- Zuesse: All US Gov't Accusations Against Russia's Gov't Are Lies
Authored by Eric Zuesse via The Saker blog,
THE FIRST ACCUSATION, which is the source of the Magnitsky Act sanctions against Russia, was in 2012 under U.S. President Barack Obama, and it alleged that Sergei Magnitsky had been a whistleblower in Russia who was a lawyer who uncovered corruption in Russia’s Government and was imprisoned for that and beaten to death there for that.
THE SECOND ACCUSATION, in 2014, is that “Russia stole Crimea.” This charge is the source of additional (and more severe) sanctions against Russis, and also of NATO’s massing of troops and weapons on and near Russia’s border, which are massed there allegedly to ‘protect’ European nations against ‘Russian aggression’ (such as ‘seizing Crimea’). It’s all founded on basic lies regarding Crimea and Ukraine. A fuller presentation of that case is here. But what constitutes the most remarkable evidence of all in this entire matter are two crucial phone-conversations. The first is the 27 January 2014 phone-conversation whereby the chief agent, Victoria Nuland, whom Obama had assigned to organize the coup to overthrow Ukraine’s democratically elected President Victor Yanukovych, gave the order as to whom Yanukovych’s replacement would be. This call is grossly misrepresented if not entirely ignored by the U.S. regime’s ‘journalists’ and ‘historians’. Nuland famously said there “Fuck the EU” (for the EU’s wanting a more moderate and less-nazi alternative to be selected). That much of the call was reported in the Western press (though with virtually no context as to what it meant and why she had said it), but the rest — the historically crucial part of it — wasn’t. This historically mega-important phone-call, which was posted to the internet a week later, on February 4th — three weeks before the man whom she named there received (just as she had instructed) the appointment to lead the post-coup Ukraine — isn’t even being denied by Washington. Instead, it’s either ignored by them, or else totally misrepresented, in the ‘historical’ accounts by the agents of the U.S. regime.
Especially remarkable about this phone-conversation, to select Ukraine’s new leader, is that it wasn’t between Ukrainians, but was instead between two Americans, selecting the person who would soon be appointed by the U.S. regime to rule Ukrainians; it actually obliterated Ukrainian national sovereignty. Nuland told Pyatt not to appoint the moderate Vitally Klitschko, the EU’s favorite, to become Ukraine’s new leader, but instead to appoint the rabidly anti-Russian Arseniy Yatsenyuk. Here, then, is the most crucial part of this historically crucial phone-conversation, the instruction she gave there that set “the New Cold War” — the movement toward World War III — overtly into motion (after its covert start on the night of 24 February 1990):
Nuland: … Yats is the guy who’s got the economic experience the governing experience; he’s the… what he needs is Klitsch [the leading moderate] and Tiahnybok [an admirer of Hitler] on the outside; he [Yats] needs to be talking to them four times a week you know. I just think Klitch going in, he’s going to be, at that level, working for Yatsenyuk; it’s just not going to work.
Pyatt: Yeah [you’re right], no [I was wrong to think that Klitschko should become the new ruler], I think that’s right. Ok. Good.
Then, she referred, in the call, to her agent (just like she was Obama’s agent), Jeff Feltman, who had been assigned to persuade the U.N.’s Ban ki-Moon and his envoy handling Ukraine — who was Holland’s former Ambassador to Ukraine, the anti-Russian and pro-American Robert Serry — to go along with the U.S., in this context:
I talked to Jeff Feltman this morning; he had a new name for the UN guy Robert Serry; did I write you that this morning?
Pyatt: Yeah I saw that.
Nuland: Ok. He’s now gotten both Serry and Ban ki-Moon to agree that Serry could come in Monday or Tuesday. That would be great, I think, to help glue this thing, and to have the UN help glue it, and, you know, fuck the EU.
Feltman chose Serry to become officially appointed on 5 March 2014 by Ban ki-Moon to “mediate the conflict between Russia and Ukraine.” (Whether Russia’s President Vladimir Putin ever knew that the U.N.’s ‘mediator’ had been chosen by Obama’s people, is unknown; presumably, he knew of the Nuland-Pyatt phone-conversation; but certainly Russia’s U.N. Ambassador, Vitaly Churkin, wasn’t comfortable about Serry’s representing the U.N. on this matter; and Crimeans also were outright hostile toward Serry.)
In other words: this was a set-up deal, set up in Washington, to create — and with the U.N.’s acceptance — a rabidly anti-Russian government, right on Russia’s doorstep, in adjoining Ukraine. Would the U.N. have accepted Russia’s replacing Mexico’s Government in a bloody coup and installing a rabidly anti-U.S. regime there? Did the U.S. in 1962 accept Soviet nuclear missiles in Cuba, which is 100 miles away from the U.S.? Of course not. Why should Russia do that, in 2014 — or ever?
Then, in a phone-call on February 26th, occurred the second important item of evidence. The foreign-affairs chief of the European Union, Catherine Ashton, was confidentially informed by her investigator, Urmas Paet, that the new Government in Ukraine was not actually the result of what the democratically elected Government had done, but was instead a coup by “the new coalition” government that had just succeeded at overthrowing the elected Government. This is from the transcript:
What was quite disturbing, the same oligarch [Poroshenko — and so when he then became Ukraine’s President three months later, he already knew this] told that well, all the evidence shows that the people who were killed by snipers, from both sides, among policemen and people from the streets, [this will shock Ashton, who thought that Yanukovych had masterminded the killings] that they were the same snipers, killing people from both sides [so, Poroshenko himself knows that his regime is based on a false-flag U.S.-controlled coup d’etat against his predecessor, Yanukovych — and he even said as much]
Well, that’s yes, …
So that and then she [Dr. Olga Bolgomets] also showed me some photos, she said that as medical doctor, she can, you know, say that it’s the same handwriting, the same type of bullets, and it’s really disturbing that now the new coalition that they don’t want to investigate, what exactly happened; so that now there is stronger and stronger understanding that behind the snipers, it was not Yanukovych, but it was somebody from the new coalition.
Notice here that Paet had tactfully avoided saying that Ashton’s assumption that it had been Yanukovych was false; instead, he totally ignored her having suggested that, and he here simply said that the evidence went totally in the opposite direction, the direction that Poroshenko himself knew to be true, that the guilty party was “the new coalition,” which Paet said nothing about, and Ashton asked him no questions about it or about what country had actually organized it. Ashton responded:
I think that we do want to investigate.
That sentiment on her part lasted, however, only about one second.
I mean I didn’t pick that up, that’s interesting. Gosh?
Ashton here seemed to have felt outright embarrassed, and she thus ended in a “Gosh” that was almost inaudible, as if a question, and then she immediately proceeded simply to ignore this crucial matter entirely. All of the evidence suggests that she was exceedingly reluctant to believe that in the overthrow, the bad guys had actually been on the anti-Yanukovych side. The overthrow of Yanukovych has since been called “the most blatant coup in history”.
On the day when the coup peaked, 20 February 2014, there was an event which turned the residents of Crimea even more against the overthrow-Yanukovych demonstrators than Crimeans already were (and Crimea had voted over 75% for Yanukovych, so they were strongly against this overthrow): it was “The Anti-Crimean Pogrom that Sparked Crimea’s Breakaway”.
Almost immediately after Yatsenyuk became the leader of Ukraine, he sacked the existing three Deputy Defense Ministers, on March 5th, and replaced them with three rabidly anti-Russian neo-Nazis, who were committed to his bombing-policy, to eliminate enough Yanukovych-voters so that the new Government, in future elections, would be able to be a continuation of Yatsenyuk’s instead of a restoration of the one that had preceded Yatsenyuk’s. The person who was made the Minister of Defense, Mikhail Koval, announced his intention to ethnically cleanse from southeastern Ukraine the “subhumans” who voted for Yanukovych, who will “be resettled in other regions,” meaning either Russia (if Russia accepts these Ukrainian refugees) or else concentration-camps inside Ukraine (and then perhaps death). “There will be a thorough filtration of people.” (That English translation has since been taken down; so, instead, try this and this.) Their property will be confiscated, and “Land parcels will be given out for free to the servicemen of the Ukrainian Armed Forces and other military formations, as well as to the employees of Interior Ministry and the Security Service of Ukraine that are defending territorial integrity and sovereignty of the country in eastern and southeastern regions of Ukraine.” That’s the euphemism for the ethnic cleansing, and mass-theft, which followed. And here is more of that, and more, and more, of this U.S.-imposed nazism. In other words, Obama’s rulers of Ukraine were rewarding ethnic-cleansing, and were offering their soldiers the opportunity to grab legally the property of their victims.
On 15 November 2017, two of the foreign mercenaries who had served as snipers in the Ukrainian coup confessed on Italian television and described how they had come to be hired for the job, by Mikheil Saakashvili (who is a U.S. Deep State asset).
The result of the U.S. regime’s takeover of Ukraine’s Government is this. And a generation of young Ukrainians are now being taught nazism, right on the border of Russia — Russia being the one country that in World War II had done the most to conquer the Nazis. The U.S. Government has flipped to pro-nazi. And time after time after time, the U.S. leads the three-or-fewer nations that vote at the U.N. against condemning nazism. That’s right: America, which under President FDR had fought against the Nazis and the other fascist regimes, now was and is itself the world’s leading racist-fascist, or ideologically nazi (but this time mainly against Russians, instead of mainly against Jews), regime, itself. (In fact, today’s America is allied with the ideologically racist-fascist, or nazi, anti-Palestinian, Israeli regime. And, it’s allied also with the nazi — but anti-Shiite — Saud regime, which was founded in 1744 on the basis of hating Shiites.)
Ukraine’s economy was destroyed by the U.S.-imposed Ukrainian regime. Until around 2013, Ukraine’s economy was fairly stable, but then the coup-operation, which had begun in Washington in 2011, for regime-change in both Ukraine and Syria, culminated successfully in Ukraine in February 2014. Ukraine’s national debt then nearly quadrupled, between 2013 and 2017, while Ukraine’s GDP simultaneously declined 39%:
Ukraine: National debt from 2012 to 2017 (in billion U.S. dollars)
2012=20.14
2013=22.67
2014=42.61
2015=60.24
2016=73.94
2017=83.96
Ukraine: GDP from 2012 to 2017
2012=175.71
2013=179.57
2014=132.34
2015=90.94
2016=93.26
2017=109.32
Because of what the U.S. regime did to Ukraine, Ukraine now has vastly higher debt, and also significantly reduced GDP from which to pay it. Nothing about this operation was at all democratic. The opposition to this operation was democratic. That’s not to say the crowd who had campaigned at the Maidan Square against Ukraine’s endemic corruption were anti-democratic, but that their leaders were — and so Ukraine is even more corrupt now than it was under Yanukovych. Four days before the Nuland-anointed Yatsenyuk left Ukraine’s Government, he tweeted on 10 April 2016, “I thank the colleagues who’ve acted honestly and selflessly. The last 2 Govs [his and Poroshenkos] were unique. They were the first manifestations of New Ukraine.” Look at the heap of contempt which his former followersheaped there upon that tweet. The pro-U.S.-regime site Euractive noted on that same day, that “his party’s approval rating has slumped to just two percent” and blamed it not on his ethnic-cleansing campaign and his sinking his country into hock to foreign investors in order to fund that war against the regions that had voted 90% for Yanukovych, but instead mainly “because of the painful transition away from a state-sustained economy” — not enough privatization, not enough graft for insider-investors to have been able to suck Ukrainians even drier than they’ve done.
All indications are that, right after the February 2014 coup, over 90% of Crimeans wanted to become Russians again, and that over 90% are happy today to be Russians again (which Crimea had been until 1954 when the Soviet dictator arbitrarily transferred Crimea from Russia to Ukraine). But the U.S. regime and its allies demand that Crimeans be taken over by the nazi racist anti-Russian and anti-Crimean regime the U.S. installed in Ukraine. The right of self-determination of peoples is honored (at least verbally) in The West for Spain’s Catalonians and for UK’s Scotts, but not at all for Crimeans, whom The West is instead determined to, essentially, destroy, by diktat (which is what the U.S.-imposed Ukrainian regime wants to do to Crimeans).
Instead of “Putin seized Crimea,” the reality is: Obama seized Ukraine. Crimeans rejected his seizure. “Putin seized Crimea” is lie #2.
THE THIRD ACCUSATION is that Russia’s Government, if not Putin himself, surreptitiously disclosed through “hacks” supplied to Wikileaks, Hillary Clinton’s and her campaign’s emails, and that Russia otherwise also campaigned, via Facebook ads, to make Donald Trump win against Hillary Clinton. Wikileaks said that the emails actually arrived via leaks not hacks, and that the leaks were from inside the Democratic Party, not from anyone outside the United States. Regarding the Facebook ads, the New York Times on 20 September 2018, bannered a 9,700-word article, “The Plot to Subvert an Election: Unraveling the Russia Story So Far”, and buried 92% of the way through it, as merely a clause in a sentence, the crucial fact that “no public evidence has emerged showing that his [Trump’s] campaign conspired with Russia in the election interference or accepted Russian money.” This startlingly anomalous declaration by their reporters was publicly noted to be anomalous, on the very same day as the article was published, when the “Moon of Alabama” blogger headlined “NYT Admits That Its ‘Mountain of Evidence’ For Russian Collusion Is Smaller Than A Molehill”. Then, on October 1st appeared, from the “Alternative Insight” blogger, “The New York Times Plots the 2016 Election”, opening:
The article starts with
“ON AN OCTOBER AFTERNOON BEFORE THE 2016 ELECTION, a huge banner was unfurled from the Manhattan Bridge in New York City: Vladimir V. Putin against a Russian-flag background…”
The paragraph ends with
“In November, shortly after Donald J. Trump eked out a victory that Moscow had worked to assist, an even bigger banner appeared.”
Note that before any facts are presented, the reader is confronted with a conclusion “Moscow had worked to assist” in Trump’s victory.
“Police never identified who had hung the banners, but there were clues. The earliest promoters of the images on Twitter were American-sounding accounts, including @LeroyLovesUSA, later exposed as Russian fakes operated from St. Petersburg to influence American voters.”
Although described “as Russian fakes operated from St. Petersburg to influence American voters,” the banners had nothing to do with the election, and the second banner was unfurled after the election. Why conclude they are Russian fakes? Could not these individuals be operating similar to many persons who have Facebook accounts, hiding their real names when commenting on controversial issues?
These lines are followed by leaps into fantasy.
“The Kremlin, it appeared, had reached onto United States soil in New York and Washington. The banners may well have been intended as visual victory laps for the most effective foreign interference in an American election in history.”How do a few unknown persons, supposedly living in St. Petersburg, suddenly morph into “The Kremlin?” How could, “The banners be intended as visual victory laps?” How is this, “the most effective foreign interference in an American election in history?” A succeeding paragraph proves the article is a bundle of unproven statements. Before presenting any facts, and using conjecture, other conclusions are impressed into the readers’ minds.
“But to travel back to 2016 and trace the major plotlines of the Russian attack is to underscore what we now know with certainty: The Russians carried out a landmark intervention that will be examined for decades to come Acting on the personal animus of Mr. Putin, public and private instruments of Russian power moved with daring and skill to harness the currents of American politics. Well-connected Russians worked aggressively to recruit or influence people inside the Trump campaign.”
What are “the major plotlines,” of what “Russian attack,” that makes it certain that “The Russians carried out a landmark (ED: Why landmark?) intervention?”
Where has there been any evidence of “Acting on the personal animus of Mr. Putin?”And, then, on November 2nd, appeared, from Gareth Porter, at Consortium News, a total mathematical disproof of the Times’s central allegation — of “The Times‘ claim last month that Russian Facebook posts reached nearly as many Americans as actually voted in the 2016 election.” He headlined “33 Trillion More Reasons Why The New York Times Gets it Wrong on Russia-gate” and displayed the mathematical impossibility of what the Facebook-ads hypothesis (which was accepted unquestioningly by the Times) asserts. He also exposed that the Facebook-ads hypothesis is based on misrepresenting what Facebook had actually asserted:
The newspaper said: “Even by the vertiginous standards of social media, the reach of their effort was impressive: 2,700 fake Facebook accounts, 80,000 posts, many of them elaborate images with catchy slogans, and an eventual audience of 126 million Americans on Facebook alone.” The paper argued that 126 million was “not far short of the 137 million people who would vote in the 2016 presidential election.” …
The newspaper failed to tell their readers that Facebook account holders in the United States had been “served” 33 trillion Facebook posts during that same period — 413 million times more than the 80,000 posts from the Russian company.
What Facebook general counsel Colin Stretch testified before the Senate Judiciary Committee on October 31, 2017 is a far cry from what the Times claims. “Our best estimate is that approximately 126,000 million people may have been served one of these [private Russian company, Internet Research Agency, ‘IRA’-generated] stories at some time during the two year period,” Stretch said.
Stretch was expressing a theoretical possibility rather than an established fact. He said an estimated 126 million Facebook members might have gotten at least one story from the IRA –- not over the ten week election period, but over 194 weeks during the two years 2015 through 2017—including a full year after the election.
That means only an estimated 29 million FB users may have gotten at least one story in their feed in two years. The 126 million figure is based only on an assumption that they shared it with others, according to Stretch.
Facebook didn’t even claim most of those 80,000 IRA posts were election–related. It offered no data on what proportion of the feeds to those 29 million people were.
In addition, Facebook’s Vice President for News Feed, Adam Moseri, acknowledged in 2016 that FB subscribers actually read only about 10 percent of the stories Facebook puts in their News Feed every day. The means that very few of the IRA stories that actually make it into a subscriber’s news feed on any given day are actually read.
And now, according to the further research, the odds that Americans saw any of these IRA ads—let alone were influenced by them—are even more astronomical. In his Oct. 2017 testimony, Stretch said that from 2015 to 2017, “Americans using Facebook were exposed to, or ‘served,’ a total of over 33 trillion stories in their News Feeds.”
To put the 33 trillion figure over two years in perspective, the 80,000 Russian-origin Facebook posts represented just .0000000024 of total Facebook content in that time.
Shane and Mazzetti did not report the 33 trillion number even though The New York Times’ own coverage of that 2017 Stretch testimony explicitly stated, “Facebook cautioned that the Russia-linked posts represented a minuscule amount of content compared with the billions of posts that flow through users’ News Feeds everyday.”
The Times‘ touting of the bogus 126 million out 137 million voters, while not reporting the 33 trillion figure, should vie in the annals of journalism as one of the most spectacularly misleading uses of statistics of all time.
The U.S. Government routinely interferes in elections all over the world, but builds mountains out of molehills of ‘evidence’ to charge that Russia’s Government is the global threat to democracy, and especially to America’s (fake) ‘democracy’. And that’s lie #3.
And, of course, the U.S. regime also had lied its way into invading Iraq in 2003, and lies today to allege that “Iran is the top state-sponsor of terrorism” and so much else; so that anyone who still trusts what the U.S. regime says, would have to be a fool. The New York Times (which participated so prominently in stenographically spreading the U.S. regime’s lies about Iraq in 2002 and 2003) is, no less now than it was then, an ongoing insult to the intelligence of its subscribers, but this time spreading lies especially against Russia. The newspaper’s subscribers didn’t cancel their subscriptions in revolt; that newspaper remains very successful, as if routinely lying to ‘justify’ invasion is okay.
The U.S. public believe the same ‘news’-media which had lied America into earlier invasions and mass-murders — wars and coups. it’s all of the U.S. major ‘news’-media, and most even of the ‘alternative’ ones (but certainly not the one you’re reading here). That’s why, when Trump’s U.N. Ambassador, Nikki Haley, on 5 April 2018, addressed students at Duke University, and said (at 46:50 in the video) “Russia’s never going to be our friend,” she wasn’t booed by anybody. And she continued, “You haven’t seen the end of what this administration will do to Russia.” In other words: she preached that hostility toward “Russia” is ‘good’. The students and the faculty seemed totally supportive of her nationalistic holier-than-thou lying pontifications. All of the questions, which were asked of her, presumed to be true all of the lies that she had stated against Russia, and against Bashar al-Assad and so much else. She easily fooled these people, because all of the major media already had fooled them, just like had been done about Iraq in 2002 and 2003. Fools never really learn, because they always already ‘know’ (the lies).
* * *
Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.
- Lockheed Martin Is Now Building NASA's Quiet Supersonic Jet
Lockheed Martin’s Skunk Works team has officially started making the X-59 Quiet Supersonic Technology (QueSST) plane, which could take to the skies in the next several years.
The defense company is building the QueSST for NASA’s Low-Boom Flight Demonstration program. The space agency has just confirmed in a press release its continued support of the plane, regarding funding, and established a timeline for the first flight in 2021.
“This aircraft has the potential to transform aviation in the United States and around the world by making faster-than-sound air travel overland possible for everyone,” said NASA Administrator Jim Bridenstine.
“We can’t wait to see this bird fly!”
The QueSST’s long, slender design will allow it to reduce the loudness of a sonic boom to that of a gentle thump.
Lockheed said the plane would fly at an altitude of 55,000 feet and reach speeds of 940 mph.
The supersonic aircraft will be flown above several US cities to measure the public’s reaction of the noise – data that will then help government regulators establish new rules for commercial supersonic air travel over land.
“This is a monumental milestone for the project,” said Jaiwon Shin, NASA’s associate administrator for aeronautics. “I’m extremely proud of the team for its hard work getting to this point, and we all look forward to watching this aircraft take shape and then take flight.”
Skunk Works and NASA have collaborated for many years on finding the perfect design for commercial supersonic aircraft. Along with noise constraints, supersonic planes have been prohibitive to fly over the US.
British Airways and Air France supersonic Concorde planes flew from New York to London in under 3.5 hours. The Concorde stopped flying in 2003 following a fatal crash in Paris.
The QueSST is currently being manufactured at the Skunk Works facility in Palmdale, California, and in the next several years, could be ready to revolutionize commercial flight.
- The Assassination That Could Have Sparked WWIII: WaPo
Authored by Stephen Knott via The Washington Post,
We know about Dallas, but JFK was almost assassinated during the Cuban missile crisis…
The assassination of President John F. Kennedy on Nov. 22, 1963, shattered the American psyche.
This traumatic event has been repeatedly revisited and commemorated, but little attention has been paid to how close Kennedy came to being killed slightly more than a year before his death in Dallas. Had the president been assassinated at this time, it probably would have led to a catastrophic war between the United States and the Soviet Union that would have totally changed the face of history.
While paying a visit to the tomb of Abraham Lincoln, in Springfield, Ill., at the height of the Cuban missile crisis on Oct. 19, 1962, a gunman had Kennedy in his telescopic sight as he was riding in a slow-moving open limousine. The scenario was eerily similar to what occurred in Dallas the following year, but for whatever reason, the Springfield gunman held his fire, sparing the nation and the world a potential assassination.
Kennedy was in Springfield to campaign for Democrats running for House and Senate seats in the 1962 midterm elections. Before delivering a public speech at the Illinois State Fairgrounds, the president paid a private visit to Lincoln’s tomb. On his way to the tomb, an “employee of the Illinois Department of Public Safety” noticed two men along the president’s motorcade route with a rifle.
According to the Secret Service report, the alert public safety official “saw a rifle barrel with telescopic sight protruding from a second-story window. The local police took into custody and delivered to Special Agents of the Secret Service” two men who were brothers-in-law.
The Secret Service noted that “a .22 caliber semi-automatic rifle and a full box of .22 long rifle ammunition was seized.”
The men admitted “pointing the gun out the window on the parade route. However, they claimed that they had merely been testing the power of the telescopic sight to determine if it would be worthwhile to remove it in order to get a better look at the President when the motorcade returned.
As there was no evidence to the contrary, and neither man had any previous record, prosecution was declined.”
These two men had a loaded rifle pointed at the president during his motorcade route, but decided not to pull the trigger. Secret Service stepped in to apprehend the men before the president’s limousine passed the men for a second time. For a brief moment, however, the president’s life hung in the balance based on the decision of a 20-year-old not to pull the trigger.
There is no evidence to suggest a connection between these two men and the Soviet Union. But at the time, any violence waged against Kennedy probably would have set off war. After all, this near miss in Springfield occurred three days after Kennedy was informed by the Central Intelligence Agency that the Soviet Union was constructing nuclear missile sites in Cuba. The Kennedy administration had been denying rumors of any such construction for months, and the president was shaken by such a bold and deceptive move by the Kremlin.
What followed was the famous “13 days” of secret deliberations on the part of Kennedy and a small circle of advisers known as the “ExComm,” (Executive Committee of the National Security Council), and equally secretive exchanges with Soviet leader Nikita Khrushchev conducted by Attorney General Robert Kennedy and a KGB operative. These exchanges helped avert a war, one that would have had catastrophic results.
In fact, the most critical period of the Cuban missile crisis turned out to be the 72 hours after Kennedy’s near-assassination in Illinois. It was the international crisis, not the gunman, that made Kennedy cut short his campaign trip to Illinois to return to Washington and deliberate on a response to the Cuban missile crisis. The president feared that the crisis could spiral into a nuclear conflict, the “final failure,” as he put it, and resisted the advice of those urging a preemptive strike on the missile sites. In the end, Kennedy rejected entreaties to bomb or invade Cuba.
If Kennedy had been killed or wounded in Springfield, Vice President Lyndon B. Johnson and a core of advisers already leaning toward some type of airstrike or invasion of Cuba probably would have approved such an attack. An assassination attempt on a U.S. president amid an “eyeball to eyeball” confrontation with the Soviet Union would have led many officials to suspect Kremlin involvement. The Soviets had already been caught lying over the missiles in Cuba, and any Soviet denials regarding the attempted assassination of Kennedy would have been seen in the same light.
Kennedy’s removal from this decision-making process, either because of death or a serious gunshot wound, would have altered the course of history. An enraged public and a core group of advisers predisposed to think the worst of Soviet intentions would have exerted enormous pressure upon Johnson to respond with force.
Generations of scholars and practitioners learned much about conflict resolution from studying Kennedy’s management of the Cuban missile crisis. Sadly, as the events of Nov. 22, 1963, revealed, nothing was learned by government security officials in the aftermath of the near miss on the road to Lincoln’s tomb. Had they grasped the red flags from the close call, such as the risk of open limousines and the need to protect against shootings, they might have saved Americans from the searing trauma ahead.
- Lawmakers Leak Plan For $3 Billion Pension-Fund Bailout
As we’ve been saying for a long time, America’s dangerously underfunded defined-benefit corporate and public pensions are little more than lavish Ponzi schemes designed to swaddle one generation of retirees with lavish benefits (a fixed monthly income and health benefits until death), while siphoning payments from a younger generation that will never reap the benefits (what’s worse, these “contributions” have been climbing, even as funds have been forced to raise fees and contributions, which has done little to address the underlying issue).
While public pensions funds have hogged most of the media spotlight, Congress has been quietly taking steps to address a more vulnerable sector of the pension space. To wit, a bipartisan group of lawmakers sneaked a provision into this year’s budget deal that established a committee to decide how to prevent the retirement benefits of 1 million Americans from evaporating once thousands of failing “multiemployer” plans finally collapse into insolvency.
That committee was given a deadline of Nov. 30 to propose a solution. And while many ideas have been bandied about (including raising fees, levies and contributions on healthy plans to subsidize their failing cousins), from the beginning, it’s difficult to imagine how this $500 billion shortfall (the aggregate underfunding of these corporate pension plans, according to an estimate from Boston College) could be covered without the American taxpayer footing the bill. Adding to the urgency, nearly one-quarter of the 1,400 multiemployer plans in the US are in the “red zone,” meaning they will likely go broke within the next decade. And if the recent bout of turmoil across virtually all asset classes continues, the day of reckoning could be hastened. Particularly if the low returns on conventional assets force these funds to place riskier bets on alternative strategies like hedge funds, something that many funds did in desperation during the ZIRP era.
So it shouldn’t come as a surprise that, in the first draft of its plan to save these pensions, the committee proposed restoring the Pension Benefit Guaranty Corporation (PBGC) to solvency with – you guessed it – taxpayer backed “subsidies” from the Treasury to the tune of $3 billion a year. The plan is also considering raising premiums, introducing new fees and – importantly – cutting benefits.
A draft of the plan, obtained by The Washington Post, would direct the Treasury Department to spend up to $3 billion annually to subsidize payments for retirees from certain underfunded pensions.
It would also require benefit cuts, higher premiums and new fees levied against companies and union members in an attempt to make the pensions as financially solvent as possible. The proposal aims to require all parties involved to make significant concessions and caps taxpayer contributions.
The retirement programs are called “multiemployer” pensions, as workers from multiple companies pay into the same retirement benefit program. But many of these pensions lack the financial assets to cover the benefits they have promised retired workers, leading to a panic from retirees who were counting on the funds. These pensions often have been plagued by mismanagement, inaccurate economic projections and in some cases corporate bankruptcies.
Unfortunately, that $3 billion isn’t nearly enough to cover the shortfall, which is why the plan also calls for other streams of capital. According to the Washington Post, the leaked draft proposal is only a rough sketch of one of several alternatives being considered by the committee (translation: this is the trial balloon). What’s perhaps most surprising about the plan is that it has bipartisan backing: This is a bipartisan effort, as neither party is ready for the political backlash of hundreds of thousands of retirees forced into bankruptcy and the poorhouse (after all, retirees vote).
We bailed out Wall Street in 2008. So why can’t be bail out the boomers, too?
But the dire financial condition of many of these multiemployer plans has forced lawmakers to consider such a move as part of a broader package of changes. A growing number of multiemployer plans are now severely underfunded, and the issue gets worse every year as more people retire and seek benefits they believe they were promised.
Lawmakers from both parties, under pressure from many retired constituents and business groups, have expressed alarm that hundreds of thousands of older Americans could soon see their retirement savings plans vanish or become severely depleted because the pensions were mismanaged or underfunded.
Many people in these pension plans, such as retired truck drivers, grocery store clerks and delivery workers, were employed by companies that went out of business. And many of these multiemployer pensions were underfunded, meaning they anticipated higher returns and lower payouts than what occurred. As problems worsened, taxpayer assistance was seen by many experts as inevitable.
“We bailed out Wall Street in 2008 and 2009,” said Kenneth Feinberg, who was appointed to a top role at the Treasury Department in 2015 working on problems with multiemployer pension plans. “Bailouts have occurred before.”
Of course, saving multiemployer funds would be like putting a band-aid on a gunshot wound. Because public pension funds are an even larger ticking time bomb . They’re facing a $7 trillion shortfall, a problem that is almost too big to contemplate. But repairing the PBGC seems like a logical first step. Like the FDIC, the PBGC is an insurance program funded by premiums paid by its participating members (pensions). Its entire income is made up of premiums collected and the investment income it earns on those premiums.
As WaPo explains, the PBGC, which was created in the 1970s, is extremely underfunded. The fund had nearly $70 billion in liabilities last year compared with $2.3 billion in assets. And since the fund’s only sources of revenue are fees it collects from its members, and returns on its investments, once markets crash and more members start to fail, the drop in revenue risks triggering a vicious cycle.
The Pension Benefit Guaranty Corp. was created by Congress to provide a financial backstop for pension plans, but the PBGC’s program to insure multiemployer plans is severely underfunded. It had $67.3 billion in liabilities as of last year and just $2.3 billion in assets. The entire fund is projected to run out of money by 2025, although the agency said “there is considerable risk that it could run out before then.”
Last year, the PBGC provided $141 million in assistance to 72 insolvent multiemployer plans, and there are several others listed as “critical” and likely to soon become insolvent.
Lawmakers have been particularly alarmed about one faltering plan called Central States Teamsters, which has 400,000 participants and whose members include retired truck drivers, among others.
Once the PBGC’s fund to pay multiemployer plans runs out of any money, the agency would be able to pay only a “small fraction” of the pension benefits that retirees were expecting, the agency said last year. Because PBGC was created by Congress for the purpose of protecting pensions, some experts believe that emergency government assistance was always anticipated.
“When…people’s livelihoods will be lost, government has always stepped up to back its own creations,” said Joshua Gotbaum, who served as director of the PBGC from 2010 until 2014.
A pension-fund crisis could cause real, tangible harm to millions of Americans. Given the severity of the risks, it’s surprising that they aren’t more widely discussed.
But then again, maybe that’s by design.
- Johnstone: Nothing In Any Conspiracy Theory Is As Bad As What's Being Done Out In The Open
Authored by Caitlin Johnstone via Medium.com,
Yesterday President Trump posted a statement on the White House website saying his administration will be standing with the House of Saud despite the CIA’s assertion that Crown Prince Mohammed Bin Salman personally ordered the murder of Jamal Khashoggi, a Saudi journalist who was living and working in the United States.
The statement reads like a long form version of one of Trump’s tweets, replete with gratuitous exclamation points and slogans like “America First!” and the lie that Iran is “the world’s leading sponsor of terror”, which will never be trueno matter how many times this administration deliberately repeats it. The world’s leading sponsor of terrorism is of course Saudi Arabia, along withIsrael and the United States.
Trump’s alleged opposition has responded with melodramatic outrage, as though a US president continuing to stand by Saudi Arabia in the face of horrific acts of violence is somehow new and unprecedented and not standard operating procedure for decades.
Dismembering a journalist while he’s still alive would be a fairly typical Tuesday afternoon for the Saudi government and would not rank anywhere near the top ten most evil things this government has done, but because it involves America and a conspiracy it’s a sexy story that everyone laps up. Add in the fact that Trump is more blunt and forthcoming about American depravity and you’ve got yourself a yarn.
Dear @realDonaldTrump: You are the President of the United States of America. You should not grovel to Saudi Arabia.
Your statement is weak despite the random exclamation points. A strong @POTUS would not excuse the Saudis for murdering a journalist & cutting him up into pieces https://t.co/MDbRFtmXRO
— Ted Lieu (@tedlieu) November 21, 2018
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This has remained a hot story through to today, invigorated by a tweet by America’s WWE president in which he crowed about low gas prices and added “Thank you to Saudi Arabia” like a good little muppet. And amid all the fist-shaking and rending of garments about the killing of one man by the Saudi government, a far less magnetic story has been published saying that about 84,701 Yemeni children under the age of five were starved to death between April 2015 and October 2018. And I say “were starved to death” instead of “have starved to death” because their starvation is the direct result of a blockade and relentless violence by Saudi Arabia.
The lack of any sense of proportion in response to the Khashoggi case compared to the destruction of civilian lives in Yemen has been roundly criticized by anyone with a public platform and open eyes, and rightly so; obviously a government murdering a journalist in cold blood would be a terrible thing, but to hold that as more worthy of attention than the anguished deaths of untold tens of thousands is obscene.
This dynamic is also not unique to Saudi human rights violations.
Take the ongoing Russiagate conspiracy theory, for example. Even if Mueller’s investigation did somehow prove that Trump colluded with the Russian government to steal the 2016 election (and it won’t), that act would still have been far less horrible than the ongoing cold war escalations that this administration has been continually advancing against a nuclear superpower. The existence of every single organism on this planet has been placed in jeopardy by Trump’s idiotic, unforgivable, still very much ongoing game of nuclear chicken with Russia, but hardly anyone ever talks about it. They focus on an empty conspiracy theory instead, partly because it is the mass media’s job to manufacture support for warmongering while downplaying its risks, and partly because theoretical conspiracies draw more attention than the things our rulers are doing right out in the open.
85,000 children under 5 may have died of starvation in Yemen war https://t.co/B2JfnsocA3
— Afshin Rattansi (reclaiming the ❌) (@afshinrattansi) November 21, 2018
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I often get conspiracy buffs asking/telling me to write about this or that theory of 9/11 or the JFK assassination or whatever, and I’m just like, dude, have you seen the stuff they’re doing in broad daylight?? It’s not that I have any attachment to the official narratives the TV tells me I’m required to believe, I just find I can get a lot more traction with much better arguments pointing out the facts that are publicly known and undisputed, especially because those things are often far worse than anything alleged in any conspiracy theory.
I mean, take 9/11. Pretty bad, right? 2,996 dead human beings. If that were engineered or permitted to happen by any faction of the US government or any of its allies, that would be pretty diabolical. But would it be worse than a million Iraqis killed in a war based on lies? Even if you only care about American lives, just the number of US soldiers killed in Iraq already far exceeds the death toll of 9/11. This was a war engineered by secretive government agencies and DC insiders, justified and sold to the public with government lies, lies which were advanced as objective and unquestionable fact by the mass media. The war was rammed through without any public accountability, a million human lives were snuffed out, and when they were done nobody was tried for war crimes. Nobody was even fired. No changes were ever made to prevent such horrors from being inflicted upon our world again.
On paper, I’d say that’s far worse than 9/11. Yes, I know the two are related, but just looking at the objective facts of those two occurrences, one is clearly more egregious an offense than the other, regardless of what specifically happened on that September morning.
It isn’t necessary to go diving down every conspiracy theory rabbit hole to understand that there’s an alliance of plutocrats and secretive government agencies running things; it’s right out in the open. You can point to them using publicly available, noncontroversial facts.
— Caitlin Johnstone ⏳ (@caitoz) November 10, 2018
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Pretty much all other conspiracy theories are like this as well; interesting and intriguing due to the idea of catching powerful people in the act of something horrible, but much less horrible than the things those same powerful people are doing publicly. Mass media outlets make no attempt to hide who owns them or to mask their virulently pro-establishment bias as they manipulate our minds day in and day out, medicine money is spent on bombs and war ships, civilians are starved to death with sanctions, wars are waged on lies and when those lies are uncovered we get nothing but a “Fuck you we do what we want,” billionaires influence the legislative branch with corporate lobbying and campaign donations right out in the open to tilt the scales in favor of the plutocratic class, money is hemorrhaging upward to the richest of the rich while Americans die of lack of healthcare, we inch closer to extinction by either ecocidal end-stage capitalism or nuclear holocaust, and lucrative arms deals are cut with an unfathomably wealthy royal family that is causing the worst humanitarian crisis on earth in Yemen.
If we could see with fresh eyes what is being done to us and our fellow man right out in the open, we would recoil and fall to the ground trembling in sheer terror. The only reason we don’t treat these terrible things like what they are is because they have been normalized for us to the point where we take them for granted and assume that’s the only way things could possibly be. Conspiracy theories sparkle because those are new stories we haven’t been desensitized to, but it’s usually the things that powerful people do out in the open that does the most damage.
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- Russia To Verify Whether USA Actually Landed On The Moon
The head of Russia’s Roscosmos space agency has vowed to verify whether or not the United States actually landed on the moon, according to the Associated Press.
Discussing a proposed Rusian mission to the moon, Dmitry Rogozin jokingly said in a Saturday video posted to Twitter:
“I answer questions of the President of Moldova: whether there were Americans on the moon… We have set this objective to fly and verify whether they’ve been there or not.”
Отвечаю на вопросы президента Молдавии: были ли американцы на Луне, зачем у @roscosmos есть истребители и трамваи и как российская космонавтика поможет молдавскому винограду?https://t.co/IRV3HUT6Sz
— Дмитрий Рогозин (@Rogozin) November 24, 2018
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Rogozin was responding to a question about whether NASA actually landed on the moon almost 50 years ago.
While Rogozin’s comments may have been made in jest, in 2015 a former spokesman for the Russian Investigative Committee called for a probe into the American moon landings.
Until Russia can “verify” the moon landing, we anticipate a lively discussin on Van Allen belt radiation and laser reflectors to ensue…
- Cryptogeddon: Bitcoin Battered Below $4000 As Long Liquidations Continue
Amid a series of liquidations of large long positions, Cryptocurrencies have crashed to fresh 2018 lows today with Bitcoin blowing through the $4000 level.
It’s a sea of red…
With the majors down 8-13%…
But, as CoinTelegraph reports, Michael Moro, the CEO of cryptocurrency trading companies Genesis Trading and Genesis Capital Trading, said that the Bitcoin (BTC) price could bottom at $3,000 in an interview with CNBC Nov. 23.
image courtesy of CoinTelegraph
Speaking on CNBC’s “Squawk Box,” Moro suggested that the leading cryptocurrency will lose another 30 percent before bottoming at $3,000. Moro said, “You really won’t find [the floor] until you kind of hit the 3K-flat level.”
Moro addressed small resistance levels, saying that he does not think the BTC price can stabilize in “the mid-3s,” also noting that the $4,000 level was tested twice in the previous days.
The crypto trader said that long-term investors are more poised to handle BTC’s slump and wait until the price rebounds, while at the same time advising not to buy the cryptocurrency at the dip:
“This is about the fifth or sixth 75 percent-plus drawdown that we’ve seen in the 10-year history of Bitcoin.
And so if you have that [long-term] lens, I don’t believe institutional investors really ultimately care where the price of Bitcoin ends in 2018, simply because they’re looking at things three to five years out.”
When asked about what the low price of Bitcoin could mean for miners, Moro suggested that the cost to mine one Bitcoin will go down because “the hash rate has dropped.”
The recent cryptocurrency market decline has resulted in a similar drop in mining profitability and forced Chinese operators to sell their mining devices at a loss. Some mining machines are being sold on the second-hand market for merely 5 percent of their original value.
Bitcoin’s price has kept falling, along with the rest of the crypto market, since the hard fork network upgrade of Bitcoin Cash (BCH) that took place Nov. 15.
* * *
Bitcoin’s share of total cryptocurrency market cap has increased to just over 55% compared to an all-time low of around a third at the turn of the year, meaning that other cryptocurrencies have suffered disproportionately during this reversal.
Furthermore, as JPMorgan notes, the latest decline in prices has also seen a sustained decline in the hash rate according to data from Blockchain.info.
This suggests that prices have declined to a point where mining is becoming uneconomical for some miners, who have responded by turning their mining rigs off.
While the listing of Bitcoin futures by the CBOE and CME in December last year made it possible for financial institutions to gain exposure to cryptocurrencies via widely recognised platforms, participation has remained rather modest.
As Figure 14 shows, open interest in the CME contract, where it has increasingly concentrated, has remained relatively stable at around $100mn on average since end-April, though given the decline in the price of Bitcoin this masks some increase in open interest in terms of units of Bitcoin. And while volumes haveat timesspiked sharply higher to over $500mn at their peak, average daily volumes have remained at arather less spectacular $150mn per day since early April on the CME contract, and just over $30mn per day on the CBOE contract.
Indeed, the futures volumes as a proportion of trading volumes on bitcoin exchanges has been relatively stable at just over 3% on average since mid-March, and have only temporarily risen meaningfully above that level.
For now Bitcoin trades at its lowest since September 2017…
An effect of the plummeting cryptocurrency prices is a significant depreciation to the capitalization of the entire market. Just seven days ago, the market was valued at $182 billion, but that number has since fallen $54 billion, or 30 percent to where it now stands at $128 billion, its lowest value since September 2017.
- How Social Media Is Becoming An Arm Of The State
Authored by José Niño via The Mises Institute,
Say the wrong things and you might get kicked off of your favorite social media platform.
Tech titans Apple, Facebook, and YouTube have wiped out talk-show host Alex Jones’s social media presence on the Internet. But the social media crusades weren’t over.
Facebook recently took down popular pages like Liberty Memes and hundreds of other prominent libertarian-leaning pages . In the wake of the Pittsburgh synagogue shooting, social media network Gab was on the receiving end of suspensions from payment processors like PayPal and Stripe and cloud hosting company Joyent. Although these companies did not provide clear explanations for their dissociation with Gab, the media had a field day when they learned that the synagogue shooter, Robert Bowers, had an account with the social media network.
Should libertarians fear social media de-platforming? Or is this a case of private actors exercising their legitimate property rights by excluding those they wish to no longer do business with?
The Blurring Lines of the Public & Private Sector
Since the question of de-platforming has popped up, some conservatives have proposed state-based solutions to solve this problem. In a role reversal, conservative commentator Ann Coulter suggested that the governmentpass anti-discrimination laws to prevent social media platforms from de-platforming conservatives. Ideological consistency is a lot to ask for from seasoned veterans of Conservative Inc these days.
Nevertheless, Coulter expanded on why the 1st Amendment protections must be extended to social media:
We need to apply the First Amendment to social media companies like Twitter, Facebook, and Google, because it is a public square, and there is precedent for that and it’s gotta be done, because this is really terrifying, and talk about chilling speech when they’re just throwing people off right and left.
Although private entities are within their rights to decide with whom they do business, libertarians should not completely dismiss concerns about social media censorship. The first question we must ask: How separate from the State are these social media giants in the first place?
This is the 21st century after all; a point where the United States has embraced over a century’s worth ofgovernment encroachments. Every nook and cranny of society— from the food we eat to the sporting eventswe watch,—has seen State interference.
When we look closely, Americans nominally own their private property, but this comes with a gigantic asterisk. Governments at all levels can regulate, micro-manage, and in extreme cases, expropriate property if the right political winds are blowing.
In an article from a few months ago, Justin Raimondo added some nuance to the de-platforming discussion. Even with the purge of Alex Jones, control freak politicians were still not satisfied. Raimondo explains the deeper implications of social media purges:
All this wasn’t good enough for Sen. Chris Murphy (D-Connecticut), whodemanded to know if the plan was to only take down “one web site.” No doubt he has a whole list of sites he’d like to take down. Even more ominously, it was revealed that a direct threat had been made to these companies by Sen. Mark Warner (D-Virginia), who sent out a memo listing all the ways the government could crack down on Big Data if they refuse to go along with cleansing the internet of “divisive” material.
Raimondo also points out how the knee-jerk response to label all company actions as “private” overlooks some damning details:
So much for the “ libertarian ” argument that these companies and the platforms they run are “private,” and not connected in any way to the governmental Leviathan. This is the kneejerk response of outlets like Reason magazine, but it’s simply not a valid position to take. The Communications Decency Act immunizes these companies against any torts that may arise from activities conducted on their platforms: they can’t be sued or prosecuted for defamation, libel, or indeed for any criminal activity that is generated by these Internet domains.
Although no laws emerged from Senator Chris Murphy’s threats, the very act of social media giants kowtowing to political demands, tell us one thing: We’re living in an extortion-based political economy. You can keep your property, provided that you cave in to our political demands. If you fail to comply, hate speech laws will be shoved down your throat.
The rabbit hole of government-private sector collusion goes even deeper. Facebook has been working with the Atlantic Council, a think tank funded by the U.S. government and other foreign governments, to fight “foreign interference” during the 2018 election season. Despite Silicon Valley’s libertarian leanings during its rise to prominence, it has frequently partnered with government institutions like the military-industrial complex.
In sum, Silicon Valley is allured by the prospect of state privilege and has worked to cultivate it like every other crony entity in the U.S.
Bad Culture Precedes Bad Politics
Unfortunately, Silicon Valley’s obsession of PC thought policing is a symptom of our present-day culture. Once a country that championed free expression at all levels of society, the U.S. is seeing its culture of free expression slowly wither away. Author Nassim Taleb explains in his book Skin in the Game how free speech threats need not always originate from the State:
Effectively, there is no democracy without such an unconditional symmetry in the rights to express yourself and the gravest threat is the slippery slope in the attempts to limit speech on grounds that some of it may hurt some people’s feelings.
Such restrictions do not necessarily come from the state itself, rather from the forceful establishment of an intellectual monoculture by an overactive thought police in the media and cultural life.
- Bank Of Canada To Start Buying Mortgage Bonds As Canadian Housing Market Cools
Ten years ago this week, the Federal Reserve announced it would start buying agency MBS. Asset purchases are now arguably a standard non-standard monetary policy tool, as all three major central banks have since embarked in some form of asset purchases, and are currently in different stages of implementation.
And on Friday, the Bank of Canada became the latest to join the parade, when it announced for the first time plans to buy government-backed mortgage bonds in an attempt to boost its balance sheet and arguably, to stabilize Canada’s flagging housing market.
The move, part of a decision to include government-guaranteed debt issued by federal Crown corporations, will allow Canada’s central bank to offset continued growth in bank notes, the central bank said in an statement Friday. It will also give it flexibility to further reduce its participation at primary auctions of Canadian government bond “to help increase the tradeable float of those benchmark securities and hence support their secondary market liquidity.”
As part of this expansion, a “small portion” of its purchases will be Canada Mortgage Bonds, which are guaranteed by Canada Mortgage and Housing Corp. Purchases of mortgage bonds will be conducted in the primary market starting later this year or early 2019, the central bank said. The key excerpt from Friday’s statement is blow:
As part of these changes the Bank plans to allocate a small portion of its balance sheet for acquiring federal government guaranteed securities by purchasing Canada Mortgage Bonds. These purchases will be conducted in the primary market, on a non-competitive basis, and are expected to commence in the latter part of 2018 or in the first half of 2019. The Bank will continue to adhere to its principles of neutrality, prudence and transparency and conduct its transactions in a manner that limits market distortions and minimizes impact on market prices.
According to Bloomberg, the federal Crown corporation has an issuance limit of C$40 billion ($30 billion) for 2018.
“In terms of CMBs, we need a little more detail on how the BoC will be participating, but it does look to be supportive of spreads,” said Mark Chandler, head of fixed-income research at RBC Capital Markets. “I would suggest only a modest impact until we learn more.”
The Bank of Canada held C$78.2 billion of Canadian government bonds and C$22.2 billion of treasury bills for balance sheet management purposes as of Nov. 21, according to its website.
While the central bank said that expanding the list of eligible assets “is for balance-sheet management purposes only and has no implications for monetary policy and financial stability objectives of the Bank”, some couldn’t help but wonder if – like 10 years ago in the US – this is just another implicit backstop of Canada’s housing market.
While that is debatable, there is no doubt that 2018 has marked a turning point in Canada’s closely-watched housing market, which can no longer count itself among the countries with the world’s hottest residential real estate. While that is good news for the housing bubbles in Toronto and Vancouver which has priced out most local residents out of the market for a new house, it’s bad news for everyone else who has come to count on steady house price growth to boost their wealth (or their ability to borrow more money).
As Daniel Tencer noted recently, Canada tumbled to 37th place in the latest global ranking of housing markets from commercial real estate firm Knight Frank, from fourth place in the same survey a year earlier. That places us firmly in the bottom half of 57 countries surveyed.
With average price growth falling to 2.9 per cent in the latest survey, from 14.2 per cent a year ago, Canada actually fell behind the U.S. on price growth — a rare occurrence since the U.S.’s housing bubble burst a decade ago.
“The rising cost of finance, an uncertain political and economic climate and currency instability in some markets is likely to be tempering demand,” the Knight Frank report noted, and that certainly seems to be the case in Canada, where rising mortgage rates and tougher new mortgage rules have reduced the maximum buying price that homebuyers can afford.
Furthermore, recent data from the Teranet/National Bank house price index, showed prices in Canada rising at their slowest pace since the financial crisis in August, up just 1.4%, with prices posting a modest improvement in the past two months.
“This is mostly a reflection of Toronto and Vancouver, the two most important real estate markets in Canada,” National Bank economist Marc Pinsonneault wrote in a client note. Indeed, Toronto house prices grew 0.3% in August, but Pinsonneault says this reflects the usual rise in prices seen in spring and summer months. Strip out the seasonality, and Toronto house prices have been falling for five months. Meanwhile, Vancouver’s house price index fell 0.4% in the month, though the index is still up 7.6 per cent from a year ago. But the momentum is gone: Adjusted for seasonality, Vancouver prices have fallen for the past three months, Pinsonneault said.
And now, the Bank of Canada seems to be taking preemptive steps, just in case this localized slowdown spreads to all other markets.
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