- Paul Craig Roberts: There Is No Freedom Without Truth
Authored by Paul Craig Roberts,
“This conjunction of an immense military establishment and a large arms industry is new in the American experience. The total influence — economic, political, even spiritual — is felt in every city, every statehouse, every office of the federal government. We recognize the imperative need for this development. Yet we must not fail to comprehend its grave implications. Our toil, resources and livelihood are all involved; so is the very structure of our society. In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military–industrial complex. The potential for the disastrous rise of misplaced power exists, and will persist. We must never let the weight of this combination endanger our liberties or democratic processes. We should take nothing for granted. Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals so that security and liberty may prosper together.”
– President Dwight D. Eisenhower
Dwight D. Eisenhower was a five-star general in charge of the Normandy Invasion and a popular two-term President of the United States. Today he would be called a “conspiracy theorist.”
Were Ike to be issuing his warning from the White House today, conservative Republicans like Senators Lindsey Graham (R-SC) and Marco Rubio (R-FL) would be screaming at Ike for impugning the motives of “the patriotic industry that protects our freedom.”
Neoconservatives such as William Kristol would be demanding to know why President Eisenhower was issuing warnings about our own military-industrial complex instead of warning about the threat presented by the Soviet military.
The presstitute media would be implying that Ike was going a bit senile in his old age, a tactic the presstitutes used against President Reagan as he struggled to end stagflation and the Cold War.
By January 17, 1961, when Eisenhower issued his warning in his farewell address to the American People, it was already too late. Cold Warriors had had their hooks into the American taxpayer for 15 years after the end of WW II, and the military-industrial complex had replaced “mom and apple pie” as the most venerated and entrenched US interest. The Dulles brothers ran the State Department and CIA and overthrew governments at will. (Read The Brothers)
The military-industrial complex had learned that regardless of the protestations of high-ranking military officers, no cost-overrun, no matter how egregious, went unpaid. Armaments industries and military bases were spread all over the country and were important considerations for every senator and many congressional districts. The chairmen of House and Senate military appropriations subcommittees and armed services committees were already dependent on campaign contributions from the military-industrial complex and for cushy jobs should they lose an election.
The Cold War was a profitable business that served many, and that is why it lasted so long.
There was never any threat of the Red Army invading Europe. Stalin declared “socialism in one country” and purged the Communist Party of the Trotskyist element that preached world revolution. An accommodation could have been reached, except that for the first time ever the military-industrial complex saw that it could keep the war business going for decades and perhaps forever.
George F. Kennan predicted that should the Soviet Union “sink tomorrow under the waters of the ocean,” another adversary would have to be invented. “Anything else would be an unacceptable shock to the American economy.”
When the Soviet Union collapsed in 1991, the “Soviet threat” was replaced with the “Muslim threat” and the “War on Terror” took over from the Cold War. Despite a succession of false flag attacks and warnings of a “thirty years war,” a few thousand lightly armed jihadists were an insufficient replacement for the Soviet Union and its thousands of nuclear ICBMs. It was an uncomfortable notion that the “world’s only superpower” could not dispose of a few terrorists.
So we are back to the Cold War with Russia. The propaganda is fast and furious. “Putin is the new Hitler.” “Russia invaded Ukraine.” Russia is about to invade the Baltics and Poland.” “Putin is a corrupt multi-billionaire.” “Putin is scheming to recreate the Soviet Union.” These accusations become headlines despite US military spending being a dozen or more times higher than Russian military spending and the Russian government expressing no hegemonic aspirations.
Eisenhower’s sucessor, John F. Kennedy, realized that the military-security complex was a threat, but he underestimated the threat and paid for it with his life when he stood up to the military-security complex. In stating this fact I have joined Eisenhower as a conspiracy theorist. (For a hair-raising account of the threat posed to President Kennedy by General Lyman Lemnitzer, Chairman of the Joint Chiefs of Staff, read chapter three in Richard Cottrell’s book, Gladio, NATO’s Dagger at the Heart of Europe.)
Conspiracies are real. There are many more of them than people are aware. Many government conspiracies are heavily documented by governments themselves with the official records demonstrating the conspiracies openly available to the public. Just google, for example, Operation Gladio or the Northwoods Project. These conspiracies alone are sufficient to chastise those uninformed Western peoples who go around saying, “our government would never kill its own people.”
Perhaps Russian studies provided my introduction to government conspiracies against their own people. I learned that the Tsar’s secret police set off bombs and killed people in order to blame and arrest labor agitators. I was skeptical of this account and wondered if it was a reflection of left-wing bias against Tsarist Russia. Some years later I asked my colleague, Robert Conquest, at the Hoover Institution at Stanford University if the account was true. He replied that the story is true as is known from the released secret police files that are part of the Hoover Institution’s archives.
False flag attacks are used by governments in order to pursue secret agendas that they cannot publicly acknowledge. If President George W. Bush and Vice President Dick Cheney had said: “We are going to attack Iraq and a half dozen other countries in order to exercise hegemony over the Middle East, steal their oil, and clear the path for Israel to steal the entirety of the West Bank of Palestine, diverting taxpayers’ resources from serving the American people into the pockets of the armaments industries and spilling the blood of your parents, spouses, children, and siblings," even the American sheeple would have resisted.
Instead, following the famous advice of Hitler’s chief propagandist, they said: “Our country has been attacked!”
Generally speaking, an observant person with a bit of education can recognize a false flag attack. However, few people pay attention beyond what the official media says, and the media no longer investigates and questions but simply repeats the official story. Therefore, only a few realize what has really happened, and when these few open their mouths they are discredited as “conspiracy theorists.”
This method of control might be wearing thin. There have been so many false flag “terrorist attacks” in the 21st century that there are now thousands of experts labeled as “conspiracy theorist.” For example, the 9/11 Truth Movement consists of thousands of high rise architects, structural engineers, demolition experts, nano-chemists, physicists, firefighters and first responders, civilian and military pilots, and former high government officials. Collectively these experts represent far more knowledge and experience than the 9/11 Commission, which did nothing but write down whatever the government told the commission, NIST, a collection of people whose incomes and careers depend on the government, and the presstitutes who can barely manage arithemetic, much less the mathematics of controlled demolition.
The neoconservatives, who controlled the George W. Bush regime, called for a “New Pearl Harbor” so that they could begin their wars of conquest in the Middle East. A “New Pearl Harbor” is what 9/11 gave them. Was this a coincidence or a Gulf of Tonkin or a Reichstag fire or a Tzarist secret police or Operation Gladio bomb?
The charge, “conspiracy theory,” is used to prevent investigation.
9/11 was not investigated. Indeed, as many experts have pointed out, there was a conscious effort to remove and destroy the evidence before it could be investigated. The 9/11 families had to lobby and protest for a solid year before the Bush regime consented to the totally controlled 9/11 Commission.
The Boston Marathon Bombing was not investigated. A scripted story was issued and repeated by the media. The San Bernardino shootings were not investigated. Again, a pre-scripted story took the place of investigation.
The success of false flag attacks in the US led to their use in the UK and France. The Charlie Hebdo affair was not investigated and the official explanation makes no sense. The story has been closed with all the loose ends dangling. For example, why did a French police official investigating the crime allegedly commit suicide in his police office in the early hours of the morning, and why was his family denied the autopsy report? What happened to this disappeared story? Why did the police finger a third participant in the attack as the “getaway driver” who had an iron clad alibi? If the police were so totally wrong about this member of the gang, how do we know they are right about the two men they shot to death. How come alleged perpetrators of “terrorist attacks” are always killed before they can talk? How come the only story we ever get is what the government says? How can people be so gullible after the Gulf of Tonkin, Operation Gladio, etc.?
Apparently the Charlie Hebdo attack was insufficient for the purpose, and now France has had what is called “the Paris attack,” an even more unbelievable event, evidence for which is missing. This false flag attack was too much for Kevin Barrett who assembled a collection of skeptical essays from 26 people into a book, Another French False Flag: Bloody Tracks From Paris To San Bernardino.
Twenty-four of these contributors do not believe the official story. Does this make them “conspiracy theorists,” or does this make them brave souls who are concerned that Reichstag fire type events are replacing Western civil liberty with fascist police states?
Ask yourself, why are those trying to preserve liberty denounced?
What incentive does contributor A.K. Dewdney, Professor Emeritus at the University of Western Ontario, author of ten books about science and mathematics, have to be a conspiracy theorist?
What incentive does Philip Giraldi, former CIA case officer and Executive Director of the Council for the National Interest, have to be a conspiracy theorist?
What incentive does Anthony Hall, Professor of Globalization Studies at the University of Lethbridge in Alberta, Canada, whose latest book has been endorsed by the American Library Association as “a scholarly tour de force,” have to be a conspiracy theorist?
What incentive does Mujahid Kamran, Vice Chancellor of Punjab University, Lahore, Pakistan, a Fulbright Scholar and recipient of numerous awards, have to be a conspiracy theorist?
What incentive does Stephen Lendman, syndicated columnist and host on the Progressive Radio News Hour, have to be a conspiracy theorist?
What incentive does James Petras, Bartle Professor of Sociology at Binghamton University, have to be a conspiracy theorist?
What incentive does Alain Soral, one of France’s public intellectuals, have to be a conspiracy theorist?
What incentive does Robert David Steele, former CIA Clandestine Services Officer, have to be a conspiracy theorist?
The neocons’ whores in the Western media who call these people “conspiracy theorists” are so stupid and unintelligent as to be unqualified to express any opinion.
Dear Western Peoples, if you wish to be able to walk down the streets of your cities without being accosted by police, demanded to present identity papers, searched, detained indefinitely or assassinated without due process of law, if you wish to be able to express your opinion about “your” government and its use of your tax payments, if you wish to be able to discuss current affairs or your personal affairs without being recorded by the NSA or the equivalent in your own country or by both, if you wish to be able to act on your moral conscience and to protest the violence the West applies to Muslims and others unfavored by powerful Western interests, such as Palestinians, if you wish to live in the freedom that was achieved in the West after centuries of struggle, wake up, find time from less meaningful pursuits to become aware of what is being stolen from you. It is late in the game. If you do not stand up for truth, you will have no freedom as there is no freedom without truth.
- The Spread Of ISIS (In 1 Disturbing "The West Is Losing" Animation)
Via Foxtrot Alpha's Tyler Rogoway,
The video below depicting the expansion of ISIS controlled territory over time is especially interesting. After explosive expansion in 2013-2014, now it seems that when any territory is taken back from the Islamic State they just expand elsewhere.
Also of interest is just how little ground has been taken back from ISIS even after almost a year and a half of coalition combat operations against it. On the other hand, it must be noted that some of the wide areas shown on the map that ISIS supposedly controls is just empty desert, and the same can be said for much of the non-ISIS controlled areas highlighted in purple.
ISIS’s great recruitment tool is the vast territory they still control even after a year and a half of constant coalition airstrikes. By just holding on against what they deem as an imperial force of infidels they retain high-credibility within their twisted world. Unless the coalition gets serious about totally overhauling its strategy and aggressively reducing ISIS footprint via ground operations, and holding that ground after, don’t expect the Islamic State to be greatly weakened anytime soon.
- Guest Post: How The Blockchain And Gold Can Work Together
Submitted by Thorsten Polleit via The Mises Institute,
A look into monetary history shows that people, when given freedom of choice, opted for precious metals as money. This doesn’t come as a surprise. Precious metals have the physical properties a medium must have to serve as legal tender: They are scarce, homogenous, durable, divisible, mintable, and transportable. They are held in high esteem and represent considerable value per unit of weight. Gold fulfills these requirements par excellence, and this is why it has always been peoples’ first choice in terms of money. Gold has proven its merits as money for millennia; it is the ultimate means of payment.
More recently, gold has been replaced by the state’s unredeemable fiat money — for reasons rather more political than economic. The state prefers money whose value can be altered at will — say, to influence overall demand, redistribute income, and to benefit some at the expense of the many. Gold money stands in the way of such machinations. Fiat money doesn’t. On the contrary, fiat money can simply be printed up; can be created out of thin air.
Fiat money has serious economic and ethical drawbacks, though. It is chronically inflationary, widens the gap between poor and rich, triggers boom-and-bust cycles, and compounds the economy’s debt burden. Most important, a fiat money regime allows the state to expand actually without limit, over time potentially transforming even a minimum state into a maximum state at the expense of individual liberty and freedom.
In the wake of the most recent financial and economic crisis of 2007–2008, many people have become concerned that their savings, mostly invested in fiat-denominated bank accounts and bonds, could be devaluated. This has prompted a search for “good” money.
Somewhat new to the mix are the digital currencies, most famous of which is the virtual unit “bitcoin.” It is a digital currency generated by decentralized, internet-based computers rather than a central authority.
Transactions through digital currencies such as bitcoin are confirmed, or validated, by a decentralized consensus system that uses a “blockchain.” The latter is essentially a public digital ledger, an account statement for transactions among computers. The blockchain is saved on many computers so that it is practically impossible to manipulate. In the case of bitcoin specifically, the blockchain ensures that only the bitcoin’s owner can make a transaction with his bitcoin, that the same bitcoin cannot be created manifold.
In this article, I’ll use bitcoin as my main example, although this technology can be applied to any number of similar digital currencies.
However, this technology has now been used to provide a new means of transferring assets among people: the “colored bitcoin.” A colored bitcoin — or something comparable using blockchain technology — represents a certain asset. For instance, physical gold can be made available for day-to-day transactions — for purchases and sales in supermarkets and on the internet — simply by transferring a gold-backed colored bitcoin from the bitcoin wallet of the buyer to the bitcoin wallet of the seller.
How could one obtain such a gold-backed bitcoin? You would buy, say, physical gold at a gold shop. The latter then issues a colored bitcoin, which represents the ownership of physical gold. The colored bitcoin is, economically speaking, a gold substitute (a money substitute, fully backed by physical gold). It can be used for making purchases and, upon the wish of its owner, it can be redeemed into physical gold at the gold shop at any time.
A colored bitcoin represents a physical thing or asset that exists outside the bitcoin network. It therefore carries with it a risk that the issuer will not live up to his promise. However, there are market solutions to this problem. For instance, the gold can be stored with a particularly trustworthy third party. Or, people hold colored bitcoins issued by various issuers. If the latter are seen to be of the same riskiness, they would trade at par to each other (after making allowance for possible storage and handling costs).
That said, the gold-on-the-blockchain technology appears to hold great potential when it comes to making possible a world of digital gold money transactions. So far, governments use regulation and taxation to inhibit and even prevent unencumbered competition among monies. However, the evolution of the blockchain largely circumvents many of the obstacles governments put in the way of a free market in money. Where it will lead is, of course, is impossible to predict with certainty.
In any case, when we’re comparing to government fiat money, digital currencies can offer attractive alternatives. The same goes for gold lovers, who may see blockchain technology as the means of conveying physical gold; and in the end digitized gold money could become a practical option.
- Hedge Funds Fight The PBOC: There Can Be Only Yuan
With every Tom, Dick, and Harry hedge fund manager now taking on The People’s Bank of China (in various ways), it is no surprise that the spread between offshore Yuan and onshore Yuan blew out to its widest in 3 weeks this morning.
They are not getting it all their way for now though.
Just as the last time the spread was this wide, The PBOC stepped in, so as we noted this morning, there was a clear and present short-squeezing danger in Yuan as The PBOC clearly intervened to snap the spread 450 pips tighter. As China opens tonight, selling pressure however is back on the Yuan…
The intervention is pretty clear…
But the battle continues, as Yuan is selling back off…
Bill Gross is right…
Gross: Hedgees are trying to break the Bank of England … uh, I mean the Bank of China. It’s 2016, not 1992.
— Janus Capital (@JanusCapital) February 3, 2016
- Shale Shock: Another Leg Lower In Oil Coming After Many Producers Found To Have Far Lower Breakevens
One of the great unknowns facing the US shale industry, and threatening the recurring rumors of its imminent demise, is how it is possible that despite the collapsing number of oil wells, and despite the plunge in crude prices which supposedly are well below all-in shale production costs, does production not only refuse to decline, but in fact has been largely increasing in the past 6 months, with just a modest decline in recent weeks.
The answer may come as a surprise not only to industry pundits, but certainly to Saudi Arabia, whose entire strategy has been to keep pressuring the price of oil low enough for long enough to put as many “marginal producers” in the US shale space out of business as possible.
According to a report by the Bloomberg Intelligence analysts William Foiles and Andrew Cosgrove, Saudi Arabia may have its work cut out for it as it will be far harder to kill many U.S. E&Ps than analysts originally thought.
The reason: a break-even model for the Permian Basin and Eagle Ford shows that oil production across five plays in Texas and New Mexico may remain profitable even when WTI prices fall below $30 a barrel, according to a 55-variable Bloomberg Intelligence model for horizontal oil wells.
The Eagle Ford’s DeWitt County has the lowest break-even, at $22.52, followed by Reeves County wells targeting the Wolfcamp Formation, at $23.40. The diversity of breakevens highlights the hazard posed by looking for a single number, even within a play.
These counties together produced about 551,000 barrels of liquids a day in October. Taking into account drilled but uncompleted wells boosts the number of potential survivors to 19. The wide range of break-evens undermines efforts to come up with a single threshold for U.S. shale producers.
The full list of breakevens by county is shown below:
To corroborate its model of break-even levels for oil producers in the Permian and Eagle Ford, Bloomberg used a Baker Hughes’ horizontal rig counts in the Spraberry play Permian and Eagle Ford. Howard County, Texas, has the lowest average break-even, at a WTI price of $29.19 a barrel. Its rig counts have doubled since oil prices began collapsing in mid-2014. In Midland County, at $30, rig counts are up 56%. Counts in Irion and Reagan counties, with two of the highest break-evens targeting the play, have fallen more than 70%.
None of this would be feasible if average breakeven prices were anywhere close to the $50-60 assumed by the consensus.
But where Bloomberg’s analysis gets outright disturbing, if only for Riyadh, is that once wells are completed, breakeven costs tumble to Saudi-like sub-$20 prices in some countries.
From Bloomberg:
Tapping drilled but uncompleted (DUC) horizontal oil wells drops break-even WTI oil prices to less than $20 a barrel in eight county-play combinations in the Permian and Eagle Ford. The analysis assumes that drilled wells are sunk costs and that drilling constitutes 30% of a well’s total cost. The 55-variable model shows that the impact of removing drilling expenses varies significantly by county and play, with break-even reductions ranging from $7.24 to $21.51, or 28% to 42%.
Bloomberg proceeds to crown DeWitt County, Texas, as the King of Shale due to its lowest breakevens across the land:
DeWitt County, Texas, has on average the lowest break-even WTI price for its oil production among 29 county-play combinations in Texas and New Mexico, at $22.73 a barrel, according to a Bloomberg Intelligence model. Shifts in drilling in the Eagle Ford may reflect differing cost levels. Dimmit County, with a break-even of $58.21, led the Eagle Ford in 1Q15 with 226 new horizontal oil wells, four times as many as DeWitt’s 56. Two quarters later, Dimmit’s new wells fell 71% to 65, while DeWitt’s surged 77%.
There is far more in the comprehensive analysis, but the punchline is simple: what many thought would be the “breaking” price point for virtually every shale play has just been lowered, and quite dramatically at that. It also means that algos and traders who had reflexively bought any dip below $30 on expectations this is close to the “sweet spot” and where the Saudis would relent, will have to drop their support levels by as much as a third!
Finally, it means that if Saudi Arabia truly means to put the marginal non-OPEC producers (read efficient U.S. shale) out of business, it will have to pump far more not less as many speculate, and worse, it will have to ramp up production very fast because as is well known by now, the Saudi Kingdom is itself hurting profusely as a result of low oil prices which are leading to budget crunches and domestic austerity such as soaring prices of gas and water.
Finally, since Saudi Arabia had expected that its FX reserve outflow would last only temporarily using $40-50 breakevens, it will have to sell many more US reserves (either TSYs or stocks) to fund the cash shortfall which will persist for far longer until oil catches down to the lowest cost US producers, which as of today’s close are at least $10/barrel lower.
In short: the oil price war is about to enter its far more vicious, and far more lethal phase, and while it is unclear who ultimately wins, whether it is Shale or the Saudis, the loser is clear: anyone who bought into bets of an imminent oil bounce.
- How Corruption Cripples America's Military
Authored by Eric Zuesse,
America’s military budget is roughly 7.2 times that of Russia ($610 billion compared to $84.5 billion), but even Western news-accounts are saying that the weaponry produced in Russia is superior overall to the weaponry produced in the United States.
Compare the top-of-the-line fighter jets of the two countries: that's the F-35 fighter-jet produced by the U.S. corporation Lockheed Martin, versus the Su-35 fighter jet produced by the Russian government (its wholly owned Sukhoi Company). The F-35 costs around $100 million per plane. The Su-35 costs around $65 million per plane.
The weaponry-expert David Majumdar headlined on 15 September 2015, “America's F-35 Stealth Fighter vs. Russia's Su-35: Who Wins?” He concluded: "Basically, an F-35 pilot should avoid a close in fight at all costs. It is highly unlikely that a U.S. Joint Force Air Component Commander (JFACC) would assign an air superiority mission to an F-35 unit if alternatives were available. But given the tiny fleet of [F-22] Raptors and dwindling F-15C fleet, it is possible that the JFACC could be forced to use the F-35 as an air superiority asset.”
In other words: the U.S. had stopped production of the better planes, the F-22 and the F-15C, which might stand a chance against the Su-35. The U.S. stopped production of those planes in order to replace them with the inferior and far costlier (and more profitable) F-35.
Earlier, on 6 December 2014, Majumdar had bannered, “Killer in the Sky: Russia's Deadly Su-35 Fighter.” He wrote:
One U.S. Navy Super Hornet pilot — a graduate of that service’s elite TOPGUN school — offered a sobering assessment. “When taken as a singular platform, I like the Su-35’s chances against most of our platforms, with perhaps the exception of the F-22 and F-15C,” the naval aviator said. “I suspect the F/A-18E/F can hold it’s own and F-35 has presumed stealth and sensor management on its side.”
But one Air Force official with experience on the Lockheed Martin F-35 Joint Strike Fighter said that the Su-35 could pose a serious challenge for the stealthy new American jet. The F-35 was built primarily as a strike fighter and does not have the sheer speed or altitude capability of the Su-35 or F-22. “The Su's ability to go high and fast is a big concern, including for F-35,” the Air Force official said.
As an air-superiority fighter, its major advantages are its combination of high altitude capability and blistering speed — which allow the fighter to impart the maximum possible amount of launch energy to its arsenal of long-range air-to-air missiles. …
Another highly experienced veteran fighter pilot added that much about the Su-35 and the capabilities of the Russian military remain unknown.
Among these unknowns were the effectiveness of the Russian plane’s “electronic attack” capabilities. Here’s how that was described:
The addition of the electronic attack (EA) capability complicates matters for Western fighters because the Su-35’s advanced digital radio frequency memory jammers can seriously degrade the performance of friendly radars. It also effectively blinds the onboard radars found onboard American-made air-to-air missiles like the AIM-120 AMRAAM. …
Said another senior Air Force official with experience on the F-22 Raptor, “So, while we are stealthy, we will have a hard time working our way through the EA to target the Su-35s and our missiles will have a hard time killing them.”
The Su-35 also carries a potent infrared search and track capability that could pose a problem for Western fighters. “It also has non-EM [electro-magnetic]sensors to help it detect other aircraft, which could be useful in long-range detection,” the Super Hornet pilot said.
Another of the Su-35’s major advantages is that it carries an enormous payload of air-to-air missiles. “One thing I really like about the Su-35 is that it is a high-end truck: It can carry a ton of air-to-air ordnance into a fight,” the Navy pilot said.
On paper, that makes the Su-35 an extremely capable platform, but as one highly experienced F-22 pilot pointed out: “Whether they can translate that into valid tactics remain[s] to be seen.”
What, then, about that electronic-attack unknown?
On 13 September 2014, Voltairenet described on the basis of a 30 April Russian report, an incident on 12 April, in which the USS Donald Cook Aegis Class destroyer, loaded with missiles, entered the Black Sea, to threaten Russia, and a Russian Su-24 flew overhead, carrying a device that can turn off all electrical systems. Voltairnet said:
As the Russian jet approached the US vessel, the electronic device disabled all radars, control circuits, systems, information transmission, etc. on board the US destroyer. In other words, the all-powerful Aegis system, now hooked up — or about to be — with the defense systems installed on NATO’s most modern ships was shut down, as turning off the TV set with the remote control.
The Russian Su-24 then simulated a missile attack against the USS Donald Cook, which was left literally deaf and blind. As if carrying out a training exercise, the Russian aircraft — unarmed — repeated the same maneuver 12 times before flying away.
After that, the 4th generation destroyer [Donald Cook] immediately set sail towards a port in Romania.
Since that incident, which the Atlanticist media have carefully covered up despite the widespread reactions sparked among defense industry experts, no US ship has ever approached Russian territorial waters again.
According to some specialized media, 27 sailors from the USS Donald Cook requested to be relieved from active service.
Later, on 31 March 2015, Ben Hodges, the Commander of the U.S. Army in Europe, issued, to Defense News, an incoherent statement against Russia, that:
the volume of artillery and rocket ammunition that has been expended [by Russia] is eye-watering. The quality of the electronic warfare [EW] capability that Russians have employed in eastern Ukraine, this is not something that you can create in the basement of your home. So when President Putin says, well these are just coal miners and tractor drivers, it is an obvious lie.
Despite Hodges's attempt to bury in an insult to Putin, reference to electronic warfare capabilities on Russia’s part, that were “eye-watering” for Hodges,Defense News made clear what brought these tears to his eyes, when it reported on 4 August 2015:
Ukrainian forces have grappled with formidable Russian electronic warfare capabilities that analysts say would prove withering even to the US ground forces. The US Army has also jammed insurgent communications from the air and ground on a limited basis, and it is developing a powerful arsenal of jamming systems, but these are not expected until 2023. …
Hodges acknowledged that US troops are learning from Ukrainians about Russia's jamming capability, its ranges, types and the ways it has been employed. He has previously described the quality and sophistication of Russian electronic warfare as "eye-watering."
Russia maintains an ability to destroy command-and-control networks by jamming radio communications, radars and GPS signals, according to Laurie Buckhout, former chief of the US Army's electronic warfare division, now CEO of the Corvus Group. In contrast with the US, Russia has large units dedicated to electronic warfare, known as EW, which it dedicates to ground electronic attack, jamming communications, radar and command-and-control nets.
Of course, Hodges hadn’t said that about “Russian electronic warfare,” he had actually said it about "the volume of artillery and rocket ammunition that has been expended.” But he never publicly objected to the news-media’s tacit acceptance of what had really brought tears to his eyes. Everyone knew it. And it wasn’t "the volume of artillery and rocket ammunition that has been expended.” So, Hodges had dealt with his tears by insulting Putin, instead of by thanking him for having given the U.S. this harmless warning shot across the bow. (Would Hodges have preferred that this capacity continue to be hidden by the Russian side?)
Everybody in the know knows that the U.S. wastes on corruption most of the money it pays, for military, just as it does for health care, and for education, and for other governmental functions. The higher the governmental level is (such as in the White House, and in the Pentagon), the bigger the percentage of waste is, because the skimming is monumental at those higher levels. And for recent U.S. Presidents, they and the foundations they set up suck in billions of dollars, as delayed ‘compensation’ for the favors that the former President had thrown to the ‘donating’ billionaire.
The BBC headlined on 25 January 2016, “Putin Is Corrupt, Says US Treasury,” and three days later, Reuters headlined, “White House Backs Treasury’s View that Putin Is Corrupt.” (Meanwhile, the U.S. Treasury Secretary himself is deeply corrupt, even if not as much as recent U.S. Presidents have been.)
The next day, January 29th, Britain’s Independent headlined, "Russia’s ‘Rustbucket' Military Delivers a Hi-tech Shock to West and Israel,” and reported:
It is this military might that is underpinning President Vladimir Putin’s strategic triumphs. His intervention in Syria has been a game changer and what happens there now lies, to a large extent, in his hands. The Ukraine conflict is semi-frozen, on his terms. The Russians are allying with the Kurds, unfazed by the Turkish anger this has provoked. And, crucially, they are now returning to Egypt to an extent not seen for 44 years, since they were kicked out by President Anwar Sadat.
One of the most senior analysts in Israeli military intelligence told The Independent in Tel Aviv last week: “Anyone who wants anything done in this region is beating a path to Moscow.”
If America elects yet another in the now-long succession, since 1980, of corrupt Presidents, it will be terrible not only for Russia, and for the countries such as Ukraine and Syria and Iraq that the U.S. is destroying, but also for the American people.
On 31 August 2015, The Daily Beast bannered, "Petraeus: Use Al Qaeda Fighters to Beat ISIS,” and reported:
Members of al Qaeda’s branch in Syria have a surprising advocate in the corridors of American power: retired Army general and former CIA Director David Petraeus.
The former commander of U.S. forces in Iraq and Afghanistan has been quietly urging U.S. officials to consider using so-called moderate members of al Qaeda’s Nusra Front to fight ISIS in Syria, four sources familiar with the conversations, including one person who spoke to Petraeus directly, told The Daily Beast.
Petraeus had organized the death squads in El Salvador and in Iraq, so he’s a natural for the global aristocracy to rely upon about such things. He’s even a regular attendee at the secret annual Bilderberg meetings.
On 16 November 2015, F. William Engdahl headlined, “Do We Really Want a New World War With Russia?” and he itemized the ways in which Russia’s military performance, in both Ukraine and Syria, has shocked the U.S. and its allies, especially. The main categories were: "Sukhoi SU-34 ‘Fullback’ fighter-bomber,” "New EW technologies,” "Killer Bumblebees,” and, "‘Status-6′,” which latter is "a new Russian nuclear submarine weapons system designed to bypass NATO radars and any existing missile defense systems, while causing heavy damage to 'important economic facilities' along the enemy’s coastal regions.”
Any U.S. President who would continue the effort started in 1990 by President George Herbert Walker Bush, to conquer and grab control of the resources of post-communist Russia, is insane, especially now, after the February 2014 U.S.-run coup in Ukraine crossed the line that Russia had repeatedly warned must not be crossed. If this effort ever stops, the ‘news’ media won’t report the U.S. gang’s retreat from this by-now 25-year-long war against Russia, which those same ‘news’ media have consistently refused to report. But even if they were to report it, no obligation by the West is so important as the obligation to stop it — the obligation to call off the West’s Saudi-Qatari-Turkish-UAE-Kuwaiti-financed Sunni terrorists, and the rest of the West’s (via NATO, the IMF, etc.) war against Russia and against Russia's Shiite and BRICS allies.
On 28 May 2014, Barack Obama told future leaders of the U.S. military:
Russia’s aggression toward former Soviet states unnerves capitals in Europe, while China’s economic rise and military reach worries its neighbors. From Brazil to India, rising middle classes compete with us, and governments seek a greater say in global forums. …
It will be your generation’s task to respond to this new world. The question we face, the question each of you will face, is not whether America will lead, but how we will lead — not just to secure our peace and prosperity, but also extend peace and prosperity around the globe.
If these sorts of lies are all that he can give us, then the Nobel Peace Prize Committee must demand he return his shameful 2009 Prize from them, right now. And why hasn’t the Committee already demanded he return it?
American Presidents, and we, should leave Russia and its allies (including the BRICS and the non-BRICS such as Argentina) in peace, not pretend to support peace, when all that the U.S. actually spreads is invasions and wars — never-ending wars, and refugees from those wars, which are profitable only for the private investors in those private war-corporations or “contractors.”
Without that corruption, there would be a vastly smaller U.S. ‘Defense’ budget. The Pentagon isn’t even auditable. We have a good idea as to where lots of the real expenses are going. And it’s the opposite of ‘humanitarian’ or ‘pro-democracy.’ It’s arms to hire, or to invest in, by the world’s top kleptocrats — the people who control the lobbyists in Washington, who basically write America’s laws, and fund America’s politics.
Amongst all corrupt aristocracies (and that’s every aristocracy), America’s takes the cake. But yet what has been a standard description which American leaders apply to the governments (such as Saddam Hussein’s, and Muammar Gaddafi’s, and Viktor Yanukovych’s) they’ve overthrown? It’s that they’re “corrupt.”
The International Criminal Court will begin to have credibility if and when it starts to prosecute American leaders such as George W. Bush and Barack Obama, but not a minute before that time. Western gangsters lead the world right now, and Western political leaders are their agents — merely fixers, for those elite gangsters.
* * *
Investigative historian Eric Zuesse is the author, most recently, of They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.
- Meet The World Leader Who Stole His Citizens' Gold
Submitted by Simon Black via SovereignMan.com,
Even before his coronation in 1626, King Charles I of England was almost bankrupt.
His predecessors King James and Queen Elizabeth had run the royal treasury down to almost nothing.
Costly war and military folly had taken its toll. The crown had simply wasted far too much money, and brought in too little.
To make matters worse, King Charles was constantly at odds with parliament.
The English government was completely dysfunctional, with constant bickering, personal attacks, and very little sound decision-making.
Parliament refused to pass the taxes that Charles needed to make ends meet. But at the same time, the King was legally unable to levy his own taxes without parliamentary approval.
So, faced with financial desperation, he began to look for alternative ways to raise revenue.
One way was relying on practically ancient, obscure laws to penalize his subjects.
The Distraint of Knighthood, for example, was based on an act from 1278, roughly three and a half centuries before Charles’ coronation.
The Act gave him the legal authority to fine all men with a minimum level of income who did not present themselves in person at his coronation.
Charles also commandeered vast amounts of land, restoring the boundaries of the royal forests to where they had been during the time of King Edward I in the 13th century.
He then fined anyone who encroached on the land, and resold much of it to industries that were supportive of his reign.
King Charles even resorted to begging; in July 1626, he requested that his subjects “lovingly, freely, and voluntarily” give him money.
When that didn’t work, the King levied a Forced Loan, effectively confiscating people’s funds under the guise of ‘borrowing’ it.
He raised about £250,000, the equivalent of about $7.5 billion today.
Emboldened by his success, Charles eventually seized assets directly, including all the gold on deposit being held at the Royal Mint– money that belonged to the merchants and goldsmiths of England.
At one point Charles even forced the East India Company to ‘loan’ him their pepper and spice inventory. He subsequently sold the products at a steep loss.
If any of this sounds familiar, it should.
Today there is no shortage of nations facing fiscal desperation. Most of Europe. Japan. The United States.
In the Land of the Free, the government has spent years… decades… engaged in the most wasteful folly, from multi-trillion dollar wars to a multi-billion dollar website.
US debt just hit $19 trillion a few days ago. And it’s only going higher.
We can already see the government’s financial desperation.
Over the years, the government has effectively levied a ‘forced loan’ totaling more than $2.6 trillion on the Social Security Trust Fund, whose ultimate beneficiaries are the taxpayers of the United States.
Bottom line, they’re ‘borrowing’ YOUR money.
Last year the government stole more from Americans through ‘Civil Asset Forfeiture’ than all the thieves in the United States combined.
In December, the US government confiscated $19.3 billion from the Federal Reserve, which, by the way, was already very thinly capitalized.
Even if you want to believe the propaganda, it’s clear that these are not the actions of a healthy, solvent government that embraces liberty.
In fact, the government published over 80,000 pages of laws, bills, regulations, and executive orders last year. Just this morning they published another 308 pages.
It’s impossible for anyone to keep up with all of these rules. And yet each can carry civil and criminal penalties, including a fine now for not having health insurance.
As Mark Twain used to say, history may not repeat, but it certainly rhymes.
Financially insolvent governments of major superpowers do not simply go gentle into that good night.
They don’t suddenly turn over a new leaf and start embracing economic freedom.
Instead, they get worse. More desperate. More destructive.
Should we honestly believe that they can continue racking up more debt than has ever existed in the history of the world without any consequences?
This is madness. At some point, fiscal reality always catches up. Maybe not at $19 trillion. Maybe not even at $20 trillion.
Maybe it takes 3 months. Or 3 years. But somewhere out there is a straw that can break the camel’s back. And that has serious consequences.
Never forget that if something is predictable, then it’s also preventable.
And facing such obvious trends, it makes all the sense in the world to take some simple, rational steps to put together your own Plan B.
- PBOC Strengthens Yuan By Most In 2 Months As Golden Week Looms
With just one more day of trading before China’s lunar new year and Sping Festival Golden Week holiday, it appears The PBOC wants to flex its intervention muscles. By strengthening the Yuan fix by 0.16% (the most in 2 months) to 1-month highs, it seems China is trying to send a message before it practically closes for a week…
Of course today’s USD collapse is not going to help their ‘devaluation’ case…
China will be practically closed from Feb 7th until re-opening on Monday Feb 15th and so one wonders if this is a last ditch attempt to dissipate speculators before they are left somewhat to their own devices for a week?
- The Continuing Demonization Of Cash
Submitted by Paul-Martin Foss via The Mises Institute,
The insidious nature of the war on cash derives not just from the hurdles governments place in the way of those who use cash, but also from the aura of suspicion that has begun to pervade private cash transactions. In a normal market economy, businesses would welcome taking cash. After all, what business would willingly turn down customers? But in the war on cash that has developed in the thirty years since money laundering was declared a federal crime, businesses have had to walk a fine line between serving customers and serving the government. And since only one of those two parties has the power to shut down a business and throw business owners and employees into prison, guess whose wishes the business owner is going to follow more often?
The assumption on the part of government today is that possession of large amounts of cash is indicative of involvement in illegal activity. If you’re traveling with thousands of dollars in cash and get pulled over by the police, don’t be surprised when your money gets seized as “suspicious.” And if you want your money back, prepare to get into a long, drawn-out court case requiring you to prove that you came by that money legitimately, just because the courts have decided that carrying or using large amounts of cash is reasonable suspicion that you are engaging in illegal activity. Because of that risk of confiscation, businesses want to have less and less to do with cash, as even their legitimately-earned cash is subject to seizure by the government.
Restrictions on the use of cash are just some of the many laws that pervert the actions of a market economy. Rather than serving consumers, businesses are forced to serve the government first and consumers last. Businesses act as unpaid tax agents, collecting sales taxes for state governments and paying excise taxes to the federal government, the costs of which they pass on to their customers. Businesses act as enforcers of vice laws, refusing tobacco sales to those under eighteen or alcohol to those under twenty-one. Financial institutions, which includes coin dealers, jewelers, and casinos, are required to report cash transactions above $10,000 as well as any activity the government might deem “suspicious.” Cash becomes such a hassle that it is almost radioactive, and many businesses would rather not deal with the burden. Using cash to buy a house is becoming impossible and it is probably only a matter of time before purchasing a car with cash will become incredibly difficult also.
Centuries-old legal protections have been turned on their head in the war on cash.
Guilt is assumed, while the victims of the government’s depredations have to prove their innocence. Governments having far more time and money to devote to asset forfeiture cases than the citizenry, most victims of cash seizures decide to capitulate rather than attempt a Pyrrhic victory. Those fortunate enough to keep their cash away from the prying hands of government officials find it increasingly difficult to use for both business and personal purposes, as wads of cash always arouse suspicion of drug dealing or other black market activity. And so cash continues to be marginalized and pushed to the fringes. Stemming the anti-cash tide will require a societal attitudinal adjustment that views cash not as something associated with crime, but as a bastion of consumer freedom and a bulwark against overzealous governments.
- Is It Time To Panic About Deutsche Bank?
Back in April 2013, we showed for the first time something few were aware of, namely that “At $72.8 Trillion, The Bank With The Biggest Derivative Exposure In The World” was not JPMorgan as some had expected, but Germany’s banking behemoth, Deutsche bank.
Some brushed it off, saying one should never look at gross derivative exposure but merely net, to which we had one simple response: net immediately becomes gross when just one counterparty in the collateral chains fails – case in point, the Lehman and AIG failures and the resulting scramble to bailout the entire world which cost trillions in taxpayer funds.
We then followed it up one year later with “The Elephant In The Room: Deutsche Bank’s $75 Trillion In Derivatives Is 20 Times Greater Than German GDP.”
Then, last June, we asked the most pointed question yet: “Is Deutsche Bank The Next Lehman?” only this time it wasn’t just the bank’s gargantuan balance sheet risk shown below that was dominant…
…. but the fact that it impaired assets had finally started to trickle down through to the income statement, leading to loss after loss, management exit after exit, market rigging settlement after market rigging settlement, and all culminating ten days ago with the bank’s “titanic”, and record, €7 billion loss, surpassing the bank’s troubles even during the depths of the Global Financial Crisis.
But while income statement losses can be brushed aside, far more troubling was that even other banks had started paying attention to the bank’s balance sheet. This is what Citi said:
We view the leverage ratio as the binding capital constraint for Deutsche. The current 3.5% is well below peers and the company’s own 4.5% target. Post restructuring & litigation charges and a Postbank divestment at 0.6x P/TB, we estimate a pro-forma leverage ratio of c3.3%. This implies a c€15bn shortfall, of which we expect part to be met by underlying retained earnings and part via AT1 issuance. However this still leaves an equity shortfall – we see a c4% leverage ratio by end-2017 – which is likely to necessitate a capital increase of up to €7bn in our view. In addition we note the target CET1 ratio of >12.5% only allows for a 0.25% management buffer above the fully-loaded SREP requirement. This provides the company with limited flexibility especially if BaFin were to introduce a counter-cyclical buffer (max 2.5% add-on).
And then there is the huge black hole that is China, and exposure to it… although others are starting to pay attention, and as New Europe wrote two weeks ago, “Major European banks… are significantly exposed to China and if there is significant deleveraging the impact will no doubt be global.”
Banks such as HSBC, such as Deutsche Bank.
We bring all this up because here is what the stock price of Deutsche Bank has done since our first warning about the huge potential risks borne by Deutsche Bank, back in April 2013 – earlier today it touched on fresh post-crisis lows and down substantially since we first started warning about it:
But the real chart everyone should be paying attention to – we certainly have been for a long, long time – is that of DB’s Credit Default Swaps, the earliest harbinger not of company risk, that has been there for a long, long time, but far more importantly of the market’s realization and admission of this risk, have been blowing up and screaming that something is very, very broken at the bank with the largest gross notional derivative exposure in the world.
So, our question for today, is it time to panic about Deutsche Bank yet?
- Iraqi Kurd Leader Wants Independence Referendum: "The Time Has Come And The Situation Is Suitable"
Iraq probably didn’t need to become any more fractious.
The country is deeply divided along sectarian lines with the Shiite government effectively making up for lost time spent under Saddam by marginalizing Iraq’s Sunni minority in the wake of the US invasion that ousted the Ba’athists.
Complicating matters is the presence of Islamic State (which in its early days recruited from the ranks of Saddam’s conquered security apparatus), who still control the country’s second-largest city as well as several oil fields.
And then there are the Kurds, whose semi-autonomous status has gotten less “semi” the more chaotic the country becomes.
As we recounted in detail back in November, a key point of contention between Erbil and Baghdad is oil revenue. SOMO wants the KDP to transfer some 500,000 b/d of oil production to SOMO and in return, the Kurds are supposed to get 17% of Iraqi oil proceeds.
Without delving too far into the specifics, just know that the two sides have never really been able to come to a comfortable and/or lasting consensus and so, the Kurds have moved to export their oil independent of SOMO to the tune of some 630,000 b/d. The revenue from those sales is Erbil’s lifeblood and the money also pays the salaries of the Peshmerga – the Kurdish fighters who have proven to be particularly effective at battling ISIS and who are allied closely with the American boots on the ground in the country.
Now, in a move that’s sure to irk Baghdad, Kurdistan President Massoud Barzani has declared that “the time has come and the situation is now suitable for the Kurdish people to make a decision through a referendum on their fate.”
In other words, Barzani wants to see what his people think about the prospect of declaring statehood.
“The chaos created by Islamic State’s occupation of swathes of Iraq and Syria has given Kurds a chance to further their long-held dream of independence,” Reuters writes, adding that “the region is currently struggling to avert an economic collapse.”
Barzani was careful to say that the referendum wouldn’t necessarily lead to a formal declaration.
“That referendum does not mean proclaiming statehood, but rather to know the will and opinion of the Kurdish people about independence and for the Kurdish political leadership to execute the will of the people at the appropriate time and conditions.”
Right. It’s not entirely clear what’s “appropriate”, but one has to think that if ever there were a “time” that was not “appropriate,” it would be now.
“Both the referendum on independence — which Iraq’s federal government opposes — and the issue of which areas it covers will raise tensions between the autonomous Kurdish region and Baghdad, potentially complicating anti-IS efforts,” AFP writes. “The region officially includes three provinces, but Kurdish forces now hold parts of four more over which the federal government wants to maintain control.”
Specifically, Baghdad won’t be keen on giving up Kirkuk, the oil-rich province in the north currently held by the Peshmerga.
It’s also unclear if Barzani could count on Recep Erdogan to support independence. As AFP correctly notes, “Turkey fears that having a Kurdish state on its southern border, or even moving toward one, could increase calls for similar action within its own territory.” In other words, it could embolden the PKK and the HDP whose politicians have called for Kurdish autonomy in Turkey.
Additionally, the harsh economic realities that accompany sub-$30 crude would make an independence push even more difficult. “There is no on-the-ground justification for a referendum now,” Kirk Sowell, a Jordan-based political risk analyst who spoke to AFP said. “You don’t form a state when you are in the middle of an economic collapse.”
Some have suggested that Barzani is simply attempting to foment a bit of expedient nationalism to rally the people. As Reuters goes on to point out, “Barzani’s mandate as president expired last year, but he remains in office.” In short, he could be out to create a distraction.
“The same way that Scotland, Catalonia and Quebec and other places have the right to express their opinions about their destiny, Kurdistan too has the right, and it’s non-negotiable,” Barzani declared.
We imagine Baghdad begs to differ.
- This Is What Central Bankers Think Of Retail Investors
We previously covered the recently burst mega-Ponzi scheme fraud, Ezubao, the biggest in Chinese history which conned more than 900,000 investors out of $7.6 billion in less than two years under the guise of being a P2P lending platform, in this is what happens when “Chinese Investors Find Out They Got Fleeced By A $7 Billion Ponzi Scheme” and in “We Need To Rise Up”: Bilked Chinese Investors Call For Nationwide Uprising After Massive Ponzi Uncovered.”
Of course this being China, even the Ponzi schemes are next level: as we noted before, police had to use two excavators and dug for 20 hours to unearth 80 bags of evidence that Ezubo executives had buried six meters underground on the outskirts of Hefei, a city in the eastern province of Anhui.
Then overnight, Reuters added some more juicy details to this epic fraud: executives at Ezubao’s parent company, Yucheng Group, now say it was “a complete Ponzi scheme”, which used investor funds to support a lavish lifestyle, the official Xinhua News Agency reported this week.
Among gifts that Yucheng Chairman Ding Ning gave his president, Zhang Min, were a $20 million Singapore villa, a $1.8 million pink diamond ring, luxury limousines and watches and more than $83 million in cash, Xinhua stated.
Amazing, but the real question is just how many other Ezubao are lurking. The short answer: many.
China’s P2P and the online finance industry also serve as a critical channel for the emerging small business and consumer market, which is often ignored by banks and mainstream financial institutions. iResearch predicts China’s unsecured consumer finance market alone will triple in size by 2019, reaching outstanding loans of over $1.7 trillion.
By November, there were over 3,600 P2P platforms as the industry raised more than 400 billion yuan, according to the China Banking Regulatory Commission (CBRC). More than 1,000 of those were problematic, it said.
The consequences when these schemes fail can be devastating, said Yang Dong, vice-dean at Renmin Law School and an expert on finance and securities law. “The harm is obvious. It’s going to damage financial reforms, cause social unrest and destabilize the regime to some extent,” he told Reuters.
400 billion yuan means as much as $60 billion in investor funds may have been Corzined from millions of soon to be very angry Chinese investors: we eagerly wait to discover their reaction when they learn the news.
But how could China’s regulators be so asleep at the wheel? How could they allow such massive Ponzi schemes, which all guaranteed double digit returns and promised investors they would “get rich quick” at a time when the economy is foundering, to proliferate so easily for so long?
The answer brings us to the punchline of this post.
According to Reuters, it all has to do with the utter disdain that China’s ruling echelon has for its upwardly mobile middle class, and specifically those tens of million of Chinese retail investors who have now been burned so badly in just the span of one year participating in a market which everyone warned for months is an epic bubble waiting to burst and which, well, burst and has been crashing ever since last summer.
Here it is:
A report on China’s stock market crash authored last year by former senior officials, including former central bank vice governor Wu Xiaoling, said Chinese retail investors are short-sighted, have a weak investment philosophy and a herd mentality.
And there it is: central bankers who abuse the naive stupidity and herding of those who are “short-sighted” enough, to put trust in the system.
But the real problem is that this is not just a Chinese issue: this is prevalent across the entire world, in both Emerging and Developing countries, as a result of the hubris, the arrogance and the megalomania of the tenured economist class and its sycophant media enablers, who as a result of centrally-planning the world for the past 7 years, are convinced they can treat those whose money they desperately need to preserve the status quo as cattle.
In China, they are in for a very rude awakening. And soon, once the hypnotic spell of central banker omnipotence finally wears off, the outcome will be the same around the globe, an outcome which anyone who lived through even a few years of Soviet central planning, knows how it ends.
- Stops Are Good, Especially in the Oil Market Feb. 3, 2016 (Video)
By EconMatters
A weak U.S. Dollar and Production Cuts News mitigated a bad EIA Inventory Report today in the oil market.
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- How Do Today's Republican Candidates Compare To The Very First?
The 2016 Presidential election features a wide range of Republican contenders. How do they compare to John Charles Fremont, who in 1856 became the very first Republican candidate for President? Adventurer, explorer, military officer, businessman, and U.S. Senator, the current contenders must pool their experience to match Fremont’s remarkable resume.
- Like Jeb Bush, Chris Christie, Mike Huckabee, and John Kasich, Fremont was a governor. Only he became the military governor of northern California by right of military conquest, not election.
- Like Ted Cruz, Marco Rubio, Rand Paul, and Rick Santorum, Fremont was a U.S. Senator – one of the first two U.S. Senators selected by the new state of California to represent the state in Washington.
- Like Donald Trump and Carly Fiorina, Fremont was a businessperson. His $10M California gold country holdings were worth the equivalent of perhaps a half billion dollars today, making Fremont, like Trump, one of the wealthiest candidates for president in U.S. history.
Fremont’s resume included additional accomplishments without parallel among the current contenders. His distinguished career of exploration helped open the West to settlement and popularized the region to countless emigrants who used his reports as their guidebooks: Mormon settlers in Utah, California’s Forty-Niners, and emigrants to Oregon. His unorthodox campaign to conquer California ultimately succeeded, but left him court-martialed and disgraced.
Fremont’s colorful life and career made him vulnerable to allegations of scandal. As a 27-year-old officer, he wooed Jessie Benton, the 15-year-old daughter of Senator Thomas Hart Benton. Despite the senator’s best efforts to keep the pair apart, they wed in secret when she was 17. Her father reconciled himself to the inevitable, and Jessie Benton Fremont ultimately played a crucial role in helping her husband compile and write the popular reports of his expeditions.
Fremont’s campaign was dogged by claims of illegitimate birth, secret Catholicism, and even cannibalism. Some of these claims were true.
And Fremont was hindered by his principled and steadfast opposition to the further spread of slavery – the issue that in four short years would propel the nation into a bloody Civil War.
- Complete And Utter Chaos
Before we start, this tweet summed up most of the desk chatter todasy…
#WallStreet traders at their desks today 😀 @ForexStopHunter @livesquawk @ForexLive @zerohedge @Schuldensuehner pic.twitter.com/yrfmQTwTkW
— Jakub Stasik (@kubachybas) January 20, 2016
Services economy dismal, ADP data weak, crude fundamentals horrible… rip snorting ramp in crude and stocks…
To be clear, today's idiotic ramp in Crude oil was nothing but an algo-induced short-squeeze just like we saw last week. Chatter of OPEC emergency meetings desparately tried to jerk headline-scanning algps higher while everything fundamentally was a disaster with inventories surging across the complex, production unchanged for the lower 48, demand plunging 16% YoY, and energy credit continuing to weaken… But then this happened…
We noted early that Yuan caught a sudden unexpected bid early…
But the following chart suggests The PBOC CNH-JPY intervention spike was the momentum ignition for today's tomfoolery…
Dudley did a job on the dollar…
And his dovishness turned bank stocks around – but credit continued to weaken notably…
Here's The Dow… if you needed a laugh… Pisani "well we were stupidly oversold"
The Dow's realized (intraday inclusive) volatility is the highest since Black Monday chaos…
On the day, Nasdaq just would not join the party… Don't ask for a catalyst for the ramp starting at 2pmET…
Double Squeeze Day…
Treasury yields plunged and ripped back to modest rise on the day…
10Y broke below 1.80% – the first time in a year…
5Y broke down to its low end of the channel – what happens next?
The Dollar was dumped against every major…as Dudley's dovish jawboning 'helped"
And Kuroda will not be happy…
Commodities all gained on the USD weakness but obviously Crude had the highest beta…
Gold broke notably above its 200-day moving average… and silver broke above its 100-day moving-average///
Finally – in case you wondered just how crazy the intrday swings are in crude oil… they are the highest since Lehman…
Charts: Bloomberg
Bonus Chart: Once again The Fed exposed its data-dependence…
Data Dependene Update pic.twitter.com/iuvRhzi3gq
— Not Jim Cramer (@Not_Jim_Cramer) February 3, 2016
- Vancouver Real Estate Goes Full-Retard; Average Home Price Now $1.8 Million
Last week we identified a “bargain” in Canadian real estate.
As you might recall, the Canadian economy is in a bit of a tailspin, and that goes double for the country’s dying oil patch. Indeed, we’ve documented Alberta’s painful experience with slumping crude exhaustively, noting that the steep decline in oil prices has triggered job losses (which hit their highest level in 34 years in 2015), depression, suicides, soaring food bank usage, and a marked uptick in property crime.
Through it all, parts of the real estate market in Canada remain red hot. In stark contrast to the millions of square feet of office space sitting vacant in beleaguered Calgary, Toronto and Vancouver are on fire.
Housing sales in the Toronto area rose 8.2% last month from a year earlier. The average selling price: $631,092.
In Vancouver, the numbers are simply astonishing. Residential property sales in Greater Vancouver rose 31.7% in January. That’s 46% above the 10-year sales average for the first month of the year and the second highest January ever, the Greater Vancouver Real Estate Board notes. The benchmark price for a detached home in Vancouver: $1,293,700. The benchmark price for an apartment: $456,600.
But it gets still crazier. The “benchmark” price represents what the Real Estate Board says a “typical” home would go for on the market. If we simply take the arithmetic mean (i.e. the average), the numbers are even more astounding. As CTV news reports, the average selling price of detached homes was much higher last month – at an astronomical $1.82 million.
“Home buyer demand is at near record heights and home seller supply is as low as we’ve seen in many years,” REBGV President Darcy McLeod said.
So a seller’s market. Got it.
In fact, it’s such a seller’s market that as we showed last week, prices on “fixer uppers” have gone through the roof. Here’s what you can get for $2.4 million in Point Grey:
As CTV news also reports, the house shown above is actually in one of Vancouver’s most desirable neighborhoods that’s home to “A-list neighbours include Lululemon founder Chip Wilson and celebrity environmentalist David Suzuki.”
So “location, location” we suppose.
There are couple of rather obvious questions that come to mind when assessing all of the above. First, what happens if Canada’s recession deepens amid a protracted slump in oil prices? You certainly don’t want to be in a position wherein you’ve paid $1.9 million for a home just prior to getting laid off. After all, the debt service burden is already quite high in Canada:
Also, who in the banking sector is most exposed to this lunacy? This quite clearly isn’t sustainable, especially given the outlook for the Canadian economy, so who on Bay Street is on the hook?
Finally, we wonder if there are exogenous factors at play here. That is, is this all domestic demand or could it be that “Mr. Chen” is effectively arbing the inexorable CAD decline versus USD on the way to funneling Chinese money into Canadian real estate thus driving up prices? We close with a simple flow chart.
Incidentally, British Columbia is now studying the level of foreign investment in the real-estate market. “I think with more data, we’ll be able to get a grasp on how to address it better because affordability, especially in the city of Vancouver, less so in the suburbs but certainly there as well, is a real issue and we have to find ways to address it,” Premier Christy Clark said Monday.
- GoLDMaN SLaCKS…
- Pitchfork Time? "Elites Have Lost Their Healthy Fear Of The Masses"
The following reader comment, posted originally in the FT is a must read, both for the world’s lower and endangered middle classes but especially the members of the 1% elite because what may be coming next could be very unpleasant for them.
Elites have lost their healthy fear of the masses
Sir, Martin Wolf (“The losers are in revolt against the elite”, Comment, January 27) and Andrew Cichocki (“Elites are listening to the wrong people”, Letters, January 29) skirt the key issue: global elites have lost a healthy sense of fear.
From the time of the French Revolution until the collapse of communism, what successive generations of elites had in common was a sense of fear of what the aggrieved masses might do. In the first half of the 19th century they worried about a new Jacobin Terror, then they worried about socialist revolution on the model of the Paris Commune of 1871. One reason for the first world war was a growing sense of complacency among European elites. Afterwards they had plenty to worry about in the form of international communism, which remained a bogey until the 1980s.
With the collapse of the Soviet Union and the spread of global capitalism, today’s elites have lost the sense of fear that inspired a healthy respect for the masses among their predecessors. Now they can despise them as losers, as the aristocracy of ancien régime France despised the peasants who would soon be burning their châteaux. Surely today’s elites are going to learn how to fear before we see any reversal of the recent concentration of wealth and power.
Is it time for pitchforks to restore the natural orders of fear yet?
h/t @WallStCynic
- Did Cruz "Steal" Iowa? Trump, Carson Slam "Dirty… Disgraceful" Tricks
Donald Trump was surprised at how well Ted Cruz did in Iowa…
Ted Cruz didn’t win Iowa, he stole it. That is why all of the polls were so wrong and why he got far more votes than anticipated. Bad!
— Donald J. Trump (@realDonaldTrump) February 3, 2016
It appears he has a reason to be…
During primetime of the Iowa Caucus, Cruz put out a release that @RealBenCarson was quitting the race, and to caucus (or vote) for Cruz.
— Donald J. Trump (@realDonaldTrump) February 3, 2016
Many people voted for Cruz over Carson because of this Cruz fraud. Also, Cruz sent out a VOTER VIOLATION certificate to thousands of voters.
— Donald J. Trump (@realDonaldTrump) February 3, 2016
As The Hill reports, Donald Trump is accusing Republican presidential rival Ted Cruz of committing fraud ahead of Monday night’s Iowa caucuses, and he is calling for a “new election.”
“Based on the fraud committed by Senator Ted Cruz during the Iowa Caucus, either a new election should take place or Cruz results nullified,” Trump tweeted on Wednesday.
Cruz came under fire in the days leading up to the Iowa caucuses for distributing a misleading mailer that attempted to shame recipients into turning out to vote for the Texas senator.
Following his decisive win over the GOP field, Cruz was accused by fellow presidential candidate Ben Carson of spreading a false rumor that Carson was dropping out of the race in order to sabotage the retired neurosurgeon’s campaign.
Cruz later apologized… and thus admitted to the act.
At his first post-Iowa rally in Milford, N.H., Trump called Cruz “dirty,” adding “what he did to Ben Carson was a disgrace.”
Finally, with a huge 24 point lead over Cruz heading into New Hampshire, one wonder what “tricks” Ted will pull out of his bag this time…
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