Aug 08

Today’s News 8th August 2018

  • London Is The World's Airbnb Capital

    10 years ago, in early August 2008, the website Airbedandbreakfast.com went online, marking the birth of Airbnb.

    Back then the three founders, Brian Cheky, Joe Gebbia and Nathan Blecharczyk wanted to help short-term travelers find affordable accommodation and provide renters with an opportunity to make an extra buck by renting out spare rooms or even just the namesake airbed on the floor. However, as Statista’s Felix Richter notes, little did they know that 10 years later their little venture would be one of the hottest private companies in the world, valued at nearly $30 billion.

    Over the years, Airbnb has developed into much more than what it was originally meant to be. These days you can rent millions of houses, apartments and rooms on the platform. For many young travelers is has become the favorite if not the only way to find accommodation when travelling.

    Luckily for Airbnb, its rise coincided with a steep increase in city tourism. In cities such as London, Paris or New York, where hotel rooms are often hard to find and/or expensive, Airbnb has become an affordable and popular way to experience cities in a less touristy way.

    The following chart, based on data from AirDNA, shows which cities are particularly popular on Airbnb.

    Infographic: London Is the World's Airbnb Capital | Statista

    You will find more infographics at Statista

    While the platform has been opposed by the hotel industry pretty much from the start, it has also drawn a fair amount of criticism from residents of popular city trip destinations for exacerbating the shortage of affordable housing in many areas. 

    A criticism that doesn’t seem entirely unfair, considering the number of objects listed in some cities.

  • Brexit – Will The EU Collapse Anyway?

    Via TruePublica.org.uk,

    It is impossible for anyone who even occasionally visits the news to ignore just how dramatically the world has changed in the last 10 years. The epicentre of the crumbling world order that we have all known was the global financial crisis. It literally shook the foundations of the Western world and the institutions that upheld it – and today they are now falling down one by one. Will the European Union be one of them as its own existential threats continue to mount?

    Political systems such as democracy are now known to be failing the world over to some degree or another and all of a sudden, many of us have started to wonder about a world without those structures we took so much for granted. Unfortunately, others have embraced this new found fragility more eagerly than others and with frightening consequences.

    It, therefore, should come as little surprise that the past decade has been assessed as a period defined by systemic dysfunction and political change. As we enter the next decade this dysfunction will characterize the momentum of a decade’s worth of disruption and one regional area of change will undoubtedly be the European Union.

    There is no point in researching for material in this article with the assistance of the hatemongering MSM rags typified by the likes of the Daily Mail, Express, Telegraph et al. We have looked at many articles, periodicals and predictions – and there has been for some time a growing belief amongst many in the financial and geopolitical environments that the future prospects of the European Union is at best ‘challenging’ but more likely dismal.

    In March 2017, TruePublica published a prediction of the near future in “New World Disorder” – an article that took the view there were substantial changes to some of the world’s normally stable institutions and political systems. As for the EU, we wrote:

    “With Britain’s recent EU referendum result came the realisation that the rules-based system on the continent had failed. Rising discontent is gathering at an unstoppable pace, much to the alarm of the ruling elite. A federalised state dreamt up by America and handed to Germany with the intention of destroying national identities, borders and sovereign rights are slowly turning into a nightmare as the 28 nation bloc enters what can only be described as a disintegration phase. In the meantime, the EU intends to make it a mistake that the British will regret and fall to their knees.”

    At this precise moment, the EU is united in this approach and Britain is indeed preparing to fall to its knees. However, the truth for the future of the EU is not just about Britain where its own prospects look far worse than even some of the most pessimistic had predicted.

    A document leaked to Germany’s Der Spiegel last year revealed that the German defence ministry set out what it saw as its worst-case scenario for the year 2040. In it, they predicted that:

    “EU enlargement has been largely abandoned, and more states have left the community … the increasingly disorderly, sometimes chaotic and conflict-prone, world has dramatically changed the security environment.”

    Der Spiegel went on to say that: 

    “The journalists to whom the document was leaked have omitted any details of what Germany is planning to do about the EU’s possible collapse and fragmentation.”

    That the document exists at all is a sign of the increased tension in the global system, especially within the EU. What is alarming is that within the report, even this scenario is already regarded as ‘over-optimistic.’ The belief from within the German establishment is clear – that the EU will quite simply not survive.

    Just a month ago, Politico.eu reported that the French Economy Minister Bruno Le Maire said that Europe is in “a state of decomposition – it’s falling apart before our eyes” – he said. And typical of the general theme in this article, Le Maire spelt it out: “member countries are closing in on themselves, trying to find national solutions.”  Various meetings have since been held between the French and German finance ministers and the reality is that they (and therefore their governments) do not see eye-to-eye. In fact, Macron’s proposals have been flatly rejected, not just by the German political elite but by the electorate.

    Business Insider reported back in May that Billionaire investor George Soros publicly stated that Europe is in the midst of an “existential crisis” and it is at genuine risk of ceasing to exist as we currently know it.

    Soros effectively argues that some in the bloc have moved so far away from its founding goals that the EU can no longer sustain itself in its current state.

    “There is no longer any point in ignoring the reality that a number of European Union member countries have explicitly rejected the EU’s goal of “ever closer union.”

    And Soros, like so many, predicts the fracturing of Europe, but not necessarily a collapse. “Instead of a multi-speed Europe, the goal should be a ‘multi-track Europe’ that allows member states a wider variety of choices. This would have a far-reaching beneficial effect.” Since his assertions back in May, just three months ago, the EU project has declined further as populism, protectionism and isolationism has become ever more prevalent in more EU member states.

    The London School of Economics recently published an article by European Politics and Policy. Its view is similar in content to many economic forecasts. It concludes that partial exits by individual member states would sap the EU from within. Rather than experiencing a sudden collapse, the EU would instead sink slowly into oblivion.

    “the EU might instead suffer a slow decline driven by ‘partial exits’ from aspects of European integration. The best-case scenario may be one in which the EU continues to limp ahead in the years to come, but with many members rather grudgingly accepting it as the least unattractive option.”

    Geopolitical Futures is an organisation that charts the course of the international geopolitical system and has accurately predicted the crisis in the EU, the economic decline of China and the re-emergence of Russia. Their view is one of continued erosion of the entire EU project.

    Virtually no country will be left untouched by the rising social, political, cultural and economic tensions throughout the (European) Continent. But under this continued instability will lurk a perhaps more troubling development: Germany, concerned with the EU’s disintegration and anxious about the economic calamity it could portend, is going to have to work harder to keep the bloc together.

    GF takes the view that the writing in on the wall for the EU. It is suffering from multiple structural problems the elite have fundamentally failed to recognise or deal with effectively.

    Europe’s problem is no longer primarily its economy – it is a crisis of trust. The European middle and lower classes have lost faith in the elite’s ability to effectively manage the economy and to understand the cultural tensions that have emerged. Large segments of the population will be disaffected by economic inequality, and there will be little the EU can do about it.

    The consequence is the GF forecasts that trust, not just amongst people but amongst EU nations will continue to erode and that friction between them is inevitable.

    “What we can say is that our forecast for Europe is one of continuity: National and regional movements will continue to erode the social, political and economic systems in Europe.” 

    Don’t forget, this prediction is for this year only and has so far been right on the button.

    CapX monitors thousands of news sources, blogs, academic papers and think-tank publications to find the most important facts and trends. Their view is just as grim.

    “The common thread across all these stalled attempts at eurozone reform is a reluctance on the part of national authorities to pursue genuinely European solutions. What this means in practice is that if and when a new crisis comes, there will be no common European response. Individual eurozone countries will be largely left to fend for themselves while EU leaders, as in the last crisis, seek to make decisions largely on the hoof. The question now is for how long eurozone leaders can get away with it? And the answer is not, perhaps, for much longer. A scan of the horizon suggests it is all too possible to identify the triggers for what could quickly become a eurozone and wider EU collapse.”

    That ‘scan’ takes the view that some things are indeed predictable and inevitable and CapX says that the threats highlighted are quite broad but identified currently as; the decline of the Chinese economy, the growing threat of trade wars, current bank indebtedness and sovereign debt. Any one of these structural issues could lead to a major recession. This time, however, the EU would not be able to withstand the economic shock. CapX, a global financial specialist believes the Euro will bring down Europe. And it concludes:

    “Brexit was a mere footnote in a much more fundamental period of European upheaval. British negotiators may strain every sinew to get a deal, only to discover the entity they’ve agreed it with soon no longer exists.”

    Then there are those who physically backed Brexit with their money on the basis that the European Union was not going to survive.

    Jim Mellon stood out among investors in 2016 as a public backer of Britain’s exit from the European Union. And the chairman of the Burnbrae Group forecasted another breakup. Mellon predicts the euro will become a future casualty of a rising anti-establishment tide, causing the currency union to splinter within the next five years.

    “Brexit is going to be a sideshow to the problems of Europe that are becoming more and more evident,” Mellon said. “The euro as it stands at the moment is just a very inappropriate mechanism — I give the euro between one and five years of life.”

    At this point, there are so many more pieces of evidence, heaps of opinion and predictions as to the demise of the EU. The fact is that the EU27 is indeed going through existential challenges.

    This has been brought about through the common themes that cause political change everywhere.

    The failure of neoliberal capitalism in Europe is the same reason why we have Trump in America, Brexit and a quarter of EU member states supporting right-wing populists. Immigration and the terrorism it imports is a serious concern amongst the people of the EU. Corporatism, corruption, economic stagnation, a doomed currency, the threat of a calamitous recession are all serious threats as well. But by far, the biggest threat is the electorate themselves who have proved time and time again that they don’t like the fact that the EU is undemocratic.

    Any single one of these threats is an existential one and the likelihood of one of them happening is very high indeed and Britain could then be well placed to profit from the disorder that brings!

  • "Who Will Dare Tell The Truth About Government?"

    Authored by Robert Gore via Straight Line Logic,

    If the US government prosecutes Julian Assange and WikiLeaks, it will mark a point of no return.

    We’ll never know what “average” Germans thought on November 11, 1938, the day after Kristallnacht. Perhaps a few recognized it for what it was: a turning point, an acceleration of Germany’s descent into hell. America’s Crystal Night looms, and if it occurs, only a few will recognize it for what it is.

    The fate of Julian Assange is the fate of one man, but it is also the fate of one of our most important freedoms. There won’t be shattered plate glass from vandalized businesses littering the streets, synagogues smashed, graves unearthed, or people herded onto trains. But his prosecution by the US government would destroy an inestimable value, one enshrined in the First Amendment, for which generations of Americans have fought and died: the right of the people and its press to inform the people and to hold their government to account.

    Aside from armed resistance and revolution, the one defense individuals have against governments is intellectual: the concept of individual rights. There is an argument as to whether those rights come from our Creator (Thomas Jefferson) or from our basic nature as humans and the requirements of our survival (Ayn Rand). Despite starting from different premises, both arguments lead to the same conclusion: individuals have inherent, inalienable, inviolable rights, and the only legitimate function of government is to protect those rights.

    The Declaration of Independence and the Constitution were explicit attempts to delineate a set of principles that recognized individual rights and tried to restrain government power. Though real-world implementation has fallen short, often far short, they were towering conceptual achievements.

    In 1933, the year Hitler assumed power, the government began enacting laws that restricted Jews’ rights to earn a living, gain an education, or work in the civil service. In 1935, the Nuremberg Laws stripped German Jews of their citizenship and forbade them from marrying non-Jewish Germans.

    Kristallnacht’s hooliganism was encouraged by the German authorities, and none of the perpetrators bore any legal consequences. More than 30,000 Jewish men were arrested and deported to concentration camps. The government would not protect Jews from the depredations of thugs and the government itself was a thug. Kristallnacht was a point of no return: Jews no longer had any legally enforceable rights. Soon enough no German would.

    In America, there is no one villain or group that one can point to as responsible for the erosion of rights. Begun the day the Constitution was ratified, it’s been a gradual process. We’ve reached the point where only a few of the rights guaranteed in the Constitution and Bill of Rights still receive any measure of government solicitude.

    Property and contract rights are out the window; the government routinely abridges them. You have no right to your own income, or to conduct your legitimate business or trade free from government regulation and interference. Much of the Bill of Rights is either irrelevant now or has been rendered a dead letter. In terms of individual rights, only the Second Amendment’s much infringed right to bear arms, and the First Amendment—the prohibition against the government establishing a religion, free speech, press, and assembly, and the right to petition the government—are still hanging by a thread.

    Which is why the fate of Julian Assange takes on such significance. While the government has prosecuted those like Chelsea (formerly Brad) Manning who have stolen government secrets and classified information, it has not prosecuted the press individuals and organizations who have published them. That is WikiLeaks’ business model: it receives, vets, and publishes stolen information, often from governments.

    The government has not gone after publishers because it would be a frontal assault on the First Amendment that it would probably lose. Any exception would swallow the general rule of press freedom. Say the Supreme Court recognized an exception: classified information whose publication would constitute an imminent and grave threat to the security of the United States. Who decides what’s an imminent and grave threat? The government would have the power to classify whatever information it pleases under that exception and put those who publish it at risk of prosecution, their only recourse years of costly litigation spent arguing that the information didn’t fit the exception.

    Many Trump admirers resist the notion that their man is interested in the acquisition and use of power, but his and members of his administration’s hostility to individual civil liberties belies that resistance. Attorney General Jeff Sessions is a gung-ho supporter of the civil-liberties-eviscerating-government-power-expanding War on Drugs and civil asset forfeiture.

    In the latter, a government seizes assets it claims were involved with crimes and makes their owners jump through myriad legal hoops—including proving the negative that their assets weren’t involved in a crime—even if the owners themselves were never convicted, or even charged, with a crime. Assets that are not “acquitted”—cars, cash, boats, houses, etc.—are kept and used by the government. President Trump has endorsed civil asset forfeiture, and has extended it outside America’s borders via an executive order (see “By Imperial Decree,” SLL, 1/2/18).

    Trump’s Secretary of State and former director of the CIA, Mike Pompeo has fashioned a legal approach the administration might use, in a case against WikiLeaks and Assange, to slither around the First Amendment. In April, still director of the CIA, he delivered a speech in which several passages demanded, but never received, careful parsing from the mainstream media. They are still obsessing over a February Trump tweet in which he declared the US media an “enemy of the people.” This is considered a threat to the First Amendment, but Pompeo’s speech was mostly ignored.

    Pompeo called WikiLeaks “a non-state hostile intelligence service often abetted by state actors like Russia.” Most press organizations, and almost all that consistently challenge the state, are non-state. WikiLeaks has published state secrets, undoubtedly considered hostile acts by those states, but how is it an intelligence service? Pompeo is arguing that WikiLeaks cannot be considered part of the press, consequently it’s not protected by the First Amendment.

    As for the “abetted by state actors like Russia,” WikiLeaks has consistently denied it received the DNC emails from Russia, and nobody has proven otherwise. The best technical evidence indicates those DNC emails were directly downloaded to a portable storage device, indicating an inside job, and not remotely hacked, by Russians or anyone else.

    Pompeo argued that “we have to recognize that we can no longer allow Assange and his colleagues the latitude to use free speech values against us.” This is straight from Orwell: you are free to say what you want, as long as you don’t say anything against the government. He claimed that WikiLeaks “pretended that America’s First Amendment freedoms shield them from justice,” and, “they may have believed that, but they are wrong.” Now where would WikiLeaks get such a crazy idea? How about the plain language of the First Amendment?

    Finally, Pompeo threatened: “To give them the space to crush us with misappropriated secrets is a perversion of what our great Constitution stands for. It ends now.” Any government “secrets” the press publishes with the full approval of the government probably aren’t going to be terribly revealing. It’s the secrets the government doesn’t want revealed, the ones that are generally “misappropriated,” that reveal the most important secrets, which an informed and free people must know if they are to call their government to account.

    From the excerpts quoted above, and the video of the relevant part of speech below, make up your own mind as to who’s perverting the Constitution.

    Freedom of the press protects the rights of the press, but more importantly protects the right of all of us to be informed, especially about what was once considered “our” government. It amplifies the freedom of speech. Even a small newspaper reaches more people than someone shouting from a street corner.

    If Assange and WikiLeaks are tried and convicted in a US court as “a non-state hostile intelligence service,” the government can slap that label on any person or organization publishing or otherwise disclosing its secrets. The case would probably make its way to the Supreme Court. If the court accepted the Pompeo exception to the First Amendment, freedom of the press and speech would become two more of the Constitution’s dead letters.

    Just the prosecution of Assange and WikiLeaks would have a chilling effect. Not that most of the US’s supine mainstream and social media would be chilled. The mainstream media that have spoken out about Assange and WikiLeaks have come down on the side of the government. The social media companies, de facto arms of the government, are shutting down politically incorrect voices. Neither mainstream or social media have anything to lose from the termination of First Amendment freedoms because they don’t say, or allow anyone else to say, anything the powers that be don’t want heard.

    Trump is a wild card on WikiLeaks and Assange. WikiLeaks’ disclosure of the DNC emails helped his campaign. He praised it back then, but now appears ready to prosecute. Trump administration officials and Trump himself often say one thing while Trump does another. It is not a given that Assange will be either extradited by the British government or prosecuted in the US.

    Few totalitarian regimes take their people’s rights away all at once. It’s done gradually to reduce dissent, until that Kristallnacht moment where it’s impossible to evade the reality: there are no rights left. If the Trump administration prosecutes Julian Assange and WikiLeaks, that sinking feeling in your stomach will be the realization that the last remnant of your rights are gone, that the government and Trump are your enemies.

    If Assange and WikiLeaks are prosecuted, who will dare tell the truth about the government? Trump will have destroyed one of the last vestiges of individual rights—and the freedom that goes with it—that once made America great.

  • Market Stunned After Musk Discloses Intention To LBO Tesla, Lawsuits Threatened

    Update 10: After all that, nobody has any idea what just happened, and a word being increasingly thrown around is lawsuit. As Yahoo’s Rick Newman writes, if the LBO deal described by Musk with “funding secured” is true, it’s a boon for shareholders. But if it’s not true, Tesla is in trouble, and shareholders may feel the pain.

    “If funding is secured, then it’s a factual statement,” says John C. Coffee, director of the Center on Corporate Governance at Columbia Law School. “But if he can’t prove that, he’s in some danger of a big lawsuit because short sellers will be devastated by this.”

    On Aug. 7, Musk tweeted: “Am considering taking Tesla private at $420. Funding secured.” Those nine words sent the stock soaring from $342 to around $370, an 8% jump. Then the Nasdaq exchange temporarily halted trading in the shares, pending clarification of material news by the company.

    About three hours after his momentous tweet, Musk posted a message to employees explaining his rationale for going private. He cited “wild swings” in the stock price and frequent attacks by short sellers as “a major distraction for everyone working at Tesla.” He cited Space X, the  rocket-launching company where Musk is also CEO, as an example of a privately owned company better able to focus on a complex long-term mission. “A final decision has not yet been made,” he said.

    And some further observations:

    If Musk’s aim was to temporarily boost Tesla’s stock in order to force losses on short sellers, it could be considered stock manipulation, which is illegal. “That’s too inviting to a plaintiff’s lawyer not to sue,” says Coffee. “This would be an attractive lawsuit. The people who think he’s manipulating the market would say they’ve suffered an injury, and you could pull all those losses together in a class action.”

    If, on the other hand, Musk can demonstrate that he has actually arranged financing for a private buyout, or made serious efforts to do so, he might be off the hook.

    Musk will now be under pressure to promptly disclose whether a buyout offer is serious and where the money would come from. The company is worth about $62 billion (after the Musk-tweet surge), and there would likely be a premium of 25% or more to entice current holders to sell, and give up future gains. At Musk’s price of $420 per share, the buyout would value the company at  around $71 billion

    In short: if this was indeed Musk’s final “burning” of the shorts, and an LBO is just a figment of his imaginations, it will be the shorts who will have the last laugh.

    And if there is a lawsuit, and one person who will be laughing, it will be the biggest TSLA bear: Jim Chanos, who gave the following statement to CNBC:

    https://platform.twitter.com/widgets.js

    * * *

    Update 9: After being halted for over an hour, TSLA stock has reopened at $371 and has risen to $381, up 11.5%. The record stock price is $385 on Sept 18, 2017.

    The bonds, however, which have a 101 Change of Control put, are far less confident about the deal going through:

    * * *

    Update 8: On its blog, Tesla has published the following email that Elon Musk sent to employees today, which appears to be merely another attack on Tesla shorts:

    The following email was sent to Tesla employees today:

    Taking Tesla Private

    Earlier today, I announced that I’m considering taking Tesla private at a price of $420/share. I wanted to let you know my rationale for this, and why I think this is the best path forward.

    First, a final decision has not yet been made, but the reason for doing this is all about creating the environment for Tesla to operate best. As a public company, we are subject to wild swings in our stock price that can be a major distraction for everyone working at Tesla, all of whom are shareholders. Being public also subjects us to the quarterly earnings cycle that puts enormous pressure on Tesla to make decisions that may be right for a given quarter, but not necessarily right for the long-term. Finally, as the most shorted stock in the history of the stock market, being public means that there are large numbers of people who have the incentive to attack the company.

    I fundamentally believe that we are at our best when everyone is focused on executing, when we can remain focused on our long-term mission, and when there are not perverse incentives for people to try to harm what we’re all trying to achieve.

    This is especially true for a company like Tesla that has a long-term, forward-looking mission. SpaceX is a perfect example: it is far more operationally efficient, and that is largely due to the fact that it is privately held. This is not to say that it will make sense for Tesla to be private over the long-term. In the future, once Tesla enters a phase of slower, more predictable growth, it will likely make sense to return to the public markets.

    Here’s what I envision being private would mean for all shareholders, including all of our employees.

    First, I would like to structure this so that all shareholders have a choice. Either they can stay investors in a private Tesla or they can be bought out at $420 per share, which is a 20% premium over the stock price following our Q2 earnings call (which had already increased by 16%). My hope is for all shareholders to remain, but if they prefer to be bought out, then this would enable that to happen at a nice premium.

    Second, my intention is for all Tesla employees to remain shareholders of the company, just as is the case at SpaceX. If we were to go private, employees would still be able to periodically sell their shares and exercise their options. This would enable you to still share in the growing value of the company that you have all worked so hard to build over time.

    Third, the intention is not to merge SpaceX and Tesla. They would continue to have separate ownership and governance structures. However, the structure envisioned for Tesla is similar in many ways to the SpaceX structure: external shareholders and employee shareholders have an opportunity to sell or buy approximately every six months.

    Finally, this has nothing to do with accumulating control for myself. I own about 20% of the company now, and I don’t envision that being substantially different after any deal is completed.

    Basically, I’m trying to accomplish an outcome where Tesla can operate at its best, free from as much distraction and short-term thinking as possible, and where there is as little change for all of our investors, including all of our employees, as possible.

    This proposal to go private would ultimately be finalized through a vote of our shareholders. If the process ends the way I expect it will, a private Tesla would ultimately be an enormous opportunity for all of us. Either way, the future is very bright and we’ll keep fighting to achieve our mission.

    And, once again, zero mention of the “committed” funding, where the money for the LBO will come from, what the capital structure would look like, or any analysis for that matter.

    Musk did decide to tweet again, however, and claim that “Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote.” It wasn’t clear how shareholders can vote for a deal without knowing who the investors are…

    https://platform.twitter.com/widgets.js

    * * *

    Update 7: With Wall Street patiently waiting for something resembling an 8-K which the company is scrambling to put together based on Elon Musk’s tweets now that the stock is halted following the CEO’s unexpected “LBO announcement” on twitter, Musk continues to tweet only in response to questions, and while he has ignored a question where the LBO funding will come from, when asked if investors could “invest once private”, Musk responded “Yes, but liquidity events would be limited to every 6 months or so (like SpaceX).”

    https://platform.twitter.com/widgets.js

    And then, in response to question if investors will be allowed to co-invest, Musk said “no forced sales” and added that he hopes “all shareholders remain. Will be way smoother & less disruptive as a private company.”

    And the punchline, which perhaps brought on the LBO tweetstorm to begin with, Musk said that an LBO “Ends negative propaganda from shorts.” Of course, it also eliminates the possibility to force a short squeeze with a spurious narrative about taking a company with a multi-billion cash burn private at a valuation of over $60 billion, which would make it bigger than TXU, and the largest LBO in history.

    https://platform.twitter.com/widgets.js

    Meanwhile, speaking on CNBC, a Financial Times journalist made it clear that “bankers close to Tesla have no knowledge of the buyout.” Come to think of it, until just two hours ago, Tesla didn’t either.

    * * *

    Update 6: The LBO by Tweet continues, with Musk now saying that “Shareholders could either to sell at 420 or hold shares & go private.”

    https://platform.twitter.com/widgets.js

    In a subsequent, and the latest so far, tweet, Musk also added that he is “super appreciative of Tesla shareholders. Will ensure their prosperity in any scenario.”

    Update 5: Tesla stock was finally halted at 2:08PM, well over an hour after Musk first tweeted:

    • *TRADING HALTED:(TSLA) Halt News Pending

    Update 4: Musk now reveals that he plans to use a “SPV” for the going private transaction:

    https://platform.twitter.com/widgets.js

    Update 3: Bloomberg commentator Sebastian Boyd is not buying it for a very simple reason: math (although meth would make it more palatable):

    Some Tesla Math

    Incidentally, Tesla has a free-float of 127.5 million shares. At $420 a share, that would cost you $53.6 billion. The company already has net debt of of $8.8 billion and an adjusted net leverage ratio of 13 times. Were it to be bought in a management-led LBO, a back-of-the envelope calculation would give it a leverage ratio of over 90 times, worse on a trailing 12-month basis. You can’t run a company on math like that.

    Update 2: And just like that, the fluid situation has just gone from bizarre to absolutely surreal, because in his very next tweet, instead of providing additional details on what is a major market moving annouincement Musk said…

    https://platform.twitter.com/widgets.js

    Although, in a follow up tweet, Musk appears to confirm the “deal”:

    https://platform.twitter.com/widgets.js

    And another alleged confirmation comes from Ross Gerber of Gerber Kawasaki:

    https://platform.twitter.com/widgets.js

    The bizarre odyssey continues, with Musk responding “Yes” to to a question that an LBO “saves a lot of headaches”:

    https://platform.twitter.com/widgets.js

    For now the stock has no idea what is going on:

    * * *

    Update: Never one to miss an opportunity, Elon Musk has just tweeted – from his verified account – that he is considering taking the carmaker private at a price of $420, and even suggests he has the funding…

    In a subsequent tweet, responding to Fox Business News’ Liz Claman, Musk confirms that he is apparently indeed serious.

    The stock prompt spiked even higher…

    … even though nobody has any idea what is going on: is it legal for Musk to say what he did without halting the stock first? Is he simply baked and inviting countless law suits? Who is providing the massive debt to a company with billions in negative cash flow? At what rate? Can Musk even do this when he is a top shareholders (and stands to reap huge gains) and his announcement creates a massive conflict of interest?  If this is even close to true, TSLA bonds (those without a change of control clause) should be sliding.

    Or maybe this is just another attempt by Musk to create a short squeeze and “crush the shorts.”

    And if he is really about to MBO – CDS buyers will be loving it…

    *  *  *

    EARLIER

    Did we just find the latest greater fool?

    The FT reports that Saudi Arabia’s sovereign wealth fund has built a significant stake in Tesla – the latest bold bet by the state fund overseen by powerful crown prince Mohammed bin Salman.

    Saudi’s Public Investment Fund (PIF) built the undisclosed stake of between 3 and 5 per cent of the electric vehicle maker’s shares this year, according to people with direct knowledge of the matter.

    Interestingly, The FT reports that PIF initially approached Musk about purchasing newly issued shares but Musk reportedly rebuffed the offer – perhaps anxious of the perception of further dilution and the promises he made of  the need for more capital.

    Note, however, that Tesla gets $0 from this secondary market investment – at a time when the carmaker is losing a record amount of money.

    Tesla shares are jumping on the news…

    And TSLA bonds are up but remain considerable “cheaper” than stocks…

    The Saudi state fund reportedly acquired the position in secondary markets with the help of JPMorgan – which is odd since JPMorgan has an ‘underweight’ on TSLA with a profit target of $195 (a great way to get the stock lower for their wealthy gulf clients).

    And all this coming just weeks after Aramco suddenly decides to raise billions in debt instead of IPOing?

    More recently, the PIF has been in talks with global banks to borrow between $6bn and $8bn, marking the first time that the vehicle entrusted with driving the kingdom’s economic transformation will directly tap banks to fund its mission.

    A skeptic might wonder whether, since Tesla can’t buyback stock directly using debt-issuance (WACC too high), it is using US bond investors as a source of funds and Saudis as the proxy buyer to achieve the same effect.

  • Ahmadinejad Urges End To US Dollar Hegemony: "Current [World] Order Needs To Change"

    As US re-imposes sanctions on Iran, former two-term Iranian President Mahmoud Ahmadinejad has spoken out against the current US hegemony.

    As RT notes, Ahamdinejad says the dollar is one of the major pillars of US dominance over global finance and trade; calling for change in the current world order.

    The former leader of the Islamic Republic tweeted on Monday, that “The use of the US Dollar as the standard unit of currency in global markets and the world banking system is the key strength of the American Empire. Things need to change, current orders should be reordered.”

    https://platform.twitter.com/widgets.js

    Seemingly confirming Ahmadinejad’s warning, President Trump reiterated his warnings against breaking Washington’s sanctions, saying in a tweet that “Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!”

    https://platform.twitter.com/widgets.js

    But, while it is a little premature, the relative surge in China’s ‘petroyuan’ futures contract overnight could suggest a shift away from the petrodollar to avoid US sanctions on Iranian oil…

    The beginning of the end of the petrodollar?

  • The Bizarre Facebook Path To Corporate Fascism

    Authored by Glen Ford via Black Agenda Report,

    Facebook has assumed additional political police powers, disrupting a planned counter-demonstration against white supremacists, set for August 12th in Washington, on the grounds that it was initiated and inspired by “Russians” as part of a Kremlin campaign to “sow dissention” in the U.S.

    The Facebook intervention is a qualitative escalation of the McCarthyite offensive launched by the Democrat Party and elements of the national security state, and backed by most of the corporate media, initially to blame Hillary Clinton’s 2016 defeat on “collusion” between Wikileaks, “the Russians” and the Trump campaign to steal and publicize embarrassing Clinton campaign emails.

    After failing to produce one shred of hard evidence to support their conspiracy theory, the anti-Russia hysteria mongers switched gears, focusing on the alleged purchase of about $100,000 in Facebook ads by the Internet Research Agency (IRA), a St. Petersburg-based Russian company, over a multi-year period.

    The problem was, most of the ads had no direct connection to the presidential contest, or were posted after the election was over, and many had no political content, at all. The messages were all over the place, politically, with the alleged Russian operatives posing as Christian activists, pro- and anti-immigration activists, and supporters of the Black Lives Matter Movement. Special prosecutor Robert Mueller was forced to flip the script, indicting 13 Russians for promoting general “discord” and undermining “public confidence in democracy” in the United States – thus creating a political crime that has not previously been codified in the United States.

    In doubling down on an unraveling conspiracy tale, the Mueller probe empowered itself to tar and feather all controversial speech that can be associated with utterances by “Russians,” even if the alleged “Russians” are, in fact, mimicking the normal speech of left- or right-wing Americans — a descent, not into Orwell’s world, but that of Kafka (Beyond the Law) and Heller (Catch-22).

    Facebook this week announced that it had taken down 32 pages and accounts that had engaged in “coordinated and inauthentic behavior” in promoting the August 12 counter-demonstration against the same white supremacists that staged the fatal “Unite the Right” demonstrations in Charlottesville, Virginia, a year ago. Hundreds of anti-racists had indicated their intention to rally against “Unite the Right 2.0” under the banner of Shut It Down DC, which includes D.C. Antifascist Collective, Black Lives Matter D.C., Hoods4Justice, Resist This, and other local groups.

    Facebook did not contend that these anti-racists’ behavior was “inauthentic,” but that the first ad for the event was purchased by a group calling itself “Resisters” that Facebook believes were behaving much like the Internet Research Agency. “At this point in our investigation, we do not have enough technical evidence to state definitively who is behind it,” said Nathaniel Gleicher, Facebook’s head of cybersecurity policy . “But we can say that these accounts engaged in some similar activity and have connected with known I.R.A accounts.”

    Chelsea Manning, whose prison sentence for sending secret documents to Wikileaks was commuted by President Obama, said the counter-protest was “organic and authentic”and that activists had begun organizing several months ago. “Folks from D.C. and Charlottesville have been talking about this since at least February,” Manning told The New York Times.

    “This was a legitimate Facebook event that was being organized by Washington, D.C. locals,” says Dylan Petrohilos, of Resist This. Petrohilos was one of the defendants in the Trump inauguration “riot” prosecutions. He protested Facebook’s disruption of legitimate free speech and assembly. “DC organizers had controlled the messaging on the no UTR fb page and now FB made it harder for grassroots people to organize,” he tweeted. The organizers insist the August 12 counter-demonstration — “No Unite the Right 2 – DC” — is still a go, as is the white supremacist rally.

    Whoever was first to buy a Facebook ad — the suspected Russian “Resisters,” or Workers Against Racism, who told the Daily Beast they decided to host their own anti-“Unite the Right 2.0” event because they thought “Resisters” was an “inexperienced liberal organizer” – there was no doubt whatsoever that the white supremacists would be confronted by much larger numbers of counter-demonstrators, in Washington. Nobody in Russia needed to tell U.S. anti-racists to shut the white supremacists down, or vice versa. The Russians didn’t invent American white supremacy, or the native opposition to it. Even if Mueller, Facebook, the Democratic Party and the howling corporate media mob are to be believed, the “Russians” are simply mimicking U.S. political rhetoric and sloganeeriing – and weakly, at that. The Workers Against Racism thought the “Resisters” weren’t worth partnering with, but that the racist rally must be countered. The Shut It Down DC coalition didn’t need the “Resisters” to crystallize their thinking on white supremacism.

    The Democratic Party and corporate media, speaking for most of the U.S. ruling class — and actually bullying one of its top oligarchs, Mark Zuckerberg — is on its own bizarre and twisted road to fascism. (Donald Trump’s proto-fascism is the old fashioned, all-American type that the white supremacists want to celebrate on August 12.) With former FBI Director Robert Mueller at the head of the pack, they have created a pseudo legal doctrine whereby “Russians” (or U.S. spooks pretending to be Russians) can be indicted for launching a #MeToo campaign of mimicry, echoing the rhetoric and memes indigenous to U.S. political struggles, while the genuine, “authentic” American political voices — the people who are being mimicked — are labeled co-conspirators in a foreign-based “plot,” and their rights to speech and assembly are trashed.

    That’s truly crazy, but devilishly clever, too. If “Russian” mimics (or cloaked spooks) can reproduce the vocabulary and political program of U.S. dissent, then all of us actual U.S. lefties can be dismissed as “dupes of the Russians” or “co-conspirators” in the speech crimes of our mimics — for sounding like ourselves.

  • North Korea Nuke Launch Site Dismantling Progress "Goes Beyond Summit Commitment"

    Amid desperate attempts by the neocons and their media lapdogs to disparage President Trump’s agreements with North Korea’s leader, claiming Kim is violating the terms, 38North has confirmed that not only is progress being made on dismantling its nuclear missile launch facilities, but “activity at the launch pad appears to go beyond that commitment.“

    As we previously noted, these stories of supposed North Korean betrayal by NBC, CNN, and the Wall Street Journal are egregious cases of distorting news by pushing a predetermined policy line. But those news outlets, far from being outliers, are merely reflecting the norms of the entire corporate news system.

    The stories of how North Korea is now violating an imaginary pledge by Kim to Trump in Singapore are even more outrageous, because big media had previously peddled the opposite line: that Kim at the Singapore Summit made no firm commitment to give up his nuclear weapons and that the “agreement” in Singapore was the weakest of any thus far.

    That claim, which blithely ignored the fundamental distinction between a brief summit meeting statement and past formal agreements with North Korea that took months to reach, was a media maneuver of unparalleled brazenness. And big media have since topped that feat of journalistic legerdemain by claiming that North Korea has demonstrated bad faith by failing to halt all nuclear and missile-related activities.

    Which makes today’s news from expert satellite imagery analyst Joseph Bermudez Jr even more notable.

    Commercial satellite imagery from August 3 indicates additional dismantlement activities are ongoing at the Sohae Satellite Launching Station since last observed. At the vertical engine test stand, used for testing and development of engines for ballistic missiles and space launch vehicles, the North Koreans have continued to tear down the steel base structure and appear to be removing fuel and oxidizer tanks from dismantled bunkers.

    At the launch pad, work on the rail-mounted processing/transfer structure used to support rocket launches continues, with two-thirds of the west wall and a third of the north wall having been removed, and its components remain on the adjacent ground. While the launch pad activity seems to be related to dismantlement, as it stands right now, we cannot rule out the possibility that it could be the beginning of a project to modify the structure for other purposes.

    While dismantlement of the vertical engine test stand represents a fulfillment of Chairman Kim’s agreement with President Trump conveyed publicly during the post-Singapore Summit press conference, activity at the launch pad appears to go beyond that commitment. These activities, however, must be viewed cautiously as “first steps” since neither are presently permanent or irreversible. The demolition of the test stand’s concrete foundations, launch pad’s gantry tower, pad foundation and exhaust deflector, etc., would represent more permanent and irreversible actions as there is no known facility with equivalent capabilities elsewhere in the country. The coming months should provide more firm indications whether these are indeed the “first steps” in reducing the North Korean ballistic missile threat.

    Read more here…

    As we concluded previously, a media complex so determined to discredit negotiations with North Korea and so unfettered by political-diplomatic reality seriously threatens the ability of the United States to deliver on any agreement with Pyongyang. That means alternative media must make more aggressive efforts to challenge the corporate press’s coverage... and today’s news seems positive (but we will see what spin it gets).

  • The Crackdown Continues: Twitter Suspends Libertarian Accounts, Including Ron Paul Institute Director

    One day after what appeared to be a coordinated attack by media giants Facebook, Apple, Spotify and Google on Alex Jones, whose various social media accounts were banned or suspended in a matter of hours, the crackdown against alternative media figures continued as several Libertarian figures, including the Ron Paul Institute director, found their Twitter accounts suspended. 

    https://platform.twitter.com/widgets.js

    On Monday, Twitter suspended the editorial director of antiwar.com Scott Horton, former State Department employee Peter Van Buren, and Dan McAdams, the executive director of the Ron Paul Institute.

    https://platform.twitter.com/widgets.js

    Horton was reportedly disciplined for the use of “improper language” against journalist Jonathan M. Katz, he said in a brief statement, while McAdams was suspended for retweeting him, he said. Past tweets in both accounts were available to the public at the time of the writing, unlike the account of Van Buren, which was fully suspended.

    According to TargetLiberty, Horton and McAdams fell victim of Twitter’s suspension algorithm after objecting to Katz’s quarrel with Van Buren over an earlier interview.

    https://platform.twitter.com/widgets.js

    https://platform.twitter.com/widgets.js

    The suspensions come days after Twitter suspended black conservative Candace Owen from Twitter for highlighting the algorithmic hypocrisy of Twitter by replacing the word “white” with “Jewish” in a series of tweets modeled on those by New York Times editor Sarah Jeong.

    just after controversial conservative Alex Jones, and his podcast InfoWars, were kicked out from most social media platforms, prompting conservative to accuse the social networks of collusion in a collective crackdown on non-mainstream voices. The Silicon Valley giants were criticized by the US political establishment for failing to prevent alleged Russian interference in the 2016 presidential election. Meanwhile, critics now say the pressured media giants are engaging in political censorship, using their market dominance and lack of legislated neutrality requirements to target descent voices ahead of the midterm elections.

    * * *

    In a scathing op-ed on Tuesday, Nigel Farage wrote that “while many on the libertarian right and within the conservative movement have their issues with Alex Jones and InfoWars, this week’s announcement by YouTube, Facebook, Apple, and Spotify represents a concerted effort of proscription and censorship that could just as soon see any of us confined to the dustbin of social media history.“

    These platforms that claim to be “open” and in favor of “free speech” are now routinely targeting — whether by human intervention or not — the views and expressions of conservatives and anti-globalists.

    This is why they no longer even fit the bill of “platforms.” They are publishers in the same way we regard news outlets as publishers. They may use more machine learning and automation, but their systems clearly take editorial positions. We need to hold them to account in the same way we do any other publisher.

    Farage then accused social media giants of being corporatist:

    That they cannot profess to be neutral, open platforms while being illiberal, dictatorial, and hiding behind the visage of a private corporation (which are more often than not in bed with governments around the world at the very highest levels).

    This isn’t capitalism. It’s corporatism.

    He concludes that the real interference in “US democracy” comes not from Russia, but from some of its most powerful corporations which now yield more power in some cases than the government itself: “This isn’t “liberal democracy” as they keep pretending. It’s autocracy.”

    “…for those that don’t take issue with the latest censorship of right-wingers by big social media — unless we take a stand now, who knows where it could end.“

  • No Peace In Strengthening Iran Sanctions

    Authored by Tom Luongo,

    President Trump is out of options.  So are his main vectors of information, the Israeli Firsters in his cabinet and family.  Israel, the U.S. and Saudi Arabia have lost the Syrian War and the ramifications of that are immense.

    Because by losing this war the U.S. has been revealed as a paper tiger incapable of imposing its will on a world which is rapidly recoiling from its dominance.

    Syria was the first time someone stood up and said, “No more.”  Putin’s dramatic intervention in Syria was supported by all the same people in Trump’s crosshairs today:  China, Iran and Hezbollah.  Eventually, Turkey realized the U.S. could not be trusted, so they are targeted for economic destruction as well.

    So, today’s impositions of new sanctions on Iran, the same playbook that Trump used against North Korea, is the only logical step on the path to the U.S. leaving the region.

    Yes, you heard me, leaving the region.

    Peak Stupidity

    At a time when the optics are all about the U.S. acting in the most mad way imaginable, the reality is that intense bullying like this only comes from weakness.  Trump has no other cards to play.

    In October of 2015 I wrote in my then Newsletter for Newsmax:

    Syria is the U.S.’ Waterloo. And this failure, along with the Fed’s indecision, creates
    a clear moment of transition from one possible future to another. It marks the beginning of the Age of Russian Diplomacy and puts a period on post-Soviet Union
    turmoil.  

    – Resolute Wealth Letter November 2015 Issue

    Since then I’ve described Putin’s intervention in Syria as the moment the peak of the U.S.’s ability to project power was revealed to the world.

    Trump, this morning, thinks he’s going to make a liar out of me.  The problem is that this move could be seen two years ago when he became the nominee of the Republican Party.

    And, as such, preparations are in place to mitigate the worst of these sanctions.  These sanctions, it cannot be over-stated enough, are the result of the Bill Browder Operationto give government the power to sanction individuals and companies not just countries via the Magnitsky Act and its sequel.

    Putin didn’t have Magnitsky killed, Browder did.  Because Magnitsky was the most likely person, as one of Browder’s accountants, who could out Browder for who he was and what he’d done.

    The purpose of these sanctions is to ratchet up the level of financial control on global business by bypassing governments and go directly to the bottom line of the people who have the most to lose.  To get them to do the bidding of those with power at the expense of those they perceive as having none.

    But, as I pointed out on last night’s live stream, why does anyone think that Iran’s government is going to fall because the rial is in free fall when Venezuelans, who are literally starving to death, haven’t overthrown theirs?

    The Response to Idiocracy

    This morning Iran finally took off the controls on the rial.  This is the right thing to do.  The Iranian people have to stop using the dollar.  It will be the moment of their true liberation from a corrupt system designed to keep them exactly where they are.

    There is no way to fight this directly for Iran.  They will have to de-dollarize and quickly.  Because, if they sue for peace and are admitted back into the world of the dollar they will be its slave.

    Because at any moment, Trump can just do this again whenever his whims suit him.  The price for that will be losing control of their government, businesses and natural resources.

    The same choice Browder et.al. put in front of Boris Yeltsin back in 1999.

    And since Trump is operating under information mostly gleaned from Israeli sources or those with Israeli dual-citizenship (most of Trump’s cabinet), then what do you think his perception of reality is?

    I’ve told you for months Trump has a blind spot about Iran.  It will be his downfall as he loses another round of Big Stick Diplomacy.  Yes, loses.

    Back in April, Trump tried to disrupt the Aluminum market by instituting, over night with zero warning, crippling sanctions on Rusal, the Russian state aluminum company, which supplies 15% of the world’s aluminum.

    The disruption to the markets was so severe the Treasury Department had to pull them back and give everyone six months to get in line.  I’m sure Goldman made a few billion on the trade.

    Now China is creating yuan-futures contracts for industrial metals to mitigate the effects of those sanctions when they go into effect later this year.

    And this morning the Chinese petroyuan futures contract is limit up on the Shanghai exchange.  It will be tomorrow as well.  Iran will get paid for its oil.  China will continue de-valuing the Yuan to protect emerging markets.

    That was the dry-run for today, just like Trump bombing Al-Shairat in 2017 over a ‘beautiful piece of chocolate cake’ was.  That bombing was a message to Iran and North Korea that Trump isn’t Obama.

    Which is nonsense because Obama bombed millions, drone-struck U.S. citizens and put crippling sanctions on whoever his masters told him to.

    As Putin says, “Presidents change, policy does not.”

    The problem for Trump is that none of that worked.  The Koreans pushed the U.S. to the bargaining table.  Kim had a nuke.  The U.S. only negotiates when it’s losing.

    The peace process was led by Korea’s leadership and Trump had to go along for the signing ceremony.

    Good for him.

    Strength Through Peace

    Trump’s tweet this morning is the essence of the authoritarian mindset and the height of hubris.  And hubris is the downfall of every would-be-Emperor.

    The Iran sanctions have officially been cast. These are the most biting sanctions ever imposed, and in November they ratchet up to yet another level. Anyone doing business with Iran will NOT be doing business with the United States. I am asking for WORLD PEACE, nothing less!

    — Donald J. Trump (@realDonaldTrump) August 7, 2018

    Great Donald, why don’t you act like that’s what you truly want?  North Korea was easy, the Koreans made it easy for you.  But, Iran is a different animal.  It’s too close to the powerful people who pull your strings and yank your chain.

    I’ve said before, when you go nuclear there is no going back.  So, now stating to the world that anyone doing business with Iran will be cut off completely from the U.S. will hurt everyone, especially Americans.

    So, Trump is going to bar Americans from buying iPhones because Apple sold a single iPhone today in Tehran?

    That’s what this statement implies.

    So, who blinks here?  China?  The U.S. economy cannot substitute domestic goods for Chinese.

    But, Trump thinks 4% GDP growth, an artifact of changes in tax policy and last year’s weak dollar, will win him the day going into the mid-terms while being tough on Iran, the bogeyman, for his base.

    It won’t.  He’ll win the mid-terms and that’s a good thing.  But, Iran will survive this.  If they were going to cave in they would have done so weeks ago.

    Rouhani would have met with Trump.

    Sanctions like this either work in the first 15 days or they never achieve their goal.  Just ask the Saudis about Qatar, the most recent example.

    Or let’s discuss Cuba, North Korea?

    Sanctions are an act of war.  Trump thinks he’s leading a holy crusade for World Peace via a policy of ‘Peace Through Strength.’  When the sad truth is that it is countries like Iran, North Korea and Russia that have embodied this principle.

    North Korea built a nuclear missile capable of devastation with Iran’s help.  No one is denying this.  But, look what that weapon achieved?  An end to an unnecessarily frozen conflict for nearly 70 years.

    Now it’s Iran’s turn to go through the motions of surviving Trump’s bravado over the same ‘weapon.’

    Putin has elevated Russian Diplomacy and military competence to a level unchallenged in the world today.  It’s the reason Trump is not threatening Iran with invasion.  Putin’s military superiority ensures a cost on the U.S. that is not tolerable to Americans.

    Pride Goeth …

    The bluff here is that Iran has to cave if Trump unites the world behind him; a man who has alienated nearly every other world leader.

    So, the real question is why?  What’s the end-game here?  Trump knows he can’t win this financial war of attrition but he still has to wage it.

    There are no good answers to this question because all of them are equally plausible:

    1. Trump is purposefully pushing countries away to let them exit NATO (Turkey, Germany)
    2. Trump is beholden to Zionist leadership embedded deep in the U.S. government and has little real negotiating room
    3. Trump is delusional and believes he won against North Korea
    4. Trump is working towards the multi-polar world counter-intuitively while being bound down by Deep State/Shadow Government forces he can’t control.

    The only interpretation of Trump’s behavior I dismiss out of hand is the Left’s argument that he’s both incompetent and corrupt.  He knows what he’s doing.  Whether he will achieve his goals is a different story.

    Lastly, never forget that Trump may be all of the things I’ve accused him of today and still wind up with World Peace, in spite of himself.

    Don’t worry, he won’t miss the opportunity to take the credit.  While we all breathe a huge sigh of relief if is does.

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