- Character Traits And Skills That Are Hard To Find During A Crisis
Submitted by Brandon Smith via Alt-Market.com,
I have never lived through a national scale crisis and like most people, I hope I never have to. That said, with the growing instability present in the state of the world today it would be rather foolish to assume that the near future holds nothing but fairy dust, unicorns and gumdrops. Preparation is a necessity.
Many Americans cannot yet relate to the concept of full spectrum crisis, but most of us have at least experienced localized disasters. In order to understand what a national emergency might look like, one simply needs to examine the microcosm of localized disasters and then imagine the same exact problems but magnified 1,000 times.
From my personal experience with local crises, I can say that the worst threat comes not from the event itself, but the ways in which people choose to deal with the event. That is to say, for smart, courageous and prepared people with the right traits and skills, there is no such thing as a crisis. For stupid people who overestimate their abilities or who let fear dominate their thinking, any crisis becomes an insurmountable moment of utter terror.
The right people in the right place at the right time — no crisis. The wrong people in the right place at the right time — total destruction. Therefore, the key to surviving any crisis is to have the right people in place, and to be well away from the wrong people.
The question is, who are the right people? How do we identify them? And, how do we examine ourselves and determine if we are ready or unready? Here are some of the increasingly rare character traits and skills that make a crisis manageable for any community.
The Ability To Act Without Permission
This is one of the hardest character qualities to find in people in a moment of crisis. Remember back to any crisis moments you have personally experienced and ask yourself how many people around you actually tried to solve the problem immediately, and how may stood around waiting for someone else to take the lead?
During larger scale disasters this frequently manifests as widespread apathy. Thousands or even millions of people milling around for someone in “authority” to tell them what they should do rather than taking measures themselves. I am not a big believer in leadership by dictation. The moment you give one or very few people the power to dictate the actions of entire groups, your society is already doomed. However, I am a believer in leadership by example because I have seen it work.
Unfortunately, people who have the ability to lead by example are few and far between. Without people of this quality within your community, it is unlikely you will survive. Decisiveness wins the day.
The Ability To Teach
When I mention the ability to teach, I am not referring to people who we designate officially as “teachers” or people who call themselves teachers. Most teachers do not actually know how to teach anything.
I am thoroughly convinced that the ability to to teach, to transfer knowledge in a way that people can easily understand and replicate, is an inborn skill — a few people are gifted with it, most people are not. I have seen men and women with expert level knowledge in numerous fields of study who are bumbling buffoons when it comes to passing that knowledge on to others. This is because it is not enough to have mastered a skill set; you must also be able to read other people and figure out how they process information. You have to be highly intuitive to teach, and this is not something that can be learned, it is something that comes naturally.
Finding great teachers during terrible times is the best way for a community to strengthen rather than weaken. It is also the only way that a society can rebuild after a collapse.
The Ability To Think Outside Of The Box
Crisis scenarios sometimes require imaginative solutions in order for the threat to be removed. Thinking outside of the box means a person is unafraid to gamble, and also unafraid to enact measures which have no precedence in history. Thinking outside of the box is not guaranteed to work, but it is a desirable trait when predictable responses are likely to fail.
An outside-the-box thinker is a kind of inventor – he invents or engineers a mechanism that no one else could have conceived of because he does not see the crisis in front of him in linear terms; he does not see it as a situation he is trapped within. Rather, he sees the crisis as if outside the bubble looking from above. Many people have done this at least once in their lives; few people are able to do this on a regular basis.
The Ability To Stay Calm
It is truly amazing how few people are able to recognize they are in the midst of an emergency or disaster and remain calm and collected. Keep in mind, people who are apathetic during a crisis are not “remaining calm,” they simply are too ignorant to understand the gravity of the situation. Remaining calm requires you to see the danger and to act accordingly without panic.
Vetting people for such a character trait is pretty easy; just watch how they respond to smaller stress events. Do they run and hide every time literally or psychologically, or do they stand their ground and work out the problem? Do they let their emotions take full control, or do they manage them?
Reactionaries can make any crisis far worse by their mere presence. Get rid of them, or teach them how to manage stress if you can.
The Ability To Direct Force Intelligently
Sometimes a crisis is not a natural event but a man-made event, and the only way to stop the crisis is to eliminate the man or men responsible. This requires self-defense, and self-defense requires force. Sadly, when most people do direct force to stop an attack rather than cowering in fear they tend to do it haphazardly and without intelligent direction. They simply lash out in anger, and sometimes the wrong people get hurt in the process.
This is kind of like using a shovel rather than a scalpel to scoop out a tumor.
The ability to direct force intelligently requires not only a propensity for acting without permission, but also in some cases remaining patient. When action is taken, it must be done with precision and insight. Finding a person who appreciates this methodology is like finding a four leaf clover nowadays.
The Ability To Psychologically Process Carnage
Disasters are usually messy and horrifying affairs leading to grisly and macabre scenes. The key is to be able to process the sight of such carnage without being mentally broken by it, while also maintaining one’s humanity. I call these people “quiet professionals.”
People who think that dealing with the pain and death of others requires you to act like a robot have missed the point entirely and are not safe and functional people to have present in a crisis.
Instead, it is vital that we continue to hold onto our empathy, but not let it disrupt our ability to take action to help those who are suffering. Anyone who simply shuts off all emotion is likely a sociopath, and while sociopaths do have a knack for functioning well in grisly jobs they also have a knack for putting other people at risk. Sociopaths are incapable of caring about others, while quiet professionals take responsibility for others despite the ugliness of the situation.
The Ability To Self-Sacrifice
This is not a quality that can be easily seen in other people. Situations that actually call for self-sacrifice usually occur only in the worst of times, and it is nearly impossible to know for certain how anyone, including ourselves, will act when that time comes.
To be clear, self-sacrifice by itself is not a noble quality. There are people out there that long for martyrdom, but they do so in the name of personal glory rather than in the name of saving others. Not only should self-sacrifice be enacted only when it is certain to save lives and no other options are available, it should also only be enacted without selfish aspirations of promoting one’s own legacy. Such an attitude invariably leads to disaster rather than redemption.
The Ability To Recognize When Others Are More Qualified To Accomplish A Task
It is vital that people have the ability to take initiative during a crisis and get things done. But, it is also vital for people to recognize when the person next to them is better qualified for a specific task.
“Leadership” — good leadership — is about deferring responsibilities in a practical way. If you cannot do this then you are not a leader, you are an annoyance or an obstacle. I have seen far too many people in leadership positions sabotage their own efforts by refusing to hand over responsibility to those better suited to certain tasks.
If you are a motivator, but not a teacher, then motivate your best teachers to teach rather than trying to take charge of both tasks and failing miserably. If you are not skilled in a particular area, then don’t try to micromanage people who are. Finding people who are “doers” is a fantastic thing, as long as they can refrain from overstepping their realm of ability and stepping on the toes of others.
The worst possible scenario I can imagine is to have a community in which leadership is not shared according to expertise to some extent. Identify micro-managers and mini-tyrants early, or suffer the fate of a completely dysfunctional community in the face of unprecedented challenges.
It is perhaps not coincidental that all of the above character qualities are growing rarer as our culture grows more and more unstable. The notion of preparedness for crisis revolves far too much around collecting supplies and menial skills and not enough around collecting people of excellent character. That is to say, true preparedness is about building up necessary supplies and talents, but it is also about organizing with uniquely qualified people. Ignoring the latter task is to set yourself up for inevitable failure.
- Trump: "The Country Is Headed For A Massive Recession; It's A Terrible Time To Invest In Stocks"
Donald Trump continued to streamroll over all conventional narratives when during a massive 96-minute interview with the Washington Post on Thursday which was released today, in which he talked candidly about his aggressive style of campaigning and offered new details about what he would do as president, he said that economic conditions are so perilous that the country is headed for a “very massive recession” and that “it’s a terrible time right now” to invest in the stock market, which, the traditionally cheerful WaPo said embraces “a distinctly gloomy view of the economy that counters mainstream economic forecasts.”
Unfortunately, his “gloomy view” is supported by such events as the record surge in gun violence and deadly shootings in Chicago, where the locals also do not ascribe to the WaPo’s rosy take on events, and instead blame the economy and the lack of jobs for the ongoing social collapse in the windy city.
In any case, Trump dismissed concern that his comments, which the WaPo said “are exceedingly unusual, if not unprecedented, for a major party front-runner”, which is precisely Trump’s style, “could potentially affect financial markets.”
“It’s irresponsible. It’s baffling that he would do this and also substantively wrong. There is no recession in sight.” -Doug Holtz-Eakin
— Robert Costa (@costareports) April 2, 2016
As the WaPo adds, “over the course of the discussion, the candidate made clear that he would govern in the same nontraditional way that he has campaigned, tossing aside decades of American policy and custom in favor of a new, Trumpian approach to the world.”
In his first 100 days, Trump said, he would cut taxes, “renegotiate trade deals and renegotiate military deals,” including altering the U.S. role in the North Atlantic Treaty Organization.
This is what he said:
“I think we’re sitting on an economic bubble. A financial bubble… We’re not at 5 percent unemployment. We’re at a number that’s probably into the 20s if you look at the real number. That was a number that was devised, statistically devised to make politicians – and in particular presidents – look good. And I wouldn’t be getting the kind of massive crowds that I’m getting if the number was a real number.”
“I’m talking about a bubble where you go into a very massive recession. Hopefully not worse than that, but a very massive recession. Look, we have money that’s so cheap right now. And if I want to borrow money, I can borrow all the money I want. But I’m rich… If somebody is a great, wonderful person, going to employ lots of people, a really talented businessperson, wants to borrow money, but they’re not rich? They have no chance…
Is it a good time to invest now? “Oh, I think it’s a terrible time right now… because the dollar’s so strong… You have – think of it – you have cheap money that nobody can get unless you’re rich. You have the regulators are running the banks. Not the guys that are being paid $50 million a year to run the banks. I mean, when you look at many of your friends that are running banks that are being paid $40 and $50 million, yeah, they’re not running the banks. The regulators are running the banks. You have a situation where you have an inflated stock market. It started to deflate, but then it went back up again. Usually that’s a bad sign. That’s a sign of things to come.”
“Part of the reason it’s precarious is because we are being ripped so badly by other countries. We are being ripped so badly by China. It just never ends. Nobody’s ever going to stop it. And the reason they’re not going to stop it is one of two. They’re either living in a world of the make-believe, or they’re totally controlled by their lobbyists and their special interests. Meaning people that want it to continue. Because what China, what Mexico, what Japan – I don’t want to name too many countries, because I actually do business in a lot of these countries – but what these countries are doing to us is unbelievable. They are draining our jobs. They are draining our money.”
“I can fix it. I can fix it pretty quickly…I would do a tax cut. You have to do a tax cut. Because we’re the highest-taxed nation in the world. But I would start…I would immediately start renegotiating our trade deals with Mexico, China, Japan and all of these countries that are just absolutely destroying us. ”
Below are some of the annotated highlights of his bearish take on the economy via the WaPo.
Trump has for months contended that the U.S. economy is in trouble because of what he sees as an overvalued stock market, but his view has grown more pessimistic of late and he is now bearish on investing, to the point of warning Americans against doing so.
“I think we’re sitting on an economic bubble. A financial bubble,” Trump said. He made clear that he was not specifying a sector of the economy but the economy at large and asserted that more bullish forecasts were based on skewed employment numbers and an inflated stock market.
“First of all, we’re not at 5 percent unemployment. We’re at a number that’s probably into the twenties if you look at the real number,” Trump said. “That was a number that was devised, statistically devised to make politicians — and, in particular, presidents — look good. And I wouldn’t be getting the kind of massive crowds that I’m getting if the number was a real number.”
Trump said, “it’s precarious times. Part of the reason it’s precarious is because we are being ripped so badly by other countries. We are being ripped so badly by China. It just never ends. Nobody’s ever going to stop it. And the reason they’re not going to stop it is one of two. They’re either living in a world of the make-believe, or they’re totally controlled by their lobbyists and their special interests.”
“I’m pessimistic,” Trump said. “Unless changes are made. Changes could be made.” By Trump, for instance: “I can fix it. I can fix it pretty quickly.” Trump firmly believes that a turnaround on trade would be the necessary beginning of a solution to any looming recession.
He mentions the Trans-Pacific Partnership as one pact he would immediately seek to renegotiate, putting him at odds with congressional Republicans who supported giving the president fast-track trade authority last year.
Coupled with his push on trade would be a “very big tax cut,” which Trump unveiled last September. That proposal increases taxes on the “very rich” but reduces taxes for most taxpayers and would cut the corporate tax rate to 15 percent. To woo companies back to the United States, he would offer an incentive of a deeply discounted rate and would no longer allow corporations to defer taxes on income earned overseas.
* * *
The Washington Post was displeased by Trump’s pessimistic view, which it said “runs counter to that of most economists, whose rough consensus is that the U.S. economy has about a 20 percent chance of slipping into recession this year largely because growth remains weak across the world, according to a Wall Street Journal survey of economists in March.”
Most economists aren’t overly worried about an imminent downturn because job creation remains strong, workers are starting to see their wages grow and the Federal Reserve remains cautious about shifting away from the low-interest-rate stance that has helped stimulate the economy.
Cheerful economists promptly chimed in to defend the economy:
“It’s irresponsible. It’s baffling that he would do this and also substantively wrong. There is no recession in sight.” -Doug Holtz-Eakin
— Robert Costa (@costareports) April 2, 2016
Of course, whether Trump is right or not with his warning about the economy and the market, only time will tell, although as we reported in mid-January, Trump is certainly hoping for a market crash. The reason is that historically, the market performance in the three months leading up to a Presidential Election has displayed an uncanny ability to forecast who will win the White House… the incumbent party or the challenger. Since 1928, there have been 22 Presidential Elections. In 14 of them, the S&P 500 climbed during the three months preceding election day. The incumbent President or party won in 12 of those 14 instances. However, in 7 of the 8 elections where the S&P 500 fell over that three month period, the incumbent party lost.
In other words, if Trump wants to win he would certainly benefit from a major drop in the S&P in the all important September to November period. That is, assuming he gets the nomination.
* * *
Of note also was Trump’s insistence that he would be able to get rid of the nation’s more than $19 trillion national debt: “We’re not a rich country. We’re a debtor nation. We’ve got to get rid of – I talked about bubble. We’ve got to get rid of the $19 trillion in debt.” How long would that take? “Well, I would say over a period of eight years.”
This is how he says he would do it: “I’m renegotiating all of our deals, the big trade deals that we’re doing so badly on. With China, $505 billion this year in trade.” He said that economic growth he foresees as a consequence of renegotiated deals would enable the United States to pay down the debt.
But Trump’s most interesting comment had nothing to do with economics – it was his admission that everyone close to him — family, friends, Republican leaders — have been urging him to tone down his attacks and reach out to former rivals, both to reassure wary voters and to begin the difficult process of unifying a party in which many have sworn to never back him. Trump does not intend to take the advice. He said such overtures are “overrated.” “I think the first thing I have to do is win,” he said. “Winning solves a lot of problems. And I have two people left”: his two remaining Republican rivals, Sen. Ted Cruz of Texas and Ohio Gov. John Kasich.
Bob Woodward summarizes his take of the Trump interview
- Shocking Video From Brussels Anti-Islam Protest Of Moment Muslim Woman Is Run Over By Car
Various far-right groups, including the anti-migrant Generation Identitaire movement, demonstrated in Belgium’s notorious Molenbeek district, the notorious terrorist breeding ground of the Belgian capital, on Saturday. At the same time, leftist groups held counter-rallies. Though the demonstrations were banned in Brussels following the March attacks, several rallies still took place in Belgian capital.
Since the attacks in Brussels Zaventem Airport and Maelbeek metro station that rocked the Belgian capital on March 22, Belgium has been on high alert, while tension between various local groups and migrants has escalated to unprecedented levels, confirmed by today’s events, when according to local news, at an anti-racism rally in the Brussels district of Molenbeek, the police clashed with hundreds of youths. Later, police temporarily closed the area after the police made 19 arrests at the Place de la Bourse, according to RTL
Thirteen rioters were arrested in the neighborhood which appears like a warzone.
@B3zero https://t.co/MN1O3v4gJS
— B3zero (@B3zero) April 2, 2016
#Molenbeek en sécurité pic.twitter.com/2hdLduXD2P
— samirlebelge (@samirlebelge) April 2, 2016
Happening Now – Brussels police detains about 30 peaceful anti racists chanting at place de la bourse pic.twitter.com/bkT4i4NWMU
— denise reese (@denice_ruptly) April 2, 2016
According to RT, at least two armed far-right activists with Molotov cocktail arrested in the Molenbeek district.
But the most shocking and violent moment took place when a car drove toward the police line, spraying a fire extinguisher. While driving off, the Audi hit a woman head on, according to twitter reports.
The video below captures the moment of impact of what RT reports, was a Muslim woman wearing a hijab, without so much as slowing down, as she bounces off the bonnet. The woman was taken to hospital immediately afterwards
Viewer discretion advised.
The perpetrator, who the Belgian media say is a resident of Molenbeek, has since reportedly been arrested.
#Molenbeek #zonderwoorden #nocomment #perplexe pic.twitter.com/pSKINbUXMv
— brussels mood (@brusselsmood) April 2, 2016
And as the world becomes witness to increasing violence by both sides, one thing is certain: Molenbeek residents will feel compelled to escalate their acts of violence even more in the next inevitable attack, which in turn will lead to an even more violent response, and so on until deadly violence between assorted groups of people is a daily fixture across Europe.
- Black Lives Matter Activist: "If Trump Wins We Will Incite Riots Everywhere"
The social fallout from Trump’s rising popularity continues with the most disturbing event taking place recently when prominent Black Lives Matter activist and rapper Tef Poe tweeted a message for “white people”: if Donald Trump wins the presidency, “niggas” will ‘incite riots everywhere.’
“Dear white people if Trump wins young niggas such as myself are fully hell bent on inciting riots everywhere we go. Just so you know,” Poe tweeted. A screenshot of the tweet was captured below by the Daily Media.
He followed up with another promise: “Trump wins aint no more rules fammo. We’ve been too nice as is.”
As Daily Media adds, “Poe is by no means a nobody, he has appeared in innumerable articles charting the rise of ‘Black Lives Matter’ and was credited with coining the phrase, “This ain’t your grandparents’ civil rights movement.”
The rapper was one of the co-founders of Hands Up United, a “social justice” organization that emerged after the death of Michael Brown that was responsible for coordinating large BLM protests in the St. Louis area.
Ironically, as the website updates, Poe has since deleted his tweet and then claimed that he never made the comments, instead suggesting it was “slander.”
“He’s now whining about “slander”. Talk crap, then play the victim when you get challenged on your crap. Same process EVERY time with social justice warriors.”
This is shown in the tweet below:
@TefPoe Slander? you tweeted & deleted…now you cry slander? lol, typical false victim SJW. pic.twitter.com/sH9cAto7hK
— LucidHurricane™ (@_LucidHurricane) March 17, 2016
Unfortunately this kind of fallout continues with prominent movement leaders across all social groups becoming increasingly belligerent toward each other, which fundamentally is driven by one simple thing: the ongoing deterioration of the US economy. Recall from the post profiling the surge in Chicago shootings that even local Chicago citizens agrees that the root of America’s rising anger is the lack of economic opportunity.
“I think it’s got something to do with economics,” Gabb says of the continued shootings. As CNN adds, most residents say communities continue to suffer from an economy that is nowhere strong enough to keep at-risk youths from looking for financial support in the wrong places.
The lament is one heard across most poor areas in the US: “I’m hoping that some money is invested in some job creation. We bailed out Wall Street, why not bail out Main Street? It would make a world of difference,” Acree says.
“If you really want to stop this epidemic of violence, the best way to stop a bullet is with a job.”
Which is odd, because according to the BLS, jobs across the US are growing at a brisk pace of over 200K per month.
Sadly, we expect this form of social devolution to continue no matter who is president in November because the underlying issue of most social problems in America, the withering economy, will not only remain unaddressed – after all a Congressman once told Bernanke to “get to work” instead of doing his job, which the Fed promptly did by further enriching the richest Americans at the expense of all other social tiers – but, worse, anyone who dares to point it out is promptly accused of “peddling fiction.”
- Greek Prime Minister Sends Angry Letter To Christine Lagarde Over IMF Leak
Today’s Wikileaks disclosure, in which two IMF officials hinted that the IMF may use a “credit event as a means to pressurize(sic) Greece” as it has been subsequently put by Greek officials, has elicited another round of widespread anger in Athens and could jeopardize the upcoming Greek debt negotiations.
The anger has been made more acute because Greece previously accused Poul Thomsen, one of the IMF staffers caught on the leak, of effectively sabotaging talks in the past when the IMF refused to compromise on Greek pension cuts after the government proposed alternatives with an equivalent fiscal impact.
As such, hoping to ride on the latest wave of populist anger, it was only a matter of time before the country’s prime minister Alexis Tsipras officially responded to the IMF.
His letter to the head of the IMF is below:
Dear Christine
I am writing to you to express my deep concern about publications on the position of IMF officials with key roles in the Greek program.
The first issue is, of course, whether their position reflects the official IMF view. Using a credit event as a means to pressurize Greece and the other member states is clearly beyond the bounds of the negotiation process as we understand it.
The second issue is whether Greece can trust, and continue negotiating in good faith with, IMF officials who express views such as those expressed in these publications. Particularly so as they seem to be threatening to delay the process in the belief that only a credit event will work to extract concessions. Successful negotiations are often difficult but they always require trust and credibility from all sides. I sincerely hope that the IMF position is to reach a quick, successful and sustainable conclusion of the review and I am sure you will take all necessary measures to ensure that the negotiation process will remain on track.
As always, I would be happy to talk to you any time on these issues, as I am sure your share my concern.
Yours Sincerely,
Alexis Tsipras
A snapshot of the letter:
While we expect that this latest scandal will quickly be forgotten, what we find most paradoxical about the situation is that the Greek ire is focused on the one entity that, while hardly innocent as per Lagarde’s previous comments, is actually is pushing for a Greek debt reduction over the refusal of European, and especially German, institutions. Granted, we also understand the Greek ire: being used as guniea pigs by the IMF in its policy battle with other NGOs is hardly pleasing and if anything, is a reflection of the Greek recent collapse into quasi-vassal status and ongoing ward of the ECB. Recall that Greece still has capital controls as its banking system is completely insolvent, and that this leverage Europe has over the country and the money of its savers will not change for a long time.
- The Great Divide: The Death Of The Middle Class
Submitted by Jeff Nielson via SprottMoney.com,
Several months ago, a chart produced by one of the Big Banks was presented to readers . It was supposed to be innocuous data on global wealth distribution, but instead portrayed a horrifying picture.
The focal point of the aforementioned article was that when it came to “the world’s poorest people,” the Corrupt West has now produced a greater percentage of severe poverty in its own populations than in India, and an equal percentage of such poverty as exists in Africa.
Stacked beside this, we see that when it comes to the richest-of-the-rich, the Corrupt West remains in a league of its own. Supposedly, we are living in “the New Normal,” where life is supposed to get increasingly harder and harder. So why does the New Normal never affect those on top?
Of course all of these extremely poor people being manufactured by our governments (as these regimes give away our jobs, destroy wages, and eviscerate our social programs) have to come from somewhere. Certainly they don’t come from the Wealthy Class.
Indeed, the chart above provides us with a crystal-clear view of where all these poor and very-poor people are coming from: the near-extinct Middle Class. In order to manufacture hundreds of millions of impoverished citizens in our nations, the Old World Order has had to engage in a campaign to end the Middle Class.
We are conditioned to consider economic “classes” within our own societies, but with the chart above, we’re given a global perspective. Where does the Middle Class exist today, globally? At the upper end, it exists in China, and to a lesser extent, in Latin America and other Asian nations. At the lower end of the Middle Class, we see such populations growing in India and even Africa.
Only in the West, and especially North America, is the Middle Class clearly an endangered species. Two incredibly important aspects of this subject are necessary to cover:
1) How and why has the One Bank chosen to perpetrate Middle Class genocide?
2) What are the consequences of the Death of the Middle Class?
Attempting to catalogue the nearly infinite number of ways in which the oligarchs of the One Bank have perpetrated their Middle Class genocide is impractical. Instead, discussion will be limited to the five most important programs responsible for the Death of the Middle Class: three of them relatively new, and two of them old.
a) Globalization
b) Union decimation/wage destruction
c) Small business decimation
d) Money-printing/inflation
e) Income taxation
Globalization was rammed down our throats in the name of “free trade,” the Holy Grail of charlatan economists . But, as previously explained, real free trade is a world of “comparative advantage” where all nations play by a fair-and-equal set of rules. Without those conditions, “free trade” can never exist.
The globalization that has been imposed upon us is, instead, a world of “competitive devaluation,” a corrupt, perpetual, suicidal race to the bottom. The oligarchs understood this, given that they are the perpetrators. The charlatan economists were too blinded by their own dogma to understand this. And, as always, the puppet politicians simply do what they are told.
Next on the list: union decimation and wage destruction are inseparable subjects, virtually the flipside of the same coin. “But wait,” shout the right-wing ideologues, “unions are corrupt, everyone knows that.”
Really? Corrupt compared to whom? Are they “corrupt” standing next to the bankers, who have stolen all our wealth ? Are they “corrupt” standing next to their Masters, the oligarchs who are hoarding all our stolen wealth ? Are they “corrupt” standing next to our politicians, who betrayed their own people to facilitate this economic pillaging? No, compared to any of those groups, unions (back when they still existed) were relative choir-boys.
When it comes to corruption, nobody plays the game as well as those on top. Compared to the Fat Cats, everyone else are rank amateurs. When unions were strong and plentiful, everyone had jobs. Almost everyone earned a livable wage (or better). Gee, weren’t those terrible times! Look how much better off we are now, without all those “corrupt unions.”
The other major new component in the deliberate, systemic slaughter of the Middle Class was and continues to be Small Business decimation. “Small business is the principal job-creator in every economy.” Any politician who ever got elected can tell you that.
If this is so, why do our corrupt governments funnel endless trillions of dollars of Corporate Welfare (our money) into the coffers of Big Business, while complaining there is nothing left to support Small Business? Why do our governments stack the deck in all of our regulations and bureaucracies, greasing the wheels for Big Business and strangling Small Business in their red tape?
Why do our governments refuse to enforce our anti-trust laws? One of the primary reasons for not allowing the corporations of Big Business to grow to an illegal size is because these monopolies and oligopolies make “competition” (meaning Small Business) impossible. One might as well try to start a small business on the Moon.
Then we have the oligarchs’ “old tricks” for stealing from the masses (and fattening themselves): banking and taxation. Of course, to the oligarchs, “banking” means stealing, and you steal by printing money. As many readers are already aware, “inflation” is money-printing – the increase (or inflation) of the supply of money.
In the absence of the gold standard, there is no way to protect savings [i.e. wealth] from confiscation through inflation .
– Alan Greenspan (1966 version )
Remove the Golden Handcuffs , as central banker Paul Volcker bragged of doing in 1971, and then it’s just print-and-steal – until the whole fiat currency Ponzi scheme implodes.
Then of course we have income taxation: 100 years of systemic thievery. No matter what the form or structure, by its very nature every system of income taxation will:
i) Provide a free ride to those at the very, very top
ii) Be revenue-neutral to the remainder of the wealthy
iii) Relentlessly steal out of the pockets of everyone else (via over-taxation)
This is nothing more than a matter of applying simple arithmetic. However, many refuse to educate themselves on how they are being robbed in this manner, year after year, so no more will be said on the subject.
These were the primary prongs of the oligarchs’ campaign to exterminate the Middle Class. As always, skeptical readers will be asking “why?” The answer is most easily summarized via The Bankers’ Manifesto of 1892 . This document was presented to the U.S. Congress in 1907 by Republican congressman, and career prosecutor, Charles Lindbergh Sr.
It reads, in part:
The courts must be called to our aid, debts must be collected, bonds and mortgages foreclosed as rapidly as possible.
When through the process of law, the common people have lost their homes they will be more tractable and easily governed through the influence of the strong arm of government applied to a central power of imperial wealth under the control of the leading financiers [the oligarchs]. People without homes won’t quarrel with their leaders.
We have “the strong arm of government.” The oligarchs saw to that by bringing us their “War on Terror.” When it comes to throwing people out of their homes, and creating a population of serfs, that’s a two-part process.
Step 1 is to manufacture artificial housing bubbles across the Western world, and then crash those bubbles. However, this is only partially effective in turning Homeowners into Homeless. To truly succeed at this requires Step 2: exterminating the Middle Class. A Middle Class can survive a collapsing housing bubble, assuming they remained reasonably prudent. The Working Poor cannot.
Finally, after more than a century of scheming, the oligarchs have all of their pieces in place. In the U.S., they’ve even already built many gulags – to warehouse these former Middle Class homeowners – since a large percentage of those people are armed.
This brings us to one, final point: the consequences of the Death of the Middle Class. What happens when you destroy the foundation of a house? Just look.
As readers have been told on many previous occasions, the “velocity of money” is effectively the heartbeat of an economy. It is another way of representing the economics principle known as the Marginal Propensity to Consume, probably the most important principle of economics forgotten by charlatan economists.
The principle is a simple one, since it is half basic arithmetic and half common sense. Unfortunately, these are both skills beyond the grasp of charlatan economists. If you take all of the money out of the pockets of the People, and you stuff it all into the vaults of the Wealthy (where it sits in idle hoards), then there is no “capital” for our capitalist economies – and these economies starve to death .
What is the response of the oligarchs to the relentless hollowing-out of our economies? They have ordered the puppet politicians to impose Austerity: taking even more money out of the pockets of the people. It is the equivalent to someone with anorexia going to a doctor, and the doctor imposing a severe diet on the patient (i.e. victim). The patient will not survive.
The Middle Class is dying. Unlike the oligarchs’ Big Banks, we are not “too big to fail.” Our jobs are gone. Our unions are gone. Our Middle Class wages are gone. Very soon, our homes will be gone. But don’t worry! It’s just the New Normal.
- America's "Capitalist" Economy Explained By 2 Dogs
- Why JPMorgan Believes Central Banks Can No Longer Save The Day
In recent weeks, JPMorgan has turned decidedly sour on the US equity market: one month ago, on March 3, JPM announced that “for the first time this cycle”, it has gone underweight stocks.
Equities, credit and commodities have all rallied in the last three weeks, as some of the immediate threats to the world economy have faded from attention, possibly only because the bad earnings season has wound up. But, to us, the fundamentals of growth, earnings and recession risk have not improved, and if anything have worsened. We remain wary of the near-empty ammo box of policy makers.
Our 12-month-out US recession odds have risen to 1/3, while equity-implied odds have instead fallen to near 1/5. But even with no recession this year or next, we see US earnings rising only slowly by low single digits and see little to boost multiples. The eventual recession should bring US stocks down some 30%, creating a strong downward risk skew to returns over the next few years.
We use the rally in stocks to sell it and go underweight stocks, versus HG corporate bonds and cash. The strong rebound of the past few weeks does create near-term momentum, and thus keeps our first UW small.
To be sure, the continued bounce since the JPM call has not been exactly reassuring of the forecast’s accuracy. However, what is surprising is that when faced with unpalatable price action, sellside researchers usually flip their call quickly.
Not in this case, because in a surprisingly candid piece released overnight, JPM’s Jan Loeys doubles down, and after asking rhetorically “Can central banks really save the day, or cycle?”, his answer is no. In fact, after saying now is the time to sell stocks, JPM’s head of global asset allocation is now even far more concerned about the over economy where his biggest concern is that central banks are powerless to stop the “collapsing productivity growth.”
Loeys begins as follows:
Equities and bonds are both up on the week, fueled by supportive central bank talk. Commodities and the dollar are down, with EM asset classes continuing to outperform. Our overall strategy remains on the defensive side. We started a year ago to dollar-average from the long risk positions we have held over the past seven years towards a more defensive one where we finally arrived last month.
The main drivers of this year-long process are the sense that the cycle in economic and earnings growth is maturing, leading us to the eventual recession, as well as the more structural force of the global collapse in productivity growth. Of the two, we view the latter one as the more ominous, as it is potentially much longer lasting, with no obvious force driving it, nor a policy solution in sight to reverse it.
Both of these negatives to world economies and risk markets have in common that they are of uncertain timing. Hence, our use of the time-honored strategy is going slowly by dollar averaging. Over the past month, data are tracking our economic forecasts, and have kept our global projections on net unchanged.
That is good news after the steady drip-drip of downgrades of the past two years. It has allowed us to reduce our 12-month US recession risk to 28%, even as it keeps us with a view that the US economy is more likely than not to contract over the next 2-3 years in response to falling profits.
And here is why JPM’s explanation why central banks are now powerless to stop the ongoing global contraction:
We are not getting any solace on our fears over collapsing productivity growth, though. Investors have been happy to see the 628K rise in US payrolls in Q1, but at that pace, jobs are growing faster than the economy, implying that GDP per worker/hour, which is productivity, is actually falling. US companies are hiring people frantically as they are unable to get more product and services out of their existing workforce. This is not a good omen for future growth in the economy and earnings, in our view.
This is something we noted last night when we noted the increasing prevalence of warnings about an upcoming US stagflation. It is also what is most troubling to JPM.
Without real upgrades to earnings or growth forecasts, we think that the recent rally in risk assets gained much from dovish actions and messages from central banks, in particular the ECB, Fed and the PBoC. One can only applaud the seriousness and pro-activeness that central banks apply to their mandates. But aren’t investors counting too much on central banks carrying the day if not the cycle?
This analyst thinks so, without disparaging their efforts, as central banks are almost out of ammo, and their tools are not well suited to handle the problems of slowing company profits and productivity.
It is our perception that much of the weaker than expected growth over the past 4 years results from a supply side problem. Lower rates can boost spending, but are not much of a solution to falling productivity growth. The latter needs greater innovation, competition, globalization, and capital investment, in our view. Low rates can boost the latter, but have not helped enough, as rising capex over recent years did not prevent falling productivity growth.
* * *
But perhaps most amusing was the following Freudian slip in the JPM piece:
“We do not see easy money as a bait to lure unsuspecting investors into risky assets.”
Then why bring it up… and if you don’t, who does?
- White House Censors French President's Use Of The Words "Islamic Terrorism"
Submitted by Mac Slavo via SHTFPlan.com,
Not only does President Obama refuse to join the words “Islam” and “terrorism,” but the White House won’t let anyone else do it either.
In a video that appeared on the White House website this morning, the words of French President Francois Hollande were censored to remove the following segment:
Islamist terrorism, is in Syria and in Iraq. We therefore have to act both in Syria and in Iraq, and this is what we’re doing within the framework of the coalition.
Here’s the censored video that has since been taken down from the White House website.
Here’s a screenshot of the transcript that was published on the site, which contains President Hollande’s full statement.
You know it’s obvious that Obama is avoiding using the phrase “Islamic terror” when even the NY Post notices. Back in November, after the Paris attack, columnist Michael Goodwin called for the President’s resignation. Goodwin wrote:
President Obama has spent the last seven years trying to avoid the world as it is. He has put his intellect and rhetorical skills into the dishonorable service of assigning blame and fudging failure. If nuances were bombs, the Islamic State would have been destroyed years ago.
He refuses to say “Islamic terrorism,” as if that would offend the peaceful Muslims who make up the vast bulk of victims. He rejects the word “war,” even as jihadists carry out bloodthirsty attacks against Americans and innocent peoples around the world.
After the attacks in San Bernadino, California in December, we pointed out that Obama attempted to shift the blame away from radical Islam to…wait for it…workplace violence.
President Obama said that the San Bernardino terrorists had mixed motives for killing 14 people and injuring 17 others. He warned Americans not to draw any conclusions:
“At this stage, we do not yet know why this terrible event occurred.”
“We do know that the two individuals who were killed were equipped with weapons and appeared to have access to additional weaponry in their homes. But we don’t know why they did it.”
…
“It is possible that this was terrorist-related, but we don’t know. It’s also possible this was workplace-related.”
“We don’t know why they did it. We don’t know at this point the extent of their plans.”
Are you f*cking serious, Mr. President?
As we noted earlier, The Intent Here Was Jihad And It Was Carefully Premeditated And Planned. President Obama, his national security team and the FBI know this.
Maybe if we all hide under our blankies and refuse to say the words, we can pretend this threat doesn’t exist too.
- IMF's Christine Lagarde: "When The World Goes Downhill, We Thrive"
When we wrote earlier that based on a leaked Wikileaks transcript, which the Greek government interpreted “as revealing an IMF effort to blackmail Athens with a possible credit event to force it to give in on pension cuts which it has rejected“, the article promptly went viral. While it remains to be determined if the IMF indeed made such an implied threat, we attribute this spike in interest to the general public’s surprise that the IMF could stoop to such a low, even by its own standards, level as to use a nation of 11 million people as a lab rat on which to conduct policy experiments.
But why the surprise?
As the below transcript from a April 2012 interview given by Lagarde to the Wharton school at UPenn, none other than IMF president Lagarde herself admitted that for the IMF to “thrive”, the world has to “goes downhill“, and that the IMF “to be sustainable” it needs to be “very in touch with our client base.”
She added that “when the world goes well and we’ve had years of growth, as was the case back in 2006 and 2007, the IMF doesn’t do so well both financially and otherwise”
It goes without saying that Lagarde’s sole prerogative as the managing director of the IMF is to make sure it “does well.”
She concluded by saying that “we need to be able to invent and reinvent ourselves in many ways.” One such client-facing “reinvention” just happened to be caught on tape.
Here is the key section:
Knowledge@Wharton: Of all the things that you do here, what are you most passionate about? What would you really like to make sure happens? It could be a small thing, it could be a large thing. What is it that really has your heart?
Lagarde: That’s complicated. I think it’s this issue of relevance … that is of real concern to me. You see, this is a very fascinating institution because it’s completely counter-cyclical. When the world around the IMF goes downhill, we thrive. We become extremely active because we lend money, we earn interest and charges and all the rest of it, and the institution does well. When the world goes well and we’ve had years of growth, as was the case back in 2006 and 2007, the IMF doesn’t do so well both financially and otherwise.
For this institution, which is a fascinating mix of almost all countries of the world with a single objective that should transcend all their respective individual policies and strategies, for it to be sustainable, we need to be very agile, very in touch with our membership, with our client base, if you will. We need to be able to invent and reinvent ourselves in many ways. So, as I was explaining about going from bilateral to multilateral surveillance, from a narrow focus to something that is more holistic, that is exactly what is at stake
h/t @rudyhavenstein
- Shuffling The Deckchairs On The USS Perpetual Growth
Submitted by Paul Brodsky via Macro-Allocation.com,
The USS Perpetual Growth was picking up speed, steaming over calm seas despite a growing chorus of capital market Cassandras fearing trouble under the surface and further out at sea.
“Full speed ahead” Skipper Yellen barked to her economates, unperturbed by ominous radar images or the uselessness of econometric expertise at the zero bound, unmindful of passenger dysentery because 95.1% of the ship’s births were full.
“Look at all this liquidity!” she likely informed Captain Blithely, her commander in chief on shore, who had spent his presidency too disengaged of economic matters (or too politically astute) to have a cogent public thought on the matter, or perhaps smart enough to figure out everyone in Washington answers to the banks and that fixing their collateral damage social programs would be the best he could hope to do.
Indeed, the Fed Chair had gone rogue among her peers, charting her central bank’s shipping lane on a divergent path from her counterparts, Draghi and Kuroda, who were steering their monetary fleets to port. Captain Yellen seemed oblivious to the economic (and rhetorical) dangers of relying on consumption: an economy should not be beholden to eating its own productive cells.
We have argued there could be only one reason the Fed would want to hike rates: it is now responsible for US dollar policy and it wants a strong one to weaken other currencies, to prop up exporting economies, and to attract global capital and deposits to the US. Alas, the wind just died – not just for the US, but for all ships at sea.
Leading up to her March 29 press conference, numerous Fed speakers had tried to jawbone the market into believing the Fed remained on track to hike rates more, maybe even in April. And yet the markets had entirely dismissed such a possibility, in fact betting the Fed would be lucky to hike rates again in 2016. One point four percent US GDP put a quick end to that. She’ll get her year over year inflation, but not growth.
And so the de facto captain of the US economic ship of state walked the Fed’s position back to better reflect market doubts. “Economic and financial conditions remain less favorable than they did back at the time of the December FOMC meeting” she offered. Well, okay, if you insist. Tell the market something it doesn’t know.
The Fed Funds rate is functionally pointless now that Interest on Excess Reserves are higher and deposit rates are zero. The bottom line is that the Fed must keep asset prices up because assets are collateral for potentially deflationary systemic debt.
Yes, the Fed can do this with a strong dollar, but it can also use talk therapy rhetorical warfare its communication policy. The great global monetary parlor game is navigating the rocky shoals of greater economic discontent.
- "Production Freeze" Narrative Collapses In Two Days: Russian Oil Output Hits New Post-Soviet Record
How quickly the oil production freeze narrative has fallen apart.
Source: stockboardasset
Indeed, it’s been a tough two days for oil bulls holding on to hope that excess oil production will normalize in the near term and that the world’s oil suppliers would somehow manage to curb oil production in the aftermath of the OPEC’s November 2014 cartel collapse.
First it was yesterday’s Bloomberg story which cited the Saudi Deputy Crown Prince Mohammed bin Salman as saying that the Saudis would not participate in an oil production freeze unless everyone including Iran which has made it joined “If all countries including Iran, Russia, Venezuela, OPEC countries and all main producers decide to freeze production, we will be among them.“
The second one came overnight.
Recall that one month ago, just as Russia and Saudi Arabia were finalizing their “agreement” to freeze oil production which was the major catalyst for the oil surge from its 13 year lows hit in early February, we got the surprising news that far from throttling production, Russian crude and condensate production just set new post-Soviet daily record of 10.92 million barrels.
Well, overnight we got the latest update of Russian oil output, and according to Bloomberg it just set a new post-Soviet high in March “as the success of a proposed crude production freeze between OPEC members and other major producers appeared to be in doubt.”
Bloomberg reports that Russian production of crude and a light oil called condensate climbed 2.1 percent in March from a year earlier to 10.912 million barrels a day, according to the Energy Ministry’s CDU-TEK unit. That narrowly beat the previous high of 10.910 million barrels in January.
With most of the Organization of Petroleum Exporting Countries members, Russia and some others outside the group scheduled to meet in Doha this month to discuss an accord on capping output, Saudi Arabia’s Mohammed bin Salman signaled in an interview with Bloomberg that if any country raises output, the kingdom will also boost sales. Prices on Friday sank more than 4 percent after the comments. Iran previously said it plans to boost production after the lifting of sanctions following a deal to curb its nuclear program.
Saudi Arabia, Russia, Venezuela and Qatar in February first proposed an accord to cap oil output to reduce a worldwide surplus and boost prices. Brent prices in London have gained nearly 40 percent from the 12-year low reached in January.
But what was most notable is that Russian oil exports rose 10% to 5.59 million barrels a day, according to the Energy Ministry data. This is just the start because as we wrote two weeks ago, according to Reuters calculations based on Energy Ministry data, Russia will have as much as 4.3 million tonnes of idle refining capacity next month, more than twice the 1.9 million tonnes unused in March. Russian refineries traditionally have the largest offline capacity in April, as companies scramble to finish maintenance before consumption of oil products peaks in summer.
This forces producers to divert crude towards exports, because there is nowhere to store the oil that otherwise would have gone to refineries.
This means that as soon as next month, there will be an extra 2.4 million tonnes of extra oil being exported by Russia; how this oil will be sold to some willing end buyer without crushing oil prices in what is already a 3 million barrel/daily oversupplied market, is unknown.
The Russian export glut is already starting to be felt, and that may be just the beginning: two additional factors may push oil supply in the open market materially higher in the coming weeks. The first as we previously explained is that up to 30 million barrels in floating storage may soon come onshore as the sliding contango makes offshore storage no longer economical. The second as also previously discussed is that some shale oil producers, including Oasis Petroleum and Pioneer Natural Resources Co, are activating drilled but uncompleted wells (DUCs) in a reversal in strategy that threatens to bring more crude to a saturated market and dampen any sustained rebound in prices.
Taken together these factors perhaps explain why oil tumbled on Friday as stocks made another 2016 high.
- "I'm 100% Sure" The US Presidential Campaign Is Being Tampered With
There is a growing recognition of the increasing tail wagging the dog nature of the internet's control over election outcomes. We recently detailed "the hidden persuaders" at work showing how the internet has spawned subtle forms of influence that can flip elections and manipulate everything we say, think and do. Confirming all of this to be chillingly true is Andrés Sepúlveda, who rigged elections throughout Latin America for almost a decade. On the question of whether the U.S. presidential campaign is being tampered with, he is unequivocal – "I'm 100 percent sure it is."
Liberty Blitzkrieg's Mike Krieger excerpts a must-read Bloomberg article,
In July 2015, Sepúlveda sat in the small courtyard of the Bunker, poured himself a cup of coffee from a thermos, and took out a pack of Marlboro cigarettes. He says he wants to tell his story because the public doesn’t grasp the power hackers exert over modern elections or the specialized skills needed to stop them. “I worked with presidents, public figures with great power, and did many things with absolutely no regrets because I did it with full conviction and under a clear objective, to end dictatorship and socialist governments in Latin America,” he says. “I have always said that there are two types of politics—what people see and what really makes things happen. I worked in politics that are not seen.”
Rendón, says Sepúlveda, saw that hackers could be completely integrated into a modern political operation, running attack ads, researching the opposition, and finding ways to suppress a foe’s turnout. As for Sepúlveda, his insight was to understand that voters trusted what they thought were spontaneous expressions of real people on social media more than they did experts on television and in newspapers. He knew that accounts could be faked and social media trends fabricated, all relatively cheaply. He wrote a software program, now called Social Media Predator, to manage and direct a virtual army of fake Twitter accounts. The software let him quickly change names, profile pictures, and biographies to fit any need. Eventually, he discovered, he could manipulate the public debate as easily as moving pieces on a chessboard—or, as he puts it, “When I realized that people believe what the Internet says more than reality, I discovered that I had the power to make people believe almost anything.”
Sepúlveda says he was offered several political jobs in Spain, which he says he turned down because he was too busy. On the question of whether the U.S. presidential campaign is being tampered with, he is unequivocal. “I’m 100 percent sure it is,” he says.
– From the excellent Bloomberg article: How to Hack an Election
Yesterday, Bloomberg published one of the most fascinating articles I’ve read all year. Below are some choice excerpts from the piece, which I encourage you to read in full.
It was just before midnight when Enrique Peña Nieto declared victory as the newly elected president of Mexico. Peña Nieto was a lawyer and a millionaire, from a family of mayors and governors. His wife was a telenovela star. He beamed as he was showered with red, green, and white confetti at the Mexico City headquarters of the Institutional Revolutionary Party, or PRI, which had ruled for more than 70 years before being forced out in 2000. Returning the party to power on that night in July 2012, Peña Nieto vowed to tame drug violence, fight corruption, and open a more transparent era in Mexican politics.
Two thousand miles away, in an apartment in Bogotá’s upscale Chicó Navarra neighborhood, Andrés Sepúlveda sat before six computer screens. Sepúlveda is Colombian, bricklike, with a shaved head, goatee, and a tattoo of a QR code containing an encryption key on the back of his head. On his nape are the words “</head>” and “<body>” stacked atop each other, dark riffs on coding. He was watching a live feed of Peña Nieto’s victory party, waiting for an official declaration of the results.
When Peña Nieto won, Sepúlveda began destroying evidence. He drilled holes in flash drives, hard drives, and cell phones, fried their circuits in a microwave, then broke them to shards with a hammer. He shredded documents and flushed them down the toilet and erased servers in Russia and Ukraine rented anonymously with Bitcoins. He was dismantling what he says was a secret history of one of the dirtiest Latin American campaigns in recent memory.
For eight years, Sepúlveda, now 31, says he traveled the continent rigging major political campaigns. With a budget of $600,000, the Peña Nieto job was by far his most complex. He led a team of hackers that stole campaign strategies, manipulated social media to create false waves of enthusiasm and derision, and installed spyware in opposition offices, all to help Peña Nieto, a right-of-center candidate, eke out a victory. On that July night, he cracked bottle after bottle of Colón Negra beer in celebration. As usual on election night, he was alone.
His teams worked on presidential elections in Nicaragua, Panama, Honduras, El Salvador, Colombia, Mexico, Costa Rica, Guatemala, and Venezuela. Campaigns mentioned in this story were contacted through former and current spokespeople; none but Mexico’s PRI and the campaign of Guatemala’s National Advancement Party would comment.
Usually, he says, he was on the payroll of Juan José Rendón, a Miami-based political consultant who’s been called the Karl Rove of Latin America. Rendón denies using Sepúlveda for anything illegal, and categorically disputes the account Sepúlveda gave Bloomberg Businessweek of their relationship, but admits knowing him and using him to do website design. “If I talked to him maybe once or twice, it was in a group session about that, about the Web,” he says. “I don’t do illegal stuff at all. There is negative campaigning. They don’t like it—OK. But if it’s legal, I’m gonna do it. I’m not a saint, but I’m not a criminal.” While Sepúlveda’s policy was to destroy all data at the completion of a job, he left some documents with members of his hacking teams and other trusted third parties as a secret “insurance policy.”
Sepúlveda provided Bloomberg Businessweek with what he says are e-mails showing conversations between him, Rendón, and Rendón’s consulting firm concerning hacking and the progress of campaign-related cyber attacks. Rendón says the e-mails are fake. An analysis by an independent computer security firm said a sample of the e-mails they examined appeared authentic. Some of Sepúlveda’s descriptions of his actions match published accounts of events during various election campaigns, but other details couldn’t be independently verified. One person working on the campaign in Mexico, who asked not to be identified out of fear for his safety, substantially confirmed Sepúlveda’s accounts of his and Rendón’s roles in that election.
Sepúlveda says he was offered several political jobs in Spain, which he says he turned down because he was too busy. On the question of whether the U.S. presidential campaign is being tampered with, he is unequivocal. “I’m 100 percent sure it is,” he says.
Rendón, says Sepúlveda, saw that hackers could be completely integrated into a modern political operation, running attack ads, researching the opposition, and finding ways to suppress a foe’s turnout. As for Sepúlveda, his insight was to understand that voters trusted what they thought were spontaneous expressions of real people on social media more than they did experts on television and in newspapers. He knew that accounts could be faked and social media trends fabricated, all relatively cheaply. He wrote a software program, now called Social Media Predator, to manage and direct a virtual army of fake Twitter accounts. The software let him quickly change names, profile pictures, and biographies to fit any need. Eventually, he discovered, he could manipulate the public debate as easily as moving pieces on a chessboard—or, as he puts it, “When I realized that people believe what the Internet says more than reality, I discovered that I had the power to make people believe almost anything.”
For most jobs, Sepúlveda assembled a crew and operated out of rental homes and apartments in Bogotá. He had a rotating group of 7 to 15 hackers brought in from across Latin America, drawing on the various regions’ specialties. Brazilians, in his view, develop the best malware. Venezuelans and Ecuadoreans are superb at scanning systems and software for vulnerabilities. Argentines are mobile intercept artists. Mexicans are masterly hackers in general but talk too much. Sepúlveda used them only in emergencies.
Chávez won but died five months later of cancer, triggering an emergency election, won by Nicolás Maduro. The day before Maduro claimed victory, Sepúlveda hacked his Twitter account and posted allegations of election fraud. Blaming “conspiracy hackings from abroad,” the government of Venezuela disabled the Internet across the entire country for 20 minutes.
Sepúlveda didn’t like the idea of working in Mexico, a dangerous country for involvement in public life. But Rendón persuaded him to travel there for short trips, starting in 2008, often flying him in on his private jet. Working at one point in Tabasco, on the sweltering Gulf of Mexico, Sepúlveda hacked a political boss who turned out to have connections to a drug cartel. After Rendón’s security team learned of a plan to kill Sepúlveda, he spent a night in an armored Chevy Suburban before returning to Mexico City.
Early polls showed Peña Nieto 20 points ahead, but his supporters weren’t taking chances. Sepúlveda’s team installed malware in routers in the headquarters of the PRD candidate, which let him tap the phones and computers of anyone using the network, including the candidate. He took similar steps against PAN’s Vázquez Mota. When the candidates’ teams prepared policy speeches, Sepúlveda had the details as soon as a speechwriter’s fingers hit the keyboard. Sepúlveda saw the opponents’ upcoming meetings and campaign schedules before their own teams did.
Money was no problem. At one point, Sepúlveda spent $50,000 on high-end Russian software that made quick work of tapping Apple, BlackBerry, and Android phones. He also splurged on the very best fake Twitter profiles; they’d been maintained for at least a year, giving them a patina of believability.
Just about anything the digital dark arts could offer to Peña Nieto’s campaign or important local allies, Sepúlveda and his team provided. On election night, he had computers call tens of thousands of voters with prerecorded phone messages at 3 a.m. in the critical swing state of Jalisco. The calls appeared to come from the campaign of popular left-wing gubernatorial candidate Enrique Alfaro Ramírez. That angered voters—that was the point—and Alfaro lost by a slim margin. In another governor’s race, in Tabasco, Sepúlveda set up fake Facebook accounts of gay men claiming to back a conservative Catholic candidate representing the PAN, a stunt designed to alienate his base. “I always suspected something was off,” the candidate, Gerardo Priego, said recently when told how Sepúlveda’s team manipulated social media in the campaign.
In 2012, Colombian President Juan Manuel Santos, Uribe’s successor, unexpectedly restarted peace talks with the FARC, hoping to end a 50-year war. Furious, Uribe, whose father was killed by FARC guerrillas, created a party and backed an alternative candidate, Oscar Iván Zuluaga, who opposed the talks.
Rendón, who was working for Santos, wanted Sepúlveda to join his team, but Sepúlveda turned him down. He considered Rendón’s willingness to work for a candidate supporting peace with the FARC a betrayal and suspected the consultant was going soft, choosing money over principles. Sepúlveda says he was motivated by ideology first and money second, and that if he wanted to get rich he could have made a lot more hacking financial systems than elections. For the first time, he decided to oppose his mentor.
Sepúlveda went to work for the opposition, reporting directly to Zuluaga’s campaign manager, Luis Alfonso Hoyos. (Zuluaga denies any knowledge of hacking; Hoyos couldn’t be reached for comment.) Together, Sepúlveda says, they came up with a plan to discredit the president by showing that the guerrillas continued to traffic in drugs and violence even as they talked about peace. Within months, Sepúlveda hacked the phones and e-mail accounts of more than 100 militants, including the FARC’s leader, Rodrigo Londoño, also known as Timochenko. After assembling a thick file on the FARC, including evidence of the group’s suppression of peasant votes in the countryside, Sepúlveda agreed to accompany Hoyos to the offices of a Bogotá TV news program and present the evidence.
It may not have been wise to work so doggedly and publicly against a party in power. A month later, Sepúlveda was smoking on the terrace of his Bogotá office when he saw a caravan of police vehicles pull up. Forty black-clad commandos raided the office to arrest him. Sepúlveda blamed his carelessness at the TV station for the arrest. He believes someone there turned him in. In court, he wore a bulletproof vest and sat surrounded by guards with bomb shields. In the back of the courtroom, men held up pictures of his family, making a slashing gesture across their throats or holding a hand over their mouths—stay silent or else. Abandoned by former allies, he eventually pleaded guilty to espionage, hacking, and other crimes in exchange for a 10-year sentence.
Three days after arriving at Bogotá’s La Picota prison, he went to the dentist and was ambushed by men with knives and razors, but was saved by guards. A week later, guards woke him and rushed him from his cell, saying they had heard about a plot to shoot him with a silenced pistol as he slept. After national police intercepted phone calls revealing yet another plot, he’s now in solitary confinement at a maximum-security facility in a rundown area of central Bogotá. He sleeps with a bulletproof blanket and vest at his bedside, behind bombproof doors. Guards check on him every hour. As part of his plea deal, he says, he’s turned government witness, helping investigators assess possible cases against the former candidate, Zuluaga, and his strategist, Hoyos. Authorities issued an indictment for the arrest of Hoyts but according to Colombian press reports he’s fled to Miami.
In July 2015, Sepúlveda sat in the small courtyard of the Bunker, poured himself a cup of coffee from a thermos, and took out a pack of Marlboro cigarettes. He says he wants to tell his story because the public doesn’t grasp the power hackers exert over modern elections or the specialized skills needed to stop them. “I worked with presidents, public figures with great power, and did many things with absolutely no regrets because I did it with full conviction and under a clear objective, to end dictatorship and socialist governments in Latin America,” he says. “I have always said that there are two types of politics—what people see and what really makes things happen. I worked in politics that are not seen.”
Last year, based on anonymous sources, the Colombian media reported that Rendón was working for Donald Trump’s presidential campaign. Rendón calls the reports untrue. The campaign did approach him, he says, but he turned them down because he dislikes Trump. “To my knowledge we are not familiar with this individual,” says Trump’s spokeswoman, Hope Hicks. “I have never heard of him, and the same goes for other senior staff members.” But Rendón says he’s in talks with another leading U.S. presidential campaign—he wouldn’t say which—to begin working for it once the primaries wrap up and the general election begins.
Now I wonder…who might that be?
As we concluded prevously, we are living in a world in which a handful of high-tech companies, sometimes working hand-in-hand with governments, are not only monitoring much of our activity, but are also invisibly controlling more and more of what we think, feel, do and say. The technology that now surrounds us is not just a harmless toy; it has also made possible undetectable and untraceable manipulations of entire populations – manipulations that have no precedent in human history and that are currently well beyond the scope of existing regulations and laws. The new hidden persuaders are bigger, bolder and badder than anything Vance Packard ever envisioned. If we choose to ignore this, we do so at our peril
- "The Coming War Will Solve Our Unemployment & Growth Problem"
Submitted by Carmen Elena Dorobat via The Mises Institute,
On the eve of World War II, Keynes delivered the following chilling address on the BBC, talking about the "grand experiment" of curing unemployment through war expenditure:
Two years later to the day, in a lecture delivered shortly after his arrival in the U.S., Mises described what the great experiment really looked like:
We are witnesses to the most frightful and phenomenal occurrence in human history: the decay of Western civilization.
London, one of the centers of this civilization… is almost completely destroyed. The buildings of the Parliament of Westminster are in ruins; the House of Commons holds its assemblies in the catacombs. […]
The theater of war is spreading, and the day seems not distant when peace will have lost its last refuge. It is a moral and material collapse without precedent.
Are we really set to revisit this disgusting Keynesian Endgame once again?
A similar situation had occurred in the US in the 1930’s.
What solved the question? War! Because World War II had occurred during the 1940’s and that became the solution for the United States. So, let’s look at the entrepreneurs in Japan. They are stuck with the deflationary mindset.
They have to switch their mindset and should start making capital investments. We are looking for the trigger.
- Chicago Disintegrates – Gun Shootings Soar An Unprecedented 89%: "It's The Struggling Economy"
While the Obama administration has been vocal about its intentions to limit access to guns for Americans across the nation, in the process achieving the opposite and leading to record gun sales, FBI firearm background checks that just hit an all time high for the month of March…
… and record stock prices of US gun makers such as Smith and Wesson, perhaps it should focus on what has become the epicenter of ground zero for violence and gun homicides in the US: Obama’s “home town” of Chicago.
According to a CNN report, gun violence in the windy city is on track to post its worst year in the 21st century, the result of an unprecedented surge in gun deaths in the first three months of the year. By March 31, 141 people had been killed, according to the Chicago Police Department. On Thursday, eight were shot and two of them died in one hour alone, Chicago Police said.
The 141 deaths in the first three months of the year mark a 71.9% jump from the same period in 2015, when 82 people were killed. It’s the worst start to a year since 1999, when 136 people died in the first three months the year, according to the Chicago Tribune.
At that pace – an average of three killings every two days – Chicago would have 564 homicides by the end of the year. That would eclipse the 468 killings recorded in 2015 and 416 in 2014.
Overall, shootings have also skyrocketed. According to data provided by Chicago police, the number of shootings in the first three months of the year jumped from 359 in 2015 to 677 in 2016 – an 88.5% increase.
The result are countless stores of personal tragedy. For example, eighty-year-old Betty Johnson has lived in Chicago’s Roseland neighborhood since 1968. She raised two children and several grandchildren on the city’s far south side, where she has lived her entire life.
After her granddaughter Sabrina was killed in a car accident in 2008, Johnson gained full custody of her great-grandson Andre Taylor.
She looked on proudly as he busied himself with swimming, football and karate. She knew the dangers someone his age faced if he spent too much time on the streets of Chicago.
On a Sunday night in March, her worst nightmare was realized. Andre, 16, was shot in the head and killed just a block from his home.
“It has gotten much worse out here,” Johnson says, standing outside her home and looking out onto the streets she knows so well.
There was gang violence when Johnson was growing up, “but you never heard anything like what’s going on today,” she says.
And it’s getting worse. Another example is 14 year old Tyjuan Poindexter.
Michael Gabb knows the pain Betty Johnson feels all too well. He helped raise his grandson Tyjuan Poindexter. The 14-year-old had never been in serious trouble, and Gabb was raising him in his home in the Kenwood neighborhood.
He believes Tyjuan was mistaken for a gang member when he was killed in a drive-by shooting just a few blocks from his home. Gabb told CNN six months ago he was hopeful police would find the people responsible. Mayor Rahm Emanuel even paid a visit to Gabb’s home to offer his condolences.
Almost six months later, Gabb is still hopeful his grandson’s killer will be found. But he thinks it may only happen if someone steps forward with information.
He hopes things can change so others don’t suffer the same fate as his grandson. But how that change will occur and what’s causing the violence is something difficult to narrow down to one definitive explanation.
Gabb, like many residents and advocates throughout the city, agree that there are several contributing factors; some old, some new.
What is perplexing is that even the ordinary people are getting it: “I think it’s got something to do with economics,” Gabb says of the continued shootings. As CNN adds, most residents say communities continue to suffer from an economy that is nowhere strong enough to keep at-risk youths from looking for financial support in the wrong places.
“There’s not enough money to sustain certain families and people go into drugs,” Gabb says.
However, and very sadly, it is none other than the president who insists that anyone suggesting the US economy is in dire shape is “peddling fiction.” In other words, classic denial of what is happening in his own back yard.
It’s hard for longtime community pastor Ira Acree to watch. He has been serving the Austin community on Chicago’s West Side for 26 years.
“It’s horrifying,” he says. “It’s horrifying to look at the numbers from this winter, because if it’s that bad in the winter, we better brace for a long, hot summer.“
And since it is indeed the economy’s fault, it is about to get much worse. Acree, like Gabb, believes the struggling economy in many communities is a big part of the problem.
“All of the violence is rooted in the illegal drug economy,” Acree says. “Many guys have allowed their economic desperation to cause them to resort to these measures. The economy is terrible, especially in African-American neighborhoods.”
Acree says the violence is the worst he’s seen since the 1990s, and he’d like to see a state of emergency declared for wide areas of the city by President Barack Obama, who called Chicago home for so many years.
The lament is one heard across most poor areas in the US: “I’m hoping that some money is invested in some job creation. We bailed out Wall Street, why not bail out Main Street? It would make a world of difference,” Acree says.
“If you really want to stop this epidemic of violence, the best way to stop a bullet is with a job.“
Which is odd, because according to the BLS, jobs across the US are growing at a brisk pace of over 200K per month.
What is rarely mentioned, however, is the true state of affairs even for those with jobs, according to which the net income of virtually every social group of Americans has devolved dramatically in recent years. As a recent Pew survey showed, by 2014, median income had fallen by 13 percent from 2004 levels, while expenditures had increased by nearly 14 percent. This change in the expenditure-to-income ratio in the years following the financial crisis is a clear indication of why and how households feel financially strained.
But that will be ignored as the myth of a recovery has to be perpetuated at all costs.
Meanwhile Chicago is disintegrating and as long as the culture of denial persists, there is no hope. The local residents know it too.
Jahmal Cole, 32, grew up in the city of North Chicago, about 45 miles from Chicago’s South Side. But in 2007, he moved to the Chatham neighborhood on the South Side, one of the toughest, to help young kids most at risk of falling prey to gangs and drugs.
“I think that we’ve developed a mentality in Chicago — we see ourselves part of the North Side, South Side,” Cole says.
If they tried to learn from others, or immerse themselves in other opportunities, Cole believes lives could be changed. His nonprofit organization, My Block, My Hood, My City, is dedicated to providing young people with opportunities to see things they don’t even know exist.
“They don’t know what’s available,” he adds. “They don’t know the museum is open Tuesday nights. Many of these kids have never even seen the lakefront in their entire life.” Many will never see a lifestyle different from one where squad cars are part of the norm and the constant hovering of police helicopters is more known than a YMCA. It’s a way of life he views as “traumatizing” to the children and part of a cycle he is trying to break.
He knows there isn’t one easy fix: “I don’t think there’s a program a policy or a resolution that’s going to solve violence in Chicago,” Cole says. He believes many teens and residents suffer from what he calls “poverty of imagination.” Cole hopes to bring new experiences to one child at a time and hopes that will make a difference.
But for Betty Johnson, as she stands outside her longtime home, thinking about all of the years she’s lived in Chicago, there isn’t as much hope as there is sadness anymore.
“I feel sorry for all of these young kids coming up today,” she says. Johnson wishes she could do more to save her other grandkids from the streets of Chicago and from the same fate as her great-grandson Andre.
“If I wasn’t so old, I’d take the other grandkids that are living with me and go so far up in the country, it would take three hours to get to me,” she says. “It’s just so bad that this is the way we have to live.”
Meanwhile, anyone who dares to expose the naked, if heavily armed emperor, will continue to be accused by those tasked with fixing the economy for all, not just for the 1%, as perpetuating the peddling of fiction. Sadly, it may be the ultimate disintegration of this city that forces the administration, either the current one or the next one, to wake from its stupor.
Until then, thousands more will die.
- A "Generational" Peak In Corporate Profit Margins
Submitted by Jesse Felder via TheFelderReport.com,
Over the past few years I’ve written a fair amount about the record-high levels of corporate profit margins. I’ve been focused on this topic because corporate earnings are one of the most popular ways to value equities thus the sustainability of record-high profit margins should be an issue of great concern to investors. If profit margins revert to historical averages, earnings-based valuation measures investors are using to justify investment in equities today could quickly go against them making stocks appear much more expensive than they do currently. And this process may now be underway.
To the point of mean reversion in profit margins, in the past I have referenced the words of a pair of investment legends. Jeremy Grantham has called profit margins, “the most mean-reverting series in finance.” And back in 1999, Warren Buffett explained why:
In my opinion, you have to be wildly optimistic to believe that corporate profits as a percent of GDP can, for any sustained period, hold much above 6%. One thing keeping the percentage down will be competition, which is alive and well. In addition, there’s a public-policy point: If corporate investors, in aggregate, are going to eat an ever-growing portion of the American economic pie, some other group will have to settle for a smaller portion. That would justifiably raise political problems—and in my view a major reslicing of the pie just isn’t going to happen.
Both of these two gentlemen clearly believe, and very strongly, that corporate profit margins have an equilibrium. They can rise above or fall below that equilibrium but the very nature of capitalism, along with its social contract, will force an inevitable reversion to the mean.
I believe there are three major factors behind the recent bubble in corporate profit margins.
First, and most obvious, is the simple trend in interest rates over the past 35 years or so. As rates have fallen to lows not seen in many generations, debt has become much less costly, especially when you also consider that corporate spreads on top of these ultra-low rates have also fallen to ultra-low levels.
Second, corporate taxes as a percent of income have been falling for a long time, as well. Recently, this may be due in large part to the growth of tax avoidance strategies, mainly those involving relocating corporate headquarters to tax havens.
Third, labor costs have also been falling for quite some time. Much of this may be due to the trend toward automation and, perhaps far more so, the offshoring of labor over the past several decades. This falling corporate cost is very apparent in the labor share of income numbers that many have discussed recently, including Paul Tudor Jones.
These three secular trends have provided a tailwind for profit margins for a long time now. However, they may be reaching, or have already reached, their full potential and begun reverting. In terms of interest rates, the Fed Funds rate has essentially been stuck at zero for seven years now. Corporate spreads hit rock bottom almost two years ago and have been reversing course ever since. Furthermore, after a long period of deregulation in the banking industry that saw lending standards loosen considerably, it appears that regulation is making a sustained comeback and the effect will likely be just the opposite.
Politically, corporations are finding it increasingly difficult to defend their use of tax avoidance schemes. Politicians have been squawking about this for a long time but it now appears as if they are ready to actually do something about it. More and more companies are reporting growing political risk in this regard as new legislation is being introduced in a variety of countries to combat it.
Finally, the trend toward offshoring looks to be in the process of reversing as overseas labor costs rise and companies focus more and more on the potential quality and branding benefits of, “reshoring.” Google trends shows a surge in the popularity of this search term in recent years.
So I agree with Grantham and Buffett that profit margins are very likely to continue to revert to their historical mean, driven by the natural forces of capitalism, and its social contract. And this will most likely be seen in either the rising cost of debt, taxes or labor, or perhaps all three.
In the short-term, history suggests the current profits recession very likely will lead to an economic recession accompanied by a bear market. In fact, profit margin peaks regularly lead major stock market peaks and profit margins peaked this cycle about four years ago already. In addition, the recent fall in earnings and profit margins is already beginning to damage those earnings-based valuation measures. The S&P 500 now trades at its highest price-to-earnings ratio since the bull market began even as the index remains well off its recent price highs. And profit margins still could have a long way to fall before even reaching their average level since 1950.
Longer-term, if these new secular trends working against profit margins are to remain in place, earnings growth will be much harder to come by for corporate America than it has been over the past few decades. And there are plenty of signs it is already becoming very difficult for them. Corporate cash flow has essentially been flat for the past five years. At the same time, more and more companies recently have resorted to financial engineering via buybacks, non-GAAP reporting and even outright fraud. My guess is this is all in an attempt to make up for broadly slowing organic profit growth due the these secular tailwinds shifting to headwinds.
Should these shifts actually turn out to be longer-term secular trends, they pose a great risk to equities in both the short-term and the long-term. Falling profit margins and rising valuations (as earnings fall) make for a pretty bearish one-two punch for the stock market. I can’t imagine investors being very eager to pay higher valuations for companies growing more slowly. That equation usually works in reverse. And there’s no reason I can see to expect these challenges to corporate profit margins to let up any time soon.
- Wikileaks Reveals IMF Plan To "Cause A Credit Event In Greece And Destabilize Europe"
One of the recurring concerns involving Europe’s seemingly perpetual economic, financial and social crises, is that these have been largely predetermined, “scripted” and deliberate acts.
This is something the former head of the Bank of England admitted one month ago when Mervyn King said that Europe’s economic depression “is the result of “deliberate” policy choices made by EU elites. It is also what AIG Banque strategist Bernard Connolly said back in 2008 when laying out “What Europe Wants“
To use global issues as excuses to extend its power:
- environmental issues: increase control over member countries; advance idea of global governance
- terrorism: use excuse for greater control over police and judicial issues; increase extent of surveillance
- global financial crisis: kill two birds (free market; Anglo-Saxon economies) with one stone (Europe-wide regulator; attempts at global financial governance)
- EMU: create a crisis to force introduction of “European economic government”
This morning we got another confirmation of how supernational organizations “plan” European crises in advance to further their goals, when Wikileaks published the transcript of a teleconference that took place on March 19, 2016 between the top two IMF officials in charge of managing the Greek debt crisis – Poul Thomsen, the head of the IMF’s European Department, and Delia Velkouleskou, the IMF Mission Chief for Greece.
In the transcript, the IMF staffers are caught on tape planning to tell Germany the organization would abandon the troika if the IMF and the commission fail to reach an agreement on Greek debt relief.
More to the point, the IMF officials say that a threat of an imminent financial catastrophe as the Guardian puts it, is needed to force other players into accepting its measures such as cutting Greek pensions and working conditions, or as Bloomberg puts it, “considering a plan to cause a credit event in Greece and destabilize Europe.”
According to the leaked conversation, the IMF – which has been pushing for a debt haircut for Greece ever since last August’s 3rd Greek bailout – believes a credit event as only thing that could trigger a Greek deal; the “event” is hinted as taking place some time around the June 23 Brexit referendum.
As noted by Bloomberg, the leak shows officials linking Greek issue with U.K. referendum risking general political destabilization in Europe.
The leaked transcript reveals how the IMF plans to use Greece as a pawn in its ongoing negotiation with Germany’s chancelleor in order to achieve the desired Greek debt reduction which Germany has been pointedly against: in the leak we learn about the intention of IMF to threaten German Chancellor Angela Merkel to force her to accept the IMF’s demands at a critical point.
From the transcript:
THOMSEN: Well, I don’t know. But this is… I think about it differently. What is going to bring it all to a decision point? In the past there has been only one time when the decision has been made and then that was when they were about to run out of money seriously and to default. Right?
VELKOULESKOU: Right!
THOMSEN: And possibly this is what is going to happen again. In that case, it drags on until July, and clearly the Europeans are not going to have any discussions for a month before the Brexits and so, at some stage they will want to take a break and then they want to start again after the European referendum.
VELKOULESKOU: That’s right.
THOMSEN: That is one possibility. Another possibility is one that I thought would have happened already and I am surprised that it has not happened, is that, because of the refugee situation, they take a decision… that they want to come to a conclusion. Ok? And the Germans raise the issue of the management… and basically we at that time say “Look, you Mrs. Merkel you face a question, you have to think about what is more costly: to go ahead without the IMF, would the Bundestag say ‘The IMF is not on board’? or to pick the debt relief that we think that Greece needs in order to keep us on board?” Right? That is really the issue.
* * *
VELKOULESKOU: I agree that we need an event, but I don’t know what that will be. But I think Dijsselbloem is trying not to generate an event, but to jump start this discussion somehow on debt, that essentially is about us being on board or not at the end of the day.
THOMSEN: Yeah, but you know, that discussion of the measures and the discussion of the debt can go on forever, until some high up.. until they hit the July payment or until the leaders decide that we need to come to an agreement. But there is nothing in there that otherwise is going to force a compromise. Right? It is going to go on forever.
The IMF is also shown as continuing to pull the strings of the Greek government which has so far refused to compromise on any major reforms, as has been the case since the first bailout.
As the Guardian notes, Greek finance minister Euclid Tsakalotos has accused the IMF of imposing draconian measures, including on pension reform. The transcript quotes Velculescu as saying: “What is interesting though is that [Greece] did give in … they did give a little bit on both the income tax reform and on the … both on the tax credit and the supplementary pensions”. Thomsen’s view was that the Greeks “are not even getting close [to coming] around to accept our views”. Velculescu argued that “if [the Greek government] get pressured enough, they would … But they don’t have any incentive and they know that the commission is willing to compromise, so that is the problem.”
Below is Paul Mason’s summary of what is shaping up as the next political scandal.
The International Monetary Fund has been caught, red handed, plotting to stage a “credit event” that forces Greece to the edge of bankruptcy, using the pretext of the Brexit referendum.
No, this is not the plot of the next Bond movie. It is the transcript of a teleconference between the IMF’s chief negotiator, Poul Thomsen and Delia Velculescu, head of the IMF mission to Greece.
Released by Wikileaks, the discussion took place in Athens just before the IMF walked out of talks aimed at giving Greece the green light for the next stage of its bailout.
The situation is: the IMF does not believe the numbers being used by both Greece and Europe to do the next stage of the deal. It does not want to take part in the bailout. Meanwhile the EU cannot do the deal without the IMF because the German parliament won’t allow it.
* * *
Let me decode. An “event” is a financial crisis bringing Greece close to default. Just like last year, when the banks closed, millions of people faced economic and psychological catastrophe.
Only this time, the IMF wants to inflict that catastrophe on a nation holding tens of thousands of refugees and tasked with one of the most complex and legally dubious international border policing missions in modern history.
The Greek government is furious: “we are not going to let the IMF play with fire,” a source told me.
But the issue is out of Greek hands. In the end, as Thomsen hints in the transcript, only the European Commission and above all the German government can decide to honour the terms of the deal it did to bail Greece out last July.
The transcript, though received with fury and incredulity in Greece, will drop like a bombshell into the Commission and the ECB. It is they who are holding E300bn+ of Greek debt. It is the whole of Europe, in other words, that the IMF is conspiring to hit with the shock doctrine.
The Greeks are understandably angry and confused; As Bloomberg reported earlier, “Greece wants to know whether WikiLeaks report regarding IMF anticipating a Greek default at about the time of the U.K. June 23 referendum on its EU membership is the fund’s official position” government spokeswoman Olga Gerovasili says Saturday in e-mailed statement. For its part, an IMF spokesman in e-mail Saturday said it doesn’t “comment on leaks or supposed reports of internal discussions.”
Two side observations:
1. has a “Snowden” leaker now emerged at the IMF; if so we can expect many more such bombshell accounts in the coming weeks; or perhaps the reason for the leak is less nuanced: a bugged hotel.
Acc to #IMF leak, conf call was held March 19, when Velculescu was still in Athens, Hilton Hotel. Makes you wonder if Hilton is bugged.
— Yannis Koutsomitis (@YanniKouts) April 2, 2016
2. it may be another turbulent summer in Europe.
- "We Won The Votes, They're Trying To Steal Them" Trump Urges Tennesseans To Crash Establishment Party
Building on the worst two week-period of his campaign, Donald Trump took to Twitter overnight to implore his Tennessean supporters to rise up, raging that the state’s Republican Party was "trying to steal" his delegates and urging them to crash a party meeting on Saturday morning to stop them – "We won the votes. They are trying to steal them. I can’t believe I am writing this. But the Tennessee Republican Party wants to steal your vote TOMORROW." As Politico reports Establishment leaders, alarmed by an intensifying backlash, have hired extra security for the event.
It's been a tough couple of weeks for Trump, as The Establishment's full court press has narrowed his lead over Cruz…
And now he is fighting back as Politico reports, Tennesse GOP establishmentarians prepare to assign delegates for a state he won strongly,
Morris urged supporters to crash the party's 10 a.m. Saturday executive committee meeting by arriving a half-hour in advance. “There is a small group of Tennessee establishment insiders pulling a fast one. DON’T LET THIS HAPPEN,” he wrote.
Party leaders, alarmed by an intensifying backlash throughout the night, have hired extra security for the event — which party chairman Ryan Haynes noted had been scheduled to take place in a small, unsecured conference room — and they're considering canceling the event altogether.
"We've seen what's happened at other events around the country," Haynes said, referencing spurts of violence at some Trump campaign rallies. "The last thing we'd want to see is something get disorderly.”
Added Haynes, "We've been in contact with individuals in law enforcement here in Tennessee.”
The skirmish is the latest in the increasingly fierce battle for delegates to the Republican National Convention in Cleveland.
At issue are the state’s 14 at-large delegates that were not assigned in the March 1 primary but are set to be selected by the party’s executive committee. Trump won the Tennessee primary and many of the delegates were directly elected at that time. Morris wrote that Trump’s campaign had struck a deal with party leaders on Wednesday to fill the remaining at-large slots with Trump’s share of the vote.
Haynes said Morris exploded earlier in the week when the party informed the campaign they'd only get six of their seven delegate choices at Saturday's meeting. Tennessee's GOP rules give the party the ultimate authority to name delegates, though it usually accepts input from the campaigns.
"They informed us that they did not care about party procedures. They don't care about the Republican Party," Haynes said.
Haynes added that on Friday, the list of delegates changed again and only four of Trump's original seven requests were included, prompting Morris' scathing call to supporters.
“The State Party Chairman, Ryan Haynes, agreed to that ON WEDNESDAY,” Morris wrote. “Those pulling his puppet strings changed his mind and now apparently he wants to appoint delegates representing candidates who don’t support Donald Trump and WHO DID NOT RECEIVE ANY ALLOCATED DELEGATES on March 1.”
One state executive committee member, Scott Smith, rebutted the Trump campaign's allegations in an email, saying that the root of the conflict is the fact that some of Trump's Tennessee supporters "depend on threats, manipulation, outlandish accusations and behavior."
- U.S. Oil Production to Drop to 5 Million Barrels Per Day over Next 12 Months (Video)
By EconMatters
With the amazing drop in Oil Rigs just over the last two months, the pain for U.S. Oil Producers is just getting started, expect U.S. Oil Production to start dropping off a cliff. We delve into the Oil Data metrics as to why April, May and June are strong months to be invested from the long side in the Oil Market – the seasonally strong part of the market from a demand perspective.
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