- 2nd Largest Gunmaker Nears Default As Americans Buy Fewer Firearms Post-Obama
2017 has seen the biggest drop in American firearms sales in history.
After 8 years of almost incessant rises in NICS Firearms Checks (a proxy for 'legal' arms sales) under President Obama…
2017 has seen a considerable drop (year-to-date) – the biggest on NICS records…
This sudden drop in demand after President Trump's election has meant Remington Outdoor, the second-largest U.S. gunmaker, has suffered a “rapid” and “sharp” deterioration in sales and a similar drop in profits since January, and faces “continued softness in consumer demand for firearms,” according to credit analysts at Standard & Poor’s Global Ratings.
As Philly.com's Joseph DiStefano reports, S&P cut the company’s corporate credit rating – already at a junk-bond-level CCC+ – two full notches, to CCC- as:
…a backlog of unsold, unwanted firearms will force Remington to operate at a loss and “pressure the company’s sales and profitability at least through early 2018, resulting in insufficient cash flow for debt service and fixed charges,” unless Remington gives up cash to pay for ongoing operations.
S&P expects “a heightened risk of a restructuring” of Remington’s $575 million senior secured loan and asset-based lending facility, which it is supposed to pay back in 2019.
If Remington defaults on its payments, based on the company’s current value, S&P expects first-lien creditors may receive around 35 cents back from every dollar they have lent or invested. Lower-rated creditors would get back less, or nothing.
While the report said that default is not yet "a virtual certainty," judging by the collapse in Remington's bond prices this week… the market is pretty sure.
And while Remington is not public, it is not alone in pain as shown below…
- The Public Are All Alone: Understanding How The Enemy Of Your Enemy Is Not Your Friend
Authored by Eric Zuesse via The Strategic Culture Foundation,
In political matters, the public are taught to believe that some political Party is ‘good’, and that the others are “bad”; but the reality in recent times, at least in the United States, has instead been that both Parties are rotten to the core (as will be clear from the linked documentation provided here).
Belief in this myth (that the opposition between Parties is between ‘good’ ‘friend’ versus ‘bad’ ‘enemy’) is based upon the common adage that “The enemy of my enemy is my friend.”
One side is believed, and ones that contradict it are disbelieved – considered to be lying, distorting: bad. But, maybe, both (or all) Parties are deceiving; maybe all of them are enemies of the public, but just in different ways; maybe each of them is trying to control the country in the interests of (and so to obtain the most financial support from) the aristocracy, while all of them are actually against the public.
Can it really be false that “The enemy of my enemy is my friend?”
Not only can be, but often is. And no one is able to vote intelligently without recognizing this fundamental political fact.
It’s true between entire nations, too – not only within nations.
For example: Hitler and Stalin were enemies of each other, but neither of them was a friend of America (except that Stalin did more than anyone else to defeat Hitler, and thereby saved the world, though the U.S. — far less a factor than the U.S.S.R. was in defeating Hitler — still refuses to acknowledge the fact that Stalin did more than anyone else did to prevent the entire world’s becoming dictatorships; so, whatever democracy exists today, is a result of that dictator, Stalin, even more than it’s a result of either FDR or Churchill).
What about internally, then?
Hillary Clinton and Donald Trump became enemies of each other, but neither of them had ever really been a friend of the American public: both of them were instead liars who would, and did, do everything they could to grab control (on the aristocracy’s behalf, who financed their respective campaigns) over what is supposed to be our Government, in a democracy. That’s just a sad fact about reality, which both of America’s political Parties deny (because they both need those voters, not merely those mega-donations; they need the public to believe that the Party cares about them).
Most of the American public have been successfully deceived by the ‘news’media, and by the ‘history’-books (likewise published by agents for the aristocracy), to believe that the U.S. Government serves the public-interest, and not the interest of the centi-millionaires and especially billionaires, who finance political campaigns. But it’s no truer than it’s true that the enemy of your enemy is necessarily your friend: both enemies of each other can be your enemies, too. The difference here is that the enmity between the aristocracy and the public is basically intrinsic, whereas the enmities between (Republican versus Democratic, or any other divisions between) aristocrats, are basically personal — these are matters of business, instead of matters of state. They are, in a sense, different business-plans — competing business-plans. But they are all assisting the aristocracy, to control the public, so as to advance the interests of the aristocracy. They’re all competing for the aristocracy’s support, and deceiving for the public’s support. Two blatant recent examples displaying this were America’s invasion in 2003 that destroyed Iraq, and America’s invasion in 2011 that destroyed Libya. Did either of those invasions advance the interests of the American public? But the owners of Lockheed Martin and other ‘defense’ contractors blossomed after 9/11. In fact: U.S. arms-exports are at record highs.
The now-proven reality in America is that the U.S. Government really does represent those billionaires and centi-millionaires, and not the public. It’s a now-proven reality, that the U.S. isn’t a democracy but a dictatorship – albeit, a two-Party one, with a real competition between billionaire and centi-millionaire Republicans on the one hand, versus billionaire and centi-millionaire Democrats on the other. But all billionaires and centi-millionaires are takers (that’s how they came to be super-rich, even the ones who didn’t inherit it from their parents), who (notwithstanding any ‘charity’ they may establish to avoid taxes while extending their control) receive from the public far more than they give to the public; and, so, there is actually an intrinsic class-war — not at all like Karl Marx famously said, between the bourgeoisie (including small-business owners) versus the proletariat (including some centi-millionaires and billionaires who became super-wealthy from being movie-stars or athletic stars and who don’t necessarily actually control any business at all, and so they’re “proletariats”), but instead between the aristocracy versus the public: the ancient and permanent class-conflict. It’s the entire aristocracy-of-wealth (which is maybe half of the nation’s wealth) that’s arrayed against the public (the poorer 99+% of the people). (In fact, Marx — the promoter of the view that the bourgeoisie are the public’s enemies — had aristocratic sponsors, and he would have remained obscure and died poor, if he had instead blamed the aristocracy, not “the bourgeoisie” — which is mainly the middle class — as being the exploiting-class. Marx, too, was an agent of aristocracy. He succeeded and became famous because he had aristocratic sponsors. Otherwise, his name would have simply been forgotten.)
Anyway, the American public are now alone. No Government represents our interests. It’s now been proven that America’s Government doesn’t represent us; and it’s not even the business of any other Government in the world to represent us; so, no foreign government does, either. No Government represents us.
In order to understand any aristocracy, one must understand what gives rise to almost all wars, because almost all wars throughout history have been between contending aristocracies – between the aristocracies of different nations. Each aristocracy needs to be able to fool its national public, to believe that they’re fighting against the foreign public, when, in fact, they’re fighting against the foreign aristocracy, and they’re fighting for the home-nation’s aristocracy – they are, almost always, fighting for one aristocracy, against another aristocracy. Any public who would know that this is the reality, would just as soon commit a democratic revolution, against the local aristocracy, as go to war for the local one, against the foreign ones. This is the reason why, in every dictatorship, the local centi-millionaires and billionaires buy up all of the ‘news’media that inform, or (on essential matters) misinform, their audiences about international relations, and about who did what to whom and why. They hire only ‘reporters’ who comply with whatever deceptions the owners feel to be necessary, in order to be able to attract sponsorships from other aristocrats’ corporations and ‘charities’. But, the aristocrats themselves are actually all in this together, because their mutually shared enemy is the public. Without deceiving the public about essential matters, no national news-medium would be able to attract the sponsorships it needs in order to grow, or even to survive.
The public thinks it’s fighting an international war, when, in fact, they’re fighting for the local aristocracy (and its allied aristocracies), against foreign aristocracies (and their allied aristocracies). This has been true since the dawn of human civilization. Only the weapons are bigger now, and the alliances (in the World Wars) are now global. (But, of course, if there is another World War, then all of human civilization will immediately end, and not long thereafter, all human and most other forms of life will also end.)
An excellent example of the real class-war, and of its international nature, is James Bamford’s 3 April 2012 masterful and pioneering article in Wired, “Shady Companies With Ties to Israel Wiretap the U.S. for the NSA”. He documented that even very high-up people in America’s NSA were kept out of the loop when joint U.S.-and-Israeli intelligence-agencies and private corporations were creating the present 1984-ish, “Big Brother” reality, in (at least) those countries (but, actually, the Sauds, and probably a few others, were also on the inside — the aristocracies not merely of those two countries, U.S. and Israel, are in the alliance).
The “Deep State” isn’t merely one nation’s aristocracy and its agents; it is basically a form of actually international gang-warfare. That’s what got us into invading and destroying Iraq 2003, Libya 2011, Syria 2012-, Ukraine (by coup 2014), and so many other nations. It wasn’t done in order to serve the America public’s interests. That’s just the standard lie — and it keeps going on, and on. Maybe until we invade Russia.
- Mapping The Highest And Lowest Incomes Of America's City Slickers
All throughout history, people have gone to cities to take advantage of the wealth and business. We wanted to know which metropolitan areas offered the best opportunities for Americans, so we looked at data for all 382 metros.
Want to know where to make the most money? The following map from HowMuch.net shows just where…
This map shows the median household income of metropolitan populations. Measuring the median makes it a good standard for “normal people.”
High Incomes in the Usual Places
The green spots on this map indicate areas with the highest median household income, and they often appear in predictable places. San Francisco. Washington DC. The Northeast.
As we’ve established with other visualizations (like this one), certain regional economies just have more money in them. That means higher incomes.
Of course, other areas have high median incomes too. The Pacific Northwest has pockets of wealth, as do Hawaii and Alaska. Denver, Salt Lake City, and the Twin Cities also support respectable incomes.
Top 5 Highest Median Household Incomes in America
- San Jose-Sunnyvale-Santa Clara (CA) | $110,040
- San Francisco-Oakland-Hayward (CA) | $96,677
- Washington-Arlington-Alexandria (VA) | $95,843
- Bridgeport-Stamford-Norwalk (CT) | $90,123
- Boston-Cambridge-Newton (MA) | $82,380
The Low-Income South
The Industrial Revolution created a major economic division between the northern and southern states. While the South stayed agrarian, the North adopted a booming manufacturing economy.
That division remains.
A quick glance at the map reveals consistently low incomes across the entire South. Households in Arkansas, Louisiana, Alabama, and Mississippi are in particularly bad shape. These states don’t have a single metro area with median household income over $59,000 per year. They haven’t recovered from the Great Recession either, which probably doesn’t help matters.
If you’re looking to leave rural America for a prosperous life in the city, avoid southern Texas. Down there, you’ll find a cluster of metro areas with teeny, tiny median household incomes.
Bottom 5 Highest Median Household Incomes in America
- Laredo (TX) | $35,659
- McAllen-Edinburg-Mission (TX)| $36,176
- Grants Pass (OR) | $36,472
- Sebring (FL) | $36,490
- Brownsville-Harlingen (TX) | $37,061
Three of them are found on Texas’ southern tip.
Fortune seekers with their heart set on Texas should stick to the big cities. They would have much better chances of securing higher incomes in the Austin-Round Rock ($71,000), Midland ($65,224), or Dallas-Fort Worth ($63,812) metro areas.
A Silver Lining
Although we all want a higher income, it’s important to remember this: income and cost of living go hand in hand. As your income rises, so do expenses. That means a high income can have low spending power while a low income doesn’t always prevent you from buying a home or saving money.
How much spending power does your income have? Try the True Cost of Living Tool to find out.
- NewsWeek Embarrasses Itself: "What Russia Did To Control The American Mind"
Authored by Mike Shedlock via themaven.net/mishtalk,
In yet another mindless fake news story about fake news, NewsWeek explains how "Russia Controls the American Mind"
NewsWeek embarrassed itself with this shoddy headline story WHY CLINTON LOST: WHAT RUSSIA DID TO CONTROL THE AMERICAN MIND AND PUT TRUMP IN THE WHITE HOUSE.
The all caps shouting is theirs.
Fake news tweets and social media posts that flooded the internet leading up to the 2016 presidential election came from a Russian troll factory that works around the clock like any IT facility – except lies were pumping out to control the American mind and put Donald Trump in the White House.
Early this month, Twitter testified before Congress and provided the Senate Intelligence Committee with more than 2,700 accounts tied to the agency, while Facebook identified more than 80,000 pieces of content linked to the agency.
Meanwhile, Google found about $4,700 worth of search-and-display ads with dubious Russian ties.
Mercy!
Imagine that.
$4,700 worth of search-and-display ads took down the Clinton campaign, despite the fact Clinton outspent Trump $969.1 million to $531.0 million according to a Bloomberg article on Campaign Fundraising.?
Writer Jessica Kwong also moaned about trolls being paid between $1,300 and $2,000 per month.
Kwong also makes this amusing claim:
"Twitter users in swing states in the U.S. received more fake news than real stories in the days leading up to the 2016 presidential election."
Yes folks, this is how Trump won the election:
By spending a mere $4,700 for paid Tweets and $1,000 or so a month for some trolls, Russia now controls our minds.
If you click on that inane article, you may be treated (as I was) to three autoplay videos, two of them were ads, running simultaneously.
You will also find a barrage of Newsweek Fake News articles like these.?
Instead of reading NewsWeek garbage about how Russia controls our minds with a few thousand dollars, I suggest reading: US spy operation that manipulates social media.
The latter is a believable article about US military software that secretly manipulates social media sites by using fake online personas to influence internet conversations and spread pro-American propaganda.
NewsWeek provides a great example of the pathetic quality of mainstream media reporting.
- The Five Biggest Tests For China's Next Central Bank Governor
Zhou Xiaochuan’s long reign as PBoC Governor is drawing to a close. He signaled his impending retirement last month and will be seventy years old In January 2018. Zhou has headed up China’s central bank from the early days of China’s “growth miracle” in 2002 and successfully – thanks to massive credit creation – steered China’s economy through the 2008 crisis.
Since then, he’s kept China’s horrendous credit bubble on the rails, while warning of the risk of a “Minsky moment” at the recent Party Congress.
As Bloomberg notes, however, Zhou’s successor will immediately be faced with a series of major problems.
When Zhou Xiaochuan finally hands over the baton at the People’s Bank of China after a decade and a half in charge, his successor will inherit a series of headaches crowned by a debt pile racing toward 300 percent of output. The next governor will be tasked with not just reining in that leverage without tripping up economic growth, but keeping an eye on accelerating inflation too, all as the institution’s role in a complex regulatory structure evolves. As if that wasn’t enough, they’ll also be tasked with maintaining a stable currency as it opens up to market forces and boosting communication to keep global investors in the loop.
"The PBOC is in more of bind than ever with its monetary policy," said Zhao Yang, chief China economist at Nomura Holdings Inc. in Hong Kong. "While it was fine to just look at inflation and economic growth targets in the past, the central bank now has to strike a balance among more targets, some of them conflicting."
Bloomberg sets out “five of the most pressing tasks” which it sees Zhou’s successor having to address from day one.
1. Financial Sector
If the $40 trillion financial sector is a ticking time-bomb, then the PBOC governor will be among those sweating over which wire to cut. Reducing risky inter-bank lending, weeding out dangerous behavior by asset managers, and corralling internet credit will all be key tasks, all while trying to prevent funding to the real economy from cratering.While it’s done a decent job so far with that balancing act, the central bank now also must find its place in a new regulatory structure for the bodies in charge of oversight. Whether the PBOC is the leading light of this effort or one among many may depend on the profile of the new governor. And the clock’s ticking — the financial sector faces further shakeups now that authorities have lifted some curbs on foreign ownership.
2. Policy Framework
How the PBOC interacts with markets in pursuit of its nominal policy goals — maintaining stability in the value of the currency and thereby promoting economic growth — is undergoing a shift. From the credit quotas of the planned-economy era that focused on the quantity of money in the system, the central bank is ultimately headed toward letting short-term interest rates set the price of money, as its global peers have long done.Under Zhou, the PBOC has developed a bewildering array of instruments to guide market rates — but now it’s trying to focus attention on just two at a time when it’s actually increasing the range of maturities it uses.
Streamlining the policy framework will be a key task for the new governor, especially as the central bank has already announced that it’s moving to a "two-pillar" system that pairs rates policy with tools geared to regulate prices of financial assets.
3. Communication
Of the world’s major central banks, the PBOC talks the least. Whereas Federal Reserve and European Central Bank officials give hundreds of policy speeches each year, Zhou does just a handful.There are signs, though, that the central bank wants to better explain itself to markets, and has slowly increased commentary this year. In an ever-more complex market environment, Zhou’s successor may have to engage in open-mouth operations a little more.
4. Currency Management
Managing China’s massive capital inflows and outflows, and their effect on the yuan, complicates PBOC efforts to regulate the amount and price of liquidity in the market. It’s a task they may ultimately be glad to be rid of, but for now heading toward a freer-floating yuan is something that the next governor is likely to continue.Moving in that direction may aid another big goal for Beijing: boosting global use of the yuan. Despite the International Monetary Fund conferring a reserve-currency status last year, the currency’s share of global payments is down from a 2.79 percent peak in August 2015.
5. Inflation
With hefty financial-sector and currency tasks already on its plate, it would be easy for the PBOC to forget a little about its inflation mandate. With a damaging episode of runaway inflation in the 1990s in mind though, Zhou’s successor should keep a close eye on developments.
Consumer prices adjusted for food and fuel held at their fastest since 2011 in October, evidence that surging factory prices are beginning to feed through. The government’s drive to reduce pollution could also spur inflation, making a tightening of policy not unthinkable.
While PBOC has to take instruction from the State Council for major policies, the governor can always leverage his knowledge and experience to guide the direction of the policy debate, said Ding Shuang, chief economist for Greater China & North Asia at Standard Charted Bank Ltd in Hong Kong.
"It’s an important ability to make good arguments for its policies to top leaders, which helps the PBOC find a louder voice among policy makers, even though it may not enjoy full independence," he said.
We don’t disagree with the broad strokes painted by Bloomberg above, however, we think Zhou’s successor will have to get his hands dirty at the “coal face” on several issues very quickly.
What is going on at the highly-indebted (and formerly highly acquisitive) conglomerate HNA if it has to pay 9% on a new bond issue.
Why have the authorities taken to issuing warnings about the price of a stock – Kweichow Moutai – rising too quickly? As we explained.
One can wonder why China is suddenly so concerned about even the hint of potential vol spike in the stock market – suggesting that even a modest selloff could have dramatic consequences for the Chinese financial sector
Then there’s the sell-off in China’s government bond market, where 10-year yields have breached the 4% level. We questioned if one reason is Wealth Management Products (WMPs), faced with redemptions, had to sell something quickly. Liquid government bonds were the easiest option, ahead of the higher yielding corporate bonds.
Now that the sell-off has spread to the corporate bond sector, are we seeing the early signs of cascading sell-offs in the Chinese financial system?
Zhou is a shrewd man and his warning about a "Minsky moment" will not have been made idly. He is also a principal architect of China's credit bubble, whether (always) willing or not, and must shoulder some of the blame. If he is lucky, his successor will be the one picking up the pieces. Below is Bloomberg's top five picks of likely replacements for Zhou.
Guo Shuqing
The China Banking Regulatory Commission chairman combines political heft with top-level financial industry experience. His resume includes stints as governor of Shandong province, chairman of China Construction Bank Corp. and head of the nation’s securities regulator. He served at the central bank before, too, as deputy governor between 2001 and 2005, simultaneously running the State Administration of Foreign Exchange.Many consider Guo a reformer in Zhou’s mold. Still, under Guo, the CBRC advanced the broader crackdown on overseas investments by China’s top dealmakers in June, when it asked banks to detail loans to such companies as Anbang Insurance Group Co. and Fosun International Ltd.
Jiang Chaoliang
The party chief of Hubei province in central China and a former chairman of two state-owned banks, Jiang isn’t new to the PBOC. He led the Shenzhen and Guangzhou branches during the Asian financial crisis years, and he worked there during the collapse of Guangdong International Trust and Investment Corp., China’s biggest-ever corporate bankruptcy at the time.Jiang was promoted to assistant governor in 2000. He served as chairman of two state-owned lenders — Bank of Communications Co., where he led an initial public offering of Hong Kong-listed shares and forged a partnership with HSBC Holdings Plc; and Agricultural Bank of China Ltd., where he started his career.
Liu He
A longtime member of Xi Jinping’s inner circle, Liu’s influence primarily occurs behind the scenes as director of the Communist Party’s Office of the Central Leading Group for Financial and Economic Affairs. He’s also vice chairman of the National Development & Reform Commission, the government’s top economic planning body.Though Liu avoids the public spotlight, the Harvard-educated economist has played a pivotal role in the relationship between China and the U.S. As global markets cratered in 2009, then-U.S. Treasury Secretary Timothy Geithner and National Economic Council Director Lawrence Summers separately made time to meet with Liu, who was seen as a link to China’s top leaders, Bloomberg News reported.
Liu Shiyu
Liu, born in 1961, took charge of China’s securities regulator early last year, tasked with restoring investor confidence after the stock-market meltdown of 2015. Using language atypical of China’s political elite, he vowed to take on the “crocodiles” and “barbarians” of the markets, and during his tenure the government imposed heavy fines on market manipulators.He joined the PBOC in 1996 and became deputy governor in 2006, according to an official biography. Before that he worked at China Construction Bank Corp. and the nation’s economic reform commission. He earned a master’s degree from the economic management school of Tsinghua University in Beijing.
Yi Gang
Like Zhou, Yi is a fluent English speaker with longstanding links to global economic leaders and a similar reputation as a reformist. Yi joined the central bank in 1997 and served in a succession of roles before being promoted to deputy governor in 2007.Yi was administrator of the State Administration of Foreign Exchange from 2009 until 2016. As head of the currency regulator, he presided over expansion of the world’s largest foreign reserve stockpile, which peaked in 2014 at nearly $4 trillion; further loosening of currency trading restrictions; and greater emphasis on increasing the yuan’s international use.
- Nasrallah Accuses US Of "Daesh Conspiracy" As Feared 'Tehran-To-Beirut Land Bridge' Is Established
Washington's past decade of Syria policy has been driven by fears of the so-called "Shia crescent" or Iranian land bridge which would conceivably connect Tehran with the Mediterranean in a continuous arch of influence. With events rapidly unfolding in Iraq and Syria, foremost among them the defeat of ISIS and the connection of Syrian and Iraqi national forces at the shared border, that land bridge has now been established for the first time in recent history.
Plans to undermine the Syrian government were manifest as early as the mid-2000's, when Damascus was put on notice by the US that "you are next" after the 2003 invasion of Iraq. Indeed, this was so well-known and openly talked about in diplomatic circles that CNN's Christian Amanpour directly informed Assad on camera that he was being targeted for regime change in a 2005 interview. She told him, "Mr. President, you know the rhetoric of regime change is headed towards you, from the United States. They are actively looking for a new Syrian leader. They are granting visas and visit to Syrian opposition politicians. They're talking about isolating you, diplomatically, then perhaps a coup d'etat or your regime crumbling."
Never Forget. 2005. Amanpour openly talks of US plotting "Coup d'état 'Regime Change" in Syria years before War. pic.twitter.com/SlWWG8vv01
— Alan (@AFK_10) March 30, 2017
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The geopolitics driving the current Middle East war were framed and set in motion under the Bush administration, as Seymour Hersh reported in 2007:
To undermine Iran, which is predominantly Shiite, the Bush Administration has decided, in effect, to reconfigure its priorities in the Middle East. In Lebanon, the Administration has cooperated with Saudi Arabia’s government, which is Sunni, in clandestine operations that are intended to weaken Hezbollah, the Shiite organization that is backed by Iran. The U.S. has also taken part in clandestine operations aimed at Iran and its ally Syria. A by-product of these activities has been the bolstering of Sunni extremist groups that espouse a militant vision of Islam and are hostile to America and sympathetic to Al Qaeda.
But now as 2017 comes to a close, the Syria-Hezbollah-Iran alliance appears victorious, and it's the House of Saud and US-backed alliance that is fragmented and in shambles. And consistent with what Hersh predicted all the way back in 2007, the US has for years supported a jihadist corridor in Syria in order to "isolate the Syrian regime, which is considered the strategic depth of the Shia expansion (Iraq and Iran)."
This week Hezbollah's Secretary-General Hassan Nasrallah has once again accused the United States and its allies in Syria of aiding ISIS. In televised remarks on Monday related to the recent fight for Albu Kamal, Nasrallah said, “The US helped Daesh as much as it could in Albu Kamal short of directly engaging forces that fought to liberate the town from Daesh.” He further accused the US of giving air cover to ISIS terrorists in Syria's east, as well as facilitating their escape from advancing Syrian army forces.
But what is the truth behind what Nasrallah calls "the Daesh conspiracy"? The current geopolitics of the Syrian battlefield, and US policy and interests east of the Euphrates, in reality gives the US military every incentive to pressure the Syrian Army while at the same time allowing a Daesh escape – as even a recent bombshell BBC investigation confirmed. But to understand the intricacies of how US policy and strategy is playing out, it is important to chart the significance of the establishment of the historic "Iranian land bridge" which occurred this month.
Below is a dispatch authored and submitted by Elijah Magnier, Middle East based chief international war correspondent for Al Rai Media, who is currently on the ground in the region and has interviewed multiple officials involved in the conflict.
A US buffer zone in northeastern Syria and a land-bridge from Tehran to Beirut. Map source: StratforFollowing the victory of the Syrian army and its allies over the “Islamic State” group in the town of Albu Kamal in the northeast of the country, the road has been opened for the first time since the declaration of the Islamic Republic of Iran in 1979 between Tehran, Baghdad, Damascus and Beirut and become safe and non-hostile to the four capitals and their rulers.
The United States tried to block the road between Tehran and Beirut at the level of Albu Kamal by forcing the Kurdish forces into a frantic race, but Washington failed to achieve its goals.
The Syrian Army along with allied forces (the Lebanese Hezbollah, the Iranian Revolutionary Guards and the Iraqi Harakat al-Nujaba’) liberated the city, opening the border with Iraq at al-Qa’im crossing. ISIS militants fled to the Iraqi al-Anbar desert and east of the Euphrates River where US and Kurdish forces are operating.
The United States established a new rule of engagement in the east of the Euphrates, informing the Russian forces that it will not accept any ground forces (the Syrian army and its allies) east of the Euphrates River and that it will bomb any target approaching the east of the river even if the objective of the ground forces is to pursue ISIS.
Thus, the US is establishing a new undeclared no-fly-zone without bothering to deny that this can serve ISIS forces east of the Euphrates and offer the terrorists a kind of protection. Moreover, the US-led international coalition air bombing against ISIS has reduced noticeably.
#Nasrallah: Daesh used coordinates provided by US drones when shelling forces attacking #AlBukamal. US jammed electronic frequencies of forces fighting Daesh. After the defeat, US facilitated evacuation of Daesh forces to SDF areas east of Euphrates #Syria pic.twitter.com/A4662IVEWG
— Walid (@walid970721) November 22, 2017
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With this US warning, it is clear that Washington is declaring the presence of an occupying force in Syria, particularly as the presence of the coalition was linked to fighting ISIS as previously announced. Today ISIS has lost all cities under its occupation since July 2014 in Iraq and before this date in Syria. Therefore there is no legal reason for the presence of the US forces in the Levant.
By becoming an occupation force, the US troops expose themselves, along with the proxy Kurds operating under its command, to attacks similar to the one in Iraq and the one in Lebanon in 1982 during the Israeli invasion.
The United States will no longer be able to block the Iraqi-Syrian road (Al-Qaim-Albu Kamal) because it is related to the sovereignty of the two countries. But this does not mean Tehran will use this route to send weapons across Baghdad and Damascus to Hezbollah in Lebanon, for two reasons: First, Iraq has sovereignty and the Prime Minister Haider Abadi will not allow any Iraqi armed party to keep its weapons because the Iraqi armed forces are responsible for holding security, especially after the defeat of ISIS in all cities. Abadi’s next step will be to disarm all Iraqi movements and organizations by the year 2018 and most likely after the forthcoming elections in May. According to well-informed sources Iran and the Marjaiya in Najaf (and the majority of the Iraqi parties) want Abadi to be re-elected for another term.
This means that Iraq will not allow its territory to be used to finance non-state actors, even if these have taken part in the elimination of ISIS. Neither will Abadi allow weapons to cross his country to an ally that fought alongside the Iraqi forces – such as Hezbollah – because he is not positioning himself against the United States and the countries of the region. This is not Iraq’s battle.
Secondly, Hezbollah does not need the land route from Tehran to Beirut because the sea and air links with Tehran are open through Syria and from it to Lebanon. Moreover, Hezbollah is no longer in need of additional weapons in Lebanon, especially since the Lebanese-Syrian front is unified against any possible future Israeli war.
As for Syria, the preparations for starting the challenging and complex rounds of negotiation to open the way for political talks which have begun in Sochi, Russia. Naturally, these talks are difficult because the United States has demands, as does Turkey, which has shown its intention to stay for a very long in the north of Syria.
In this context, Syrian President Bashar al-Assad is ready to prepare for a new constitution, on which work began several months ago. Syrian and international human rights experts and law specialists have been discussing with various groups how to establish new constitutional foundations for Syria, aiming to invite the numerous anti-Damascus parties to lay down their arms and join in the negotiations for the future of Syria.
The only problem remains with al-Qaeda in Bilad al-Sham, and the thousands of foreign fighters in Idlib, waiting for the results of the Turkish-Syrian negotiation. The war was long and complex, mainly because of shifting alliances. But the peace will be no less complex to construct if future wars based on revenge and a greedy desire for territory are to be avoided.
- Gold Fund: Bitcoin Will Make Gold "Global Money" Again
The manager of Old Mutual Gold & Silver Fund, a precious metals fund with over $220 mln under control has said Bitcoin is “paving the way” for a global gold comeback.
Speaking to Bloomberg in an interview published today, Ned Naylor-Leyland said that the marriage of Bitcoin and gold was essentially a logical one given the characteristics and remit of both.
“Bitcoin was explicitly designed to be digital gold,” he said.
“So if you’re going to have a small proportion of a fund in Bitcoin, it should be in a gold fund because that’s exactly the point.”
As CoinTelegraph's William Suberg notes, the fund, which began in April this year, is aiming to allocate up to five percent to cryptocurrency, creaming off profits from price upticks to reinvest back into gold and silver.
image courtesy of CoinTelegraph
Naylor-Leyland is highly bullish on the concept going forward, echoing CME Group’s Chairman Emeritus Leo Melamed in his desire to bring discipline to the scene for investors.
“It’s about bringing the ownership of disciplined money into the modern world,” he continued.
“Bitcoin is paving the way for the reintroduction of gold as global money.”
As we previously discussed, the real importance of bitcoin is not making cheap, easy payments. It’s not a way of making fast payments. It’s not going to allow for microtransactions or all these other use cases that we’ve heard are important for bitcoin.
The most important thing that bitcoin offers is a new form of sound money outside the control of any authority or government in the world. And that is something very, very important for the world economy. Bitcoin is hard money as opposed to easy money.
Easy money refers to money whose quantity is easy to increase, in case there is an increase in demand for it. So if people move toward using copper as money, it is very easy for copper miners to increase the supply and bring the price back down, which will hurt the people who used copper as the store of value for their savings. So copper is bad as a store of value, because it’s easy to produce in response to an increase in demand.
Gold, on the other hand, is hard money because even if the price of gold goes up a lot, it is very hard for gold miners to increase the supply of gold in the world. It is hard to bring the value down. Therefore, gold serves as a good store of value in the long run. It’s a much better store of value than other forms of money over time.
Bitcoin is far closer to gold. It is a digital equivalent of gold.
Bitcoin’s supply is strictly limited. There will only ever be 21 million bitcoins. And the code that controls the issuing of the bitcoins is decentralized among thousands, tens of thousands of nodes that operate the bitcoin software. And if it were to change, it would need the majority agreement of everybody involved.
Since everybody involved has an interest in maintaining the monetary policy in a way that maintains the value of the money, it is highly unlikely that we’re going to witness any change in the monetary policy. Even technical changes, like changing the block size or various parameters, have been almost impossible to make in bitcoin.
It’s possible to make a copy of bitcoin, but it’s not possible to change bitcoin. There will always be some people that want to stick to the inflation schedule as it is. So the monetary policy of bitcoin is immutable, it isn’t going to change, and since the supply is strictly limited and the network is distributed and nobody can control it, we might just have the digital equivalent of gold.
This, I think, is an enormously important innovation, because it has many good properties that gold doesn’t have. It’s very easy to send across the world very quickly, and it’s much harder to confiscate than gold. Therefore, the possibilities are exciting for people who believe in the importance of sound money for society.
Look at the era of the classical gold standard, from 1871, the end of the Franco–Prussian War, until the beginning of World War I. There’s a reason why this is known as the Golden Era, the Gilded Age, and La Belle Epoque. It was a time of unrivaled human flourishing all over the world. Economic growth was everywhere. Technology was being spread all over the world. Peace and prosperity were increasing everywhere around the world. Technological innovations were advancing.
I think this is no coincidence. What the gold standard allowed people to do is to have a store of value that would maintain its value in the future. And that gave people a low time preference, that gave people the incentive to think of the long term, and that made people want to invest in things that would pay off over the long term.
With bitcoin, once you’ve started holding some bitcoin and you see it appreciate, you start understanding that there is a very high opportunity cost to spending, and you start thinking twice about spending frivolously.
Also, bitcoin matters for moving very large quantities and high amounts of value, particularly in transactions in which you’re trying to avoid censorship or economic inflation from the central bank. So as a store of value, this is what bitcoin’s importance is.
* * *
Not everyone in the wider gold industry is as happy with the status quo, however.
Discussing a drop in profits, BullionVault Research Director Adrian Ash said earlier this month that Bitcoin “noise” was “distracting” some investors and leading to gold being sidelined.
As John Rubino previously noted, sound money advocates who love the concept of cryptocurrencies but don’t want to abandon precious metals have been trying to clarify their thoughts of late.
Risk Hedge just helped, with a comprehensive statement of the pro-gold position.
The following is an excerpt. Read the full article here.
All the Reasons Cryptocurrencies Will Never Replace Gold as Your Financial Hedge
Despite what the crypto-evangelists will tell you, digital tokens will never and can never replace gold as your financial hedge.
Here are six reasons why.
#1: Cryptocurrencies Are More Similar to a Fiat Money System Than You Think.
The definition of “fiat money” is a currency that is legal tender but not backed by a physical commodity.It’s clear that cryptocurrencies partially fit the definition of fiat money. They may not be legal tender yet, but they’re also not backed by any sort of physical commodity. And while total supply is artificially constrained, that constraint is just… well, artificial.
You can’t compare that to the physical constraint on gold’s supply.
Some countries are also exploring the idea of introducing government-backed cryptocurrencies, which would take them one step closer toward fiat-currency status.
As Russia, India, and Estonia are considering their own digital money, Dubai has already taken it one step further. In September, the kingdom announced that it has signed a deal to launch its own blockchain-based currency known as emCash.
So ask yourself, how can you effectively hedge against a fiat money system with another type of fiat money?
#2: Gold Has Always Had and Will Always Have an Accessible Liquid Market.
An asset is only valuable if other people are willing to trade it in return for goods, services, or other assets.Gold is one of the most liquid assets in existence. You can convert it into cash on the spot, and its value is not bound by national borders. Gold is gold—anywhere you travel in the world, you can exchange gold for whatever the local currency is.
The same cannot be said about cryptocurrencies. While they’re being accepted in more and more places, broad, mainstream acceptance is still a long way off.
What makes gold so liquid is the immense size of its market. The larger the market for an asset, the more liquid it is. According to the World Gold Council, the total value of all gold ever mined is about $7.8 trillion.
By comparison, the total size of the cryptocurrency market stands at about $161 billion as of this writing—and that market cap is split among 1,170 different cryptocurrencies.
That’s a long shot from becoming as liquid and widely accepted as gold.
#3: The Majority of Cryptocurrencies Will Be Wiped Out.
Many Wall Street veterans compare the current rise of cryptocurrencies to the Internet in the early 1990s.Most stocks that had risen in the first wave of the Internet craze were wiped out after the burst of the dot-com bubble in 2000. The crash, in turn, gave rise to more sustainable Internet companies like Google and Amazon, which thrive to this day.
The same will probably happen with cryptocurrencies. Most of them will get wiped out in the first serious correction. Only a few will become the standard, and nobody knows which ones at this point.
And if major countries like the US jump in and create their own digital currency, they will likely make competing “private” currencies illegal. This is no different from how privately issued banknotes are illegal (although they were legal during the Free Banking Era of 1837–1863).
So while it’s likely that cryptocurrencies will still be around years from now, the question is, which ones? There is no need for such guesswork when it comes to gold.
#4: Lack of Security Undermines Cryptocurrencies’ Effectiveness.
Security is a major drawback facing the cryptocurrency community. It seems that every other month, there is some news of a major hack involving a Bitcoin exchange.In the past few months, the relatively new cryptocurrency Ether has been a target for hackers. The combined total amount stolen has almost reached $82 million.
Bitcoin, of course, has been the largest target. Based on current prices, just one robbery that took place in 2011 resulted in the hackers taking hold of over $3.7 billion worth of bitcoin—a staggering figure. With security issues surrounding cryptocurrencies still not fully rectified, their capability as an effective hedge is compromised.
When was the last time you heard of a gold depository being robbed? Not to mention the fact that most depositories have full insurance coverage.
The gold vs bitcoin debate has a long way to run. But if the outcome is a world in which money is what the market – rather than the government – says it is, then hopefully there will be room for both.
- China Deleveraging Hits Corporate Bonds As Cascade Effect Begins
Following the market lockdown during October’s Party Congress, many commentators were disturbed by the continued rise in Chinese government bond yields as we returned to “business as usual”, with the 10-year rising to 4%. At the beginning of this month, we discussed the sell-off (see “China: Shadow Bank Inflows Are Critical To Sustain The Ponzi…But They’re Falling”) and noted a useful insight from the Wall Street Journal.
An important anomaly to note about the bond rout: as government bonds sold off, yields on less-liquid, unsecured Chinese corporate bonds barely moved.
That is atypical in an environment of rising rates – usually, bond investors shed their less-liquid holdings and hold on to assets that are more easily tradable, like government debt.
The question was…why had corporate bond yields barely moved? The answer, according to the WSJ, was that China’s deleveraging policy led to redemptions in the shadow banking sector, e.g. in the notorious $4 trillion Wealth Management Products (WMP) sector. Faced with redemptions, shadow banks had to sell something…quickly…and highly liquid government bonds were the “easiest option”. Furthermore…and this is potentially significant…the WSJ noted.
Meanwhile, the nonbanks have held on to their higher-yielding corporate bonds, which at least have the benefit of helping them to maintain high returns.
Not any more (see below).
We agreed with the WSJ’s explanation at the time, but noted that the government bond sell-off was actually a sign of the unravelling of the WMP Ponzi scheme. The Chinese authorities are wise to the Ponzi which is why they announced the overhaul of shadow banking and WMPs last Friday (see “A ‘New Era’ In Chinese Regulation Means Turmoil For $15 Trillion In China's ‘Shadows"). However, the new regulations don’t kick in until mid-2019, a sign to us that when they looked “under the bonnet”, they didn’t like what they saw.
We doubt that China can achieve an orderly restructuring of its shadow banking sector, never mind its much larger credit bubble. A sign that we have taken another step towards China’s “Minsky moment” is that the bond sell-off has spread to the corporate bond market. The chart shows how spreads versus sovereign bonds have blown out during the last few weeks.
Bloomberg noted how the 10-year yield on China Development Bank notes, a quasi-sovereign issue, closed above 5% for the first time since 2014 today while, in another report, it put the corporate bond sell-off in a wider context.
China’s deleveraging campaign is finally starting to bite in the nation’s corporate-bond market, a shift that will make 2018 a clearer test of policy makers’ appetites to let struggling companies fail. Yields on five-year top-rated local corporate notes have jumped about 33 basis points since the month began, to a three-year high of 5.3 percent, according to data compiled by clearing house ChinaBond. Government bonds, which have far greater liquidity, had already moved last month as the central bank warned further deleveraging was needed.
With more than $1 trillion of local bonds maturing in 2018-19, it will become increasingly expensive for Chinese companies to roll over financing — and all the tougher for those in industries like coal that the nation’s leadership wants to shrink. Two companies based in Inner Mongolia, a northern province that’s suffered from a debt-and-construction binge, missed bond payments on Tuesday, in a demonstration of the kind of pain that may come.
Bloomberg tries to put a positive spin on the corporate bond sell-off, defaults are healthy in terms of differentiating good and credits.
In the long haul, that all may be good for China. Allowing more defaults could see its bond market become more like its overseas counterparts, with a greater differentiation in price. And that could mean it channels funds more productively. “The deleveraging campaign and the new rules on the asset management industry will further differentiate good and bad quality credits, and make the onshore credit market more efficient,” said Raymond Gui, senior portfolio manager at Income Partners Asset Management (HK) Ltd. “Weaker companies will find it harder to roll over their debts because funding costs will stay high.” Gui predicts yields will keep climbing. The average for top-rated corporate bonds is already 2.2 percentage points above what investors demanded to hold them in October last year.
The rise comes as authorities show greater determination to shift the economy onto a more sustainable footing, with less debt. The latest move was a plan to discipline the asset-management industry, including banning guaranteed rates of return. People’s Bank of China Governor Zhou Xiaochuan graphically depicted the risk of excess leverage, by evoking a "Minsky moment," or sudden collapse of asset values. Key to that endeavor will be scaling back some of the implicit credit guarantees that have backed a broad swathe of Chinese borrowers. The country only started allowing corporate defaults in 2014. Last year there was a record, coming in at at least 29. It’s unclear yet whether that total will be met in 2017.
Bloomberg spoke to an analyst who also believes the recent sell-off in Chinese bonds is more to do with separating the “wheat from the chaff”, rather than anything more profound.
"We expect the divergence of performance between different bond categories (Chinese government bonds, policy bank bonds and credits) to become more prominent into 2018," Albert Leung and Prashant Pande, rates strategists at Nomura Holdings Inc., wrote in a note Wednesday.
We disagree. From our perspective, it looks like early signs of cascading sell-offs within Chinese financial markets, which have long been abused by excessive leverage and Ponzi characteristics. Talking of which, the Shanghai Composite Index suffered its biggest one-day drop since June 2016.
What caused the sell-off? According to some commentators it was fear that the local bond rout was getting out of control…hence "cascade". We noted last week that traders had been stunned by the official warning from Beijing that some stocks – in this case Kweichow Moutai – had risen "too far, too fast". Zhengyang Shen, a Shanghai-based analyst at Northeast Securites commented.
"The decline in Moutai has triggered selloffs in some of this year's best performing stocks."
Which sounds an awful lot like another example of cascading selling…
- How FDR Politicized Thanksgiving
Authored by Tho Bishop via Mises Canada,
Call me old-fashioned, but one thing I am always thankful for every Thanksgiving is the blessing of not having Franklin Delano Roosevelt in the White House.
After all, of all the heroes of the American progressive movement, few have quite the record of sins as FDR. The man routinely celebrated in the halls of academia was guilty of Japanese internment camps, stealing Americans’ gold, prolonging the Great Depression, and establishing a number of Federal agencies that continue to haunt the American economy today.
But perhaps one of the most absurd examples of Roosevelt’s Presidential arrogance was his attempt in 1939 to move Thanksgiving a week earlier than its traditional date as the last Thursday Thanksgiving in November.
The President’s motivation would have earned the approval of his friend John Maynard Keynes. The country was still suffering from the Great Depression and some prominent retailers were concerned that since the holiday fell on the unusually late date of November 30th, post-Thanksgiving day sales would suffer. The lobbying proved effective as FDR became convinced that moving the date to November 23rd would help boost consumption and the economy along with it. On October 31st, President Roosevelt signed Executive Proclamation 2373 making the change official.
The change faced immediate resistance, only amplified by the move’s late announcement. Republicans compared the President’s decision to “the omnipotence of a Hitler,” while American football clubs – who regularly scheduled rivalry games for Thanksgiving – were particularly outraged by the sudden change. Polls found that overall 62% of Americans opposed the President’s actions. Democrats favored the move 52% to 48% while Republicans opposed it 79% to 21%. This partisan divide was lampooned by Looney Toons creator Tex Avery in his 1940 animated short Holiday Highlights which listed different Thanksgiving Day dates for Democrats and Republicans.
State governments also got involved. In a holiday-themed form of nullification, twenty five states with Republicans governors refused to recognize what became derided as “Franksgiving,” instead sticking with the original November 30th date, while Texas opted to recognize both.
In spite of the backlash, FDR would continue with his earlier Thanksgiving Day date until his Commerce Department discovered in 1941 that, like most of his attempts to stimulate the economy, Franksgiving was a flop.
As the New York Times reported, “a record crowd of reporters” were on hand to hear the President admit that “that the Commerce Department had found that expected expansion of retail sales had not occurred.”
But this did not mean that government was done meddling with the holiday.
In November of 1941, Congress worked together with the president to hammer out a bipartisan deal officially recognizing Thanksgiving as the fourth Thursday in November.
So on this Thanksgiving, no matter how hard it may be to avoid getting into a heated political with friends and family, be thankful that at least the holiday itself is no longer marred by partisanship. After all, holidays should always be about time enjoyed with loved ones, far beyond the machinations of government tyrants.
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