- How Controlling Syria's Oil Serves Washington's Strategic Objectives?
How Controlling Syria's Oil Serves Washington's Strategic Objectives?
Authored by Nauman Sadiq,
Before the evacuation of 1,000 American troops from northern Syria to western Iraq, the Pentagon had 2,000 US forces in Syria. After the drawdown of US troops at Erdogan’s insistence in order for Ankara to mount a ground offensive in northern Syria, the US has still deployed 1,000 troops, mainly in oil-rich eastern Deir al-Zor province and at al-Tanf military base.
Al-Tanf military base is strategically located in southeastern Syria on the border between Syria, Iraq and Jordan, and it straddles on a critically important Damascus-Baghdad highway, which serves as a lifeline for Damascus. Washington has illegally occupied 55-kilometer area around al-Tanf since 2016, and several hundred US Marines have trained several Syrian militant groups there.
It’s worth noting that rather than fighting the Islamic State, the purpose of continued presence of the US forces at al-Tanf military base is to address Israel’s concerns regarding the expansion of Iran’s influence in Iraq, Syria and Lebanon.
Regarding the oil- and natural gas-rich Deir al-Zor governorate, it’s worth pointing out that Syria used to produce modest quantities of oil for domestic needs before the war – roughly 400,000 barrels per day, which isn’t much compared to tens of millions barrels daily oil production in the Gulf states.
Although Donald Trump crowed in a characteristic blunt manner in a tweet after the withdrawal of 1,000 American troops from northern Syria that Washington had deployed forces in eastern Syria where there was oil, the purpose of exercising control over Syria’s oil is neither to smuggle oil out of Syria nor to deny the valuable source of revenue to the Islamic State.
There is no denying the fact that the remnants of the Islamic State militants are still found in Syria and Iraq but its emirate has been completely dismantled in the region and its leadership is on the run. So much so that the fugitive caliph of the terrorist organization was killed in the bastion of a rival jihadist outfit, al-Nusra Front in Idlib, hundreds of kilometers away from the Islamic State strongholds in eastern Syria.
Much like the “scorched earth” battle strategy of medieval warlords – as in the case of the Islamic State which early in the year burned crops of local farmers while retreating from its former strongholds in eastern Syria – Washington’s basic purpose in deploying the US forces in oil and natural gas fields of Deir al-Zor governorate is to deny the valuable source of income to its other main rival in the region, Damascus.
After the devastation caused by eight years of proxy war, the Syrian government is in dire need of tens of billions dollars international assistance to rebuild the country. Not only is Washington hampering efforts to provide international aid to the hapless country, it is in fact squatting over Syria’s own resources with the help of its only ally in the region, the Kurds.
Although Donald Trump claimed credit for expropriating Syria’s oil wealth, it bears mentioning that “scorched earth” policy is not a business strategy, it is the institutional logic of the deep state. President Trump is known to be a businessman and at least ostensibly follows a non-interventionist ideology; being a novice in the craft of international diplomacy, however, he has time and again been misled by the Pentagon and Washington’s national security establishment.
Regarding Washington’s interest in propping up the Gulf’s autocrats and fighting their wars in regional conflicts, it bears mentioning that in April 2016, the Saudi foreign minister threatened that the Saudi kingdom would sell up to $750 billion in treasury securities and other assets if the US Congress passed a bill that would allow Americans to sue the Saudi government in the United States courts for its role in the September 11, 2001 terror attack – though the bill was eventually passed, Saudi authorities have not been held accountable; even though 15 out of 19 9/11 hijackers were Saudi nationals.
Moreover, $750 billion is only the Saudi investment in the United States, if we add its investment in Western Europe and the investments of UAE, Kuwait and Qatar in the Western economies, the sum total would amount to trillions of dollars of Gulf’s investments in North America and Western Europe.
Furthermore, in order to bring home the significance of the Persian Gulf’s oil in the energy-starved industrialized world, here are a few stats from the OPEC data: Saudi Arabia has the world’s largest proven crude oil reserves of 265 billion barrels and its daily oil production exceeds 10 million barrels; Iran and Iraq, each, has 150 billion barrels reserves and has the capacity to produce 5 million barrels per day, each; while UAE and Kuwait, each, has 100 billion barrels reserves and produces 3 million barrels per day, each; thus, all the littoral states of the Persian Gulf, together, hold 788 billion barrels, more than half of world’s 1477 billion barrels of proven oil reserves.
No wonder then, 36,000 United States troops have currently been deployed in their numerous military bases and aircraft carriers in the oil-rich Persian Gulf in accordance with the Carter Doctrine of 1980, which states: “Let our position be absolutely clear: an attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force.”
Additionally, regarding the Western defense production industry’s sales of arms to the Gulf Arab States, a report authored by William Hartung of the US-based Center for International Policy found that the Obama administration had offered Saudi Arabia more than $115 billion in weapons, military equipment and training during its eight-year tenure.
Similarly, the top items in Trump’s agenda for his maiden visit to Saudi Arabia in May 2017 were: firstly, he threw his weight behind the idea of the Saudi-led “Arab NATO” to counter Iran’s influence in the region; and secondly, he announced an unprecedented arms package for Saudi Arabia. The package included between $98 billion and $128 billion in arms sales.
Therefore, keeping the economic dependence of the Western countries on the Gulf Arab States in mind, during the times of global recession when most of manufacturing has been outsourced to China, it is not surprising that when the late King Abdullah of Saudi Arabia decided to provide training and arms to the Islamic jihadists in the border regions of Turkey and Jordan against the government of Bashar al-Assad in Syria, the Obama administration was left with no other choice but to toe the destructive policy of its regional Middle Eastern allies, despite the sectarian nature of the proxy war and its attendant consequences of breeding a new generation of Islamic jihadists who would become a long-term security risk not only to the Middle East but to the Western countries, as well.
Similarly, when King Abdullah’s successor King Salman decided, on the whim of the Crown Prince Mohammad bin Salman, to invade Yemen in March 2015, once again the Obama administration had to yield to the dictates of Saudi Arabia and UAE by fully coordinating the Gulf-led military campaign in Yemen not only by providing intelligence, planning and logistical support but also by selling billions of dollars’ worth of arms and ammunition to the Gulf Arab States during the conflict.
In this reciprocal relationship, the US provides security to the ruling families of the Gulf Arab states by providing weapons and troops; and in return, the Gulf’s petro-sheikhs contribute substantial investments to the tune of hundreds of billions of dollars to the Western economies.
Regarding the Pax Americana which is the reality of the contemporary neocolonial order, according to a January 2017 infographic by the New York Times, 210,000 US military personnel were stationed all over the world, including 79,000 in Europe, 45,000 in Japan, 28,500 in South Korea and 36,000 in the Middle East.
Although Donald Trump keeps complaining that NATO must share the cost of deployment of US troops, particularly in Europe where 47,000 American troops are stationed in Germany since the end of the Second World War, 15,000 in Italy and 8,000 in the United Kingdom, fact of the matter is that the cost is already shared between Washington and host countries.
Roughly, European countries pay one-third of the cost for maintaining US military bases in Europe whereas Washington chips in the remaining two-third. In the Far Eastern countries, 75% of the cost for the deployment of American troops is shared by Japan and the remaining 25% by Washington, and in South Korea, 40% cost is shared by the host country and the US contributes the remaining 60%.
Whereas the oil-rich Gulf Cooperation Countries (GCC) – Saudi Arabia, UAE, Kuwait and Qatar – pay two-third of the cost for maintaining 36,000 US troops in the Persian Gulf where more than half of world’s proven oil reserves are located and Washington contributes the remaining one-third.
* * *
Nauman Sadiq is an Islamabad-based attorney, columnist and geopolitical analyst focused on the politics of Af-Pak and Middle East regions, neocolonialism and petro-imperialism.
Tyler Durden
Sat, 11/02/2019 – 23:30 - Visualizing The Massive Cost Of Cybercrime
Visualizing The Massive Cost Of Cybercrime
What do Equifax, Yahoo, and the U.S. military have in common? They’ve all fallen victim to a cyberattack at some point in the last decade – and they’re just the tip of the iceberg.
Today’s infographic from Raconteur delves into the average damage caused by cyberattacks at the organizational level, sorted by type of attack, industry, and country.
Rising Cybercrime Costs Across the Board
The infographic focuses on data from the latest Accenture “Cost of Cybercrime” study, which details how cyber threats are evolving in a fast-paced digital landscape.
Overall, Visual Capitalist’s Imam Ghosh notes that the average annual cost to organizations has been ballooning for all types of cyberattacks. For example, a single malware attack in 2018 costed more than $2.6 million, while ransomware costs rose the most between 2017–2018, from $533,000 to $646,000 (a 21% increase).
Both information loss and business disruption occurring from attacks have been found to be the major cost drivers, regardless of the type of attack:
-
Malware
Major consequence: Information Loss
Average cost: $1.4M (54% of total losses) -
Web-based attacks
Major consequence: Information Loss
Average cost: $1.4M (61% of total losses) -
Denial-of-Service (DOS)
Major consequence: Business Disruption
Average cost: $1.1M (65% of total losses) -
Malicious insiders
Major consequences: Business Disruption and Information Loss
Average cost: $1.2M ($0.6M each, 75% of total losses)
In 2018, information loss and business disruption combined for over 75% of total business losses from cybercrime.
Cybercrime Casts a Wide Net
No industry is untouched by the growing cost of cybercrime—the report notes that organizations have seen security breaches grow by 67% in the past five years alone. Banking is the most affected, with annual costs crossing $18 million in 2018. This probably comes as no surprise, considering that financial motives are consistently a major incentive for hackers.
Here is the average cost of cyberattacks (per organization) across 15 different industries:
Interestingly, the impact on life sciences companies rose the most in a year (up by 86% to $10.9 million per organization), followed by the travel industry (up 77% to $8.2 million per organization). This is likely due to an increase in sensitive and valuable data being shared online, such as clinical trial details or credit card information.
So What Can Companies Do?
Accenture analyzed nine cutting-edge technologies that are helping mitigate cybercrime, and calculated their net savings: the total potential savings minus the required investment in each type of technology or tool.
With almost $2.3 million in net savings, many companies recognize the high payoff that comes with security intelligence. On the other hand, leveraging automation, artificial intelligence, and machine learning can potentially save over $2 million—however, only 38% of businesses have adopted this solution so far.
Cybercrime will remain a large-scale concern for years to come. From 2019–2023E, approximately $5.2 trillion in global value will be at risk from cyberattacks, creating an ongoing challenge for corporations and investors alike.
Tyler Durden
Sat, 11/02/2019 – 23:00 -
- Was There Another Reason For Electricity Shutdowns In California?
Was There Another Reason For Electricity Shutdowns In California?
Authored by Richard Trzupek via The Epoch Times,
According to the official, widely reported story, Pacific Gas & Electric (PG&E) shut down substantial portions of its electric transmission system in northern California as a precautionary measure.
Citing high wind speeds they described as “historic,” the utility claims that if they didn’t turn off the grid, wind-caused damage to their infrastructure could start more wildfires in the area.
Perhaps that’s true. Perhaps. This tale presumes that the folks who designed and maintain PG&E’s transmission system are unaware of or ignored the need to design it to withstand severe weather events, and that the Federal Energy Regulatory Commission (FERC) and North American Electric Reliability Corporation (NERC) allowed the utility to do so.
Ignorance and incompetence happens, to be sure, but there’s much about this story that doesn’t smell right—and it’s disappointing that most journalists and elected officials are apparently accepting it without question.
Take, for example, this statement from a Fox News story about the Kincade Fires: “A PG&E meteorologist said it’s ‘likely that many trees will fall, branches will break,’ which could damage utility infrastructure and start a fire.”
Did you ever notice how utilities cut wide swaths of trees away when transmission lines pass through forests? There’s a reason for that: When trees fall and branches break the grid can still function.
So, if badly designed and poorly maintained infrastructure is not the reason PG&E cut power to millions of Californians, what might have prompted them to do so? Could it be that PG&E’s heavy reliance on renewable energy means they don’t have the power to send when an “historic” weather event occurs?
Wind Speed Limits
The two most popular forms of renewable energy come with operating limitations. With solar power the constraint is obvious: the availability of sunlight. One does not generate solar power at night and energy generation drops off with increasing degrees of cloud cover during the day.
The main operating constraint of wind power is, of course, wind speed. At the low end of the scale, you need about a 6 or 7 mph wind to get a turbine moving. This is called the “cut-in speed.” To generate maximum power, about a 30 mph wind is typically required. But, if the wind speed is too high, the wind turbine will shut down. This is called the “cut-out speed,” and it’s about 55 mph for most modern wind turbines.
It may seem odd that wind turbines have a cut-out speed, but there’s a very good reason for it. Each wind turbine rotor is connected to an electric generator housed in the turbine nacelle. The connection is made through a gearbox that is sized to turn the generator at the precise speed required to produce 60 Hertz AC power.
The blades of the wind turbine are airfoils, just like the wings of an airplane. Adjusting the pitch (angle) of the blades allows the rotor to maintain constant speed, which in turn allows the generator to maintain the constant speed it needs to safely deliver power to the grid. However, there’s a limit to blade pitch adjustment. When the wind is blowing so hard that pitch adjustment is no longer possible, the turbine shuts down. That’s the cut-out speed.
Now consider how California’s power generation profile has changed. According to Energy Information Administration data, the state generated 74.3 percent of its electricity from traditional sources—fossil fuels and nuclear—in 2001. Hydroelectric, geothermal, and biomass-generated power accounted for most of the remaining 25.7 percent, with wind and solar providing only 1.98 percent of the total.
By 2018, the state’s renewable portfolio had jumped to 43.8 percent of total generation, with wind and solar now accounting for 17.9 percent of total generation. That’s a lot of power to depend on from inherently unreliable sources.
Thus, it would not be at all surprising to learn that PG&E didn’t stop delivering power out of fear of starting fires, but because it knew it wouldn’t have power to deliver once high winds shut down all those wind turbines.
Tyler Durden
Sat, 11/02/2019 – 22:30 - Forgiving Student Loan Debt Would Create Moral Hazard, Exacerbate Problems: Moody's
Forgiving Student Loan Debt Would Create Moral Hazard, Exacerbate Problems: Moody's
Wiping out student loan debt would provide a modest bump to the economy, but could risk “moral hazard” which would eventually make the problem worse, according to Moody’s Investors Service.
The opinion comes as Democratic presidential candidates Bernie Sanders and Elizabeth Warren dangle the prospect of forgiving some or all of the $1.5 trillion in outstanding education debt. Both candidates have also proposed free free college.
Moody’s, however, think the effects of wholesale debt forgiveness at a macro level would be fairly muted.
“In the near term, we would expect student loan debt cancellation to yield a tax-cut-like stimulus to economic activity, contributing to a modest increase in household consumption and investment,” said William Foster, the firm’s senior credit analyst. “The magnitude of the stimulus would depend on the size of the debt relief and income level of the beneficiaries.“
In dollar terms, Foster cited studies showing that canceling debt would add $86 billion to $108 billion a year to GDP over a 10-year period. Less aggressive measures to forgive some loans and restructure payments for others would amount to $120 billion over a decade.
In a $21.5 trillion U.S. economy, those kinds of gains won’t move the needle very fair [sic] from a broad sense. –CNBC
That said, CNBC notes that the issue of student debt ‘and its role in growing wealth inequality’ has been seized upon by Democratic candidates, and could eventually lead to a ‘fundamental change to the way higher education is financed in the U.S.’ due to the disproportionate impact on younger people.
“Over the longer term, debt forgiveness could lead to an improvement in small business and household formation, as well as increased homeownership,” Foster continues in the note. “However, it could also increase the risk of moral hazard and the accumulation of even higher student debt burdens.“
Future borrowers, for instance, might be encouraged to run up big loan balances on the assumption that their debts will be forgiven at some point.
It’s also unclear how much forgiveness would address wealth inequality. The New York Fed estimates that about two-thirds of outstanding debt is currently held by the upper-half of earners. –CNBC
Last month a former official working for the agency administering the country’s federal student loan program resigned, and has endorsed canceling most of the country’s outstanding student debt.
Calling the system “fundamentally broken,” A. Wayne Johnson – appointed in 2017 by Education Secretary Betsy DeVos, says that repayment trends suggest most student loan debt will never be repaid, according to the Wall Street Journal.
His solution? Forgive up to $50,000 for anyone with federal student-loan debt, which would amount to a bailout of approximately $925 billion. The plan would wipe out the debt of nearly 37 million borrowers. He would also advocate for a tax credit for up to $50,000 for people who have already repaid their debt.
Interestingly, that’s the exact amount Elizabeth Warren’s plan would forgive; $50,000 for anyone with under $100,000 in annual household income (and less for those above that amount).
“It’s a problem for all of us,” said Warren in April, adding: “It’s reducing home ownership rates. It’s leading fewer people to start businesses. It’s forcing students to drop out of school before getting a degree.”
Tyler Durden
Sat, 11/02/2019 – 22:00 - The Middle East's New Post-Regime-Change Future
The Middle East's New Post-Regime-Change Future
Authored by Matthew Ehret via The Strategic Culture Foundation,
With the transformation of the rules of the “Great Game” in the Middle East emerging out of President Trump’s recent Syrian surprise pullout and Putin’s brilliant manoeuvres since 2015, a sweeping set of development/reconstruction programs led by China now have a chance to become hegemonic across the formerly hopeless, terrorist-infested region.
The fact that the Arab states of the Middle East were targeted for destruction by western geopoliticians over the last 40 years is not un-connected to the region’s historic role as “cross-roads of civilizations” which were once the bridge between East and West along the ancient Silk Road (c. 250 BC). Today’s New Silk Road has brought 150 countries into a multipolar model of cooperation and civilization-building which necessitates a stabilized Middle East in order to function.
When asking “how could a reconstruction of the Middle East be possible after so many years of hell” I was pleasantly surprised to discover that both great projects once derailed have been given new life with the new prospects for peace and also new projects never before dreamed possible have been created as part of the New Silk Road (Aka: One Belt One Road).
Just to get a sense of this incredible potential that is keeping western oligarchs up at night, I want to quickly review just a few of the greatest China-led reconstruction projects which are now taking hold in four of the most decimated areas of the Middle East: Iraq, Syria, Yemen and Afghanistan.
Iraq Joins the New Silk Road
After decades of foreign manipulation, the Iraqi government was able to declare victory over Da’esh in 2017- just 3 years after the western-sponsored insurgents had gained control of one third of the territory. This new stability created by Russia’s intervention into Syria, unleashed a vast potential for China-led reconstruction to not only re-build the war-torn nation, but launch it into the 21st century.
In September 2019, Iraqi Prime Minister Adil Abdu-Mahdi announced Iraq’s participation in the New Silk Road standing alongside Xi Jinping in Beijing. Mahdi said: “Iraq has gone through war and civil strife and is grateful to China for its valuable support… Iraq is willing to work in the ‘One Belt One Road’ framework”. President Xi then said: “China would like, from a new starting point together with Iraq, to push for the China-Iraq Strategic Partnership”.
Part of this Strategic Partnership involves an Oil for Reconstruction program which will see Chinese firms exchange infrastructure-building for oil (100 000 barrels/day to be exact). Already Iraq is China’s 2nd largest supplier of overseas oil while China has become Iraq’s #1 trade partner. Abdul Hussein al-Hanin (Advisor to the Prime Minister) explained that rather than giving money for Iraqi oil, China would build its projects defined by 3 priorities which al-Hanin said “first is building and modernizing the highways and internal roads with their sewage systems. Second is the construction of schools, hospitals and residential and industrial cities, and third is the construction of railways, ports, airports and other projects”. Atop the list of “other projects” include water treatment systems and power plants.
While Iraq’s economy is dependant on oil (making up 65% of its GDP, 100% of its export revenue), China’s New Silk Road focuses upon diversifying Iraq into a more complex full spectrum economy which is vital to enhance its sovereignty.
While great strides have been made towards a new system, anti-government protests threaten to disrupt this program having left 100 dead and thousands wounded since they began in July 2018.
A New Hope for Syria
The wounds Syria has inflicted since the crisis erupted in 2011 will take generations to heal, with over half a million deaths, a loss of 5.6 million civilians who have fled the country and approximately 6.1 million displaced within Syria itself. China has made clear its intentions to bring the BRI to Syria as fast as possible since 2017 with Foreign Ministry spokesman Geng Shuang saying:
“Too many people in the Middle East are suffering at the brutal hands of terrorists. We support regional countries in forming synergy, consolidating the momentum of anti-terrorism and striving to restore regional stability and order. We support countries in the region in exploring a development path suited to their national conditions and are ready to share governance experience and jointly build the Belt and Road and promote peace and stability through common development.”
After committing $23 billion in aid in 2018, BRI projects in Syria have taken many forms which can now begin as a viable peace process is finally underway, including East-West rail and road connections between Asia and Europe passing through Iran, to Iraq and into Syria where goods can be sent to the Basra Port in Iraq, the Syrian ports of Latakia and Tartus on the Mediterranean as well as the incredibly important Port of Tripoli in Lebanon called a “pearl on the New Silk Road” by the Chinese.
Discussion of a North South route connecting transport routs through Syria to Lebanon, Israel and Egypt into Africa are now underway and the timing of the chaotic anti-government protests in Lebanon makes one wonder if western meddling is behind it.
Many of the beautiful possibilities for Syrian reconstruction were laid out in great detail in a 2016 Schiller Institute video entitled Project Phoenix which has circulated widely across the Arab world.
Assad’s Five Seas Strategy Revived
Little known in the western world, President Bashar al-Assad had already advanced this vision as early as 2004 when he first announced his “Five Seas Strategy”. In an August 1, 2009 interview, President Assad described his program beautifully:
“Once the economic space between Syria, Turkey, Iraq and Iran becomes integrated, we would link the Mediterranean, Caspian, Black Sea, and the [Persian] Gulf . . . we aren’t just important in the Middle East. . . Once we link these four seas, we become the unavoidable intersection of the whole world in investment, transport, and more.”
Going beyond mere words, President Assad had led delegations signing agreements with Turkey, Romania, Ukraine, Azerbaijan, Iran, Iraq and Lebanon to begin Five Seas projects. This was done at a moment that President Qadaffi was well underway building the Great Manmade River as the largest water project in history alongside a coalition of nations of Sudan and Egypt.
In a powerful report Extending the New Silk Road to West Asia and Africa, BRI expert Hussein Askary wrote: “Through the BRI, China is offering the rest of the world its know-how, experience and technology, backed by a $3 trillion financial arsenal. This is a great opportunity for West Asia and Africa to realize the dreams of the post-World War II independence era, dreams that have unfortunately been sabotaged for decades. The dramatic deficit in infrastructure both nationally and inter-regionally in West Asia and Africa can, ironically, be considered in this new light as a great opportunity.”
It is now becoming obvious, that the Syrian project that was derailed in 2011 can now get back on track.
Yemen as Keystone of the Maritime Silk Road
The four year Saudi war on Yemen has been a humanitarian disaster of our times. However in spite of insurmountable odds, the Yemenis have managed to not only defend themselves but have pulled off one of the most brilliant military flanking maneuvers in history crippling the Saudi economy on September 29th. This victory has both forced the Saudis to eat yet-another mouthful of humble pie and created a breathing space for a serious discussion for Yemen’s reconstruction through participation in the New Silk Road. Sitting upon the entry of the Gulf of Aden with the Red Sea, Yemen is today as it was 2000 years ago: a vital node in both Maritime Silk Road and the land-based Silk Road connecting Asia with Africa and Europe.
Already several Yemeni organizations have been created endorsing this vision led by the Yemeni Advisory Office for Coordination with the BRICS, Yemeni Youth BRICS Cabinet and the New Silk Road Party which has gained the support of leading government officials since their founding by Yemeni poet/statesman Fouad al-Ghaffari in 2016. Courageous efforts such as these have resulted in the government’s signing an MOU to join the BRI in June 2019.
A word on Turkey and Afghanistan
The Middle Corridor linking Turkey to Georgia and Azerbaijan via rail and to China via Turkmenistan and Kazakhstan was hailed by Erdogan to “be at the heart of the Belt and Road Initiative.” In July 2019, Erdogan said the BRI “has emerged as the greatest development project of the 21st century”. After citing the Yavuz Sultan Selim Bridge over the Bosporus, Eurasian tunnel and Marmaray system across the Dardanelles and its vast high speed rail, Erdogan continued by saying: “Turkey shares China’s vision when it comes to serving world peace, preserving global security, stability, promoting multilateralism… the world seeks a new multipolar balance today”. It is no secret that Turkey has come to the realization that its destiny relies on China, whose trade rose from $230 million in 1990 to a staggering $28 billion in 2017!
President Trump’s efforts to bring the Taliban to the discussion table with the Afghan government of Ahmadzai have resulted in a renewed potential for China’s desire to extend the $57 billion China-Pakistan-Economic Corridor (CPEC) into Kabul. While this diplomatic opportunity is very fragile, it is the closest the region has yet come to a viable resolution to the post 2001 insanity (including the replacement of its opium-based economy towards a viable full spectrum nation).
It goes without saying that the entire Arab world is looking at a new future of hope and development through the combined efforts of Russia and China. The USA, under Trump’s efforts to undo the decades of Gordian Knots in the Middle East have resulted in the most absurd campaign from republican and democratic tools in Washington to impeach the president. Obviously, a US-Russia-China alliance would be a wonderful blessing for the world, but for this to occur, the matter of the deep state infestation of America must first be dealt with.
Tyler Durden
Sat, 11/02/2019 – 21:30 - Rage With The Machine? 90's Resistance Band Reunites To Do Establishment Bidding In 2020
Rage With The Machine? 90's Resistance Band Reunites To Do Establishment Bidding In 2020
Legendary 1990s band Rage Against The Machine has been triggered into reuniting ahead of the 2020 election in order to #resist four more years of Donald Trump – perhaps the most anti-establishment, ‘outsider’ president in US history.
The band will initially play three shows “along or near the Mexican border,” according to Consequence of Sound, where they’ll surely explain their silence in 2011 when the Obama administration was called out by the ACLU for family separation and sticking migrant kids in cages (though Tom Morello did accuse Obama of war crimes, and admitted in 2012 that he ‘drank the Kool-Aid‘ when Obama was elected in 2008).
Rage *For* The Machine. Like loyal man servants
— Louie Lozano 🇺🇸 (@WeldtoWrite) November 1, 2019
Next spring, Zack de la Rocha, Tom Morello, Brad Wilk, and Tim Commferford will take the stage for the first time since 2011. The staunchly political rock band will initially play a trio of shows in cities along or near the Mexican border, including El Paso, Texas; Las Cruses [sic], New Mexico; and Phoenix, Arizona. They’ll then head to Indio, California in April to headline the 2020 installment of Coachella. –Consequence of Sound
According to CoS, the reunion shows were announced Friday morning via an unverified Instagram account and later confirmed by the publication.
As recently as May of this year, Morello seemed to downplay the possibility of a RATM reunion. “I would say, rather than people waiting around for Rage Against the Machine, form your own band,” he told Heavy Consequence. “Let’s hear what you have to say. Get out there and do it. Don’t sit around twiddling your thumbs waiting for some other band to do it.” However, the impending 2020 presidential election and possibility of Donald Trump winning a second term reportedly compelled the band into action.
Needless to say, the fact that RATM will effectively be cheerleading for the establishment has not gone unnoticed.
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So they’ll be used as political pawns? How unique and genuine
— Yellow Red Sparks 🌕 (@yellowredsparks) November 1, 2019
Rage against , yet vote 4 the machine?
— Anthony Conso (@AnthonyConso) November 1, 2019
When a Dem is in office: “Yes Sir, I’ll do exactly what you tell me.”
I can’t take em seriously.
— Mad Mad Zartman (@Drewshbag99) November 1, 2019
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Shilling in the Name Of https://t.co/LWywzHypLV
— Jack Posobiec 🇺🇸 (@JackPosobiec) November 1, 2019
Tyler Durden
Sat, 11/02/2019 – 21:00 - How School Districts Put Politics Before Children
How School Districts Put Politics Before Children
Authored by Matthew Bankert via The Mises Institute,
Many people wary of government power rightly criticize public schools for being more indoctrination than education.
When the institution is fully dependent on the state for support, why would any ideas be put forth that could put their lifeblood in jeopardy? On education, Mises wrote in Human Action:
…as soon as one wants to go farther [than elementary notions of geometry, the natural sciences, and the valid laws of the country], serious difficulties appear. Teaching at the elementary level necessarily turns into indoctrination. It is not feasible to represent to adolescents all the aspects of a problem and to let them choose between dissenting views…The party that operates the schools is in a position to propagandize its tenets and to disparage those of other parties.
However, one aspect of public education that is not often discussed is the potential insidiousness of school districting. In the Howard County Public School System (HCPSS) in Maryland this insidiousness is coming brazenly out in the open.
Without much fanfare, schools routinely get their districts tweaked every few years to balance out school capacity as students age in and out. Back in August 2019, however, the HCPSS superintendent unveiled a radical redistricting plan that seeks to more evenly distribute students across the county by household income. In the superintendent’s own words, “Previous redistricting processes focused more narrowly on capacity utilization and other factors such as socioeconomics took a back seat. This proposal is…leading with equity as the driver to provide all students with full access and opportunity to receive the best educational services and supports.”
Having school capacity take a back seat, the proposal looks at the percentage of students in the Free and Reduced Meals (FARM) program at a given school as a gauge for socio-economic status. If the percentage is higher than desired, “polygons” (the subdistricts in the county allocated to a particular school) would be moved from that school’s district to another school’s district where the FARM percentage is less, and vice versa. For many, this will mean leaving their neighborhood school and going to a school farther away. Thus, a flurry of polygons are potentially shuffling around for the sake of equity.
The legislative body of Howard County is the Howard County Council. Three council members recently introduced a resolution called CR-112 in support of the redistricting plan that made things even more explicit, bringing race into the equation: “…[the Council] supports the Howard County Board of Education and Howard County Public School System in their efforts to lawfully integrate through the boundary review process and focus their efforts and resources to close the achievement gaps and racial and economic disparities in the Howard County Public School System.”
Fallacies of the Proposal
CR-112 cites the landmark Supreme Court case “Brown v. Board of Education” as justification. Unfortunately, the irony of that case is lost on the council: Oliver Brown sued the school board with the NAACP because his daughter was being bused far away to a segregated school, when there was a neighborhood school close to his house.
CR-112 also is arguably going against a 2007 supreme court decision, which forbade local school systems from integrating schools compulsorily based on race. “The way to stop discrimination on the basis of race is to stop discriminating on the basis of race,” said Chief Justice John Roberts at the time. The superintendent’s proposal, on the other hand, slyly avoids this pitfall by not explicitly referring to race, but focusing on socio-economic status.
Wanting to bring busing back into fashion, the superintendent is willing to accept a $2.76 million increase in transportation costs for busing students further distances in the name of equity. The cynical among us might wonder if just dividing the $2.76 million among the less affluent students could be more effective (and greener). The increased busing puts some families in a strange position where their kids will be transported right by their closest high school on the way to their newly districted high school (this sounds eerily similar to a famous Supreme Court case). Some families will have 3, 4, or 5 high schools in closer proximity than their districted high school.
Furthermore, Howard County has some notable characteristics that make this redistricting situation especially amusing. The redistricting proposal calls for greater socioeconomic equality, but Howard County is the third richest county in the United States as of 2018. Might other US counties call on Howard County to spread their wealth around?
The county council calls for “racial integration,” but the schools are already incredibly diverse. The county-wide average of white students in the elementary, middle, and high schools is only 34%, 36%, and 39% respectively (pages 25-26 of the superintendent’s proposal). One could rightly ask the question, what are the “correct” demographics, and why? What is the goal the proposal seeks to achieve?
In a free society, if there was a local school that didn’t live up to a family’s standards, they could just choose another nearby school. There would be no school districts. But in this society of public schools, what is a family’s only option if they don’t like the local school and private or home school is not a good option? In many cases, though not all, they have to move to a different area. This is a pretty drastic measure, and some are willing to do it. However, when the public school bureaucracy has the power to radically change the school districts according to their whims, what hope will families have that even moving to a different neighborhood will get them into a better school?
Fortunately, the opposition to this proposal in Howard County has been overwhelming. Many protests have happened across the county with national media taking notice. Hundreds and hundreds of parents and students have written letters and testified before the Board of Education. The Board of Education will make a final decision on the proposal in late November 2019.
Tyler Durden
Sat, 11/02/2019 – 20:30 - Uber Eats Says Drone Deliveries Coming To San Diego In 2020
Uber Eats Says Drone Deliveries Coming To San Diego In 2020
If it’s UPS, FedEx, and or Amazon, or maybe even food delivery companies, they’re all gravitating towards adopting drones for last-mile deliveries.
UPS has undoubtedly embraced the focus of last-mile logistics by incorporating drones over the last several years.
Now it seems like Uber Eats, an online food ordering and delivery platform — launched by ride-hailing company Uber, is the next company to utilize drones for delivering goods from businesses to consumers.
The company is expected to launch the new drone delivery service in the San Diego Metropolitan area in 2H20.
On Oct. 28, Uber tweeted a rendering of the Uber Eats drone, a six-rotor drone that is capable of carrying two meals in its body.
Is it a bird? Is it a plane?
No, it’s our new @UberEats Elevate drone design. pic.twitter.com/RpkJbDx2db
— Uber (@Uber) October 28, 2019
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The drone has the capability of traveling up to 18 miles or 12 miles round-trip at an altitude of about 400 feet.
From the restaurant (staging area) to the drop-off point, the company estimates delivery times to the customer will be around eight minutes, including the time to load and unload the meals.
Several pilot tests of the new service were conducted in 2018. A McDonald’s near San Diego State University was the site of one of the tests.
Uber Eats has spent that last year perfecting the design of the drone. The one seen in the rendered picture tweeted by Uber is expected to be the final design.
More elaborate test flights are slated for the next several months, as it’s expected the new service will launch in San Diego by summer 2020.
Tyler Durden
Sat, 11/02/2019 – 20:00 - Chang: China Is "The Third Reich In The 21st Century"
Chang: China Is "The Third Reich In The 21st Century"
Scholar Gordan Chang warns that the United States must ultimately “disengage from China” on all fronts if it is to maintain its status as a global superpower or risk China’s massive potential to change the geopolitical structure of the world.
Chang, who just returned from Japan, Hong Kong and South Korea, spoke on The Sara Carter Show where he described the current state of Beijing and the authoritarian government’s influence across the globe.
“This is the Third Reich in the 21st century,” said Chang.
China’s policy “is incompatibility with our system. We are unfortunately going to have to reverse course and disengage from China to protect ourselves – to reduce our vulnerability to an extremely dangerous actor.”
This reporter was recently in Japan and South Korea with Chang and other experts who attended the international CPAC conventions. It is an international effort to connect with foreign allies who are battling increased pressure by socialist and leftist leaders bent on targeting open markets, democracy and independence.
“What we have to do ultimately is to disengage from China to get our companies out of China, to get China out of the United States because we cannot live with this militant Communist superstate that takes the position that China is the world’s only sovereign state,” said Chang.
He noted that the Chinese government sees the U.S. as basically subjects of Beijing’s expansion and that the communist government believes “Americans must acknowledge Chinese sovereignty and obey them.”
He noted that the Trump administration must “continue to impose high tariffs.” Chang does not believe that the current proposed trade deal with China will change Beijing’s efforts to take economic control or curtail the Chinese military and intelligence apparatus from stealing intellectual property.
“China has been stealing hundreds of billions of dollars of U.S. intellectual property each year,” he said. “And I don’t think we’re going to stop that with a Phase 1 trade deal.”
“So get our companies out of China,” he added. “That will reduce their opportunity for stealing from us right now. You know Sara, Beijing is dropping hints that we have to accept the genocidal campaign it’s conducting inside its own borders.”
“This is absolutely unacceptable what China is doing there is trying to eliminate racial and ethnic group a religious group,” said Chang.
He noted that the Chinese aren’t going to back down and basically demand that the U.S. not change its policy or get involved with their own human right’s violations in their nation or in the region.
Tyler Durden
Sat, 11/02/2019 – 19:30 - "What Are You Thinking?": Pelosi Warns 2020 Candidates They're On The Wrong Track
"What Are You Thinking?": Pelosi Warns 2020 Candidates They're On The Wrong Track
House Speaker Nancy Pelosi thinks Democrats running for president in 2020 might strike out against Trump with ultra-liberal policies that fire up the party’s progressive base, yet might not go over so well with swing voters in flyover states.
Proposals pushed by Elizabeth Warren and Bernie Sanders like Medicare for All and a wealth tax play well in liberal enclaves like her own district in San Francisco but won’t sell in the Midwestern states that sent Trump to the White House in 2016, she said. –Bloomberg
“What works in San Francisco does not necessarily work in Michigan,”Pelosi said in a wide-ranging interview with Bloomberg. “What works in Michigan works in San Francisco — talking about workers’ rights and sharing prosperity.”
“Remember November,” she added. “You must win the Electoral College.”
And while she didn’t back any particular candidate running for office, Pelosi said Democrats should be focusing on “lower costs of prescription drugs, bigger paychecks by building infrastructure, and cleaner government.“
She also worries that candidates like Warren and Sanders are going down the wrong track by trying to ‘out-left’ each other to court fellow progressives while abandoning moderate voters that the party needs to win back from Trump.
“As a left-wing San Francisco liberal I can say to these people: What are you thinking?” Pelosi said. “You can ask the left — they’re unhappy with me for not being a socialist.“
Pelosi also expressed concerns that voters don’t care about the Green New Deal promoted by Bernie Sanders and Elizabeth Warren, which calls for rapid, radical reductions in carbon emissions.
“There’s very strong opposition on the labor side to the Green New Deal because it’s like 10 years, no more fossil fuel. Really?” said Pelosi.
The speaker’s concerns reflect those of many Democratic leaders and donors who believe that left-wing policies will alienate swing voters and lead to defeat.
Warren and Sanders are betting on a different theory — that voters who float between parties are less ideological and can be inspired to vote for candidates who represent bold new change in Washington.
Pelosi said Democrats should seek to build on President Barack Obama’s Affordable Care Act instead of pushing ahead with the more sweeping Medicare for All plan favored by Warren and Sanders that would create a government-run health care system and abolish private insurance. –Bloomberg
Instead, Pelosi says Democrats need to salvage Obamacare:
“Protect the Affordable Care Act — I think that’s the path to health care for all Americans. Medicare For All has its complications,” she said, adding that “the Affordable Care Act is a better benefit than Medicare.”
Warren on Friday announced that her Medicare for All plan would cost $52 trillion (raising federal spending by $20.5 trillion over 10 years), and would be funded through a wave of taxes on large corporations, the wealthy, cracking down on tax evasion, an $800 billion reduction in defense spending, and putting newly legalized immigrants on the tax rolls. The Biden campaign called her plan “mathematical gymnastics” which would raise taxes on the middle class. Warren hit back, accusing Biden of “running in the wrong presidential primary.”
“Democrats are not going to win by repeating Republican talking points,” Warren said while speaking in Des Moines, Iowa. “So, if Biden doesn’t like that, I’m just not sure where he’s going.”
Watch above, or read the rest of the report here.
Tyler Durden
Sat, 11/02/2019 – 19:21 - The Plunge In Global Shipping Container Rates Means The Economic Rebound Will Have To Wait
The Plunge In Global Shipping Container Rates Means The Economic Rebound Will Have To Wait
The global/US economy is in trouble, and more specifically, S&P500 earnings deterioration will likely end up in a recession in the next several quarters.
US major equity indexes are hitting new highs, as Treasury yields have soared this weak on the idea that a 2016-style rebound in the global economy is imminent.
Earlier in the week, UBS strategist Francois Trahan blew apart the imminent global/US rebound narrative and said: “The earnings landscape has already deteriorated and will likely get worse: The consensus year-over-year growth rate in S&P500 forward earnings is down to a mere 1% from a peak of 23% in September of 2018. Forward earnings are already contracting in the Midcap and Smallcap indices…If history were a perfect guide, the S&P500 would trough in Q2 of 2020 and rebound after that. Should the economy bottom in Q4 of 2020, as interest rates suggest, then history argues, the S&P500 would begin to price in a sustainable recovery sometime between April and August of 2020…PMIs Argue That Forward EPS Growth Will Trend Lower For Another 6 Months.”
President Trump’s non-stop fake trade news tweeting has indeed decoupled the market from focusing on worsening macro and fundamentals.
Teddy Vallee, CIO of Pervalle Global, has spotted an alarming downtrend in the Freightos 40 ft. Global Shipping Container Rate.
Vallee has likely found an accurate barometer of global economic activity, now plunging in the last two months.
“The move in container shipping rates is consistent with the continued deterioration in raw industrial commodities, China’s official PMI, China’s steel PMI, as well as market internals such as industrials relative to the S&P500,” Vallee said.
Freightos 40 ft. Global Shipping Container Rate started to trough in 1H19. The narrative back then was the global/US economy would rebound in 4Q19 and soar in 2020. But with 61 days left in 4Q, macroeconomic headwinds continue to mount across the world as global container rates plunge to new lows on the year, suggesting a global/US economic revival is nowhere to be found.
With no signs of a global recovery, market participants will once again be jawboned back to reality, or as some have called it: a ‘macro matters’ event — the only question is finding the trigger that brings everybody out of the fake trade news daze spurred by the Trump administration.
Tyler Durden
Sat, 11/02/2019 – 19:00 - Portland Antifa Sentenced To Nearly Six Years For Attacking Trump Supporter
Portland Antifa Sentenced To Nearly Six Years For Attacking Trump Supporter
A 24-year-old member of Antifa who hit another man over the head with a baton during a June 29 scuffle in Portland was sentenced to nearly six years in prison on Friday, according to Oregon Live.
Gage Halupowski Gage Halupowski was identified as one of several black-clothed and masked Antifa demonstrators seen on video attacking Adam Kelly after he appeared to come to the aid of an elderly man who had been attacked by the violent leftists.
Different angle:
CONTENT WARNING: Police have declared a civil disturbance after a violent brawl broke out between left- and right-wing protesters today. Video by Sergio Olmos/Underscore. Full story: https://t.co/dJMlSoDkg6 pic.twitter.com/fx8hELNziW
— Portland Tribune (@ThePortlandTrib) June 29, 2019
Kelly wrote on Facebook after the attack that he suffered a concussion and required 25 staples to close the wounds.
Adam Kelly’s head And now, Gage is going to prison.
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Breaking: Antifa militant Gage Halupowski sentenced to nearly 6 years in prison for striking a man on head from behind w/a baton during riot. He was masked at the time & assaulted an officer while trying to escape. His lawyer says sentence is too severe. https://t.co/g0VNdtPYcx pic.twitter.com/aSNYum9xzV
— Andy Ngo (@MrAndyNgo) November 2, 2019
Defense attorney Edward Kroll said Halupowski made “a really terrible decision” and that Kelly didn’t deserve what happened to him, but the attorney believed the agreed-upon 70-month prison sentence was “one of the harshest sentences I’ve seen for someone with no criminal background and young age.”
Kroll cited the Measure 11 charges Halupowski faced and the attack being caught on video as leaving the 24-year-old with few options other than taking the plea deal. Kroll also noted that Halupowski hit Kelly once, but it had been determined that at least two other people hit him in the head with batons.
[Multnomah County Deputy District Attorney Melissa] Marrero disagreed with Kroll’s assertions, saying she felt the charges and sentence were appropriate based on the severity of Kelly’s injuries and Halupowski’s strike. She said first-degree assault, which carried a potential 90-month sentence, and riot charges were initially considered in the case. –Oregon Live
Conservative journalist Andy Ngo was also present at the June protest, where he sustained injuries of his own.
In the ER. pic.twitter.com/spe5N4nzVl
— Andy Ngo (@MrAndyNgo) June 29, 2019
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According to the report, “Halupowski was one of three people arrested during rival demonstrations between far-right and anti-fascist groups on June 23. Police at one point declared the protests a civil disturbance.”
Tyler Durden
Sat, 11/02/2019 – 18:40 - Connecticut: Where Ridicule Is A Crime
Connecticut: Where Ridicule Is A Crime
Authored by Alan Dershowitz via The Gatestone Institute,
Two students at the University of Connecticut have been charged with the crime of ridiculing African Americans by shouting the N-word as part of a childishly inappropriate game. A video of the incident went viral and generated protests on and off the campus.
Outrageous as shouting this racist epithet is, the First Amendment protects it from criminal prosecution or other governmental sanctions. The Connecticut General Statute under which the students were charged is just about as unconstitutional as any statute can be. It is not even a close case. Here is what the statute criminalizes:
Section 53-37 – Ridicule on account of creed, religion, color, denomination, nationality or race.
Any person who, by his advertisement, ridicules or holds up to contempt any person or class of persons, on account of the creed, religion, color, denomination, nationality or race of such person or class of persons, shall be guilty of a class D misdemeanor.
“Ridicules or holds up to contempt”!
Among the most fundamental First Amendment rights is to ridicule — regardless of the reason. The same is true of holding people or groups up to contempt. Were this absurd statute to be upheld — which it will not be — it could be applied to comedians, op-ed writers, politicians, professors and other students.
Consider, for example, ridiculing people based on nationality. Sacha Baron Cohen, based on his films, would be guilty on multiple accounts. So would Mel Brooks. African American comedians often ridicule “whitey.” Feminist stand-up comedians mock men mercilessly.
Or consider “holds up to contempt” — half the faculty of many universities, including some at University of Connecticut — would be guilty for holding up Israel to contempt. Or students who attack other students for “white privilege” or “male privilege” would be committing a crime. Or pro-choice students or faculty who mock Christian fundamentalists who oppose abortion or gay rights. Where would it stop?
And what about “creed”? Is being a conservative or a Trump supporter a creed that cannot be ridiculed?
Of course, none of these politically correct ridiculers would ever be prosecuted under this statute. And therein lies its greatest danger: selective prosecution based on current political correctness. Precisely the kind of unpopular speech which the First Amendment was designed to protect would be most at risk. Anti-Semitic, anti-Christian and anti-conservative views are freely expressed not only outside of classes but in some classes as well. Such hateful expressions are not only tolerated, they are often praised as “progressive” by some of the same students and faculty members who would censor politically incorrect hate speech. Under the First Amendment, such selective censorship is intolerable.
Because the University of Connecticut is a public institution for adults, it is fully bound by the First Amendment. Its students are free to express racist ridicule and contempt outside of the classroom (the rules governing classroom speech are more complex).
The proper response to the expression of such obnoxious views is to counter them with better views in the marketplace of ideas, not to censor them and not to call the police.
So let there be rallies demanding mandatory diversity classes. Let the university president “bravely” stand in solidarity with the understandably offended students. Let the perpetrators be condemned and ostracized. These actions too are protected by the first amendment. But do not censor or prosecute protected obnoxious speech. All who care about civil liberties, regardless of race, should now join with the racist students in opposing their criminal prosecution and demanding that the Connecticut statute be struck down as unconstitutional.
The American Civil Liberties Union (ACLU) and the president of the university should lead the campaign against criminalizing speech that ridicules. Now that would take courage in our age of political correctness and at a time when the hard left is demanding “free speech for me but not for thee.” But this is not an age in which courage is widely practiced, especially on university campuses, and most especially by administrators.
So, do not count on others to defend the First Amendment rights of troublemakers who express racial ridicule or condemnation. The defense must come from grass roots civil libertarians who understand the need to protect speech we hate even more that speech we love. Where is Voltaire — to whom the quote “I disapprove of what you say, but I will defend to the death your right to say it” is often attributed — when we most need him?
Tyler Durden
Sat, 11/02/2019 – 18:20 - Hong Kong Protestors Firebomb Xinhua News Agency Office
Hong Kong Protestors Firebomb Xinhua News Agency Office
Hong Kong protestors on Saturday firebombed the Hong Kong office of the Chinese state-run news agency Xinhua, ramping up nearly a half a year of violent protests across the city that triggered a technical recession last week.
Video of protestors vandalizing the Xinhua News Agency Asia-Pacific Regional Bureau office in Hong Kong, surfaced onto Twitter around 12:30 pm est Saturday. The footage shows demonstrators smashing windows and firebombing the reception area of the building.
#Xinhua strongly condemns vandalizing of its #HongKong office by rioters more: https://t.co/STqsAY1soM pic.twitter.com/fOzXX2nmWg
— CGTN (@CGTNOfficial) November 2, 2019
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#HongKong protesters vandalize & set fire to #Xinhua news agency officehttps://t.co/CMz27mzQNK pic.twitter.com/NkxYzeS91o
— RT (@RT_com) November 2, 2019
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VIDEO: Wan Chai offices of state-run #Xinhua News Agency after they were badly damaged during today’s pro-democracy protests in Hong Kong pic.twitter.com/NI9XS0T4v7 #PRC #CCP #violencespolicieres #HongKongPolice #Corbyn #Xinjiang #CarrieLam #Xijinping #indyref2 #Labour #Beijing
— Sam Pye (@freddie1999) November 2, 2019
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A Xinhua spokesperson on Saturday evening strongly condemned the savage behaviors of protestors setting fire to its Asia-Pacific office.
“We resolutely support the Hong Kong Special Administrative Region government and police in stopping violence and chaos in accordance with the law. We also believe that this illegal act will be condemned by all sectors of Hong Kong society,” the spokesperson said.
Xinhua is a Chinese state-run news agency that echoes the talking points of the Communist Party of China.
Protesters in recent weeks have specifically targeted Chinese businesses that have strong connections with Beijing as anger continues to erupt over what protestors say China is trying to take their freedoms away.
Thousands of protestors shut down streets around the Causeway Bay shopping district on Saturday, throwing rocks and chanting pro-democracy slogans at police.
Police responded by firing teargas canisters and water cannons to break up several rallies. Protestors also tossed petrol bombs.
Beijing has been unwilling to use the People’s Liberation Army (PLA) forces to intervene in the protests, but if more Chinese businesses are firebombed, then it’s likely PLA forces could lock down the city in the near term.
Tyler Durden
Sat, 11/02/2019 – 18:00 - Deepfakes Paranoia Considered Pointless
Deepfakes Paranoia Considered Pointless
Authored by Byrne Hobart via Medium.com,
Deepfakes paranoia is the dumbest worry in the world…
The concern is that AI has gotten so good that we’ll be able to create videos of important people saying all sorts of nutty things, which will lead to a total breakdown in our ability to trust important institutions.
The problem here is that world leaders already say incredibly nutty things. Making a fake video of Donald Trump saying something outrageous is superfluous, like photoshopping a picture of Jeff Bezos so he’s holding a twenty dollar bill.
The other problem is that the media suffer from an intellectual autoimmune disorder, and relentlessly hype up minor misstatements into full-blown hysteria. If you’re at all partisan, you can think of examples of The Other Guys doing this. Every educated person knows that “cling to guns and religion” was a sympathetic remark from a churchgoer, except of course for the educated people who know that Mitt Romney’s “47%” line was a rhetorical flourish about people who pay no Federal income taxes.
The point is not to take sides; anyone who wants to win 270 or more electoral votes is going to say some dumb things, simply because low-information voters are the easiest to persuade and the easiest to lie to. If your options are either a) to patiently explain how your technocratic policy ideas artfully thread the needle between disparate goals for a variety of constituencies, or b) to rant about how the other party hates your country, your family, and your wallet, option B wins every time.
Seizing the Memes of Production
Internet discourse has gone through discrete ages. As Slate Star Codex recently noted, there was a time when debates about atheism were the single most important topic on any message board, and threatened to swallow all other forms of discourse. Before that, though, the Default Debate that ate everything else was on the ethics of music piracy. (You know it was a long time ago because nobody had enough bandwidth to download entire videos.)
This topic was huge, sprawling, and it came up all the time. One of the common rhetorical flourishes was to bite the bullet: a popular PSA compared downloading pirated content to stealing a car, and pirates would note that, if “stealing” meant costlessly duplicating a car, they absolutely would. The crux of the issue was this: is stealing about depriving the owner of their property, or depriving the seller of their power?
Eventually, we more or less resolved the piracy debate through a simple expedient: Spotify — with the help of a Napster cofounder — built a UI that was, finally, easier than piracy. As it turned out, the problem music pirates were solving was not that it music was too expensive, it was that the purchase experience was awful.
Today, the deepfakes debate is remarkably similar. The issue is not so much that anyone can make a deceptive video; it’s that the media are losing their monopoly on deceptive editing. It used to be that if you wanted a video of a politician saying something boneheaded, you had to painstakingly assemble hours of video, then maliciously stitch together whatever narrative they need. Getting internet access at a young age is a good way to develop immunity; ideally you’d think of any non-live interview as being part of the same genre as this video.
There’s a continuum between totally misleading edits and mere soundbites that sound less damning in full context. But there’s relentless pressure towards dishonest news: a neutral media source is less exciting than a partisan one, and any political news story in the US will tend to have two contradictory partisan narratives and one neutral one that makes both sides look bad. If you’re a news producer and you go with the neutral version, you’ll sound biased to anyone who heard either party’s talking points beforehand, so neutrality is, paradoxically, the most adversarial position to take.
It might seem like distorting the contents of a speech is dishonest, but to anyone sufficiently partisan, it’s not: what sounds to one observer like an out-of-context quote will sound to someone else like a revealing Freudian slip. And, of course, very few people have the interest or attention span to delve into the details.
You can view this as a crisis, or you can view it as a description of how the system works. I choose the latter: the media represent a de facto electoral college. You choose who to listen to, and they’ll give you a worldview in which voting a certain way makes all the sense in the world. In that model, deepfakes represent a constitutional crisis without the constitution: we had a setup where a small number of people could manufacture pleasant lies, but now everyone has access to an informational ghost gun printer. Scary, sure, but mostly to the people who were safely in charge in the old status quo.
The Truth Matters, But Not To Voters
In a recent profile of Amy Klobuchar, The Economist says “She can see Iowa from her front porch in Minneapolis, she says in Sigourney, a flyspeck of coffee and antique shops amid vast acres of corn country. She can see Canada from it, too, she adds, in a quick pop at Sarah Palin…” This is, of course, a reference to Palin’s infamous claim that one of her foreign policy credentials was that she could see Russia from her house. But… that was Tina Fey.
Two people famous for playing politicians on TV
Does it really matter if, uncharitably, journalists can’t tell the difference between C-SPAN and SNL, or, charitably, if they think their readers can’t? Not especially. An elected official is a consumer packaged good, not a person; they’re devised by marketing teams and sold through complex omnichannel campaigns, which have more to do with mood affiliation than policy. A slight shift in the relative importance of formal PR and guerilla marketing doesn’t make a huge difference in the ultimate outcome, it just affects whether or not mainstream journalists can hold on to their prestige.
One early narrative about the Internet was that it meant anyone, anywhere, could be their own New York Times or Wall Street Journal. Now, journalists are in a tizzy because the Internet means anyone can be their own Sergei Eisenstein or Leni Reifenstahl. As it turns out, these are the same thing.
Tyler Durden
Sat, 11/02/2019 – 17:30 - Greta Thunberg Begs For Help After Traveling Halfway Around The World 'The Wrong Way'
Greta Thunberg Begs For Help After Traveling Halfway Around The World 'The Wrong Way'
Autistic environmentalist Greta Thunberg has appealed for help after traveling halfway around the world “the wrong way” because the United Nations moved its global climate meeting from Chile to Spain.
“As #COP25 has officially been moved from Santiago to Madrid I’ll need some help,” tweeted Thunberg, “Now I need to find a way to cross the Atlantic in November… If anyone could help me find transport I would be so grateful.”
I’m so sorry I’ll not be able to visit South and Central America this time, I was so looking forward to this. But this is of course not about me, my experiences or where I wish to travel. We’re in a climate and ecological emergency.
I send my support to the people in Chile.— Greta Thunberg (@GretaThunberg) November 1, 2019
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Thunberg, who rejected a $51,000 Nordic Council environmental award last week because “The climate movement does not need any more awards,” might hit up her parents – an opera singer and an actor, for travel funds.
Or, perhaps she can ask her new friend Leonardo DiCaprio for a ride on one of the private jets he uses to fly around the world to climate events?
Thunberg then appeared to acknowledge her truly first world problem, tweeting “This of course no problem. People are suffering all around the world, and I’m fine whatever I do and wherever I am.“
This of course no problem. People are suffering all around the world, and I’m fine whatever I do and wherever I am.
— Greta Thunberg (@GretaThunberg) November 1, 2019
We’re sure Greta will find her way to Madrid over the next four weeks, where she can guilt the UN into action with more stories of her ruined childhood.
Tyler Durden
Sat, 11/02/2019 – 17:00 - Does Daylight-Savings Time Make Any Sense?
Does Daylight-Savings Time Make Any Sense?
Authored by Mike Shedlock via MishTalk,
On Sunday, November 3, those on Daylight Savings Time need to adjust their clocks. Does this make any sense?
Hell to Pay
It’s nice when you gain an hour of sleep. But it seems like hell when you lose one.
Only a Joke
Many don’t know this but Benjamin Franklin proposed Daylight Savings Time as a Joke.
In case every news anchor on your television screen telling you to “spring forward” hasn’t been enough of a reminder, Sunday marks the start of Daylight Saving Time, a bizarre routine in which most Americans’ iPhones automatically steal an hour of sleep from them.
The act of moving the clock an hour forward in an effort to save time in the sun during the warmer months is almost always credited to Philadelphia’s most famous son, Benjamin Franklin.
Here’s the thing: when Franklin wrote to Paris about “diminishing the cost of light,” he wasn’t being serious. He was making a joke.
The letter Franklin wrote anonymously to Parisians about making better use of daylight was satirical. Per The History Channel:
By the time he was a 78-year-old American envoy in Paris in 1784, the man who espoused the virtues of “early to bed and early to rise” was not practicing what he preached. After being unpleasantly stirred from sleep at 6 a.m. by the summer sun, the founding father penned a satirical essay in which he calculated that Parisians, simply by waking up at dawn, could save the modern-day equivalent of $200 million through “the economy of using sunshine instead of candles.”
Oh, and the best part? As History notes, Franklin wasn’t even suggesting the idea of Daylight Saving Time. All he was doing was making fun of the French and suggesting they get out of bed earlier.
Joke or Not
Joke or not we are still stuck with the ritual.
And twice every year a debate takes place.
Pros and Cons Take 1
Please consider Top 3 Pros and Cons of Daylight Saving Time
Top 3 Pros
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Daylight Saving Time’s (DST) Longer Daylight Hours Promote Safety.
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DST Is Good for the Economy.
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DST Promotes Active Lifestyles.
Top 3 Cons
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Daylight Saving Time (DST) Is Bad for Your Health.
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DST Drops Productivity.
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DST Is Expensive.
Never Ending Debate
People in favor of keeping Daylight Saving Time say it allows drivers to commute more safely in daylight, promotes outdoor activities, and stimulates the economy. Those who oppose Daylight Saving Time say that the change is a harmful disruption to health and work productivity, and is expensive. While the time change was initially implemented to save energy, studies are mixed and have found our current use of air conditioning and heating may negate the energy saved by not having to use electric lights and may actually increase electricity usage.
What Really Happened?
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Benjamin Franklin is often credited with the idea of DST because, in a satirical letter to the authors of The Journal of Paris, he suggested the French wake earlier to take advantage of “using sunshine instead of candles.”
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DST as we know it was proposed by a New Zealand entomologist, George Vernon Hudson, who wanted longer hours for insect study.
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The first locality to enact DST was Port Arthur (now Thunder Bay, Ontario), Canada, in 1908. The first country to enact DST was Germany on Apr. 30, 1916, although the Germans dropped the time change at war’s end.
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American farmers were opposed to DST because, regardless of what the clock said, their cows weren’t ready to be milked until later in the day during DST.
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A resort in Madagascar created its own DST, which runs an hour ahead of the rest of the country, so the lemurs would “naturally join us in the Oasis garden… for the ‘5 O’clock tea.'”
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Some ancient civilizations are known to have used practices similar to DST. Roman water clocks, for example, used different scales for different times of the year.
Hero or Goat?
Benjamin Franklin was joking, but the unsung hero (or goat) was New Zealand entomologist, George Vernon Hudson, who wanted longer hours for insect study.
Who is Affected?
Approximately 1.5 billion people in 70 countries observe DST worldwide. In the United States, 48 states participate in Daylight Saving Time. Arizona, Hawaii, some Amish communities, and the American territories (American Samoa, Guam, Puerto Rico, the Virgin Islands, and the Northern Mariana Islands) do not observe DST. As of Mar. 4, 2019, at least 44 bills to change daylight saving were being actively considered in 24 states. 55% of Americans said they are not disrupted by the time change, 28% report a minor disruption, and 13% said the change is a major disruption.
World Divided Over Time
Curse Against Humanity
Business Insider comments Daylight-Saving Time is a Curse Against Humanity.
More than 152,560 people have petitioned Congress to end daylight-saving time. Some of the comments on the petition are practical appeals.
Get Rid of DST?
I am all in favor. Are you?
But how?
Standardtime.com has a peculiar suggestion.
Imagine you are right on the border of that line. Crossing the line would change the time by two hours.
That will never fly.
Change Which Way?
Assume a more practical “no change”. But which way?
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Perpetual DST
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Perpetual Regular Time
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Double DST
Less than half are happy with the damn clock-change ritual, but there is no consensus how to fix it.
Some want two time zones. Some want double DST (perpetual DST but a two hour shift), and some simply want to kill the whole damn thing.
My preference in order
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Perpetual Regular Time
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Perpetual DST
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DST
Double DST and standard time are simply too bizarre to rank.
Tyler Durden
Sat, 11/02/2019 – 16:30 -
- First Images Of US Troops Occupying Syria's Oil Fields Stir Outrage
First Images Of US Troops Occupying Syria's Oil Fields Stir Outrage
The reality of American foreign policy all in one stunning image: regional Iraqi Kurdistan24 television has broadcast the first footage of the United States Army seizing and ‘protecting’ a Syrian oil field in the country’s northeast.
Specifically the images are of a US armed convoy at Rumelan oil field, and are the first to show Trump’s ordered “secure the oil” policy in action. A Salon op-ed aptly quips in reaction: “It’s about the oil, stupid: Trump wants to end the forever wars, except the one about oil and money.”
US forces began patrols at oilfields on Mount Qarachokh near Derik in northeastern #Syria on Friday. #TwitterKurds pic.twitter.com/UjdCn6FFVL
— Kurdistan 24 English (@K24English) November 2, 2019
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Middle East war correspondent Jenan Moussa, who has covered the Iraq war and other US occupations in the region, voiced the growing outrage over the US resource theft underway in Syria:
Since discovery of oil in the MidEast, many in the region said: the U.S. is only here to steal our oil. U.S. denied it, and claimed it’s about democracy, human rights, women etc.
Not sure if Americans realize but these pictures of U.S. troops in northeast Syria are HUGELY damaging to U.S. image.
Since discovery of oil in MidEast, many in region said: U.S. only here to steal our oil.
U.S. denied, claimed it’s about democracy, human rights, women etc.
Not sure if Americans realize but these pictures of U.S. troops in northeast Syria are HUGELY damaging to U.S. image. pic.twitter.com/C3exwUbHtD
— Jenan Moussa (@jenanmoussa) November 2, 2019
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One Syrian commentator said sarcastically on social media:
The Few. The Proud. The Marines. stealing Syria’s oil.
And further pointed out that, “Trump just showed you the naked truth about US foreign policy in the Middle East.”
A US coalition statement earlier this week confirmed American forces are being “repositioned” in Syria’s oil rich region just east of the Euphrates to “protect critical infrastructure”.
Mechanized units have been observed going into the area, however, no tanks have as yet been seen.
US Pandur AGMS around Syrian city of Qamishli. pic.twitter.com/t01ArISUib
— Aldin 🇧🇦 (@aldin_ww) November 2, 2019
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The coalition statement said that “mechanized forces” providing “infantry, maneuverability, and firepower” are further en route to bolster forces currently redeploying in the region, and in support of Kurdish-led Syrian Democratic Forces.
Tyler Durden
Sat, 11/02/2019 – 16:11 - Goldman: Most Investors Are Focusing On Elizabeth Warren's Rising Election Prospects
Goldman: Most Investors Are Focusing On Elizabeth Warren's Rising Election Prospects
When it comes to the main Democratic contender for the 2020 presidential election, now that we have learned that Joe Biden’s campaign is going through a very difficult time, opinions about Elizabeth Warren and her impact on the market range from one extreme to the other. On the one hand we have:
- Does Elizabeth Warren Want To Crash The Global Financial Markets?
- Tudor Jones, Steve Cohen Warn Of Market Collapse If Warren Elected
- Cooperman: If Warren Wins They Won’t Open The Stock Market
- Fleckenstein: Market Would Be “Limit Down” If Elizabeth Warren Was Elected Today
- Elizabeth Warren Blames Businesses For Everything
- Billionaire Cooperman Blasts Warren For “Sh*tting On The Fu**ing American Dream”
On the other, we recently noted that “An Elizabeth Warren Presidency May Not Be Catastrophic For The Market” while the most famous behind the scenes democratic operative, George Soros, recently effectively endorsed Warren:
And then there’s this, which makes a mockery of anyone predicting the fate of capital markets based on who is president:
With that in mind, and considering that the 2020 election is now just 366 days away, Goldman’s chief equity strategist David Kostin writes that portfolio managers are intently focused on the investment implications of potential outcomes of the 2020 US elections, and specifically on Elizabeth Warren’s rising prospects in both the prediction markets and polls.
What is odd is that while Senator Warren is the clear favorite in prediction markets…
… polls still show Joe Biden as the leader, even if Warren is fast approaching (although in the aftermath of the absolute disaster for pollsters that was the 2016 presidential election, we are shocked anyone still pays attention to what polls – which have now been outed as a political ploy meant to suppress voting intentions – represent).
The good news is that confusion will rapidly drop after Super Tuesday when the field of candidates for the Democratic nomination will narrow significantly. The first nomination contest, the Iowa caucus, takes place on February 3rd, roughly 100 days from now. Voters in 18 states will have cast their ballots by March 3rd. Approximately 34% of total delegates are slated to be pledged on March 3rd alone (“Super Tuesday”), when 14 states will hold primaries.
Yet election uncertainty is expected to remain high even after the Democratic nominee is officially determined at the July 13-16th party convention (plus there is always the Hillary Clinton wildcard): as Goldman notes, “the US is politically divided and the general election for the Presidency and many Congressional races are extremely competitive. Prediction markets assign a 74% probability that Democrats maintain control of the House of Representatives and a 54% likelihood the party captures the Presidency.
And while occupancy of the White House is important, investors also need to focus attention on which party controls the Senate. Here, prediction markets assign just a 35% likelihood that the Democrats will gain control of the Senate.
According to Kostin, “taken together, prediction markets currently suggest a roughly 70% likelihood that the 2020 election results in a divided government. Prediction markets assign a 20% probability of a Democratic sweep and a 10% probability of a Republican sweep.” As a result, “a divided Congress would likely constrain the prospect of sweeping legislation or reforms, which require passage from both chambers of Congress.“
So what do these odds imply for markets? To answer this question, Goldman looks at two key aspects of markets: earnings and valuations.
From an earnings perspective, it is well-known that several presidential candidates have proposed rolling back the 2017 corporate tax cut. Democratic presidential candidates including Senator Warren, Senator Sanders, Mayor Buttigieg, and former Vice President Biden have called for higher corporate tax rates. Here, the rule of thumb is that every 1% increase in effective tax rate translates into a roughly 1% decrease in S&P 500 EPS.
Increasing the effective tax rate by 8% from 18% back to 26% would reduce Goldman’s 2021 S&P 500 EPS estimate by $21 (11%) to $164, assuming the legislation applies retroactively to the start of 2021. $18 of the reduction comes directly from a higher tax rate and $3 comes from a reversal of the estimated impact of corporate tax reform on US GDP growth in 2018.
From a valuation perspective, Goldman cautions that changes in policy uncertainty and consumer confidence will impact valuations ahead of the 2020 election. Uncertainty is already elevated; indeed, the Global Economic Policy Uncertainty Index is near record highs and the US index averaged 105 this year (vs. the long-term average of 97). Goldman uses its macro model of the yield gap between the S&P 500 earnings yield and 10-year US Treasury yield to estimate the impact of uncertainty and confidence on equity valuations, and observes that if policy uncertainty rises by 50 points, the yield gap would increase and lead to a P/E compression of 1-2 multiple points from the current level of 18x; if consumer confidence falls by 10 points (from 96 to 85), S&P 500 P/E would decline by roughly 2 multiple points, all else equal.
That said, the best course of action may be to do nothing. After all, prediction markets imply just a 20% probability of Democratic sweep and a 10% likelihood of a Republican sweep. As such, Kostin suggests that “investors should discount the likelihood that policies can actually be adopted” and adds that “based on our earnings and valuation sensitivities, the current state of the race implies a probability-weighted year-end 2020 S&P 500 level of roughly 3200. In addition, recent history has shown that US equities react more to policy implementation than election outcomes.”
Yet even if Goldman believes complacency may be the best alternative, and the S&P500 which just hit a new all time high of 3,063 agrees, the Goldman strategist does point out that investors have started to use options to protect positions broadly from election uncertainty even as volatility typically rises sharply just one month prior to the Election Day. Of note, the term structure of implied volatility vol curve shows elevated levels around November 2020, reflecting uncertainty around the election outcome.
Here Kostin also notes that the bank’s previous research shows that equity index implied volatility tends to rise most immediately ahead of political events. For example, implied volatility rose sharply ahead of the Brexit referendum in 2016, the US election in 2016, and the French election in 2017, but only within the two to three weeks ahead of those events. In other words, the market will most likely freak out just days before a potential Warren presidency is actually in the cards.
There is more.
While Goldman cautions that both health care and bank stocks will likely be dramatically affected by a Warren presidency, it is the “Big Tech” sector – who stocks have broadly underperformed since July – that is most at risk, due to a confluence of risk factors.
Consider that both Democrats and Republicans have called for regulatory and antitrust scrutiny of “Big Tech” companies. The rhetoric has been centered primarily on FB, AMZN, and GOOGL, and this summer the Department of Justice (DoJ), the Federal Trade Commission (FTC), and many state attorneys-general have launched investigations into the companies. These stocks have lagged in aggregate during the past three months, but it may not all be attributable to policy overhang; August brought a sharp rotation out of growth stocks and into value stocks as trade news improved and recession fears eased.
Indeed, while Goldman remains “Overweight” the Information Technology sector (22% of the S&P 500), it is downgrading the Communication Services to Neutral from Overweight on the basis of rising regulatory risk. The bank cites its previous research which showed that antitrust lawsuits typically take years to resolve but ultimately result in lower valuation between lawsuit filing and resolution and slower sales growth following resolution. And although Goldman sees the growth prospects of many Communication Services companies as still attractive, the valuation overhang from regulatory uncertainty will likely continue to grow and weigh on the sector’s performance. The sector represents 10% of the S&P 500 with FB (17%) and GOOGL (29%) the dominant constituents accounting for 46% of the sector’s market cap.
What does history show
While it is the case that US market performance has usually been positive during the 12 months before an election (see chart below), returns have been driven by earnings rather than valuation. In fact, valuations typically moved sideways during the lead-up to presidential elections before moving higher following Election Day, as the overhang from uncertainty faded. Despite flat valuations, positive earnings growth typically powered positive equity returns. Since 1936, the S&P 500 annual return during a presidential election year equaled 10%. It is worth noting that with the S&P now set for its third consecutive quarter of declining earnings, it is not clear just what catalyst will serve as the inflection point to push corporate profitability higher, which would suggest that 2020 may be an outlier to this general trend.
As Kostin writes separately, history suggests that US equities actually react more to policy implementation than election outcomes. When considering the earnings and valuation scenarios discussed above, investors must also account for the fact that several conditions must be met for these policies to impact equity prices: (1) a particular candidate must win the presidency, (2) the candidate’s party must control the House and the Senate, (3) the candidate must choose to pursue certain policies, and (4) the legislation must pass through Congress. These scenarios must therefore be discounted by the probability that these conditions are all met.
The 2016 example demonstrates the importance of policy implementation. In the month following the 2016 election, many “Trump Trades” – such as cyclicals, small-caps, and infrastructure beneficiaries – sharply outperformed. However, these trades reversed their gains during the subsequent year as investors reduced expectations of immediate policy implementation. The performance of Goldman’s sector-neutral high tax rate basket (ticker: GSTHHTAX) around tax reform provides a clear example. Following the initial rally and unwind in early 2017, investors adopted a “show-me” attitude towards tax reform given congressional hurdles. Constituents of GSTHHTAX, which stood to gain the most from lower corporate tax rates, traded sideways up until passage of the legislation became clear.
What about after the election
The last chart below provides 6-month returns for the S&P 500 following past elections, stratified by outcome. Since 1932, the median S&P 500 return for an all-Democratic sweep equals +1%, compared with +4% for an all-Republican sweep and +3% for a divided government.
Tyler Durden
Sat, 11/02/2019 – 15:54
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