Sep 27

Today’s News 27th September 2018

  • US And Turkey "Quietly" Making Progress At "Highest Levels" On Release Of American Pastor

    A new report in Middle East Eye says Pastor Andrew Brunson could very soon be released from Turkish detention after months of immense US pressure on Ankara has sent the Turkish lira into a nosedive.

    In the past weeks the issue has been out of the public eye compared to the heated and seemingly constant back and forth between US and Turkish leaders concerning the detained American citizen over the summer. 

    The new report, citing Turkish and US government sources, suggests the relative cooling down in public statements surrounding Brunson’s fate is due to behind the scenes progress being made in the case. Notably, President Trump did not once mention Turkey or the Brunson issue during his major speech before the UN General Assembly on Tuesday, after being very vocal in prior months. 

    Andrew Brunson has been held in Turkey since 2016. Image source: AP

    According to Middle East Eye:

    But the shrill tone and tit-for-tat tariff slapping has lulled lately.

    The calm, according to a Turkish diplomat, comes after Ankara, under pressure to stem the country’s economic freefall, told Washington that the conflict could only be resolved if the public squabbling stopped.

    The Turkish diplomat said further, “We knew we had to solve the problem and normalize our relations with the US for the sake of Turkey’s economy, but it was not possible to do that amid challenging statements.” He continued, “So we both decided to prevent any more escalation and solve the problem quietly.”

    Turkey’s President Recep Tayyip Erdogan mentioned in statements this week that Pastor Brunson’s fate is a judicial matter, distancing himself from the contentious issue which effectively led to a summer long diplomatic war with Washington, resulting in the Turkish lira losing more than 45 percent of its value this year.

    There was a moment of hope this week, however, when on Monday US Secretary of State Mike Pompeo told reporters at the UN General Assembly that Brunson could be released this month, immediately after which the lira value jumped to a one-week high.

    “As the president, I don’t have the right to order his release. Our judiciary is independent. Let’s wait and see what the court will decide,” Erdogan told Reuters on Wednesday. Erdogan also claimed the severely ailing economy had nothing to do with the diplomatic feud with the US: “The Brunson case is not even closely related to Turkey’s economy. The current economic challenges have been exaggerated more than necessary and Turkey will overcome these challenges with its own resources,” he said.

    Meanwhile a US diplomat confirmed that the Brunson case is being discussed at “the highest levels” between Washington and Ankara. 

    “There is a will on both sides to solve this problem,” the American diplomat told Middle East Eye. “We both want to leave this problem behind and focus on other areas to further our cooperation; especially Manbij, trade relations, and so on.”

    Pastor Brunson, a 50-year-old evangelical pastor from Black Mountain, North Carolina was detained starting in 2016, and is undergoing trial in Turkey while under “house arrest” and is facing charges of espionage and aiding terrorist groups after being accused of cooperating with “Kurdish terrorists” and colluding with the Gulenist Islamic movement to mount a failed coup against Erdogan in 2016. He faces up to 35 years in prison if found guilty, and has now been in Turkish custody for two years. 

    Trump has made it a personal mission to free Brunson, previously issuing statements via Twitter condemning his detention. For example last July, Trump stated, while addressing the Turkish president directly: “A total disgrace that Turkey will not release a respected U.S. Pastor, Andrew Brunson, from prison. He has been held hostage far too long. Erdogan should do something to free this wonderful Christian husband & father. He has done nothing wrong, and his family needs him.”

    Congress has also held up transfer of F-35 fighters which were set to be delivered to Turkey, citing its horrible human rights record and the detention of Brunson. 

    It appears that Turkey has now been brought to breaking point as it seeks to revive the nosediving lira, but will seek to keep its acquiescence to the White House as quiet as possible. 

  • A "Perfect Storm" Surrounds One Of The Worst Ebola Outbreaks In History Right Now

    Authored by Daisy Luther via The Organic Prepper blog,

    An Ebola outbreak that has been going on in the Democratic Republic of Congo since August is already one of the worst in history – the 7th worst to be precise – and it looks like it may spiral out of control. Peter Salama, WHO Deputy Director-General for Emergency Preparedness and Response, called the situation “a perfect storm.”

    Unrest and war in the region combined with community resistance and mistrust of medical personnel are making it difficult for the World Health Organization to get a handle on the outbreak. Dr. Salama said:

    “We are now extremely concerned, that several factors may be coming together over the next weeks to months to create a potential perfect storm. A perfect storm of active conflict, limiting our ability to access civilians, distress by segments of the community, already traumatized by decades of conflict and of murder…

    …We’ve seen attacks now on August 24, September 3, 9, 11, 16, 21 and most recently and most dramatically September 22 in the city itself of Beni,” he said. He said that Beni was the base for the agency’s base for the “entire operation.” (source)

    The outbreak is based in North Kivu, which is on the border of Uganda and Rwanda. Violence has displaced more than a million people in the area, and there have been a number of brutal machete attacks against civilians. Things got so bad that the WHO was forced to cease their operations for an entire week while the Ebola virus spread.

    One of the armed groups in DRC which pose a threat to civilians and the international response to Ebola, the ADF – Allied Democratic Forces – has sufficient military capacity to ambush blue helmets from the UN’a Stabilization Mission in DRC (MONUSCO) and government forces – the FARDC.

    “The ADF in particular has enormous capabilities,” Dr Salama said. “They’ve been able to overrun entire FARDC-bases in and around Beni, they’ve been able to ambush (UN) forces.” (source)

    ADF is an Islamist group that is a serious threat to the Congolese government as well as relief workers.

    If WHO and its partners had to leave North Kivu … we would have grave concerns that this outbreak would not be able to be well controlled in the coming weeks or months.” (source)

    But it isn’t only violence and war that are factors in this “perfect storm.”

    Local traditions are making it the Ebola outbreak more likely to spread.

    The local traditions in the Congo are making relief efforts more difficult.

    …“We’ve heard this morning, that that ‘ville morte’, which was yesterday, has now been extended right through to Friday of this week,” he said, “which basically means for the UN family, including WHO, a lockdown in Beni. Our operations are in effect suspended.”

    …Butembo could also declare a “ville morte” in coming days in sympathy with the people of Beni, he said, potentially increasing the chances of the situation deteriorating rapidly.

    “If we do see unsafe burials that can’t be responded to and symptomatic people that can’t be accessed, we can see this situation deteriorating very quickly,” Dr. Salama said.

    A “ville morte” is a period of mourning.

    Local politicians are manipulating the public so they’re afraid to be treated.

    Meanwhile, it’s an election year in the area and local politicians are taking full advantage of this crisis.

    In addition to many people’s fear of Ebola, the WHO senior official explained that the situation was being further complicated by local politicians who “exploited and manipulated” them prior to upcoming elections.

    Social media reaction to the outbreak was also adding to a “range of conspiracy theories”, Dr Salama said, adding that people have been “actively fleeing” health-workers, including in places where there have been a large number of cases in recent weeks. (source)

    “Pockets of resistance” against treatment, fueled by the politicians, are making it difficult to get a handle on new cases. Terrified people are running away from workers into areas that are inaccessible due to security concerns.

    We also see a very concerning trend. That resistance, driven by quite natural fear of this terrifying disease, is starting to be exploited by local politicians, and we’re very concerned in the run up to elections, projected for December, that exploitation… will gather momentum and make it very difficult to root out the last cases of Ebola.”

    Some people were fleeing into the forest to escape Ebola follow-up treatment and checks, sometimes moving hundreds of kilometers, he said…

    …social media posts were conflating Ebola with criticism of the DRC government and the United Nations and “a range of conspiracy theories”, which could put health workers at risk. (source)

    This fear of treatment is something we’ve seen numerous times. During the last outbreak, families literally broke into treatment facilities and took their ailing family members who were diagnosed with active Ebola to prayer meetings, where they died in the most contagious stages of the disease.

    The disease is now threatening Uganda

    Thus far, there are no cases of Ebola in Uganda, but worry has spiked as a case was confirmed near the border at a popular destination for Ugandans.

    Tchomia landing site is the closest Democratic Republic of Congo (DRC) landing site to Ugandan districts in the Bunyoro sub-region On Friday, Ituri province vice governor Keta Upar said in a statement that the latest Ebola case had been reported in Tchomia.

    Tchomia is one of the busiest fish markets in eastern DRC and attracts several Ugandan businessmen from the landing sites of Butiaba, Walukoba, Kijangi, Kaiso,Sebigoro, Nkondo, Ndaiga, Ntoroko, Kyehoro and Fofo from the districts of Hoima, Buliisa, Kikuube, Ntoroko and Kagadi.

    Usually, Ugandan businessmen cross to Tchomia market on a weekly basis – posing a big threat that the Ebola outbreak can easily be brought into the country. Tchoima fish market operates every Thursday. (source)

    Ugandan officials have stepped up screening at the border.

    Screening of people crossing from DRC for signs and symptoms of Ebola is being conducted at official and unofficial points of entry. Communities have been sensitised about Ebola and are vigilant and reporting any suspicious cases for investigation. (source)

    Here’s a map that shows the area and where the case was diagnosed.

    It’s encouraging to see that Uganda is not allowing political correctness to sway them from doing the right thing for their people. We can only hope that the United States will do the same in a time where deadly diseases can spread so easily. Physical check-ups of people from areas where epidemics are out of control should be the norm, not a unique thing that is protested loudly.

    At least 100 people have died.

    The current outbreak is the 7th largest in history.

    In the past two months, 150 cases have been confirmed or “probable” and as of Sept. 23, 100 people had died.

    The worst-case scenario is that the Ebola virus continues to spread in North Kivu and moves across the border to other countries. If that happens, we could be facing a nightmare like the 2014-15 Ebola epidemic, during which more than 11,000 people died. The only good news: This time we have an effective vaccine. (source)

    As of Monday, 80% of Ebola contacts and three suspected cases could not be reached for disease monitoring.

  • Asia Development Bank Warns US-China Trade War Could Trigger 2019 Asia Slowdown

    The Asian Development Bank (ADB) warned on Wednesday that growth prospects for Asia next year could slow substantially as the US-China trade war disrupts multinational corporations’ supply chains, inflicting damage on the region’s export-reliant economies.

    Peak quantitative easing policies have been realized; central bank asset purchases $1.6tn in 2016, $2.3tn in 2017, $0.3tn in 2018, and will decline $0.2tn in 2019. It is late-cycle, and the Federal Reserve is tightening, which explains why global stocks are down YTD ex. US tech. Meanwhile, global liquidity is rapidly shrinking, and that has become a significant concern for Asian business activity by pushing up borrowing costs, while capital outflows are also a risk.

    Reuters said the Manila-based institution kept its 2018 economic growth forecast for the region unchanged at 6.0% in an update of its Asian Development Outlook. But slashed next year’s projection to 5.8% from 5.9%.

    “Downside risks to the outlook are intensifying”, said ADB Chief Economist Yasuyuki Sawada, pointing to the potential impact of US-China trade tensions on regional supply chains and the risk of sudden capital outflows if the Federal Reserve continues hiking interest rates.

    The ADB’s growth cut to 5.8%  estimate for 2019 would be the slowest for the region since the Dotcom bust (2001) when it expanded 4.9%. The report covers a total of 45 countries in the Asia-Pacific region.

    Additionally, Reuters said ADB’s revised outlook for 2019 had not factored in President Trump’s recently implemented tariffs on $200 billion worth of Chinese goods imposed on Monday. 

    The domestic economy in China “seems to be quite robust and supporting 6.6% growth this year”, Sawada told the press. “But admittedly we don’t know (how) the further escalation of the trade dispute may directly affect consumer sentiment.”

    Beijing fixed its 2018 growth target to 6.5%, similar to 2017, which it beat by expanding at 6.9%. Despite the trade war, Chinese authorities have stayed the course for 2018 growth target, as new easing measures have been introduced to prevent an already cooling economy.

    In a recent BofA report titled “The Thundering World,” the profit outlook has become more negative for world risk assets. Global EPS has peaked; was 22% in February, now 16%. One leading indicator of global profits is Korean exports, which predicts an imminent global slowdown.

    ADB said weakness in Southeast Asia is expected: beware moderating export growth, quickening inflation, net capital outflows and a worsening balance of payments, with growth this year projected to slow to 5.1% from the July forecast of 5.2%.

    “Policymakers have at their disposal an array of policy tools with which to manage pockets of vulnerability and maintain stability, but they must be applied carefully,” Sawada said.

    Sawada said Asian governments have “enough policy space to handle” shocks and pressure from currency depreciation.

    A perfect storm of trade wars and quantitative tightening is brewing in the world, and it could soon lead to a sudden growth shock in the Eastern hemisphere, in 2019. 

    So what happens next? A possible 2019 slowdown in Asia could trigger a repricing event in the US, as the gap between US equities and global stocks is wide. 

  • Kavanaugh Mayhem: Two Men Cop To Feeling Christine Ford's Breasts, Contradicting Her Accusation

    The Senate Judiciary Committee on Wednesday night released a time of their efforts to responded to various accusations against Supreme Court nominee Brett Kavanaugh – including two men who say they they were the basis for the “groping” allegation. 

    The claims also include a new allegation from a San Diego woman who alleges that Kavanaugh and others raped her in the backseat of a car, though it does not specify the place, date or identities of the alleged accomplices. 

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    Last week, former Scalia clerk Ed Whelan floated a theory over Twitter in a series of now-deleted tweets, suggesting that Blasey Ford had confused Kavanaugh with another high school student who looked almost identical to him. Ford claims “there is zero chance that I would confuse him.” 

    And earlier Wednesday, another Kavanaugh accuser – Julie Swetnick, had an ominous cloud of doubt cast over her allegation that the Supreme Court nominee and a friend were operating a date-rape “gang bang” operation at 10 high school parties she attended as a legal adult three years older than Kavanaugh (yet didn’t report once).

    Politico reports that Swetnick’s ex-boyfriend, Richard Vinneccy – a registered Democrat, took out a restraining order against her, and says he has evidence that she’s lying. 

    “Right after I broke up with her, she was threatening my family, threatening my wife and threatening to do harm to my baby at that time,” Vinneccy said in a telephone interview with POLITICO. “I know a lot about her.” –Politico

    “I have a lot of facts, evidence, that what she’s saying is not true at all,” he said. “I would rather speak to my attorney first before saying more.”

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    Avenatti called the claims “outrageous” and hilariously accused the press of “digging into the past” of a woman levying a claim against Kavanaugh from over 35 years ago. 

    Meanwhile, Swetnick has now been linked to Blasey Ford – as she utilized the law firm run by Ford to sue her previous employer, New York Life Insurance Co. for sexual harassment. 

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    Ford and Kavanaugh are scheduled to testify before the Judiciary Committee on Thursday. If it even happens at this point, will one – or both of the “mystery gropers” make an appearance?

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  • The Battle For Our Minds

    Authored by Patrick Lawrence via ConsortiumNews.com,

    There are battlefields in Syria, Ukraine, Yemen, and elsewhere, but given the state of corporate media, perhaps the most consequential battle now being fought is for our minds…

    After reading The New York Times piece “The Plot to Subvert an Election” I put the paper down with a single question.

    Why, after two years of allegations, indictments, and claims to proof of this, that, and the other did the newspaper of record—well, once the newspaper of record—see any need to publish such a piece? My answer is simple: The orthodox account of Russia-gate has not taken hold: It has failed in its effort to establish a consensus of certainty among Americans. My conclusion matches this observation: The orthodox narrative is never going to achieve this objective. There are too many holes in it.

    “The information age is actually a media age,” John Pilger, the noted British–Australian journalist, remarked during a symposium four years ago, when the Ukraine crisis was at its peak.

    “We have war by media; censorship by media; demonology by media; retribution by media; diversion by media—a surreal assembly line of obedient clichés and false assumptions.”

    Pilger revisited the theme in a piece last week on Consortium News, arguing that once-tolerated, dissenting opinion has in recent years “regressed into a metaphoric underground.”

    There are battlefields in Syria, Ukraine, Yemen, and elsewhere, but perhaps the most consequential battle now being fought is for our minds.

    Those who dispense with honest intellectual inquiry, healthy skepticism of all media, and an insistence that assertions require supporting evidence should not win this war. The Times piece by Scott Shane and Mark Mazzetti—two of the paper’s top-tier reporters—is a case in point: If the Russia-gate narrative were so widely accepted as their report purports, there would have been no need to publish such a piece at this late date.

    Many orthodox narratives are widely accepted however among a public that is not always paying attention. The public too often participates in the manufactured consent. Usually it take years for the truth to be widely understood. Sometimes it comes when the U.S. admits it decades later, such as the role of the CIA in the coups in Iran and Chile. Other times it comes through admissions by former U.S. officials, such as former Defense Secretary Robert McNamara about the Vietnam War.

    Even Recent Narratives are Fraying

    There are more recent examples of official narratives quickly fraying if not starting to fall apart, though Establishment media continues to push them.

    For instance, there are serious doubts about who was responsible for alleged chemical weapons attacks in Syria. The most significant was in Eastern Ghouta in August 2013 followed by attacks in Khan Sheikhoun (April 2017) and Douma (April 2018).

    The corporate media accounts of each of these attacks have been countered with persuasive evidence against the prevailing view that the government of Bashar al–Assad was to blame. It has been provided journalists (Seymour Hersh ), a scientist (Theodore Postol ), and on-the-ground correspondents and local witnesses. These reports are subject to further verification. But by no means do official narratives stand without challenge.

    There is also the case of Malaysian Flight MH–17, shot down over Ukrainian territory in June 2014. The official report, issued a year later, concluded that the plane was downed by Ukrainian rebels using a Russian-supplied missile. The report was faulty from the first: Investigators never visited the site , some evidence was based on a report produced by Bellingcat , an open-source web site affiliated with the vigorously anti–Russian Atlantic Council, and Ukraine was given the right to approve the report before it was issued.

    Last week the Russian military disclosed evidence that serial numbers found in the debris at the MH–17 crash site indicate the missile that downed the plane was produced at a Soviet military-production plant in 1986 owned by Ukraine. Let us see further verification of this evidence (although I seriously doubt any Western correspondent will seek any). The official report of 2015 noted the serial numbers, so we know they are authentic, but it did not use them to trace the missile’s provenance.

    There is also the seriously muddled case of the poisoning of the Skripals in Britain.  Why hasn’t the Western media dug into this story rather than accept at face value the pronouncements of the British government?

    A month ago I lamented the damage Russia-gate has done to many of our most important institutions, the press not least among them. What is the corporate media thinking? That once President Trump is dumped, all will return to normal and professional standards will be restored? One can also argue the reverse: that adversarial journalism has returned to the White House beat largely out of personal animus towards Trump and that it will disappear again once a more “normal” president is in office.

    As Pilger put it, “This is a seismic shift, with journalists policing the new ‘groupthink,’ as [Robert] Parry called it, dispensing myths and distractions, pursuing its enemies.”

    In other words, Establishment journalism has shifted far afield from its traditional ideals of non-partisan, objective reporting and is instead vying for your mind to enlist it in its agenda to promote American interests abroad or one party or the other at home.

     

    We can’t let them get away with it. Our minds are our own.

  • Top US General Says Troop Readiness In Korea Facing "Degradation" After Trump Suspended Exercises

    As part of the White House’s ongoing attempts for North Korean denuclearization and as relations continue to thaw between Pyongyang and Seoul, President Trump last month cancelled previously scheduled US military exercises with South Korea’s armed forces.

    But a top general has testified before Congress that this pause in joint military exercises is hurting American troop readiness in the region.

    In testimony before the Senate Armed Services Committee on Tuesday, Army General Robert Abrams said that Trump’s decision has led to a “slight degradation” in American readiness.

    Abrams is the president’s own nominee to lead US forces in Korea. However the comments came as the soon to be top US military commander in the Korean peninsula broadly defended Trump’s calculated diplomatic concessions to the North which are designed to slowly ease tensions. 

    “The suspension of military exercises … was a prudent risk if we’re willing to make the effort to change the relationship with [Pyongyang],” explained Abrams, who heads Army Forces Command. “I think there is certainly degradation to the readiness of the force. That’s a key exercise to maintain continuity and to continue to practice our interoperability, and so there was a slight degradation.”

    Gen. Abrams testified before the Senate Armed Services Committee on Capitol Hill in Washington on Tuesday. He’s been nominated to take command of U.S. and allied forces in South Korea. (image via AP)

    Trump announced last June just after meeting with North Korea’s Kim Jong Un in Singapore for their historic summit that the US would suspend “select” exercises with South Korea.

    At the time Trump had described the war games as highly “provocative” and cancelled large scale regularly scheduled exercises that had been slated for August. 

    The suspension of joint exercises formed a key topic of discussion during Tuesday’s committee hearing with Democrat Senators pressing the general on how many scheduled training exercises could be skipped before US forces were severely hindered from maintaining adequate levels of readiness. 

    Gen. Abrams said this would be “hard to judge” but added that he would “apply that judgement based on what I assess on the ground.”

    Sen. Dan Sullivan (R-Alaska) asked the following at a key point during the hearing: “If Kim Jong Un offers to remove illegally obtained ballistic missiles and nuclear weapons for lawfully deployed U.S. troops on the Korean Peninsula, do you think that would be a smart decision, and tactically and strategically that would be good for our posture not just on the Korean Peninsula but in the region?”

    The General responded: “Tactically, without any mention of any change in his conventional capability, there would be a significant amount of risk,” and he added that Russia and China would be “strongly encouraged” by such a scenario.

    Sen. Sullivan replied: “We think it would be strategically disastrous and the fact the administration seems to be toying with it is very troubling. And Congress doesn’t support it.”

    China and Russia have pursued closer ties of late, for the first time conducting major joint exercises as part of the Vostok-2018 early this month. Hawkish Congressional leaders have worried that the North Koreans could be engaged in stall tactics meant in part to weaken US military preparedness on the peninsula. 

  • The Everything Bubble: When Will It Finally Crash?

    Authored by Brandon Smith via Alt-Market.com,

    Much like the laws of physics, there are certain laws of economics that remain constant no matter how much manipulation exists in the markets. Expansion inevitably leads to contraction, and that which goes up must eventually come down. Central banks understand this reality very well; they have spent over a century trying to exploit those laws to their own advantage.

    A common misconception among people new to alternative economics is the idea that central banks only seek to keep the economy afloat, or keep it expanding forever. In reality, these institutions and the money elites behind them artificially inflate financial bubbles only to deliberately implode them at opportunistic moments.

    As I have outlined in numerous articles, every economic bubble and subsequent crash since 1914 can be linked to the policy actions of central bankers. Sometimes they even admit to culpability (to a point), as Ben Bernanke did on the Great Depression and as Alan Greenspan did on the 2008 credit crisis. You can read more about this in my article ‘The Federal Reserve Is A Saboteur – And The “Experts” Are Oblivious.’

    Generally, central bankers and international bankers mislead the public into believing that the crashes they are responsible for were caused “by mistake.” They rarely if ever mention the fact that they often use these crises as a means to consolidate control over assets, resources and governments while the masses are distracted by their own financial survival. Centralization is the name of the game. It is certainly no mistake that after every economic implosion the wealth gapbetween the top 0.01% and the rest of humanity widens exponentially.

    Yet another crash is being weaponized by the banks, and this time I believe the motivations behind it are rather different. Or at least the goals are supercharged.

    The next phase of the financial elite’s plans for centralization involve a complete restructuring of the global monetary climate, something Christine Lagarde of the IMF has often referred to as the great “economic reset.” The term “economic reset” is more likely code for “economic collapse,” one epic enough to facilitate a completely new monetary framework with a new global reserve currency. A historically unprecedented economic reset would require a historically unprecedented financial bubble, which is exactly what we have today.

    The ‘Everything Bubble’ as many alternative analysts are calling it is built upon multiple crumbling pillars. Here they are in no particular order:

    Central Bank Stimulus

    Bailouts and QE measures on the part of central banks have been used as a stopgap since the 2008 crash to prevent market reversals whenever they appear. Most of all, central banks have been particularly obsessed with keeping stocks in a perpetual bull run, which Ben Bernanke and Alan Greenspan admitted was part of maintaining a certain positive “psychology” within the public. In other words, the purpose of stimulus measures was to give the masses a false sense of security, not heal the real economy.

    The other primary initiative behind stimulus was to prop up debt poisoned governments and corporations around the world. However, the intention was not necessarily to help these institutions climb out of the red. No, instead, the goal was to keep them semi-solvent long enough for them to take on EVEN MORE debt, to the point that when they do collapse the aftermath will be so devastating that recovery would be impossible.

    The timing of the central bank tapering of QE should be treated as an alarm on the crash of the everything bubble. With the Federal Reserve cutting off QE measures, the Bank of Japan using “stealth tapering,” and the European Central Bank warning of high inflation and the need for tapering, it is clear that the era of easy money is almost over. When the easy money is gone, the crash is near.

    Stock Buybacks

    Using steady loans from the Federal Reserve as well as Trump’s tax cut, stock markets have been inflated beyond all reason by corporations implementing the equities manipulation scheme of stock buybacks. By artificially reducing the number of stock shares on the market, companies can increase the “value” of the existing shares and fuel a bull market rally. This rally has nothing to do with actual wealth creation, of course. It is a game of phantom wealth and inflated numbers.

    Stocks in particular will require ever more debt on the part of corporations along with never-ending near zero interest rates in order to keep the farce going. The central bankers, though, have other plans.

    Near Zero Interest Rates

    Low interest rates should be considered a part of the stimulus model, but I’m setting them separately because they represent a special kind of market manipulation. The option for corporate entities to borrow from the Fed at almost no cost has done little to improve the effects of the 2008 credit crisis. In fact, corporate debt levels are now near all-time highs not seen since the last crash. This time, however, dependency on low cost loans has conjured a monstrous addiction within the business cycle. Any increase in interest rates will trigger painful withdrawals.

    Central banks around the world are now increasing that pain as they hike rates well beyond what many analysts were expecting a few years ago. Corporate debt in particular is highly vulnerable to this new tightening policy. Without low rates, corporations can no longer afford to hold the debts they have, let alone take on more debt in a futile attempt to keep equities propped up.

    Central banks argue that “inflation” is the excuse for hiking interest rates at this time. True inflation has been well above Fed targets for years, and the banking elites showed no care whatsoever. I suspect that the real reason is that the next phase of the reset is near, and a little chaos is needed.

    For decades, the Fed has kept the neutral rate of interest well below the rate of inflation. For the first time in at least 30 years, the Fed under Jerome Powell is seeking to increase neutral rates to make them equal to the pace of inflation (official inflation). The Fed has approximately two to three more rate hikes (including the September rate hike) to reach the pace of inflation. I believe this is our window on the next crash; the moment at which the Fed completely reverses its past policy of artificial support for the economy.

    Federal Reserve Balance Sheet

    I have written at great length about the correlation between the Fed’s balance sheet and equities and I will not go into great detail here.  Simply put, with each increase in the balance sheet over the past decade, stocks rallied in tandem. As the Fed cuts assets, stocks enter volatility. A divergence has occurred the past two months between the Fed balance sheet and stocks, but I believe this is temporary.

    Corporate buybacks are at all-time highs in 2018, and it’s obvious that this is meant to offset the Fed’s waning support for the markets. As interest rates increase and the Trump tax cut dwindles, though, buybacks will die.

    If we consider the possibility that the Fed’s assets also include stock shares as many suspect, then the Fed asset dumps would also INCREASE the number of existing shares on the market and sabotage corporate efforts to reduce shares through stock buybacks. I predict stocks will once again converge with the falling Fed balance sheet by the end of this year and that they will continue to drop precipitously through the last quarter of 2018 and the rest of 2019.

    Timing Is Everything

    Central banks need cover before they can launch their “global reset,” and what better cover than a massive international trade war? Trump’s trade war is an excellent distraction which can be used as a rationale for every negative consequence of the central banks pulling the plug on stimulus life support. Meaning, the disasters the central bankers cause through tightening into a weak economic environment can be blamed on Trump and the trade conflict.

    I don’t think it’s a coincidence that almost every escalation in the trade war happens to take place at the same time as major central bank announcements on rate hikes and balance sheet cuts. The latest trade war salvo of $200 billion in tariffs against China is leading to a Chinese announcement on retaliation — all of this taking place on the exact week of the Fed’s September meeting which is expected to result in yet another rate hike and expanded balance sheet cuts.

    The Fed’s tightening policies have resulted in a severe reaction by emerging markets which are already crashing and have diverged greatly from U.S. markets. American stocks will not escape the same fate.

    The Fed’s neutral rate efforts suggest a turning point in late 2018 to early 2019. Balance sheet cuts are expected to increase at this time, which would also expedite a crash in existing market assets. The only question is how long can corporations sustain stock buybacks until their own debt burdens crush their efforts? With such companies highly leveraged, interest rates will determine the length of their resolve. I believe two more hikes will be their limit.

    If the Fed continues on its current path the next stock crash would begin around December 2018 into the first quarter of 2019. After that, other sectors of the economy, already highly unstable, will break down through 2019 and 2020.

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  • US Pulls Patriot Missiles From Middle East As Focus Shifts To China, Russia Threat

    The Pentagon is removing Patriot missile systems from several Middle Eastern countries next month, an a move that the Wall Street Journal says coincides with a “realignment of forces and capabilities as the military steps up its focus on threats from China and Russia,” citing multiple senior military officials. 

    The relocation of the systems out of the Middle East, which hasn’t been previously disclosed, is one of the most tangible signs of the Pentagon’s new focus on threats from Russia and China and away from the long-running conflicts in the Middle East and Afghanistan.

    Two Patriot missile systems will be redeployed from Kuwait, and one each from Jordan and Bahrain, officials said. Patriots are mobile missile systems capable of shooting down missiles and planes.

    The four systems have been taken offline and will be redeployed by next month, officials said. There are no plans for any of them to be replaced, and they are being returned to the U.S. for refurbishing and upgrades, an official said. –WSJ

    While some Patriot systems will remain in the region, removal of the four batteries “amounts to a major drawdown of the capability Patriots provide in the region,” notes the Journal, which adds that their removal also comes amid the White House intensifying its rhetoric against Iran and “amid an increasingly cvomplex battlefield in Syria.” 

    According to a 48-page report issued Tuesday by the State Department, Iran’s missile programs pose a significant threat, and the Islamic Republic maintains “a stockpile of hundreds of missiles that threaten its neighbors in the region.” 

    Patriot missile systems deployed around the world utilize what is referred to as “point defense” – providing defensive capabilities over a smaller radius to shoot down aircraft, while the newest version of the system, the PAC-3, can shoot down missiles as well. Their effective range is only in the dozens of miles, so they are typically located near bases or other sensitive installations they are intended to protect. 

    Patriot systems owned by Saudi Arabia are used there frequently, for example, regularly shooting down missiles fired from Yemen, where a civil war has ragedsince 2015.

    American allies in the region have depended on such missile-defense systems for years. The systems play both a real and symbolic role in countering the threat posed by nearby Iran. Bahrain, in particular, has grown concerned about Iran-backed groups and other Shiite militias destabilizing the small island nation. –WSJ

    Washington’s move comes as Russia announced the deployment of their S-300 anti-aircraft system to the Syrian government, following the downing of a Russian Il-20 plane due to outdated Syrian air-defense systems. 

  • Kavanaugh "Gang Bang" Accuser Exposed: Restraining Order, Link To Blasey-Ford

    Brett Kavanaugh’s fourth accuser, Julie Swetnick, has just had an ominous cloud of doubt cast over her allegations against the Supreme Court nominee. 

    Less than 24 hours after her attorney, Michael Avenatti, revealed Swetnick’s salacious claim that Kavanaugh and a friend ran a date-rape “gang bang” operation at 10 high school parties she attended as an adult (yet never reported to the authorities), Politico reports that Swetnick’s ex-boyfriend, Richard Vinneccy – a registered Democrat, took out a restraining order against her, and says he has evidence that she’s lying. 

    “Right after I broke up with her, she was threatening my family, threatening my wife and threatening to do harm to my baby at that time,” Vinneccy said in a telephone interview with POLITICO. “I know a lot about her.” –Politico

    “I have a lot of facts, evidence, that what she’s saying is not true at all,” he said. “I would rather speak to my attorney first before saying more.”

    Avenatti called the claims “outrageous” and hilariously accused the press of “digging into the past” of a woman levying a claim against Kavanaugh from over 35 years ago. 

    New York Life

    Earlier Wednesday, researcher and journalist Thomas Wictor discovered that a report about Swetnick by The Guardian had mysteriously been altered to remove a reference to her former employer, New York Life: 

    Lo and behold, Swetnick made a sexual harassment claim against New York Life – and used the firm run by Christine Blasey Ford’s attorney to represent her.

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    What a small world…

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