they want to legally purchase could very quickly regret it. Moreover, irrespective of your stance on the issue, it’s dangerous and irresponsible to call for shadow public policy by crooked mega banks.

  Interestingly enough, as a huge Bitcoin proponent, I wouldn’t mind it at all if the banks listen to Sorkin. I couldn’t come up with a more effective marketing campaign to demonstrate clearly to the entire planet why Bitcoin is so incredibly important to a free society. It’s not as if mega banks are especially popular as things stand, so anything that makes a censorship resistance payment system look even better compared to the legacy financial system is perfectly fine by me. Bitcoin’s ability to fund Wikileaks in the face of a financial system blockade is what sparked my interest in the protocol in the first place. If banks want to signal to an entirely new demographic the important of permissionless money, be my guest.

  *  *  *

  If you liked this article and enjoy my work, consider becoming a monthly Patron, or visit our Support Page to show your appreciation for independent content creators.

  

• 'Green' Rush: Visualizing How Cannabis Legalization Will Impact California

  Across the United States, there’s a seemingly unstoppable movement gaining ground.

  The legalization of cannabis for adult use – first passed in the states of Washington and Colorado in 2012 – is now approved in a total of nine states and the District of Columbia; and as Visual Capitalist’s Jeff Desjardins notes, by the end of the year, that total could be in the mid-teens as states vote on cannabis-related ballots in the upcoming mid-term elections.

  CALIFORNIA’S GREEN RUSH

  States are legalizing the adult use of cannabis for various reasons, but there’s no doubt that one of the primary ones is the potential impact on both the economy and government coffers.

  Today’s infographic comes from cannabis royalty company FinCanna Capital, and it helps to contextualize the possible effects of cannabis legalization on the country’s largest state economy: California.

  

  Courtesy of: Visual Capitalist

  Experts say the current cannabis market (including unregulated sales) in California is already worth about $8.5 billion, making cannabis quite the cash crop to start with. In fact, it’s an amount that’s bigger than the current three largest agricultural markets in the state: milk and cream ($6.1B), grapes ($5.6B), and almonds ($5.2B).

  With the passing of Proposition 64 in November 2016 and legalization officially taking effect January 1, 2018, the state of California is now the world’s largest regulated cannabis market.

  To take advantage of this growing opportunity, entrepreneurs are rushing to the Golden State from far and wide.

  SIZING UP THE GREEN RUSH

  In 2016, the regulated market for cannabis, which only included medical marijuana at the time, was worth $2.81 billion in California.

  However, Arcview Market Research predicts that California will see regulated sales grow at a 23.1% annual pace between 2016-2020 as adult use sales come into play. By 2020, the total regulated industry will be worth $6.5 billion.

  Meanwhile, it’s expected that the state government will be pocketing from the rush as well, picking up $1 billion or moreper year from taxes. That includes a 15% levy on all cannabis sales, as well as cultivation taxes applied to buds and trimmings.

  THE MEDICAL COMPONENT

  As the largest legal market on the planet, California could see less expected green shoots, as well.

  Because of its federal classification as a Schedule I substance, cannabis is extremely under-researched globally. With wider state acceptance of cannabis in California, it may be possible to foster an environment where more could be learned about the vast medical potential of the plant through the state’s powerful universities and institutions. This could lead to increased innovation, investment, and medical discoveries that could have an additional economic impact.

  Such a track would follow in the footsteps of Israel, which is the world’s leader in marijuana research. In the country, there are 120 ongoing studies, $100 million in foreign and U.S. funds invested into patents, startups, and delivery devices, and ten-fold growth in investment expected between 2017-2019.

  

• Prohibition Never Works: Banning Alcohol Didn't Work, And Banning Guns Won't Either

  Authored by Mac Slavo via SHTFplan.com,

  They say those who don’t pay attention to history are destined to repeat it…

  

  It seems like even though humans have paid attention, they somehow think the same things that failed in the past, like prohibition and communism, will magically work now.

  

  Alcohol kills almost three times as many Americans as guns. Last year, about 33,000 people died of gunshot-related injuries, including those who shot themselves; suicide. When removing those who killed themselves only (again, suicide), that number drops to 15,549, by even anti-gun activists estimates.  To put that in perspective, this year’s flu and the vaccine to “prevent” said flu is more deadly. So far, it’s been killing an estimated 4,000 Americans per week. That’s roughly 16,000 per month, a number already higher than last year’s total “gun deaths” which include justified homicides (or self-defense.) You don’t have to be a genius at math to understand that “gun violence” isn’t really the epidemic the media wants you to believe.

  

  By comparison, alcohol abuse killed nearly 88,000 people in 2015 in the United States. So why not ban booze? Because the United States tried that.  It was called prohibition, and it didn’t work.

  It resulted in the government poisoning their own people: yes, the US government.  The same government that the anti-gun activists say wouldn’t do that to us. Rational humans would rather not see the government get a monopoly on guns. But the US has strayed rather far from logic, relying on emotional outbursts and teenage angst temper tantrums. 

  Joe Joseph from the Daily Sheeple also brings an interesting point to consider. “Did you know, that alcohol is the number one underlying cause and factor behind crime in the US?” Alcohol is alone causes more harm to society than heroin, cocaine, and marijuana combined.

  So where’s society’s outrage over alcohol abuse?  Why aren’t kids marching for alcohol control? Because prohibition doesn’t work.

  People who want to break the law and drink will do so.  People snort cocaine regardless of the fact that it’s illegal.  Where is society’s outrage at the right thing?

  “Where are all the millions of dollars and campaign contributions and television ads trying to save people’s lives from the dangers of alcohol?” Joseph asks.

  “This is huge because we have to look at the facts. And the facts are: while it’s awful that these events take place, they’re anomalies in the grand scheme of things. Alcoholism is not an anomaly. It’s very present, ever present in our society and substance abuse is getting worse and worse and worse because the root cause isn’t being tackled.”

  The root cause is pain and voids within a person. The problem is that social engineering has created a god for people and that god is the government. And it’s a very poor substitute for actual spirituality, says Joseph.

  Americans don’t “pull themselves up by their own bootstraps” and rely on their ingenuity and faith and individual strengths.  Americans now rely on the god created by social engineering: government. Simply suggest that humans could run their own lives just fine without a government, and most people will act as if you actually insulted their god.

  “Freedom is not free,” says Joseph. “Freedom comes at a great cost. It takes a lot to maintain freedom….people are being pushed to the point of rebellion in this country and on purpose.”

  Follow Joe Joseph and his News Shots here, on The Daily Sheeple’s YouTube channel. 

  

• "I Haven't Eaten Meat In 2 Months" – Venezuelan Oil Workers Are Collapsing From Hunger On The Job

  Those who are unfamiliar with Venezuela’s unprecedented economic collapse might be surprised to learn that the country’s oil production has only slowed, even as the price of a barrel of crude has risen in most international markets.

  Unsurprisingly (it’s Venezuela), there’s a macabre explanation for this phenomenon: The workers at PDVSA – Venezuela’s state-owned oil company, which once showered Venezuelans with oil wealth – are literally collapsing due to hunger and exhaustion as workers defy their government handlers and flee their jobs in their desperation as the value of their pay has been completely erased.

  Bloomberg spoke with several workers in Venezuela’s oil industry about the harsh conditions they face on a daily basis.

  

  Of course, oil workers aren’t the only ones suffering: The situation in Venezuela is getting so dire that ordinary Venezuelans are losing tons of body weight because of the food shortages. Many can no longer afford to buy meat.

  One worker told Bloomberg about how his weekly salary barely pays for the corn flour he mixes with water and drinks every morning.

  At 6:40 a.m., Pablo Ruiz squats at the gate of a decaying refinery in Puerto La Cruz, Venezuela, steeling himself for eight Sisyphean hours of brushing anti-rust paint onto pipes under a burning sun. For breakfast, the 55-year-old drank corn-flour water.

  Ruiz’s weekly salary of 110,000 bolivares — about 50 cents at the black-market exchange rate — buys him less than a kilo of corn meal or rice. His only protein comes from 170 grams of canned tuna included in a food box the government provides to low-income families. It shows up every 45 days or so.

  “I haven’t eaten meat for two months,” he said. “The last time I did, I spent my whole week’s salary on a chicken meal.”

  Hunger is hastening the ruin of Venezuelan’s oil industry as workers grow too weak and hungry for heavy labor. With children dying of malnutrition and adults sifting garbage for table scraps, food has become more important than employment, and thousands are walking off the job. Absenteeism and mass resignations mean few are left to produce the oil that keeps the tattered economy functioning.

  Researchers at three Venezuelan Universities reported losing on average 11 kilograms (24 lbs) in body weight last year and almost 90% now live in poverty, according to a new university study on the impact of a devastating economic crisis and food shortages. That annual survey has become a key barometer of the country’s economic stress since the government stopped releasing reliable economic data, as Reuters reports.

  Per Reuters, over 60% of Venezuelans surveyed said that during the previous three months they had woken up hungry because they did not have enough money to buy food. About a quarter of the population was eating two or less meals a day.

  After winning the presidency in 1999, leftist President Hugo Chavez was proud of improving Venezuela’s social indicators as the country’s economy was bolstered by oil-fueled welfare policies.

  But his successor President Nicolas Maduro, who has ruled since 2013, has allowed corruption to flourish. And his political allies have mismanaged the economy to such a degree that the collapse in the price of oil during 2014 had ruinous consequences.

  Even as the price of crude has begun to creep materially higher, the situation in Venezuela is only getting worse.

  In contemporary Venezuela, currency controls restrict food imports, hyperinflation eats into salaries, and people line up for hours to buy basics like flour.

  As a result, 90% of Venezuelans live in poverty.

  In what appears to be a last-ditch effort to rescue the country’s economy and his regime, President Nicolas Maduro yesterday began sales of the Petro, Venezuela’s oil-backed cryptocurerency. The launch was so successful, Maduro has assured the public, that he is considering launch a “Petro Oro” – a cryptocurrency backed by gold reserves.

  

  But perhaps even more shocking than the dire circumstances under which PDVSA’s remaining employees go to work every day is the contrast with the country’s prosperous past, as Bloomberg describes it…

  For decades, PDVSA was a dream job in a socialist petro-state. The company supplied workers not only with a good living and revolutionary-red coveralls, but cafeterias that served lunches with soup, a main course, dessert and freshly squeezed juice. Now, the cafeterias are mostly bare, the children are hungry and employees are leaving to work as taxi drivers, plumbers or farmers. Some emigrate. Some hold out as long as they can.

  …Now, instead of enjoying the trappings of a comfortable, middle-class life (not to mention freshly squeezed fruit juice), desperate employees are risking the government’s wrath – and possibly sacrificing their chance at a government pension someday – to escape not only from their jobs, but from Venezuela.

  Those who quit without notice risk losing their pensions, as bureaucrats refuse to process paperwork. Many managers live in terror of arrest since the Maduro regime purged the industry, imprisoning officials from low-level apparatchiks to former oil ministers. In one human resources office, a sign advertised a limit of five resignations a day.

  “Management is holding them back to stop brain and technical drain,” said Jose Bodas, general secretary of United Federation of Venezuelan Oil Workers. He estimates 500 employees have resigned at the Puerto La Cruz refinery and nearby processing facilities in the past 12 months – even though superiors have labeled them “traitors to the homeland,” a phrase that often precedes arrest. In the streets, families sell their boots and the red coveralls.

  “They’re giving up because of hunger,” Bodas said. “They’re leaving because they get paid better abroad. This is unheard of, a catastrophe.”

  In a nightmarish reflection of what life must’ve been like in some of the most poverty stricken areas of the Soviet Union, widespread adsenteeism is forcing those who stay behind to work long hours at the state’s insistence – without any additional compensation.

  Sitting in the living room of his house, on his day off, Endy Torres says he has lost 33 pounds over the past 18 months. He shows his PDVSA identification photo as proof: a chubby-cheeked man, weighing 176 pounds.

  Ten years ago, he joined the company expecting an ample salary and comfortable pension. Today, his 700,000 bolivars per month, plus a food bonus of 1.6 million bolivars (about $9.50 altogether) can’t fill the fridge at his grandmother’s house, where he lives.

  About 10 people from his department resigned in January. There are 263 plant operators remaining and 180 vacancies at the Puerto La Cruz refinery, he said.

  Absenteeism forces those who show up to work extra hours and burn precious calories. The lack of investment in equipment and maintenance has increased technical failures, almost all in the early hours of the morning, he said. When they occur, workers are too fatigued to act quickly, and accidents occur.

  And the worst part of it all is: Even if oil prices make a surprise comeback, years of favoritism, corruption and – now – international sanctions mean it’s unlikely Venezuela’s oil industry will suddenly blossom once again: For those who stay behind, the formerly wealthiest country in Latin America will probably remain mired in poverty, for as long as it’s ruled by a corrupt autocracy.

   

  

• America's Election Meddling Would Indeed Justify Other Countries Retaliating In Kind

  Authored by Caitlin Johnstone via The Strategic Culture Foundation,

  There is still no clear proof that the Russian government interfered with the 2016 US elections in any meaningful way. Which is weird, because Russia and every other country on earth would be perfectly justified in doing so.

  

  Like every single hotly publicized Russiagate “bombshell” that has broken since this nonsense began, Mueller’s indictment of 13 Russian social media trolls was paraded around as proof of something hugely significant (an “act of war” in this case), but on closer examination turns out to be empty. The always excellent ‘Moon of Alabama’ recently made a solid argument that has also been advanced by Russiagate skeptics like TYT’s Michael Tracey and Max Blumenthal of The Real News, pointing out that there is in fact no evidence that the troll farming operation was an attempt to manipulate the US election, nor indeed that it had any ties to the Russian government at all, nor indeed that it was anything other than a crafty Russian civilian’s money making scheme.

  The notion that a few Russian trolls committed a “conspiracy to defraud the United States” by “sowing discord” with a bunch of wildly contradictory posts endorsing all different ideologies sounds completely ridiculous in a country whose mainstream media spends all its time actively creating political division anyway, but when you look at it as a civilian operation to attract social media followers to sock puppet accounts with the goal of selling promoted posts for profit, it makes perfect sense. James Corbett of The Corbett Report has a great video about how absolutely bizarre it is that public dialogue is ignoring the fact that these trolls overwhelmingly used mainstream media like the Washington Post in their shares instead of outlets like RT and Infowars. As a scheme to acquire followers, it makes perfect sense. As a scheme to subvert America, it’s nonsensical.

  There is currently no evidence that the Russian government interfered in the US election. But it is worth pointing out that if they did they had every right to.

  

  “Whataboutism” is the word of the day. At some point it was decreed by the internet forum gods that adding “-ism” to a description of something that someone is doing makes for a devastating argument in and of itself, and people have hastened to use this tactic as a bludgeon to silence anyone who points out the extremely obvious and significant fact that America interferes in elections more than any other government on earth.

  

  “Okay, so America isn’t perfect and we’ve meddled a few times,” the argument goes. “So what? You’re saying just because we’ve done it that makes it okay for Russia to do it?”

  Actually, yes. Of course it does. Clearly. That isn’t a “whataboutism”, it’s an observation that is completely devastating to the mainstream Russia narrative. If it’s okay for the CIA to continuously interfere in the elections of other countries up to and including modern times, it is okay for other countries to interfere in theirs. Only in the most warped American supremacist reality tunnel is that not abundantly obvious.

  Every country on earth is absolutely entitled to interfere in America’s elections. America is responsible for the overwhelming majority of election interferences around the world in modern times, including an interference in Russia’s elections in the nineties that was so brazen they made a Hollywood movie about it, so clearly an environment has been created wherein the United States has declared that this is acceptable.

  

  It amazes me that more people aren’t willing to call this like it is. No, it would not be wrong for Russia to interfere in America’s elections. Yes, what America did to Russia absolutely would make a proportionate retaliation okay. Of course it would.

  Imagine this:

  A guy in a cowboy hat runs into a bar and starts punching people. Most of them just rub their sore jaws and hunch over their drinks hoping to avoid any trouble, but one guy in a fur cap sets down his vodka and shoves the man in the cowboy hat.

  The man in the cowboy hat begins shrieking like a little girl. All his friends rush to his side to comfort him and begin angrily shaking their fists at the man in the fur cap.

  “Hey, he punched me!” says the man in the fur cap.

  “That’s a whataboutism!” sobs the man in the cowboy hat.

  Can you imagine anything more ridiculous?

  

  Seriously, how do people think this is a thing? How does anyone think it’s legitimate to respond to my article about a former CIA Director openly admitting that the US still to this day interferes with elections around the world babbling about “whataboutisms”? What a doofy, indefensible monkey wrench to throw into the gears of political discourse.

  Yes, obviously by asserting that it is acceptable for the CIA to meddle in other countries’ elections, the US has created an environment where that sort of thing is acceptable. If Americans just want to embrace their American supremacist bigotry and say “Yeah we can do that to you but you can’t do it to us cuz we have big guns and we said so,” that’s at least a logically consistent position. Crying like little bitches and behaving as though they’ve been victimized by some egregious immorality is not.

  

  Channel 4 News reported on the research of the Institute for Politics and Strategy at Carnegie Mellon University’s Don Levin back in November, writing the following:

  Dov Levin, an academic from the Institute for Politics and Strategy at Carnegie Mellon University, has calculated the vast scale of election interventions by both the US and Russia.

  According to his research, there were 117 “partisan electoral interventions” between 1946 and 2000. That’s around one of every nine competitive elections held since Second World War.

  The majority of these – almost 70 per cent – were cases of US interference. And these are not all from the Cold War era; 21 such interventions took place between 1990 and 2000, of which 18 were by the US.

  If Americans don’t like election meddling, they need to demand that their government stops doing it. As long as it remains the very worst offender in that department, the US is entitled to nothing other than the entire world meddling in its elections.

  I shouldn’t even have to say this. Do unto others as you would have them do unto you. Don’t dish it out if you can’t take it.

  Duh.

  

• Why The Market's Most Important Correlation Has Flipped

  Two days before the February 5 volmageddon, and before everyone became an overnight expert on inverse VIX ETFs, CTAs an risk parity funds, we showed two chart which we explicitly said presaged a turning point for markets, vol-targeting funds, and hinted at an imminent risk-parity tantrum.

  The first showed the unmistakable correlation shift between 10Y yields and the S&P, which we said is “considerably worrisome for investors.”

  

  Meanwhile, we also showed that the bond-equity correlation, which has been predominantly negative since the Lehman crisis, had started creeping up towards positive territory. Specifically, we said that “the 90-day correlation between stock (SPY) and bond (TLT) markets has surged ominously in the last few weeks.”

  

  Three weeks later, Bank of America – in response to “many interest rate questions from investors” – published a 50 page report which looks at the relationship between rising rates and stocks to conclude, after tortured and convoluted logic and several goalseeked examples, that rising rates are not bad for stocks.

  Actually, they are, and here is the simplest reason why in just 9 words: “Every market crash has been preceded by Fed tightening.“

  

  Still, BofA did have some interesting observations on the long-term historical relationship and rolling 3 year correlation between the S&P and 10Y yields, to wit:

  Over the past 64 years, stocks have exhibited a weak and inconsistent correlation with interest rates (-11%).

  

  Over this period, the correlation has seen a wide range from -63% to 75%. The relationship was generally negative for most of the 1960s through the 1990s (higher yields bad for stocks), a period during which the average level of rates was 7.5%. But since the turn of the century, the relationship was generally positive (higher yields good for stocks) a period during which the average level of rates was 3%. The relationship with rates and stock returns peaked about five years ago, but has remained positive and has been trending higher since the recent trough of 13% in late 2015 (Chart 2).

  

  And now it’s flipped again… and it’s not the only one: as the following bloombergchart show, the 6-month rolling correlation between stocks and the dollar, which was also positive for the past 4 years, has turned sharply negative.

  

   

  So why is this (or rather these) most critical market correlation inverting as yields creep ever higher? Overnight, Blackrock’s Russ Koesterich gave an elegant explanation, highlighting three things: i) the reversal in the correlation sign, ii) the nonlinear relationship between the two key asset classes, and iii) the relative interest rate.

  First, why the correlation turns negative:

  Financial theory does suggest that equity valuations, i.e. the price you pay for a dollar of earnings, should drop as the interest rate used to discount that earning rises. Empirical evidence supports this. A simple linear regression of stock multiples versus interest rates demonstrates that over the very long term, rates and market multiples are negatively correlated. Since 1954, for every one percentage point increase in 10-year Treasury yields the price-to-earnings ratio (P/E) on the S&P 500 contracts by approximately 0.70 points.

  Another way of showing this is the following chart from BofA which shows the impact of the change in the real risk free rate on S&P fair value. The higher rate, the lower the S&P, or as BofA explains, “every 50bp increase in the normalized real risk-free rate reduces the fair value of the S&P 500 by roughly 6-8%”

  

  To offset the gloomy message some – like Blackrock – try to extrapolate a non-linear relationship between yields and multiples:

  However, if you allow for a more complex expression of the relationship, things look somewhat different. Rather than a straight line, a better description of the relationship between rates and multiples is nonlinear, i.e. the relationship changes depending on the level of rates. Allowing for this nuance, interest rates explain nearly 30% of the variation in S&P 500 earnings multiples (see the accompanying chart).

  

  Finally, there is the special case of low rates: here again is Kosterich:

  Rates and multiples are more likely to rise in tandem when interest rates are rising from unusually low levels, as is the case today. Under these circumstances, faster growth is treated as a positive as it alleviates recession and deflation fears. In addition, faster nominal growth is also associated with faster earnings growth.

  Unfortunately, there is a caveat. Rates and valuations can rise together—to a point. At some point the negative relationship between rates and valuations reasserts itself. In other words, at a certain level higher bond yields create real competition for stocks, particularly dividend stocks, and put downward pressure on multiples.

  What that point is, is of course the $64 trillion question: while some have suggested 2.75%, some 3.0% the latest and greatest estimation of this inflection point came from Credit Suisse this week, which calculated that the day of reckoning for stocks will take place just as the 10Y yield hits 3.50%.

  

  Of course, by the time the 10Y actually does hit 3.5% it will be far too late as anticipating traders will have been busy frontrunning this event… and selling; it explains why the closer we get to 3.00%… or 3.50%, the greater the divergence between the 10Y and the S&P, and why the higher yields go, the more negative the correlation, until it eventually snaps back when stocks finally capitulate and the next crash hits.

  

Digest powered by RSS Digest