- Macron Approval Rating Crashes Twice As Fast As Trump's
It appears that Trump is no longer the president with the fastest plunge in his approval rating: that honor has now fallen to France’s Emanuel Macron, who since his dramatic victory in the May 7 presidential election, has seen his popularity plummet, and according to a a new poll conducted by Ifop for Le Journal du Dimanche, most French voters are now dissatisfied with Emmanuel Macron’s performance, a dramatic decline for the president who basked in a landslide election victory less than four months ago.
The poll showed Macron’s “dissatisfaction rating” soaring to 57%, from 43% in July. At the same time, those satisfied with Macron tumbled from 54% in July (and 62% at election) to just 40% in August, a stunning 22% drop over three months… which is twice as fast as Donald Trump’s fall from grace. According to Gallup, on Inauguration Day, 45% of Americans said they approved of Trump and since then, the number has declined by 11% to 34%, which again is only half as bad as Macron popularity plunge. The Ifop poll also showed the cumulative drop in Macron’s popularity ratings since May was far bigger than that of previous Socialist president Francois Hollande over the same period, who is best known for achieving the lowest approval record of any recent French president on record. As such, one wonders how Macron’s approval rating in a few short years can even be positive.
Quoted by Reuters, French government spokesman Christophe Castaner said the ruling party was going through a “tricky time”, but added that displeasing some people was a price worth paying if the government wanted to push through reforms. The only problem is the government will most likely not be able to push through reforms, even as Macron’s approval continues its sharp descent. Cartaner also told BFM TV that “yes, we are encountering difficulties, but you cannot just spend your time only looking at polls when you’re in government. We are there to transform the country. Our country needs us to take risks, and we are taking risks.” Spoken like a true megalomaniac.
As for Macron – who is currently midway through a schedule of official visits to various European capitals and who most recently got into a violent feud with Poland when he criticized the Warsaw government for its “non-European ideals” to which Polish PM Beata Syzdlo slammed “arrogant” Macron saying “you won’t rule Europe” – has suffered a number of setbacks since being elected, including tough debates in parliament over labor reform, a standoff with the military and cuts to housing assistance. Then, just last week, Macron became the target of social media scorn and humor, while political opponents criticized the president when it emerged he spent €26,000 ($31,000) on makeup during his first 100 days in office and his office also backed down on plans to give his wife a formal, paid role after a public backlash.
In any case, the latest polling is terrible news for the young new president who was expected to inspire his country with hope and confidence yet appears to be doing just the opposite: Bernard Sananes, head of French polling company Elabe, said the latest survey could encourage Macron’s political opponents, after his party won a commanding majority in parliament.
“It could mean, for the government, that the opposition mobilizes itself again,” Sananes told BFM TV.
It wasn’t just Macron: the poll also showed a steep drop in approval for Prime Minister Edouard Philippe, with 47% expressing satisfaction with him – down 9% from last month.
As Reuters adds, Macron – France’s youngest leader since Napoleon – faces a big test next month when the far-left CGT trade union leads a rally to protest against plans to deregulate the jobs market. “Now is the key time, with the labor executive orders to be presented,” said Francois Savary, chief investment officer at Geneva-based investment firm Prime Partners, who has an “underweight” position on French equities.
- Embracing A Multipolar World Order: How Rodrigo Duterte Is Revolutionizing The Philippines
Authored by Federico Pieraccini via The Stratgaic Culture Foundation,
In a new global environment, centered on a multipolar world order, the Philippines offers a unique perspective for understanding the changes occurring in international relations.
With the victory of Rodrigo Duterte in May 2016, many anticipated a major change in Manila's relations with such countries as the United States and China. The Philippines has always enjoyed a privileged role in the containment strategy directed by Washington against the People's Republic of China. Since the very beginning of Duterte’s presidency, and especially during Obama's final months in office, Duterte displayed his disappointment with the United States’ use of the Philippines as a bulwark against Chinese expansion in the region. Such a role is something that a pragmatic leader like Duterte, with the interests of his nation at heart, would never accept to adopt.
Duterte’s first diplomatic visits and statements confirmed this direction, with blunt words confirming his intentions to widen cooperation and alliances with the major countries of China and Russia, as demonstrated during Duterte's visit to Beijing and Moscow.
In the months that followed, with Trump as the new occupant of the White House, Duterte greatly softened his rhetoric and moves against the United States, sensing some sort of natural affinity with Trump. Although Duterte has repeatedly shown an aversion to the imperialist policies of the American colonial masters, he seems to have a high regard for strongmen like Putin, Xi and, of course, Donald Trump, among whose company he includes himself.
Trump's victory in the 2016 election has created a common ground with Duterte: both oppose their internal establishment and have a tough way of getting along with their political enemies. Besides this, Trump is much less interested in pursuing Obama's 'Asian Pivot', a policy based on the containment of China through economic and military pressure from US allies in the region like the Philippines. Trumps looks more interested in using existing trade between the US and China as a means of harassing Beijing.
One of the main events that appears to have shaken the Duterte presidency, in addition to the internal political struggles and pressure from opposing political parties, is the terrorist attacks and clashes with Daesh in the city of Marawi on the island of Mindanao. What was meant to be a rapid operation to liberate the city from Daesh is turning out to be an urban counter-guerrilla operation with an unknown end date.
With internal pressure building up against Duterte, both from within his party and from the opposition, stemming from the difficult relationship with Washington, the North Korean crisis seems like the perfect opportunity to ease relations with Washington and seize the opportunity to silence his domestic critics.
Manila, being marginally involved in this crisis, has allowed Duterte, showing brilliant intuition, to seize this opportunity to criticize Kim Jong-un (without risking a worsening of the overall situation with the DPRK), openly supporting Donald Trump's policy as well as Beijing's diplomatic efforts. It is a win-win situation for Duterte, at once placating internal critics, following Beijing's lead, and giving credit to Trump.
Duterte seems to have realized that rather than a firm stance against Washington, a disinterested dialogue may be the best option for alleviating internal criticism by US-influenced lobbies within the Philippine establishment.
The good news for Trump's strategic planners ends here.
In addition to purchases of arms from Russia, still unclear in terms of quantity but certainly imminent, Manila and Beijing have begun a slow but inexorable rapprochement. In recent months, the discussions surrounding the Scarborough Shoal have progressed from rhetoric involving threats to cooperation and dialogue. The situation has shifted from a possible war to a major agreement summed up by the Foreign Minister of Manila, Delfin Lorenzana, thusly: «The Chinese will not occupy new features in the South China Sea nor will they build structures in Scarborough Shoal».
This statement, agreed on with Beijing, is the basis of a new conception of the multipolar world order that heavily relies on a respect for international relations. Fair negotiations grounded on common interests shared by all parties involved are what unite different countries. It represents a striking difference to the old unipolar world order where military force and power is imposed by Washington on practically every other state. Manila has every interest in developing a new and fruitful dialogue with Beijing, hoping to solve all controversies related to contested areas. The impetus for such talks seems to be economic.
The areas disputed by China and the Philippines in the South China Sea, besides being important for geostrategic reasons, contain considerable reserves of natural resources. What appears to be on the cards is an agreement between Manila and the Philippines to jointly explore territories that are undisputed by the Philippine oil and gas firm PXP Energy Corp and the China National Offshore Oil Corp. Revenues are to be divided to the effect of «60% to Manila and 40% to Beijing in any areas under the control of the Philippines authorities.”
This clarification from Alan Peter Cayetano, Secretary of Foreign Affairs, seems to have every intention of preventing internal criticism coming from politicians and entrepreneurs opposed to any collaboration or de-escalation with Beijing. Critics are using harsh rhetoric, as seen with minority lawmakers Gary Alejano and Edcel Lagman, who are opposed to the energy plan, saying it would be illegal: «This is contrary to our Constitution because these areas should be exclusively for the Filipinos,» Lagman said.
Despite the misgivings of Duterte's opponents, joint explorations are a starting point for re-establishing relations between the two countries, and seem to be a sensible choice with potential economic benefits for both countries. As explained by an administration official who prefers to remain anonymous: «What we are looking at is a deal that will first cover exploration activities in uncontested areas, areas closer to the Philippines, including Recto Bank».
Manila does not possess the technological capacity to carry out such explorations on its own, and for Beijing this strengthens its position in the South China Sea vis-a-vis other disputing countries in the region. Joint explorations highlight the benefits that arise from mutually beneficial economic cooperation with China. Overcoming tensions and conflict while making money looks like an offer too good for any country in the region to refuse. It is easy to deduce that this an asymmetrical response from Beijing in response to the American attempt to increase tensions in the region, such as with the recent appearance of Daesh on the Philippine peninsula, or with the DPRK issue.
The scope of projects between Manila and Beijing seem to indicate a clear path ahead. Using the joint exploration of important energy resources, and creating new investment projects, it looks like a clever way to create economic and political conditions for tackling more pressing issues like disputed territorial areas. Normally these diplomatic negotiations are unsuccessful and often inconclusive, since both factions are unable to make concessions to their opponents, having nothing to gain and everything to lose.
Manila and Beijing are using a common approach to reach an agreement over disputed territories, with economic plans to jointly exploit the many resources in the area being an incentive to pursue negotiations. With the alternative to cooperation, prosperity and dialogue being hostility, with the possibility of war, there is no other choice other than to cooperate to smooth out their differences.
In observing mandarin diplomacy, one will see that this is Beijing's primary strategic approach to all sorts of matters. The Belt and Road Initiative is the ultimate expression of this approach, complemented by a series of infrastructure investments in countries involved in the project that will significantly improve living conditions of their citizens.
Besides joint explorations, Beijing's infrastructure projects in the Philippines also seem to be heading in this direction. Without being naive, Manila also understands that the more China becomes important to the Philippine economy, the more leverage Beijing has over its strategic decisions. These projects all look good for their economic revenues, but China also has a broader objective, namely safeguarding its interests in what it defines as its own “backyard», referring to the South China Sea.
Duterte seems to have understood, probably better than any other leader of the multipolar international order, the opportunity to counterbalance American influence in the region through Chinese investments. In addition, asking Moscow for some help in tackling the Mindanao terror crisis could be crucial in the future. All these factors seem to have greatly strengthened Duterte’s position and that of Manila on the Asian chessboard, granting a degree of independence that has not been enjoyed over the past decade in the Philippines.
- YouTube "Economically Censors" Ron Paul, Labels Videos "Not Suitable" For All Advertisers
Former US Congressman Ron Paul has joined a growing list of independent political journalists and commentators who’re being economically punished by YouTube despite producing videos that routinely receive hundreds of thousands of views.
In a tweet published Saturday, Wikileaks founder Julian Assange tweeted a screenshot of Paul’s “Liberty Report” page showing that his videos had been labeled “not suitable” for all advertisers by YouTube's content arbiters.
YouTube economically censors former presidential candidate @RonPaul for criticizing U.S. foreign policy on Afghanistan and WikiLeaks. pic.twitter.com/AnC88rZkhO
— Julian Assange ???? (@JulianAssange) August 26, 2017
//platform.twitter.com/widgets.js
Assange claims that Paul was being punished for speaking out about President Donald Trump’s decision to increase the number of US troops in Afghanistan, after Paul published a video on the subject earlier this week.
The notion that YouTube would want to economically punish a former US Congressman for sharing his views on US foreign policy – a topic that he is unequivocally qualified to speak about – is absurd. Furthermore, the “review requested” marking on one of Paul's videos reveals that they were initially flagged by users before YouTube's moderators confirmed that the videos were unsuitable for a broad audience.
Other political commentators who’ve been censored by YouTube include Paul Joseph Watson and Tim Black – both ostensibly for sharing political views that differ from the mainstream neo-liberal ideology favored by the Silicon Valley elite.
Last week, Google – another Alphabet Inc. company – briefly banned Salil Mehta, an adjunct professor at Columbia and Georgetown who teaches probability and data science, from using its service, freezing his accounts without providing an explanation. He was later allowed to return to the service.
Conservative journalist Lauren Southern spoke out about YouTube’s drive to stifle politically divergent journalists and commentators during an interview with the Daily Caller.
“I think it would be insane to suggest there’s not an active effort to censor conservative and independent views,” said Southern.
“Considering most of Silicon Valley participate in the censorship of alleged ‘hate speech,’ diversity hiring and inclusivity committees. Their entire model is based around a far left outline. There’s no merit hiring, there’s no support of free speech and there certainly is not an equal representation of political views at these companies.”
Of course, Google isn’t the only Silicon Valley company that’s enamored with censorship. Facebook has promised to eradicate “fake news,” which, by its definition, includes political content that falls outside of the mainstream.
Still, economically punishing a former US Congressman and medical doctor is a new low in Silicon Valley's campaign to stamp out dissent.
- Internal CIA Memos Expose Media As Agency's "Principal Villains", Urges "Intervention In Journalism Schools"
Authored by Emma Best via Muckrock.com,
“Absolute power corrupts absolutely, and the power of the media to publish in this country is nearly absolute.”
A series of 1984 memos from the CIA Inspector General’s (IG) office reveals some alarming views on the press and how to deal with them. Among other things, the memo shows that 33 years before the Agency declared WikiLeaks a hostile non-state intelligence service, they were viewing the general press in the same terms.
Several weeks prior, CIA Director Casey had asked the IG to weigh in on officer Eloise Page’s paper on unauthorized disclosure. The IG passed the task onto someone on his staff, who produced a four page SECRET memo for IG James Taylor, who passed it onto Director Casey.
The IG specifically endorsed the proposal for a program where the Agency would intervene with journalism schools, which is discussed further below.
The SECRET memo began by endorsing the proposals that Page had laid out in her paper. Specifically praised among her proposed initiative was new legislation, a special FBI unit, and a special prosecutor. While it was obviously hoped that this would help enforce the law, the member of the IG staff also hoped that they would create a chilling effect. The sole criticism for Page’s paper was that it lacked a strategy for dealing with the media, who were the “principal villains” in all of this.
To the Inspector General’s office, the reason that the press were the “principal villains” was simple: “absolute power corrupts absolutely” and “the power of the media to publish in this country is nearly absolute.” As a result of the media’s “absolute power”, argued the Agency that had been involved in mind control attempts, illegal surveillance, tampering in foreign elections and dozens of assassinations, assassination attempts and coups, they had been corrupted absolutely. The member of the IG’s staff then suggested that they compare the media to the “opposition,” a reference to hostile intelligence services. This could be backed up by citing “precise parallels in methods and results, if not in motivations, between the media’s attempts to penetrate us and the opposition’s attempts to do the same.”
The IG’s office argued that the Agency’s response to the media had been largely passive and inadequate. Proposing that it was “time for an offense as well as a defense”, they offered a list of potential Do’s and Don’ts for the Agency.
First and foremost, they argued that the Agency shouldn’t “frontally attack” concepts such as the First Amendment and freedom of the press. Nor should any program to curb media excesses be announced. While they had praised Page’s suggestion of new legislation, they also argued that the Agency shouldn’t expect anything to materialize. Nor should they expect help from Congress on covert action – it was simply “too easy to argue there’s a public interest in debating actions that could lead to war.” Instead, the Agency should remember that journalists don’t operate in a vacuum and their support/publishing structure can be prevailed upon as a method of tempering a journalist’s activities – especially since the press had “their own reasons for wanting to improve [their] image.”
The list of Do’s was significantly longer, beginning with several self-explanatory suggestions and a call for releasing “a sanitized list of foolish media disclosure that have cost the country or individuals substantially.” The second half of that suggestion remains redacted, marked as exempt from disclosure lest it reveal some of the Agency’s sources or methods.
The list of Do’s also included using the Agency’s official contacts “in leadership posts” for academia and the media. There were “undoubtedly” similar unofficial contacts that could also be prevailed upon.
A later suggestion similarly pointed out that “the media have owners, Boards of Directors, managing editors et al” and that the Agency “had some success for a while in staving off” something, the details of which remain redacting allegedly to protect the Agency’s sources and methods.
The penultimate suggestion put forward by the IG’s office was that the Agency should figure out just what media ethics reviews and processes existed, and “try to get such people to address the issues that concern us.” That finding out and using proper channels needed to be suggested as a new strategy to pursue is mildly alarming.
The final suggestion, which was specifically praised by the IG when presenting the memo to the CIA Director, was using Agency contacts with college and university presidents at schools of journalism to change their curriculums. The hope was that this might challenge or put an end “to the practice of publishing indiscriminately whatever an investigative reporter can come up with.” The IG seemed taken with the idea that “given some curriculum changes, the next generation of reporters might show some elevation of ethics.”
The CIA Director passed the memo to Clair George, the Agency official responsible for liaising with Congress who would later be convicted of lying to Congress.
You read the exchange of memos here.
Is it any wonder that the CIA is now terrified of the non-mainstream media, that is outside of their control?
- "We're Back In The '60s Again" – Bomb-Shelter Sales Are Booming In The US And Japan
US-based bomb-shelter manufacturers should maybe think about buying Kim Jong Un a fruit basket.
According to McClatchy, sales have in both the US and Japan have risen dramatically this year as President Donald Trump and Kim have exchanged threats of nuclear annihilation. US and Japanese defense officials now believe the North is in possession of a nuclear warhead small enough to fit onto one of its ICBMS. The isolated country launched three short-range missiles into the East Sea Friday night – its first missile test in nearly a month – after US officials had praised Kim’s restraint earlier in the week.
Ron Hubbard, president of Atlas Survival Shelters, a firm based in Montebello, California, said he expects to sell 1,000 shelters this year at a price of $25,000 apiece, according to McClatchy.
"Sales and inquiries have spiked, according to several of the U.S. companies that make money from doomsday fears.
“The increase in demand is everywhere. We are getting hundreds of calls,” said Ron Hubbard, president of Atlas Survival Shelters, a firm based in Montebello, California. Inquiries have slowed down as tensions have eased over the last week, but Hubbard said he still expects to have a banner year, selling 1,000 shelters at an average price of $25,000 each.”
Sales in Japan have increased to the point where one manufacturer is opening a sales office in Osaka.
“Hubbard reports there is intensified demand in Japan, where he has opened a sales office in Osaka. He’s also opening a new 400,000-square-foot plant in Dallas, largely to serve the Japanese market.
“We are back in the 1960s again,” said Hubbard, referring to the Cold War demand for bomb shelters. “We’ve got a crazy man on one side and Donald Trump on the other.”
Gary Lynch, general manager of Rising S Shelters in Murchison, Texas, has also seen a rise in demand for his products both in Japan and the US.
“'It is all due to the rhetoric on what is going on in North Korea,’ said Lynch, who said he has sold 67 bomb shelters internationally this year, mostly to Japan, compared to just nine for all of 2016.”
Lynch’s boss, Rising S owner Clyde Scott, told McClatchy that after Obama became president in early 2009, his company was inundated with orders from conservatives who were afraid Obama would try and take their guns. Now, Rising S is selling shelters to Democrat who are afraid Trump will start a war.
“In the United States, bomb shelter customers run the gamut. Some are homeowners recently alarmed about the threat of a nuclear strike. They also include survivalists and “preppers” — people preparing for man-made or natural disasters. Rising S is owned by a Texas prepper named Clyde Scott, who named his company after Jesus Christ, the rising son.
After Barack Obama was elected, Lynch said Rising S was contacted by customers worried about the government coming after their guns. After Trump was elected, a different clientele — Democrats — started calling. 'People are worried that Trump would start a war,' he said.”
Falling prices could be another reason for the bump in sales…
“Atlas markets 15 types of shelters, Hubbard said, but focuses on a corrugated steel pipe model, which can be decked out with luxuries or kept as a simple “man cave.” He said he’s brought his average price down from $100,000 to about $25,000 in the past six years.
“I think of myself as a modern-day Henry Ford, coming out with a shelter that everyone can afford,” Hubbard said.”
Instead of selling individual shelters, one California-based company built a doomsday bunker in Indiana and sold shares for $35,000 a pop. They’ve already sold out.
"Vivos, another California-based company, offers a completely different shelter experience. It sells shares in underground bunker complexes, a sort of doomsday condominium. Vivos — which means “to live” in Latin — says that its 80-person Indiana complex is completely sold out, with shares going for $35,000 per adult.
Even Kim and Kanye are buying…
“In their sales pitches, bunker companies also promise customers complete confidentiality. Rising S continues to fend off tabloid rumors that it's building a bunker for Kanye West and Kim Kardashian.”
…but they're trying to keep it quiet because people who own bunkers generally don’t want their neighbors to know they have one.
“Owners of shelters generally insist they don’t want their neighbors to know they have one, Hubbard said. “They would all be freaking out and banging on your door,” he said. “It is kind of like when a ship sinks — everyone swims to the floating life raft."
Demand for bunkers is rising even in South Korea, where residents have long since written off Kim Jong Un’s threats as empty rhetoric.
“There’s even increased interest in South Korea, he says.
“South Koreans generally don’t buy shelters because they are numb to the rhetoric coming out of North Korea,” he said. “But apparently Kim Jong Un has struck a chord.”
Though Trump promised during the campaign to adhere to an “America first” policy of nonintervention, he has repeatedly demonstrated a knack for military confrontation since taking office, having launched a missile strike on a Syrian government airfield and, just this past week, announcing that he would increase the number of troops in Afghanistan – a decision that reportedly inspired former staffer Sebastian Gorka to resign in protest.
In the absence of Bannon, as long as Trump continues to surround himself with generals like Chief of Staff John Kelly, the threat of thermonuclear conflict will linger.
- Volatility Makes A Comeback
Authored by James Rickards via The Daily Reckoning,
Volatility has languished near all-time lows for months on end. That’s about to change.
For almost a year, one of the most profitable trading strategies has been to sell volatility. Since the election of Donald Trump stocks have been a one-way bet. They almost always go up, and have hit record highs day after day. The strategy of selling volatility has been so profitable that promoters tout it to investors as a source of “steady, low-risk income.”
Nothing could be further from the truth.
Yes, sellers of volatility have made steady profits the past year. But the strategy is extremely risky and you could lose all of your profits in a single bad day.
Think of this strategy as betting your life’s savings on red at a roulette table. If the wheel comes up red, you double your money. But if you keep playing eventually the wheel will come up black and you’ll lose everything.
That’s what it’s like to sell volatility. It feels good for a while, but eventually a black swan appears like the black number on the roulette wheel, and the sellers get wiped out.
I focus on the shocks and unexpected events that others don’t see.
Right now looks like one of those highly favorable windows when the purchase of volatility is the right move. You could collect huge winnings as the short sellers scramble to cover their bets before they are wiped out completely.
Your correspondent (left) on the floor of the New York Stock Exchange with television anchor Lelde Smits, and Stephen “Sarge” Guilfoyle during a recent visit. Sarge is the director of NYSE floor operations and one of the savviest traders on the floor. He told me, “Jim, there’s no liquidity here; it left a long time ago. When markets turn, they won’t get any support from the floor.”
The chart below shows a 20-year history of volatility spikes. You can observe long periods of relatively low volatility such as 2004 to 2007, and 2013 to mid-2015, but these are inevitably followed by volatility super-spikes.
During these super-spikes the sellers of volatility are crushed, sometimes to the point of bankruptcy because they can’t cover their bets.
The period from mid-2015 to late 2016 saw some brief volatility spikes associated with the Chinese devaluation (August and December 2015), Brexit (June 23, 2016) and the election of Donald Trump (Nov. 8, 2016). But, none of these spikes reached the super-spike levels of 2008 – 2012.
In short, we have been on a volatility holiday. Volatility is historically low and has remained so for an unusually long period of time. The sellers of volatility have been collecting “steady income,” yet this is really just a winning streak at the volatility casino.
The wheel of fortune is about to turn and luck is about to run out for the sellers. It will soon be time for the buyers of volatility to collect their winnings, big time.
Here are the key volatility drivers we have considered:
Many analysts assume that the North Korean situation is less critical today because the rhetoric has recently toned down, and the North Korean dictator, Kim Jong Un, said that he would delay his plan to fire missiles at the U.S. Territory of Guam.
But, that’s false comfort. Kim’s statement of restraint on Guam was conditional on “good behavior” by the U.S. That was a reference to a previously planned joint military exercise of U.S. and South Korean forces running from Aug. 21 – 31, 2017. Kim’s idea of good behavior was if the U.S. called off the exercise.
That wasn’t happening.
The military exercise started as planned late Sunday. Now all bets are off. Kim could fire a missile at Guam, which the U.S. has already said it will shoot down.
Kim could also test a submarine-launched ballistic missile (SLBM) that could evade U.S. anti-missile defenses or be fired at close range at the U.S. west coast. Kim might test a new nuclear weapon; perhaps a miniaturized warhead that would be the right size to place in the warhead of his ICBM that can strike Los Angeles.
One or more of these provocations seems highly likely. The U.S. response will be firm and potentially aggressive. This would put the North Korean crisis back on the front burner, and send volatility soaring.
Another ticking time bomb for a volatility spike is Washington, DC dysfunction, and the potential double train wreck coming on Sept. 29. That’s the day the U.S. Treasury is estimated to run out of cash. It’s also the last day of the U.S. fiscal year; (technically the last day is Sept. 30, but that’s a Saturday this year so Sept. 29 is the last business day).
Congress has to pass two major pieces of legislation. One is a debt ceiling increase so the Treasury does not run out of money. The other is a continuing resolution so the government does not shut down.
Both bills could be stymied by conservatives who want to tie the legislation to issues such as funding for Trump’s wall, sanctuary cities, funding for planned parenthood, funding to bailout Obamacare and other hot button issues.
If the conservatives don’t get what they want, they won’t vote for the legislation. If conservatives do get what they want, moderates will bolt and not support the bills. Democrats are watching Republican infighting with glee and see no reason to help with their votes. The White House has already said that a “good” government shutdown may be desirable to help crystallize the policy debate.
If these two legislative fixes are not done by Sept. 29, we’re facing both a government shutdown, and the potential for a default on the U.S. debt. Time is short and my estimate is that one or both of these pieces of legislation will not be completed in time. This will certainly trigger a volatility spike and produce huge profits for investors who make the right moves now.
Other sources of volatility include a planned “Day of Rage” on Nov. 4 when alt-left and antifa activists plan major demonstrations in U.S. cities from coast-to-coast. Antifa are neo-fascists posing as antifascists; hence the name “antifa.” Based on past antifa actions in UC Berkeley and Middlebury College violence cannot be ruled out. This could be unsettling to markets and be another source of volatility.
Then there are the wild cards including a natural disaster such as a hurricane, which can threaten the U.S. eastern seaboard or Gulf coast this time of year. In fact, a potential Category 3 hurricane is bearing down on Texas’ Gulf coast right now. It could dump up to 30 inches of rain and cause great destruction in the area.
Hurricane Katrina struck at the very end of August in 2005 and Superstorm Sandy hit the Jersey Shore in October 2012. Both did enormous damage and unsettled markets for a time.
Other wild cards include domestic terror and cyber attacks.
Finally, we are entering an historically volatile time of year. Many of the greatest stock market crashes of all time have occurred in September or October including the Black Thursday (Oct. 24, 1929) and Black Tuesday (Oct. 29, 1929) crashes that started the Great Depression, and the Black Monday (Oct. 19, 1987) crash, in which the stock market fell 22.61% in a single day. From today’s levels, a 22.61% drop would mean a loss of 4,900 Dow points in a single day.
Don’t rule it out.
None of these scenarios are far-fetched or even unlikely. The war with North Korea is coming. Washington, DC dysfunction is a fact of life and we’ve had several government shutdowns in recent years. Social unrest is spreading and in the headlines every day. Hurricanes and terror attacks happen with some frequency.
It has been nine years since the last financial panic so a new one tomorrow should come as no surprise.
In short, the catalysts for a volatility spike are all in place. We could even get a record super-spike in volatility if several of these catalysts converge.
Investors who prepare now for this coming wave of market shocks stand to realize huge gains when volatility roars back to life after sleepwalking for months.
- Vietnam Plans To Legalize Bitcoin By 2018
Vietnam is on the cusp of joining a growing list of countries that have explicitly legalized bitcoin and other cryptocurrencies, according to local media outlets cited by CoinTelegraph. Prime Minister Nguyen Xuan Phuc has authorized the formulation of a plan that could result in the legalization of digital currencies by next year, reportedly ordered the country’s central bank, ministry of finance and the ministry of public safety to study and draft the legal framework.
If successful, Vietnam would join Japan and a handful of other countries that have explicitly legalized bitcoin and digital currency transactions. The US has taken steps toward regulating digital currencies, but those decisions have mostly been made by regulators, as well as the State of Delaware. In a vague but consequential ruling issued last month, the SEC decreed that digital currencies are securities that should be registered with the commission. Back in 2015, the CFTC ruled that bitcoin should be classified as a commodity, and earlier this summer it approved the first SEF for bitcoin-related derivatives.
Nguyen Xuan Phuc
Like Russia and China, Vietnam was initially skeptical of digital currencies. But like its larger peers, it has slowly warmed to them. Russian authorities announced in June that they were exploring how best to regulate digital currencies, and, earlier this year, Chinese authorities adopted new regulations to ensure local digital currency exchanges enforce its financial rules.
According to CoinTelegraph, the assessment process must be completed by August 2018, but most of the paperwork needed to implement the new regulations should be finished by year’s end.
Part of Vietnam’s framework will include rules for taxing digital-currency users.
“Simultaneously, Vietnamese officials are mandated to work on a taxation system for digital currencies. The system, which will determine how virtual currency users in the country will be taxed, is due for implementation in June 2019.
Moreover, proposals on how to prevent and handle violations concerning the use of cryptocurrencies should be submitted for approval by September of the same year.”
In other blockchain news, CoinTelegraph is also reporting that Papua New Guinea’s central bank has drafted a plan for blockchain integration, joining central banks in the UK, Canada, the PBOC and a host of other countries in exploring potential applications for blockchain technology.
The plan was presented by PNG central bank governor Loi Bakani during a blockchain conference hosted by the central bank.
Bakani said blockchain technology could help introduce more of Papua New Guinea’s people to the banking system.
"It is the new innovations that can change people's lives – almost 85 percent of our people live outside the banking system."
PNG is hoping that the focus on digital technology will attract more foreign investment, bringing more economic opportunity to the impoverished country, according to CoinTelegraph.
- Tillerson Out? "Frustrated" Trump "Fed Up" With Secretary Of State: Axios
After North Korea launched three more short-range ballistic missiles into the East Sea early on Saturday morning, local time, political observers were eagerly looking forward to Trump’s response, especially since the president had managed to get boxed in by Kim Jong Un: on one hand, do nothing and be mocked and ridiculed not only by the North Korean press, but by the rest of the developed world, whose view of Trump’s diplomatic skills could hardly be any worse; or on the other hand, launch a military campaign, either surgical or broad, and risk a retaliation against South Korea and millions of US allies dying.
In the end the US appears to have chosen the former and on Sunday, Secretary of State Rex Tillerson said the firing of three ballistic missiles by North Korea this week was a provocative act but that the United States will continue to seek a peaceful resolution. The de-escalating tone took place just days after Tillerson credited the North with showing some restraint by not launching a missile since the ICBM test in July, and he had expressed hope that the easing of tension could lead to dialogue. That was not meant to be, although in it appears that what happened next is North Korea called the US bluff, and the US folded.
“We do view it as a provocative act against the United States and our allies,” Tillerson said in an interview on Fox News Sunday. “We’re going to continue our peaceful pressure campaign as I have described it, working with allies, working with China as well to see if we can bring the regime in Pyongyang to the negotiating table.”
As the NYT also reported, North Korea used multiple-rocket launchers off its east coast on Saturday to fire three short-range missiles that could strike United States military bases deep in South Korea, officials in Seoul said. The launches were the North’s first rocket tests since two intercontinental ballistic missile, or ICBM, were fired last month.
By resuming the tests, North Korea defied repeated urgings from the United States and South Korea to stop weapons trials and other provocations to pave the way for dialogue. The United States Pacific Command said that one of the three ballistic missiles had blown up immediately after blastoff, but that two others had traveled about 155 miles before splashing down. That would be far enough to reach major South Korean and American military bases, including those near the city of Pyeongtaek, about 60 miles south of Seoul. The range would also be sufficient to reach Seongju, a South Korean town where the United States has begun installing an advanced missile-defense system known as Thaad.
Kim Dong-yub, a defense analyst at the Institute for Far Eastern Studies at Kyungnam University in Seoul, said the tests on Saturday appeared to be aimed at expanding the strike range.
Nevertheless, the nature of the tests prompted some relief in the region.
The missiles flew to the northeast, not toward Guam, home to major United States Air Force and Navy bases. North Korea threatened to launch ballistic missiles in a “ring of fire” around Guam after President Trump threatened to hit the North with “fire and fury” if it persisted with its development of ICBMs.
Surprisingly, South Korea did not issue its usual condemnatory statement against the tests. In Tokyo, the chief cabinet secretary, Yoshihide Suga, said the missiles did not fall in Japanese waters or pose a threat to his nation’s safety. White House officials said that Mr. Trump had been briefed on the tests but did not immediately have any further comment.
And while North Korea was certainly on Tillerson’s agenda, what the media was focused on was Tillerson’s reported distancing from Trump’s remarks after the deadly Virginia protests, saying the president “speaks for himself.” Tillerson’s comment on “Fox News Sunday” follows Gary Cohn, the president’s chief economic adviser and the director of the National Economic Council, saying in a Financial Times interview published last week that the administration “can and must do better” in condemning hate groups.
In the exchange below, Chris Wallace asked Tillerson about Trump’s response to the racist carnage in Charlottesville. Tillerson replied: “I don’t believe anyone doubts the American people’s values or the commitment of the American government, or the government’s agencies to advancing those values and defending those values.”
Wallace asked the obvious follow-up question: “And the president’s values?”
“The president speaks for himself,” Tillerson said, leaving Wallace with a surprised look on his face.
Must-watch. Wallace asks Tillerson if Trump speaks for American values: “The President speaks for himself.” (Note Wallace’s reaction.) pic.twitter.com/fHEk6qjwPd
— Kyle Griffin (@kylegriffin1) August 27, 2017
//platform.twitter.com/widgets.js
So, in response moments ago Axios reported that Tillerson appears to be the next top administration in Trump’s proverbial board room, who may soon here the trademarked Trump phrase: “You’re Fired!” According to Axios, “there’s a ticking problem with Rex Tillerson, and it’s growing louder by the day, citing officials inside and close to the White House.”
President Trump has been growing increasingly frustrated with his Secretary of State. One time recently, after Trump had returned from a meeting on Afghanistan, a source recalled Trump saying, “Rex just doesn’t get it, he’s totally establishment in his thinking.”
As Axios adds, “Trump is getting more and more fed up with Tillerson, who has still yet to staff his agency.”
So is Tillerson the next top administration official to get kicked out by Trump? Unfortunately, the firings at the White House have been so fast and furious in recent weeks, the online political prediction marketplace PredictIt.com hasn’t had the time to put together a contract tracking the odds of Tillerson’s imminent survival, or lack thereof.
- Uber Selects Expedia Chief Dara Khosrowshahi As Its Next CEO
Just nine hours after Jeff Immelt tweeted that he was no longer in the race to be Uber’s next CEO, moments ago Uber’s board selected Expedia CEO Dara Khosrowshahi, 48, various news outlets report. According to Recode, the board selected the “third candidate”, one who was not only an unknown until now, but one who as the photo below shows, is also not a woman despite his beguiling first name and the board’s rumored prerogative to pick a female next leader.
Dara Khosrowshahi, current CEO of Expedia
In a statement, a spokesperson said: “The Board has voted and will announce the decision to the employees first.” If he accepts, he would be replacing founder Travis Kalanick and interim CEO Ariana Huffington.
The decision appears to have stumped everyone, including Recode’s Kara Swisher who writes that “what that means is anyone’s guess, and sources close to one of the remaining possible CEO picks — Hewlett Packard Enterprise CEO Meg Whitman — said she has not been informed of any choice nor had the board agreed to some the the things she was asking for to take the job. Whitman was asking for a number of things, including less involvement of ousted CEO Travis Kalanick.”
As the NYT adds, Jeff Immelt, a finalst until this morning, withdrew when it became clear that he did not enough have support. Recode adds that “Immelt dropped out of the running this morning, with sources close to his thinking calling the process totally “dysfunctional” (and worse).”
And while the board was leaning toward Meg Whitman, the chief of Hewlett Packard Enterprise, “matters changed over the course of Sunday afternoon and the board decided on Mr. Khosrowshahi” according to the NYT.
While not much is known about Dara Khosrowshahi, and why the board thinks the Expedia chief can successfully replace Travis Kalanick as head of the world’s most valuable private company, what is known is that under Khosrowshahi, Expedia was one of the first tech companies to file a legal challenge against Trump’s travel ban, citing the potential harm it could do its employees and customers. As such, the Iranian-American appears to be high on the #resistance totem. His anti-Trump bias was further exposed in his year end note to employees, in which he said he wants to send “just a big thank you to our global employee base for an improved 2016 and certainly an improved end to the year. And hopefully we will all be alive to see the end of next year.”
Some further background:
Dara Khosrowshahi has served as CEO of Expedia, Inc., since August 2005. Since that time, Expedia has extended its global presence to more than 60 countries worldwide through Expedia, Hotels.com, and Hotwire online booking brands, and the travel community sites of TripAdvisor Media Network. Ten years later, in 2015, Expedia awarded him $90 million worth of stock options as part of a long-term employment agreement, stating he would stay until 2020.
Before joining Expedia, Khosrowshahi served as the CEO of IAC Travel. Khosrowshahi worked at Allen & Company from 1991 to 1998, and as its vice president from 1995 to 1998. He is also a board director for BET.com, Hotels.com and several other companies.
In February 2015, the New York Times Company announced Khosrowshahi as one of two new nominees for its board of directors. He will formally stand for election at the annual meeting of stockholders on May 6, 2015. Arthur Sulzberger, Jr., the publisher of the New York Times and chairman of The New York Times Company praised Khosrowshahi’s “comprehensive digital and international experience, as well as significant financial expertise”.
The search for Uber’s new CEO had been riven by scandal and discord, especially between former CEO Kalanick and Benchmark, the VC firm that is a major Uber shareholder and that also has a seat on Uber’s board. Both Kalanick and Benchmark had their own preferred candidates for a new chief. Benchmark recently sued Kalanick to try and force him off the board.
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