Jan 05

Today’s News 5th January 2017

  • Chinese Cruise Ship With 2,000 Passengers Stuck At Sea For Two Days Due To Smog

    Beijing’s pollution problem is getting worse by the day.

    On Wednesday, the Chinese capital issued its highest “red fog alert” for only the second day in history, keeping highways closed in and around the city which is already under a smog alert after weeks of choking winter pollution. China’s weather bureau warned of visibility of less than 50 meters in some areas, leading many airports to cancel flights.

    The heavily polluted Hebei province, which surrounds most of Beijing, said on Tuesday it had ordered all polluting firms in Tangshan, China’s biggest steel-producing city to the east of Beijing, to shut down which likely means that China is in for a substantial “manufacturing” shock in the coming months. 

    Hebei, which was home to seven of China’s 10 smoggiest cities in 2015, will build the world’s biggest dust prevention barrier, stretching nearly two miles, at the major coal port of Qinhuangdao in a bid to cut pollution, state media said on Wednesday.

    For now, however, China is very much defenseless against the toxic byproduct of its rapid industrialization, which also happens to be a major factor permitting the Chinese economy to grow at the goalseeked 6-7% level or somewhere thereabouts. Unfortunately for Beijing, it’s a choice of either stable manufacturing growth or clean air: the two are mutually exclusive.

    And nowhere was that more visible today, so to speak, than near the port of Tianjin, where according to the Beijing Evening News, a large cruise ship with more than 2,000 people on board was stuck at sea for two days because it was unable to dock in the heavy smog that has enveloped much of northern China. The vessel finally returned to the Port of Tianjin on Monday afternoon after drifting for two days at sea. The thick air pollution had earlier made it impossible to safely berth the vessel, according to the article

    A passenger was quoted as saying that the ship was scheduled to return on New Year’s Eve after traveling to South Korea and Japan. But she was told by the crew that the ship could not dock as visibility was severely compromised by the smog. She said the passengers had been unsure how long they would be stuck at sea but were grateful there was plenty of entertainment on board to kill time.

    “Unlike passengers who are stuck at some public facilities like an airport, we got to use the pool and the gym to keep ourselves busy,” she said.

    As Reuters adds, poor visibility prompted three major northern ports to suspend the loading of ships on Tuesday, maritime safety agencies said.

    Unless Beijing’s leadership is willing to take draconian measures to curb smog production, which inevitably means an economic slowdown, expect scenes such as the ones shown below to continue.

  • Washington Post Is Richly Rewarded For False News About Russia Threat While Public Is Deceived

    Authored by Glenn Greenwald, originally posted at The Intercept,

    In the past six weeks, the Washington Post published two blockbuster stories about the Russian threat that went viral: one on how Russia is behind a massive explosion of “fake news,” the other on how it invaded the U.S. electric grid. Both articles were fundamentally false. Each now bears a humiliating editor’s note grudgingly acknowledging that the core claims of the story were fiction: The first note was posted a full two weeks later to the top of the original article; the other was buried the following day at the bottom.

    The second story on the electric grid turned out to be far worse than I realized when I wrote about it on Saturday, when it became clear that there was no “penetration of the U.S. electricity grid” as the Post had claimed. In addition to the editor’s note, the Russia-hacked-our-electric-grid story now has a full-scale retraction in the form of a separate article admitting that “the incident is not linked to any Russian government effort to target or hack the utility” and there may not even have been malware at all on this laptop.

    But while these debacles are embarrassing for the paper, they are also richly rewarding. That’s because journalists — including those at the Post — aggressively hype and promote the original, sensationalistic false stories, ensuring that they go viral, generating massive traffic for the Post (the paper’s executive editor, Marty Baron, recently boasted about how profitable the paper has become).

    After spreading the falsehoods far and wide, raising fear levels and manipulating U.S. political discourse in the process (both Russia stories were widely hyped on cable news), journalists who spread the false claims subsequently note the retraction or corrections only in the most muted way possible, and often not at all. As a result, only a tiny fraction of people who were exposed to the original false story end up learning of the retractions.

    Baron himself, editorial leader of the Post, is a perfect case study in this irresponsible tactic. It was Baron who went to Twitter on the evening of November 24 to announce the Post’s exposé of the enormous reach of Russia’s fake news operation, based on what he heralded as the findings of “independent researchers.” Baron’s tweet went all over the place; to date, it has been re-tweeted more than 3,000 times, including by many journalists with their own large followings:

    But after that story faced a barrage of intense criticism — from Adrian Chen in the New Yorker (“propaganda about Russia propaganda”), Matt Taibbi in Rolling Stone (“shameful, disgusting”), my own article, and many others — including legal threats from the sites smeared as Russian propaganda outlets by the Post’s “independent researchers” — the Post finally added its lengthy editor’s note distancing itself from the anonymous group that provided the key claims of its story (“The Post … does not itself vouch for the validity of PropOrNot’s findings” and “since publication of the Post’s story, PropOrNot has removed some sites from its list”).

    What did Baron tell his followers about this editor’s note that gutted the key claims of the story he hyped? Nothing. Not a word. To date, he has been publicly silent about these revisions. Having spread the original claims to tens of thousands of people, if not more, he took no steps to ensure that any of them heard about the major walk back on the article’s most significant, inflammatory claims. He did, however, ironically find the time to promote a different Post story about how terrible and damaging Fake News is:

     Whether the Post’s false stories here can be distinguished from what is commonly called “Fake News” is, at this point, a semantic dispute, particularly since “Fake News” has no cogent definition.  Defenders of Fake News as a distinct category typically emphasize intent in order to differentiate it from bad journalism. That’s really just a way of defining Fake News so as to make it definitionally impossible for mainstream media outlets like the Post ever to be guilty of it (much the way terrorism is defined to ensure that the U.S. government and its allies cannot, by definition, ever commit it).

    But what was the Post’s motive in publishing two false stories about Russia that, very predictably, generated massive attention, traffic, and political impact? Was it ideological and political — namely, devotion to the D.C. agenda of elevating Russia into a grave threat to U.S. security? Was it to please its audience — knowing that its readers, in the wake of Trump’s victory, want to be fed stories about Russian treachery? Was it access and source servitude — proving it will serve as a loyal and uncritical repository for any propaganda intelligence officials want disseminated? Was it profit — to generate revenue through sensationalistic click-bait headlines with a reckless disregard to whether its stories are true? In an institution as large as the Post, with numerous reporters and editors participating in these stories, it’s impossible to identify any one motive as definitive.

    Whatever the motives, the effects of these false stories are exactly the same as those of whatever one regards as Fake News. The false claims travel all over the internet, deceiving huge numbers into believing them. The propagators of the falsehoods receive ample profit from their false, viral “news.” And there is no accountability of the kind that would disincentivize a repeat of the behavior. (That the Post ultimately corrects its false story does not distinguish it from classic Fake News sites, which also sometimes do the same.)

    And while it’s true that all media outlets make mistakes, and that even the most careful journalism sometimes errs, those facts do not remotely mitigate the Post’s behavior here. In these cases, they did not make good faith mistakes after engaging in careful journalism. With both stories, they were reckless (at best) from the start, and the glaring deficiencies in the reporting were immediately self-evident (which is why both stories were widely attacked upon publication).

    As this excellent timeline by Kalev Leetaru documents, the Post did not even bother to contact the utility companies in question — the most elementary step of journalistic responsibility — until after the story was published. Intelligence officials insisting on anonymity — so as to ensure no accountability — whispered to them that this happened, and despite how significant the consequences would be, they rushed to print it with no verification at all. This is not a case of good journalism producing inaccurate reporting; it is the case of a media outlet publishing a story that it knew would produce massive benefits and consequences without the slightest due diligence or care.

    The most ironic aspect of all this is that it is mainstream journalists — the very people who have become obsessed with the crusade against Fake News — who play the key role in enabling and fueling this dissemination of false stories. They do so not only by uncritically spreading them, but also by taking little or no steps to notify the public of their falsity.

    The Post’s epic debacle this weekend regarding its electric grid fiction vividly illustrates this dynamic. As I noted on Saturday, many journalists reacted to this story the same way they do every story about Russia: They instantly click and re-tweet and share the story without the slightest critical scrutiny. That these claims are constantly based on the whispers of anonymous officials and accompanied by no evidence whatsoever gives those journalists no pause at all; any official claim that Russia and Putin are behind some global evil is instantly treated as Truth. That’s a significant reason papers like the Post are incentivized to recklessly publish stories of this kind. They know they will be praised and rewarded no matter the accuracy or reliability because their Cause — the agenda — is the right one.

    On Friday night, immediately after the Post’s story was published, one of the most dramatic pronouncements came from the New York Times’s editorial writer Brent Staples, who said this:

    Now that this story has collapsed and been fully retracted, what has Staples done to note that this tweet was false? Just like Baron, absolutely nothing. Actually, that’s not quite accurate, as he did do something: At some point after Friday night, he quietly deleted his tweet without comment. He has not uttered a word about the fact that the story he promoted has collapsed, and that what he told his 16,000-plus followers — along with the countless number of people who re-tweeted the dramatic claim of this prominent journalist — turned out to be totally false in every respect.

    Even more instructive is the case of MSNBC’s Kyle Griffin, a prolific and skilled social media user who has seen his following explode this year with a constant stream of anti-Trump content. On Friday night, when the Post story was published, Griffin hyped it with a series of tweets designed to make the story seem as menacing and consequential as possible. That included hysterical statements from Vermont officials — who believed the Post’s false claim — that in retrospect are unbelievably embarrassing.

    That tweet from Griffin — convincing people that Putin was endangering the health and safety of Vermonters — was re-tweeted more than 1,000 times. His other similar tweets — such as this one featuring Vermont Sen. Patrick Leahy’s warning that Putin was trying to “shut down [the grid] in the middle of winter” — were also widely spread.

    But the next day, the crux of the story collapsed — the Post’s editor’s note acknowledged that “there is no indication” that “Russian hackers had penetrated the electricity grid” — and Griffin said nothing. Indeed, he said nothing further on any of this until yesterday — four days after his series of widely shared tweets — in which he simply re-tweeted a Post reporter noting an “update” that the story was false without providing any comment himself:

    In contrast to Griffin’s original inflammatory tweets about the Russian menace, which were widely and enthusiastically spread, this after-the-fact correction has a paltry 289 re-tweets. Thus, a small fraction of those who were exposed to Griffin’s sensationalistic hyping of this story ended up learning that all of it was false.

    I genuinely do not mean to single out these individual journalists for scorn. They are just illustrative of a very common dynamic: Any story that bolsters the prevailing D.C. orthodoxy on the Russia Threat, no matter how dubious, is spread far and wide. And then, as has happened so often, when the story turns out to be false or misleading, little or nothing is done to correct the deceitful effects. And, most amazingly of all, these are the same people constantly decrying the threat posed by Fake News.

    A very common dynamic is driving all of this: media groupthink, greatly exacerbated (as I described on Saturday) by the incentive scheme of Twitter. As the grand media failure of 2002 demonstrated, American journalists are highly susceptible to fueling and leading the parade in demonizing a new Foreign Enemy rather than exerting restraint and skepticism in evaluating the true nature of that threat.

    It is no coincidence that many of the most embarrassing journalistic debacles of this year involve the Russia Threat, and they all involve this same dynamic. Perhaps the worst one was the facially ridiculous, pre-election Slate story — which multiple outlets (including The Intercept) had been offered but passed on — alleging that Trump had created a secret server to communicate with a Russian bank; that story was so widely shared that even the Clinton campaign ended up hyping it — a tweet that, by itself, was re-tweeted almost 12,000 times.

    But only a small percentage of those who heard of it ended up hearing of the major walk back and debunking from other outlets. The same is true of The Guardian story from last week on WikiLeaks and Putin that ended up going viral, only to have its retraction barely noticed because most of the journalists who spread the story did not bother to note it.

    Beyond the journalistic tendency to echo anonymous officials on whatever Scary Foreign Threat they are hyping at the moment, there is an independent incentive scheme sustaining all of this. That Russia is a Grave Menace attacking the U.S. has — for obvious reasons — become a critical narrative for Democrats and other Trump opponents who dominate elite media circles on social media and elsewhere. They reward and herald anyone who bolsters that narrative, while viciously attacking anyone who questions it.

    Indeed, in my 10-plus years of writing about politics on an endless number of polarizing issues — including the Snowden reporting — nothing remotely compares to the smear campaign that has been launched as a result of the work I’ve done questioning and challenging claims about Russian hacking and the threat posed by that country generally. This is being engineered not by random, fringe accounts, but by the most prominent Democratic pundits with the largest media followings.

    I’ve been transformed, overnight, into an early adherent of alt-right ideology, an avid fan of Breitbart, an enthusiastic Trump supporter, and — needless to say  — a Kremlin operative. That’s literally the explicit script they’re now using, often with outright fabrications of what I say (see here for one particularly glaring example).

    They, of course, know all of this is false. A primary focus of the last 10 years of my journalism has been a defense of the civil liberties of Muslims. I wrote an entire book on the racism and inequality inherent in the U.S. justice system. My legal career involved numerous representations of victims of racial discrimination. I was one of the first journalists to condemn the misleadingly “neutral” approach to reporting on Trump and to call for more explicit condemnations of his extremism and lies. I was one of the few to defend Jorge Ramos from widespread media attacks when he challenged Trump’s immigration extremism. Along with many others, I tried to warn Democrats that nominating a candidate as unpopular as Hillary Clinton risked a Trump victory. And as someone who is very publicly in a same-sex, inter-racial marriage — with someone just elected to public office as a socialist — I make for a very unlikely alt-right leader, to put that mildly.

    The malice of this campaign is exceeded only by its blatant stupidity. Even having to dignify it with a defense is depressing, though once it becomes this widespread, one has little choice.

    But this is the climate Democrats have successfully cultivated — where anyone dissenting or even expressing skepticism about their deeply self-serving Russia narrative is the target of coordinated and potent smears; where, as The Nation’s James Carden documented yesterday, skepticism is literally equated with treason. And the converse is equally true: Those who disseminate claims and stories that bolster this narrative — no matter how divorced from reason and evidence they are — receive an array of benefits and rewards.

    That the story ends up being completely discredited matters little. The damage is done, and the benefits received. Fake News in the narrow sense of that term is certainly something worth worrying about. But whatever one wants to call this type of behavior from the Post, it is a much greater menace given how far the reach is of the institutions that engage in it.

  • Mexico Panics As Trump's Leverage "Far Greater Than What Mexican Elites Thought"

    Earlier this morning we noted that the Mexican Peso was plunging once again – very close to all-time record lows – as fears spread that Ford’s decision yesterday to cancel a $1.6 billion plant may become the norm following president-elect Trump’s tweet that “this is just the beginning.”

     

    And here is the peso:

     

    And while many senior politicians within the Mexican government dismissed Trump’s campaign speeches as empty rhetoric, per the Associated Press, Ford’s cancellation of it’s $1.6 billion auto plant has served as a “much needed wake-up call” that shows that Trump has far greater leverage “than what Mexican elites thought until recently.”

    “Trump leaves Mexico without 3,600 jobs,” read the headline on El Universal. “Ford’s braking jolts the peso,” said Reforma, referring to the Mexican currency’s nearly 1 percent slump following the news.

     

    Two weeks before inauguration, the scuttling of the planned Ford factory and Trump’s pressure on General Motors should be a “much-needed wake-up call,” said Mexico analyst Alejandro Hope.

     

    It shows “how much actual leverage Trump has within specific companies, which is far greater than what Mexican elites thought until recently,” Hope said. “They claimed that at the end of the day economic interests would prevail over political messaging. That’s clearly not the case.”

    All of which has caused some level of panic within the Mexican political and media spheres from the elites who are slowly realizing that when Trump says he wants to disrupt the status quo by renegotiating NAFTA and building a border wall, “he means it”….as completely shocking as it may be that a politcian might actually mean what he says. 

    In an editorial, El Universal also recalled the deal Trump struck in December with Carrier to keep 800 of 1,300 jobs at an Indiana furnace factory from being sent to Mexico, in return for millions of dollars in tax incentives. It also implicitly criticized the Mexican government’s response to the incoming administration.

     

    “Mexico loses thousands of jobs with no word on a clear strategy for confronting the next U.S. government which has presented itself as protectionist and, especially, anti-Mexican,” the paper wrote. “Trump will try to recover as many U.S. companies that have set up in Mexico as possible. He will try to make them return at whatever cost, through threats or using public resources.”

     

    “Ford’s decision is indicative of what awaits the economies of both countries,” the daily La Jornada said. “For ours a severe decrease in investment from our neighboring country, and for the U.S. a notable increase in their production costs.”

     

    Hope said more decisions like Ford’s are likely to come. And while the loss of a single planned plant probably does not fundamentally change the U.S.-Mexico economic relationship, “it certainly shows that the idea that the status quo was entrenched was false.”

     

    “This should put us on notice that when he says that he wants to renegotiate NAFTA, he means it,” Hope said.

    As we pointed out a few days ago, with Trump scoring new victories with every passing day, the question no longer seems to be whether or not Vicente Fox will pay for the “f**king wall,” but rather, how he’ll pay for it…cash or credit, Mr. Fox?

  • Let’s Play FOMC Bingo: Minutes Show 15 Instances of Uncertainty

    Submitted by Mish Shedlock of MishTalk

    The Fed released Minutes of the December 13-14, 2016 FOMC Meeting today.

    Let’s dive into the minutes to dissect the amount of Fed uncertainty.

    1. Market-based measures of uncertainty regarding monetary policy at horizons beyond one year moved up, suggesting that some of the firming in OIS rates could reflect a rise in term premiums.
    2. The declines in EME currencies and risky asset prices were reportedly driven by higher U.S. yields as well as by uncertainty about possible changes in U.S. trade policies.
    3. The staff viewed the uncertainty around its projections for real GDP growth, the unemployment rate, and inflation as similar to the average of the past 20 years. The risks to the forecast for real GDP were seen as tilted to the downside, reflecting the staff’s assessment that monetary policy appeared to be better positioned to offset large positive shocks than substantial adverse ones. In addition, the staff continued to see the risks to the forecast from developments abroad as skewed to the downside.
    4. In their discussion of their economic forecasts, participants emphasized their considerable uncertainty about the timing, size, and composition of any future fiscal and other economic policy initiatives as well as about how those polices might affect aggregate demand and supply.
    5. Many participants underscored the need to continue to weigh other risks and uncertainties attending the economic outlook. In that regard, several noted upside risks to U.S. economic activity from the potential for better-than-expected economic growth abroad or an acceleration of domestic business investment. Among the downside risks cited were the possibility of additional appreciation of the foreign exchange value of the dollar, financial vulnerabilities in some foreign economies, and the proximity of the federal funds rate to the effective lower bound.
    6. Several participants also commented on the uncertainty about the outlook for productivity growth or about the potential effects of tight labor markets on labor supply and inflation.
    7. Some contacts thought that their businesses could benefit from possible changes in federal spending, tax, and regulatory policies, while others were uncertain about the outlook for significant government policy changes or were concerned that their businesses might be adversely affected by some of the proposals under discussion.
    8. A few added that continued gradual strengthening in labor markets would help return inflation to the Committee’s 2 percent objective. But some other participants were uncertain that a period of tight labor utilization would yield lasting labor market benefits or were concerned that it risked a buildup of inflationary pressures.
    9. A few participants noted the uncertainty surrounding real?time estimates of the longer-run normal rate of unemployment, and it was pointed out that geographic variation in labor market conditions contributed to that uncertainty.
    10. Many participants expressed the need for caution in evaluating the implications of recent financial market developments for the economic outlook, in light of the uncertainty about how federal spending, tax, and regulatory policies might unfold and how global economic and financial conditions will evolve.
    11. While viewing a gradual approach to policy firming as likely to be appropriate, participants emphasized the need to adjust the policy path as economic conditions evolved. They pointed to a number of risks that, if realized, might call for a different path of policy than they currently expected. Moreover, uncertainty regarding fiscal and other economic policies had increased.
    12. Moreover, many participants emphasized that the greater uncertainty about these policies made it more challenging to communicate to the public about the likely path of the federal funds rate.
    13. Participants noted that, in the circumstances of heightened uncertainty, it was especially important that the Committee continue to underscore in its communications that monetary policy would continue to be set to promote attainment of the Committee’s statutory objectives of maximum employment and price stability.
    14. Members agreed that there was heightened uncertainty about possible changes in fiscal and other economic policies as well as their effects.

    Uncertainty Scorecard

    • 15 instances of derivations of “uncertainty”
    • 2 instances of “heightened uncertainty“
    • 2 instances of “uncertain“
    • 1 instance of a sentence with with the word “uncertainty” used twice
    • 1 instance of “greater uncertainty“
    • 1 instance of “considerable uncertainty“
    • 1 instance of “uncertainties” plural

    FOMC Minutes Bingo

    In FOMC Bingo you have to get every box filled. There were better cards. Wizard was a killer. Otherwise, I had a chance.

    Fed Uncertainty Principle

    Let’s review the Fed Uncertainty Principle and its corollaries  as I wrote them on April 3, 2008, before the crash.

    Fed Uncertainty Principle:

     

    The fed, by its very existence, has completely distorted the market via self reinforcing observer/participant feedback loops. Thus, it is fatally flawed logic to suggest the Fed is simply following the market, therefore the market is to blame for the Fed’s actions. There would not be a Fed in a free market, and by implication there would not be observer/participant feedback loops either.

     

    Corollary Number One:

     

    The Fed has no idea where interest rates should be. Only a free market does. The Fed will be disingenuous about what it knows (nothing of use) and doesn’t know (much more than it wants to admit), particularly in times of economic stress.

     

    Corollary Number Two:

     

    The government/quasi-government body most responsible for creating this mess (the Fed), will attempt a big power grab, purportedly to fix whatever problems it creates. The bigger the mess it creates, the more power it will attempt to grab. Over time this leads to dangerously concentrated power into the hands of those who have already proven they do not know what they are doing.

     

    Corollary Number Three:

     

    Don’t expect the Fed to learn from past mistakes. Instead, expect the Fed to repeat them with bigger and bigger doses of exactly what created the initial problem.

     

    Corollary Number Four:

     

    The Fed simply does not care whether its actions are illegal or not. The Fed is operating under the principle that it’s easier to get forgiveness than permission. And forgiveness is just another means to the desired power grab it is seeking.

    Economists Predict Uncertainty to Clear Up

    If and when the economists are ever “certain” about the economy, I am certain they will be wrong.

    Back in August, I noted Economists Expect “Mount Everest” of Uncertainty to Clear Up by December

    What happened?

    Attempts by the Fed and economists to measure uncertainty are certainly ridiculous.

  • Rand Paul Introduces Bill to Audit the Fed, Says it Has Trump Support

    Literally nothing is going to happen here. Let’s not pretend Congress will actually pass a Rand Paul bill that simply requests for the Federal Reserve to be audited. After all, they’re the central bank for the world now, rigging markets and fixing rates almost on demand. There are a lot of people with a lot of questions for the Fed — an entity who presides over an unlimited balance sheet and the power to both print fiat currency at will and to increase the amount of interest it charges the U.S. government.

    Any person or entity under the auspices of the SEC or FINRA is forced to undergo routine audits, just to make sure everything is kosher. Why isn’t the same standard used for the Fed?

    Rand Paul wants to change that and he says it has the support of President elect Trump.
     

    On Tuesday, U.S. Senator Rand Paul reintroduced his Federal Reserve Transparency Act, widely known as the “Audit the Fed” bill, to prevent the Federal Reserve from concealing vital information on its operations from Congress. Eight cosponsors joined Senator Paul on the legislation.
     
    Representative Thomas Massie (KY-4) has introduced companion legislation, H.R. 24, in the U.S. House.
     
    “No institution holds more power over the future of the American economy and the value of our savings than the Federal Reserve,” said Sen. Paul, “yet Fed Chair Yellen refuses to be fully accountable to the people’s representatives.”
     
    “The U.S. House has responded to the American people by passing Audit the Fed multiple times, and President-elect Trump has stated his support for an audit. Let’s send him the bill this Congress.”
     
    “The American public deserves more insight into the practices of the Federal Reserve,” said Rep. Massie. “Behind closed doors, the Fed crafts monetary policy that will continue to devalue our currency, slow economic growth, and make life harder for the poor and middle class. It is time to force the Federal Reserve to operate by the same standards of transparency and accountability to the taxpayers that we should demand of all government agencies.”
     
    On January 12, 2016, a bipartisan Senate majority voted 53-44 in support of Audit the Fed.
     
    S. 16 would require the nonpartisan, independent Government Accountability Office (GAO) to conduct a thorough audit of the Federal Reserve’s Board of Governors and reserve banks within one year of the bill’s passage and to report back to Congress within 90 days of completing the audit.
     
    Audit the Fed would amend section 714b of Title 31 of the U.S. Code to allow the GAO to fully audit:
     
    transactions for or with a foreign central bank, government of a foreign country, or nonprivate international financing organization;
     
    deliberations, decisions, or actions on monetary policy matters, including discount window operations, reserves of member banks, securities credit, interest on deposits, and open market operations;
     
    transactions made under the direction of the Federal Open Market Committee; or
     
    a part of a discussion or communication among or between members of the Board and officers and employees of the Federal Reserve System related to clauses (1)–(3) of this subsection.

    paul

    Isn’t anyone interested in learning how this happened and how they intend to unwind it?

    feds-balance-sheet

     

     

  • It's The "Most Volatile" Year For Political Risk Since World War II

    "In 2017 we enter a period of geopolitical recession," warns Eurasia Group president Ian Bremmer, adding that international war or "the breakdown of major central government institutions" isn't inevitable, though "such an outcome is now thinkable." In the company's 19th annual outlook, Eurasia fears that U.S. unilateralism under Donald Trump, China’s growing assertiveness and a weakened German Chancellor Angela Merkel will make 2017 the "most volatile" year for political risk since World War II.

     

     

    As Bloomberg reports, the warning is a reminder of the range of threats to stability in 2017, from elections in Germany, France and the Netherlands and Britain’s planned exit from the European Union to setbacks in emerging nations such as Brazil and refugee crises.

    With Trump’s ascent to the presidency on an America First platform, the global economy can’t count on the U.S. to provide “guardrails” anymore, according to Eurasia, which advises investors on political risk. Trump’s signals of a thaw with Russia, skepticism toward the North Atlantic Treaty Organization and his “alignment” with European anti-establishment parties such as France’s National Front could weaken the main postwar alliance protecting the global order, according to the report released Tuesday.

     

    “You could see an environment that geopolitically is by far the worst that we’ve experienced in decades in 2017 and yet the investment into the U.S. markets and the strength of the American dollar is going to grow,” he said in a Bloomberg Television interview.

    In China, a scheduled leadership transition makes it likely that President Xi Jinping will be “more likely than ever to respond forcefully to foreign policy challenges,” potentially leading to spikes in U.S.-China tensions, according to Eurasia. To maintain domestic stability, Xi might “overreact” to any sign of economic trouble, leading to a risk of new asset bubbles or capital controls, Eurasia said.

    Merkel, who is seeking re-election in the fall, faces likely disputes over Brexit, Greece’s simmering debt crisis and an “increasingly authoritarian” Turkish President Recep Tayyip Erdogan, threatening a refugee accord between the EU and Turkey.

    “Despite just how wrong the polls have been in recent major electoral contests across the developed world, Merkel will win a fourth consecutive term,” the report said. “But the need to appease domestic critics this year will leave her a diminished figure, impacting the quality of her leadership both at home and in the EU.”

    Other risks cited by Eurasia include:

    • Lack of economic reforms, with only China on a “positive trajectory” among 14 major nations and Italy, Russia, Saudi Arabia, South Africa, Turkey and the U.K. declining.

    • Politicians blaming central banks, including the Federal Reserve, for economic woes. Such attacks mark “a risk to global markets in 2017 by threatening to upend central banks’ roles as technocratic institutions that provide financial and economic stability.”
    • A “witch hunt” against parts of the opposition in Turkey, even tighter control over government and the media by Erdogan, and pressure on the Turkish central bank to keep rates low and rely increasingly on fiscal stimulus to offset slowing growth.
    • North Korea’s nuclear program, which may yield some 20 nuclear weapons, combined with technological advances allowing strikes at the U.S. west coast in the future.
    • National Front leader Marine Le Pen winning the French presidential election is the biggest political risk in Europe, where EU ties and the euro area are “in a process of gradual, slow-motion disintegration,” New York University economics professor Nouriel Roubini said on Bloomberg Television. “If Le Pen comes to power in France, if an anti-euro party comes to power in Italy, this could be the beginning of the end of Europe and the euro zone,” he said.

    Eurasia concludes…

    This year marks the most volatile political risk environment in the postwar period, at least as important to global markets as the economic recession of 2008. It needn’t develop into a geopolitical depression that triggers major interstate military conflict and/or the breakdown of major central government institutions. But such an outcome is now thinkable, a tail risk from the weakening of international security and economic architecture and deepening mistrust among the world’s most powerful governments.

    Full Eurasia Group Report below…

  • Manhattan Apartment Prices Collapse Most In Four Years

    When Douglas Eilliman released their 3Q 2016 recap of Manhattan real estate sales, it basically showed that pricing held up during the quarter as sellers refused to lower their asks but the number of closings collapsed as buyers started to back away from a market that was starting to look bubbly.  Here was our conclusion at the end of 3Q:

    In conclusion, the lesson seems to be that the marginal New York City buyer has been priced out of the market (volume down 20%) while sellers have not yet accepted that the bubble has burst deciding instead to maintain listing prices while letting their apartments sit on the market longer amid growing inventory levels.  Meanwhile, the luxury market is the only segment that seems to be holding up which only serves to prove that Chinese billionaires still have cash they would like to hide in the U.S.

    Well, it seems as though sellers took note and decided to slash asking prices in 4Q.  With median prices dropping 6.3% year-ove-year, 4Q 2016 marked the biggest quarterly decline in Manhattan real estate prices in 4 years, according to a note from Bloomberg.

    NYC Aparment

     

    After being forced to slash his asking price twice in two months on a property in Chelsea, Rex Gonsalves notes that “This isn’t a market where you go into a bidding war.”

    Rex Gonsalves, a broker with Halstead Property, thought $715,000 was a fair price for a one-bedroom co-op apartment in Chelsea with an outdoor patio. But after one month on the market, the best offers that came in were about 30 percent lower, he said.

     

    The sellers agreed to cut the price twice in two months, bringing it down to $649,000. That attracted two offers — one below the asking price and one above it, Gonsalves said. The 16th Street apartment sold in December for the higher price, $659,000.

     

    “This isn’t a market where you go into a bidding war,” he said. “When we got this offer over ask, the sellers said, ‘This is great.’ It really helps to have savvy sellers, who understand the market.”

    Meanwhile, after scrapping a lot of deals in 3Q 2016 due to unrealistic asking prices, Jonathan Miller, of brokerage Miller Samuel, told Bloomberg that sellers are slowly coming to terms with the reality that prices need to come down if they actually want to sell their apartments rather than just pretend.

    “Maybe we’re heading out of the period when there was no shame in overpricing your home,” Jonathan Miller, president of Miller Samuel, said in an interview. “We’re moving away from that and into something more pragmatic: Do you want to actually sell your property or do you want to pretend? Part of selling is pricing correctly or being more negotiable.”

     

    Buyers agreed to pay more than the asking price in just 13 percent of all sales that closed in the quarter, down from 29 percent a year earlier, the firms said. They also are taking longer to make a decision: Previously owned properties that sold in the period spent an average of 80 days on the market, up from 71 days a year earlier. Manhattan resale deals totaled 2,385, a decline of 1.5 percent.

     

    “We saw buyers acting a lot more aggressively with their bidding,” said Pamela Liebman, chief executive officer of brokerage Corcoran Group, which released its own report Wednesday that showed a decrease in sales for the quarter. “They didn’t hesitate to come in and make low offers. A lot of sellers remained unrealistic throughout the year, and that killed a lot of deals.”

    With the floodgates open, the only question now is how low will prices have to drop to clear the massive inventory overhang on the New York market?  Once fear grips that market, the race to the bottom can be quick and painful.

  • Second Video Emerges Of Same Chicago Teens Assaulting Another Trump Supporter – Chicago PD Responds

    UPDATE: Chicago PD Press Conference reveals that the four suspects in custody are all adults, and the victim who is special needs, had been with the perpetrators for 24-48 hours. Charges should be forthcoming. Officals aren’t willing to call it a hate crime at this point.

    As reported earlier on this site, four Chicago teens are in custody after a they live streamed what appears to be the kidnapping, beating, and mutilation of a white Trump supporter (scroll down for footage). In the profanity-laced video, the victim is seen bound and gagged in a corner while the thugs alternate between striking the man, cutting him, and threatening his life with anti-white / anti-Trump hate speech. This is apparently the second time these assailants have done this to a Trump supporter, as further investigation has uncovered a second prior video of a similar attack.

    “F*ck Donald Trump, F*ck white people”

    “There’s gonna be a murder. Pop pop pop”

    “We gonna put this bitch in the trunk, put a brick on the gas, like aaaaaaaaah”

    “Pistol whip his ass, fool“

     

    Currently in custody: 

      

    The woman who recorded the attack showed no remorse in the video’s comments section (which has been deleted):

    More Facebook reactions:

    And the full 28 minute disturbing video of the incident (NSFW):

    The victim is currently being treated for his injuries at a local hospital.

    Meanwhile, an earlier look through the suspect’s Facebook feed led to another video of the same assailants abusing another Trump supporter in a similar attack. During the attack, the victim is made to kiss the floor and say “F*ck Donald Trump” at knifepoint. 

    As a wise man named Chuck once said

    “This can’t be real. Nobody is that stupid.”

    Content originally generated at iBankCoin.com

  • Trump Is Working On A Plan To Restructure, Pare Back The CIA And America's Top Spy Agency

    Just in case the accusations that president-elect Donald Trump is a puppet of the Kremlin, intent on destabilizing and weakening the US weren’t loud enough, moments ago the WSJ assured these would hit an unprecedented level with a report that Trump, a harsh critic of U.S. intelligence agencies, is working with top advisers on a plan that would restructure and pare back the nation’s top spy agency, the Office of the Director of National Intelligence, prompted by a belief that it has “become bloated and politicized.”

    The Office of the Director of National Intelligence, or ODNI, was established in 2004 in large part to boost coordination between intelligence agencies following the Sept. 11, 2001 terror attacks.

    The planning comes in a time of turbulence between Trump and American intelligence agencies: the president-elect has leveled a series of social media attacks in recent months and the past few days against the U.S. intelligence apparatus, at times dismissing and mocking their assessment – perhaps with cause, after all there is still no evidence – that the Russian government hacked emails of Democratic groups and John Podesta and then leaked them to WikiLeaks and others in an effort to help Trump win the White House.

    According to the Journal, among those helping lead Mr. Trump’s plan to restructure the intelligence agencies is his national security adviser, Lt. Gen. Michael Flynn, who had served as director of the Defense Intelligence Agency until he was pushed out by DNI James Clapper and others in 2013. Also involved in the planning is Rep. Mike Pompeo (R., Kan.), who Mr. Trump selected to be his CIA director.

    It’s not just the ODNI: one of the people familiar with Trump’s planning told the WSJ his advisors also are working on a plan to restructure the Central Intelligence Agency, cutting back on staffing at its Virginia headquarters and pushing more people out into field posts around the world. The CIA declined to comment on the plan.

    “The view from the Trump team is the intelligence world [is] becoming completely politicized,” said the individual, who is close to the Trump transition operation. “They all need to be slimmed down. The focus will be on restructuring the agencies and how they interact.”

    Trump may have a point: after all it was the Democrats who accused the FBI of being so politicized that Comey’s reopening of the Clinton email server case is what cost her the presidency. Alternatively, Trump has listed his reasons to allege that the CIA is likewise “politicized”, however in the other direction.

    To be sure, he has been quite open about his feelings on the subject. In one of his Wednesday tweets, Trump referenced an interview that WikiLeaks editor in chief Julian Assange gave to Fox News in which he denied Russia had been his source for the thousands of hacked Podesta and DNC emails. As reported earlier, Trump tweeted: “Julian Assange said ‘a 14 year old could have hacked Podesta’—why was DNC so careless? Also said Russians did not give him the info!”

    In response, Trump was criticized by both Democratic and Republican lawmakers and from intelligence and law-enforcement officials for praising Russian President Vladimir Putin, for attacking American intelligence agencies, and for embracing Mr. Assange, long viewed with disdain by government officials and lawmakers.

    “We have two choices: some guy living in an embassy on the run from the law…who has a history of undermining American democracy and releasing classified information to put our troops at risk, or the 17 intelligence agencies sworn to defend us,” said Sen. Lindsey Graham. “I’m going with them.”

    Additionally, Trump’s advisers say he has long been skeptical of the CIA’s accuracy, and the president-elect often mentions faulty intelligence in 2002 and 2003 concerning Iraq’s weapons programs. But he has focused his skepticism of the agencies squarely on their Russia assessments, which has jarred analysts who are accustomed to more cohesion with the White House.

    The rest of the story is largely familiar: here is the rundown from the WSJ

    Top officials at U.S. intelligence agencies, as well as Republican and Democratic leaders in Congress, have said Russia orchestrated the computer attacks that hacked and leaked Democratic Party emails last year. President Barack Obama ordered the intelligence agencies to produce a report on the hacking operation, and he is expected to presented with the findings on Thursday.Russia has long denied any involvement in the hacking operation, though Mr. Putin has said releasing the stolen emails served a public service.

     

    The heads of the CIA, Federal Bureau of Investigation, and Director of National Intelligence James Clapper are scheduled to brief Mr. Trump on the findings on Friday. Mr. Trump tweeted late Tuesday that this meeting had been delayed and suggested that the agencies still needed time to “build a case” against Russia.

     

    White House officials said Mr. Trump will be briefed on the hacking report as soon as it is ready. White House officials have been increasingly frustrated by Mr. Trump’s confrontations with intelligence officials.

     

    “It’s appalling,” the official said. “No president has ever taken on the CIA and come out looking good.”

    * * *

    In what some may see as a preemptive counter-coup against unfriendly elements, the WSJ notes that Trump shares the view of Flynn and Pompeo that the intelligence community’s position that Russians tried to help his campaign is an attempt to undermine his victory or say he didn’t win, the official close to the transition said.

    Flynn will lead the White House’s National Security Council, giving him broad influence in military and intelligence decisions throughout the government. He is also a believer in rotating senior intelligence agencies into the field and reducing headquarters staff.

    Meanwhile, current and former intelligence and law-enforcement officials have reacted with a mix of bafflement and outrage to Mr. Trump’s continuing series of jabs at U.S. spies. “They are furious about it,” said one former senior intelligence official, adding that a retinue of senior officials who thought they would be staying on in a Hillary Clinton administration now are re-evaluating their plans following Mr. Trump’s election.

    Additionally, current and former officials said it was particularly striking to see Trump quote Assange in tweets. “It’s pretty horrifying to me that he’s siding with Assange over the intelligence agencies,’’ said one former law-enforcement official.

    And that may explain why Trump has decided to overhaul the entire US security apparatus from the ground up.

    Paul Pillar, a 28-year veteran of the CIA who retired in 2005, said he was disturbed by Trump’s tweets and feared much of the intelligence community’s assessments could be filtered through Lt. Gen. Flynn, chosen by Mr. Trump as his national security adviser.

    “I’m rather pessimistic,” he said. “This is indeed disturbing that the president should come in with this negative view of the agencies coupled with his habits on how he absorbs information and so on that don’t provide a lot of hope for change.”

    As a result of Trump’s unprecedented overhaul of the US intelligence apparatus, we expect that to soon hear the loudest calls for Trump committing treason yet.

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