- Paul Craig Roberts Fears "A Stalinist Purge In America?"
Authored by Paul Craig Roberts,
This year could turn out to be a defining year for the United States. It is clear that the US military/security complex and the Democratic Party aided by their media vassals intend to purge Donald Trump from the presidency. One of the open conspirators declared the other day that we have to get rid of Trump now before he wins re-election in a landslide.
It is now a known fact that Russiagate is a conspiracy of the military/security complex, Obama regime, Democratic National Committee, and presstitute media to destroy President Trump. However, the presstitutes never present this fact to the American public. Nevertheless, a majority of Americans do not believe the Democrats and the presstitutes that Trump conspired with Putin to steal the election.
One question before us is: Will Mueller and the Democrats succeed in purging Donald Trump, as Joseph Stalin succeed in purging Lenin’s Bolsheviks, including Nikolai Bukharin, who Lenin called “the golden boy of the revolution,” or will the Democratic Party and the presstitutes discredit themselves such that the country moves far to the right.
Stalin didn’t need facts and could frame-up people at will as he had absolute power. In the US the presstitute media, like Stalin, does not concern itself with facts, but the presstitutes do not have absolute power. Indeed, few people trust the presstitutes, and even fewer trust Mueller.
Many are puzzled that President Trump has not moved against his enemies as they have no evidence for their charges. Indeed, Mueller’s indictments have nothing whatsoever to do with the Russiagate accusations. Why are not Mueller, Comey, Rosenstein, and all the rest indicted for their clear and obvious crimes?
America’s future turns on the answer to this question.
Is it because the Trump regime is letting the presstitutes and the Democrats destroy their credibility, or is it because Trump is weak, confused, and doesn’t know how to use the powers of his office to slay those who intend to slay him?
If it is the former, then America will move far to the right.
If it is the latter, America will have had its own Stalinist purge, and the purge is likely to follow the Stalin model and to extend down to those who voted for Trump.
The failure of the integrity of the liberal/progressive/left has left the US facing two unpalatable outcomes. One is a right-wing government empowered by the left’s self-defeat. The other is the rise of the Identity Politics state in which oppression will be based on gender, race, and beliefs.
This is not the only issue that could be resolved in 2018. There are others, and the other two major ones are the economic situation and the military situation.
For a decade the central banks of the West and Japan have printed money far in excess of the increase in real goods and services. This money printing has not caused massive inflation of consumer prices. Instead it has caused inflation in financial instruments and real estate.
The high Dow Jones average is the product of this money printing. Can the central banks stop printing money and allow interest rates to rise, thus collapsing equity prices and pension funds? What would be the consequences?
Militarily, since World War II Washington has relied on its armed predominance to dictate to the world. But now the President of Russia has announced possession of what are from the US perspective super weapons that do not, as some claim, give Russia parity with the US, but give Russia immense military superiority over the US, indeed over the entire Western alliance.
Russia’s capability, which the US has no chance of matching any time soon, means that Washington’s policy of intimidation has no chance of intimidating Russia. If Washington’s policy toward Russia continues in a hostile demeanor, Russia is likely to kick Washington’s teeth out.
The cat has been belled. America is no longer “the sole superpower.” It is a second-rate power whose hubris is likely to do it in. Will it happen in 2018?
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- Meet The 'Man' Who Crashed Bitcoin In 2018
Bitcoin’s Tokyo Whale (not to be confused with that Tokyo Whale) revealed on Wednesday that he has sold off about $400 million in bitcoin and bitcoin cash since late September.
Nobuaki Kobayashi, bankruptcy trustee for Mt. Gox, the largest bitcoin exchange in the world before hackers absconded with tens of thousands of customers’ bitcoins worth billions at recent prices, said he started selling in late September, meaning it’s quite possible he sold at least some of the coins at the highs reached toward the end of last year.
Kobayashi made his disclosure in the report from the 10th creditors’ meeting, which took place Wednesday.
In the report, he said he’d started selling off the bitcoin and bitcoin cash to raise money for disbursements that the trustee will soon need to begin making as bankruptcy claims are being evaluated, per Bloomberg.
Which brings us to the crash of Bitcoin from December 2017 through February 2018.
Matt Odell (@Matt_Odell) presents the full list of transfers out of their wallet.
h/t @alistairmilne
As Odell points out “More than half of the bitcoin they sold (18k btc) was transferred to an exchange on Feb 5th. The day before bitcoin hit its 3 month low of ~$6000. They panicked and sold the bottom. Market absorbed it well.”
This is what Kobayashi’s “sells” look like on the chart of Bitcoin…
Odell explains “The arrows on the chart above mark the dates of each Gox wallet transfer. Worth noting, these aren’t the dates of the sales, those most likely happened right after, these are the dates of the transfers to the exchange.“
So that explains – or reveals – the mysterious man on the offer-side of Bitcoin for two months.
Still, Bloomberg reports that Kobayashi is sitting on another approximately $1.9 billion, which he says he plans to offload soon…
* * *
Notably, buried deep in the report, Kobayashi disclosed that he’s asked US prosecutors for more information about the arrest of Alexander Vinnik, a Russian national who was charged with laundering $4 billion in stolen Mt. Gox profits through his old exchange, BTC-e.
It’s unclear whether Kobayashi is planning on trying to recover some of these funds…
Read the full report below:
2018.03.07mtgox by Anonymous JJ6eerL on Scribd
- Stockman Celebrates The End Of The Goldman Sachs Regency At The White House
Authored by David Stockman via Contra Corner blog,
The financial commentariat and the robo-machines are all in a tizzy this morning because Gary Cohn up and quit. But we say good riddance: The man gave Trump bad advice on nearly every single issue—trade, taxes, fiscal policy and the Fed.
We didn’t make any bones about that viewpoint during our appearance on Fox Business this AM. When Maria Bartiromo asked us about Cohn’s departure, our reply was: Hallelujah, the Goldman Sachs Regency in the White House is finally over!
The fact is, we do have a trade crisis, but Gary Cohn and the Wall Street pseudo-free traders don’t care and never have. That’s because they fiercely support a perverted, self-serving monetary regime that systematically and massively inflates financial assets, even as it strip mines and deflates the main street economy.
As we have been pointing out in this series, there is a perverse symbiosis between the Fed and the Dirty Float central banks of the 10 major countries (China, Vietnam, Mexico, Japan, etc), which account for 90% of the nation’s $810 billion trade deficit (2017). Together they have ripped the guts out of the US industrial economy—effectively sending jobs and production abroad and cash flow and liquidated capital to Wall Street.
For its part, the Fed has monkey-hammered US competitiveness. That’s the result of its insensible 2.00% inflation policy, which has fatally inflated nominal dollar wages in a world market drowning in cheap labor priced in artificially under-valued currencies.
At the same time, its massive interest rate repression and price-keeping operations in the stock market have turned the C-suites of corporate America into financial engineering joints. So doing, they have slashed real net business investment by nearly 3o% since the turn of the century, by 20% from the 2007 pre-crisis peak and, actually, to a level in 2016 that barely exceeded real net investment two decades earlier in 1997.
Meanwhile, the C-suites shuttled upwards of $15 trillion of cash flow and debt capacity during the last decade alone into stock buybacks, vanity M&A deals and excess dividends and recaps. As we said in today’s Fox interview, America’s business leaders will not stop strip-mining their companies in order to juice Wall Street and goose their own stock options until they are taken to the woodshed by a stern task-master at the Fed.
By that we mean a central bank that is willing to get out of the financial asset price propping and pegging business, and to thereby permit the kind of stock market collapse that would finally expose the folly of corporate America’s endless financial engineering. Indeed, at this point nothing else will stop them except being run out of their jobs for massive dissipation of corporate resources and piling their balance sheets high with unproductive debt.
Yet until there is a clean sweep at the Fed and a purging of today’s crop of financial engineers and speculators from the C-suites, there is no possible way to reverse the nation’s faltering trade accounts. Doing so would require a major revival of investment in facilities, equipment, technology, people and business innovation that simply isn’t in the cards in today’s casino.
Yesterday we mentioned that the US has incurred a massive and widening trade deficit for 43 years running, and that the cumulative shortfall totals $15 trillion. But much of that reflects long-ago dollars that have since been inflated away by the Fed’s relentless effort to stimulate more inflation.
Accordingly, if that 43-year string of trade deficits is re-priced in 2016 dollars of purchasing power, the horror shows is just all the more stunning. To wit, the US economy has incurred nearly $19 trillion of cumulative trade deficits since 1975 in today’s purchasing power.
Is there any wonder that US manufacturing output is still 2.5% below its pre-crisis level of late 2007, and that total industrial production including energy, mining and utilities has barely returned to the flat line?
In this context, one of the chief culprits responsible for those dismal results is the trillions of cheap debt-fueled M&A deals that occur annually, and which cause massive layoffs, facility closures and asset reductions in the name of short-run “synergies”.
Of course, all of this booming M&A is supposed to represent the noble work of productivity enhancement and the efficiencies fostered by the so-called market for “corporate control”. And it would in a world of honest money and free market financial discipline.
But just the opposite is true under the Fed’s destructive regime of financial asset inflation. Overwhelmingly, M&A has become a vanity project of empire-building boards and CEOs, who then slash investments and necessary operating costs in order to deliver paint-by-the numbers “synergies” and to service their bloated debts. In effect, they shrink the GDP, not expand it.
At length, of course, these so-called synergies get lost in the fog of time and new deals, even as they eventually morph into reduced capacity for long-term growth, employment, competitiveness and profits. And when M&A deals eventually fail, the mountains of goodwill created by these over-priced transactions get written off, while plants, equipment and people get “restructured” into what Wall Street is pleased to call “one-time costs” that are to be added-back to ex-items “earnings”.
Likewise, the fetish of share-buybacks is not reflective of the free market at work, either, even as Wall Street risibly proclaims that companies are “returning capital to shareholders” because it is the “highest and best” use of available cash.
No it’s not!
In a technologically dynamic world where continuous heavy investment is a prime facie condition for sustainable growth, the cult of stock buybacks would better be described as the grim reaper of corporate finance. In fact, it is part and parcel of the ultra-speculative climate on Wall Street and in the corporate C-suites alike that has been fostered by the Bubble Finance policies of central bankers.
It is now almost universally the case that scalping short-term profits and virtually overnight trading gains is what is driving the casino. So how in the world did Trump get convinced that borrowing $1.5 trillion to slash the corporate tax rate to 21% would “stimulate” anything except an orgy of stock buybacks and financial engineering?
Indeed, if any exclamation mark was needed on the departure of Goldman’s current plenipotentiary in the White House, this morning’s announcement that February brought an all-time record of $153 billion of stock buyback announcements was surely it.
At the current annualized run rates, stock buybacks at $800 billion plus upwards of $2 trillion of domestic M&A deals and hundreds of billions more of LBOs, leveraged recaps and special dividends will pump $3.5 trillion of cash back into the canyons of Wall Street this year.
Did Gary Cohn explain this to the Donald?
Nah, it was his job to make sure nothing got in the way.
At the same time that corporate America is being strip-minded by Wall Street and the C-suites, US workers also have one foot on the banana peel of inadequate corporate investment in productivity enhancing tools, technology and training; and one-arm tied behind their backs owing to the drastic inflation of nominal wages.
But the latter has done nothing more than help some keep up in part or whole with the Fed’s 2.00% inflation, while relegating many others to outright jobs losses—owing to them being off-shored to the China Price for goods and the India Price for services.
Thus, since the year 2000, nominal wages of US production and nonsupervisory workers (blue line) are up by nearly 60%, which has not helped them one bit because consumer price inflation (green line) has been nearly as high.
Accordingly, real weekly wages of prime age male workers (orange line) have actually flat-lined for the past 17 years.
In the interim, of course, US goods and services production has been massively off-shored. And this trend has been acutely compounded by the systematic under-valuation of currencies by the 10 great trade offenders described yesterday.
To repeat, the US does $4 trillion of combined export and import business with the rest of the world each year. About $2 trillion of that is spread among approximately 150 countries where trade is evenly balanced as between about $1 trillion of imports and exports each.
For the most part, the counties involved such as Canada, the UK, the Scandinavian nations, Brazil etc. have not attempted to trash their own currencies any faster than the Fed has inflated its own dollar liabilities. That means they defended themselves from the Fed’s rampant expansion of US dollar liabilities, but did not take advantage of it to justify outright exchange rate suppression and mercantilist export promotion.
By contrast, the other $2 trillion of trade is accounted for by just 10 countries, of which China, Vietnam and Mexico account for over half. Yet among the Dirty Float Ten, US exports in 2017 amounted to only $625 billion, while imports from these countries were more than double that figure at $1.352 trillion.
Stated differently, US exports to the Dirty Float 10 amounted to just 46% of imports from them. And that absurd imbalance is not remotely due to faltering capitalist enterprise on main street or bad trade deals made in Washington.
To the contrary, the real US trade problem is a monetary problem that can only be cured by regime change in the Eccles Building.
While we have little hope that this reality will ever penetrate the orange comb-over, there is still a double dose of “good news” (of sorts) in today’s contretemps.
To wit, Gary Cohn didn’t get the Fed Chairman’s job, which would have made all of this far worse. And Goldman Sachs has finally been purged from the Oval Office.
There’s that—and it’s at least something.
- China Reports Outbreak Of Highly Contagious Bird Flu
A dangerous strain of bird flu that has been circulating in 2013 could be on the verge of snowballing into a global pandemic.
The Paris-based Organization for Animal Health said Wednesday that a farm in Shaanxi province has reported an outbreak of a highly dangerous pathogen, while a separate farm in Guangxi province has reported an outbreak of H5N6, another dangerous strain of bird flu.
The H5N6 virus killed 23,950 ducks out of a flock of 30,462 ducks, according to the Chinese Ministry of Agriculture. The remaining birds were all slaughtered..
In Shaanxi, the H7N9 virus killed 810 layers out of a flock of 1,000 birds.
Last year, the number of bird flu cases in China spiked as the annual outbreak was much worse than normal. It also saw the virus split into two distinct strains that are so different, they no longer respond to the same vaccines, according a Reuters report from late last year. H7N9 is becoming increasingly pathogenic, meaning it possesses the capacity to kill infected birds.
According to the South China Morning Post, Yoshihiro Kawaoka of the University of Wisconsin and a colleagues tested a version of the new H7N9 strain taken from a person who died from their infection last spring. They found that the virus replicated efficiently in mice, ferrets and non-human primates, and that it caused even more severe disease in mice and ferrets than a low pathogenic version of the same virus that does not cause illness in birds.
But perhaps the most disturbing aspect of the virus is its ability to spread easily from cage to cage. When placed in cages adjacent to healthy ferrets, the virus will spread easily from infected animals and health animals, suggesting the virus can be transmitted by respiratory droplets such as those produced by coughing and sneezing.
As one expert pointed out, “the work is very concerning in terms of the implications for what H7N9 might do in the days ahead in terms of human infection,” said Michael Osterholm, an infectious disease expert from the University of Minnesota.
Since 2013, the H7N9 bird flu virus has sickened at least 1,562 people in China and killed at least 612. Some 40 percent of people hospitalized with the virus die.
And the number dying during each epidemic has increased dramatically in recent months.
In the first four epidemics, the virus showed few changes. But last flu season, there were some 764 cases – nearly half of the 1,562 total.
Which is why a new risk assessment tool from the U.S. Centers for Disease Control and Prevention ranks H7N9 as the leading animal flu strain with the potential of causing a human pandemic.
- Police: We're The Experts – Don't You Dare Criticize Us
Authored by Ryan McMaken via The Mises Institute,
One of the most surprising developments in the wake of February’s Florida school shooting is the willingness by many generally police-friendly commentators to denounce the lack of action by local police against the shooter.
From National Review, to The Federalist, to Donald Trump, many of the law enforcement officers involved in the shooting are being accused of outright “cowardice.”
Part of this is agenda-driven. The inaction on the part of law-enforcement organizations demonstrates that it is not enough to “call 911” and hope the police show up to protect the victims. As Michael Graham notes, the Florida situation is part of a “pattern of police cowardice” which was also apparent at the 2016 Orlando shooting and at the Newtown, Connecticut shooting. In both cases, police stood outside while gunmen worked freely inside the building in question.
Thus, if police are going to protect themselves while victims are at the mercy of gunmen, this illustrates that private gun ownership is perhaps the only reliable defense — whether in the hands of professional private security or even amateurs. Opponents of a police monopoly on gun ownership have seized upon this police failure as a helpful illustration of their position.
In the past, however, the right-wing’s knee-jerk tendency to always defend the police would likely have prevented much direct criticism of police agencies themselves. That reticence, however, appears to be falling away, and the cowardice of government law enforcement officials has now become become an open question.
Naturally, this does not bode well for the position of police agencies in the political hierarchy. Law enforcement agencies have long depended on their “hero” status as an important factor in ensuring that police organizations get whatever they want from local governments and state legislatures.
“We’re Experts, Do What We Say”
In response, many defenders of police have become testy and defensive, resorting to slipshod arguments that amount to little more than “you people who aren’t police should just shut up.”
A typical example of this can be found in USA Today where Tim Vogt, a former border patrol officer and current instructor at a “law enforcement academy,” denounces any criticism of the sheriff’s deputies involved.
Vogt’s argument? Police should not be subject to criticism “from the unqualified and spineless peanut gallery.”
In other words, Vogt holds that government agents are unassailable experts who ought not be forced to suffer commentary from the ignorant taxpayers who, it seems, aren’t good for much other than paying the bills for law-enforcement agencies.
Vogt’s article resorts to perpetuating myths about police agencies, as well. He claims that “we also take more risks than most of you choose to on a daily basis,” implying that most Americans can’t fathom the risks that police officers take. In reality, millions of Americans are employed daily in lines of work that are more dangerous than being a police officer — including truck drivers, landscape maintenance workers, farmers, roofers, and construction workers.
Vogt resorts to outright deception when he claims that police “risk their lives on behalf of others each day, all for a lower middle-class wage.” This is not true outside the tiniest, most rural police forces. A typical police organization pays police well above median wages, and benefits are even greater when the extremely generous police pensions are included in the calculation. Scot Peterson, the police officer that Vogt is specifically defending, was being paid double the local median income.
This sort of lashing out, however, is nothing new for defenders of law enforcement after rank police incompetence becomes apparent.
In his book defending the police response to the Columbine Massacre, former SWAT officer Grant Whitus declared: “I want to say to the critics: Okay, if you think it’s so damn easy, then you go patrol a beat…I bet you wouldn’t make one day with me before you pissed yourself.”
Alan Pendergast, in a review of Whitus’s book notes:
It’s a standard cop refrain: You haven’t been where I’ve been, so shut your piehole.
Significantly, Whitus invokes the movie A Few Good Men as an illustration of how police actions should be immune to criticism.
In the film, when questioned about his abuse of military power, the Jack Nicholson characters screams “You can’t handle the truth!” and goes on to explain how the general public is too yellow-bellied and ignorant to understand the real threats that are out there in the world. Thus, the military, his reasoning goes, should be left unquestioned in regards to how it goes about doing its business.
It is not surprising that Whitus wants this same rationale to apply to police work as well. The pain-in-the-neck general public doesn’t possess the secret wisdom government agents have, so the public’s opinions are all just the idle speculations of a “worthless peanut gallery.”
Should Police Be Immune from Political Opposition?
In foreign and military affairs, those who want citizens and taxpayers to keep quiet and do as their told invoke the phrase “politics stop at the water’s edge.”
It is a sentiment often expressed by advocates for more foreign intervention and ever more taxpayer funding for military institutions. The idea is the taxpaying public is too stupid or too ignorance to have anything other than worthless opinions when it comes to military and foreign affairs beyond the borders of the United States. Modern Americans have typically caved to this bullying tactic. Writing in the 1990s, however, at the end of the Cold War, Samuel Francis noted that such an attitude is incompatible with a free society:
The self-sufficiency, the civic independence, of the citizens of a republic, the idea that the citizens should support themselves economically, should be able to defend themselves,educate themselves, and discipline themselves, is closely connected to the idea of public virtue…A self governing people is simply too busy, as a rule, with the concerns of self-government to take much interest in other peoples’ business…A self-governing people generally abhors secrecy in government and rightly distrusts it. The only way, then, in which those intent upon…the expansion of their power over other peoples, can succeed is by diminishing the degree of self-government in their own society. They must persuade the self-governing people that there is too much self-government going around, that the people themselves simply are not smart enough or well-informed enough to deserve much say in such complicated matters as foreign policy…We hear it…every time an American President intones that “politics stop at the water’s edge.” Of course, politics do not stop at the water’s edge unless we as a people are willing to surrender a vast amount of control over what the government does in military, foreign, economic, and intelligence affairs.
Francis’s critique applies to police matters as well, of course. Politics do not stop at the front door of the police station or sheriff’s office unless we are “willing to surrender a vast amount” of citizen control over what the government does to us.
Many Americans are willing to surrender their civic responsibility to others, though. Francis contends that the modern American government relies heavily on citizen deference to the state’s “incumbent managerial elite.” This elite asserts it deserves a special exalted status above the taxpayers because the elites are, well, elites. And they know best.
This is the same claim now being made by current defenders of the police.
Deference to the “experts” in police and military organizations, however, has not always been a given in America.
Indeed, among citizens in the nineteenth century, it was considered unbecoming to step aside and allow government agents to set the terms of national defense and public safety.
In the nineteenth century, critics of excessive deference to state “expertise” on matters of keeping the peace spoke in terms of “manliness” in resisting usurpation of privately-supplied community order. This measure of things never quite went away, although now the bravado comes largely from defenders of government agents. Thus, we see that critics of police are denounced as “spineless” nobodies who will “piss themselves” if faced with the dangers police face. On the surface, the debate is about courage, but the subtext behind apologists like Whitus and Vogt is one of “we’re real men, and the rest of you aren’t.”
Indeed, how voting citizens — all of whom were men through most of the nineteenth century — viewed themselves in relation to government agents with guns varied in earlier eras. As noted by Bret Carroll in American Masculinities: a Historical Encyclopedia, deference toward military power “clash[ed] with the equally masculine virtues of independence and individualism.” The ideal citizen was a “citizen-soldier who was a frontiersman, a yeoman farmer, or a shopkeeper.”2
Standing armies were viewed with “suspicion,” and much of this grew out of ideas passed down from Revolution-era opposition to occupying British soldiers who were seen as being of “low moral character.”
It was only after the Civil War, Carroll notes, that the very large numbers of veterans in the general population began to create a “mystique” around military service, and to encourage a culture that “glorified military service” above activities in the private sector.
Because law enforcement agencies in their modern form were extremely rare in the US before the late nineteenth century, the functions of police were also largely viewed as a matter of private self-defense, and not a matter for “experts” who were to be unquestioned by the general public.
Today, the language of “manliness” or “virtue” has been replaced by the language of “expertise.” And, from the government’s point of view, expertise is even better as a standard of police and military power because it can be readily used to exclude all outsiders from exercising influence over internal government matters.
The attempt at having the experts take over, of course, has not been totally successful. There is still a well-established tradition in the United States of civilian oversight for military affairs, and non-police oversight for law-enforcement. County sheriffs are subject to voters and police forces are subject to civilian mayors and city councils.
Nevertheless, the claim that critics of police inaction are part of a unqualified “peanut gallery” has been successful for decades. It is an indication of a cowed and passive citizenry, but we may be finally witnessing some pushback from the non-experts who aren’t buying the pro-government myths any longer.
- ECB Preview: Draghi Set To "Avoid Any Sudden Moves" But Watch Forward Guidance
Recent news events, including an anti-establishment surge in Italy, and President Trump’s tariff tirade, underpin the argument for Mario Draghi to avoid any sudden moves in tomorrow’s ECB statement and press conference.
“Draghi is likely to err on the side of caution at the meeting of the Governing Council on March 8. The next major change to forward guidance probably won’t materialize until June — only concessionary tweaks are likely this month.” -David Powell and Jamie Murray, Bloomberg Economics
With the euro having traded somewhat sideways for a month as most of the European equity markets collapsed, analysts suggest that Draghi may take his currency-strength-jawboning foot off the pedal and tweak forward guidance estimates to signal the beginning of the end for easing.
SocGen’s Kit Juckes pointed out, “If we get a slight language tweak on Thursday and a drop in average hourly wage growth in the U.S., we’ll be above $1.25 by the weekend.”
As Ransquawk notes, last time round, the central bank refrained from providing much of a blueprint as to how they intend to unwind their current stimulus program after its current end-date of September with Draghi stating that no discussion took place with regards to tapering. When asked about EUR appreciation, Draghi stated that it was a source of uncertainty and it is too early to say whether FX moves have had a pass-through effect.
ECB JANUARY MINUTES: The highlights from the January minutes saw policymakers state that changes in communications were viewed as premature with some expressing the preference for dropping their current easing bias.
SOURCE REPORTS: In the immediate aftermath of the previous meeting, source reports revealed that ECB rate setters were split about the next move as the Euro’s rise complicates the outlook. Thereafter, further reports suggested that the Bank’s PSPP will conclude with a short taper and some officials want clearer guidance on interest rate hikes. However, the most pertinent of the sources for the March meeting came last week with ECB policymakers seen to be unlikely to signal a policy shift this time round but could discuss a dropping of their current easing bias.
ECB RHETORIC: Perhaps the most significant recent contribution from ECB policymakers came from ECB’s Coeure who noted the ECB might end its net purchases even before it can see a sustained rise in inflation. However, this is likely to be more relevant for meetings later in the year than this time round. Elsewhere, Draghi highlighted last week that inflation is yet to show more convincing signs of sustained upward adjustment while the Euro area economy is expanding robustly.
DATA: From a growth perspective, Q4 GDP figures printed at 0.6% and thus in-line with the Bank’s current forecasts. On the inflation front, prelim Eurozone CPI slipped to 1.2% from 1.3% during the month of February with core measures still uninspiring. However, prospects for wage growth will likely appease some policy makers. Elsewhere, survey data via Markit saw the EZ composite figure slip to 57.1 from Jan’s 58.8 but remains firm by historical standards nonetheless.
Ransquawk points out that potential adjustments to the forward guidance are as follows:
RATES: No adjustment expected on this front until details of the curtailing of asset purchases have been announced later in the year. N.b., at the previous meeting Draghi stated that he sees “very little chance” that the ECB will raise interest rates this year.
ASSET PURCHASES: As revealed by the latest ECB source reports, a discussion around dropping the easing bias for asset purchases is expected to take place. After the notion being rejected by policymakers in January on the basis that fundamentals had not changed enough to warrant such an adjustment, this meeting might be too soon for consensus at the Bank to adopt such a change in communication. Note, consensus before the source reports suggested that this will not be actioned by the bank until June with the Bank to not reveal their method of curtailing bond purchases until the following meeting in July.
GROWTH: No adjustment expected on this front.
INFLATION: No adjustment expected on this front.
And here is what to watch out for…
ECB STAFF PROJECTIONS: Changes are widely expected to be particularly minor/non-existent with information since the previous forecasts unlikely to provide much incentive for the Bank to make any major adjustments.
From a growth perspective, Pictet suggest that there is some minor upside risk to the 2018 forecast but ultimately any changes are likely to be tweaks rather than the mass adjustments seen in December. On the inflation front, the firmer EUR is set to negate any upside pressure from the climb in oil prices and upside in food prices. However, BAML believe that 2018 inflation could see a minor nudge higher on the basis that the Dec projections were too soft at the time. See below for the December projections.
PRESS CONFERENCE: Ultimately, aside from the macroeconomic projections and potential tweaks to the introductory statement, this week’s press conference could be one of the more uneventful presentations by the ECB President with Draghi set to ‘kick the can down the road’ on unveiling any major clues as to how and when the ECB will conclude their asset purchase programme.
In terms of subjects the ECB President will likely be quizzed on by journalists, aside from the future path of the PSPP, Draghi will likely be questioned on the ECB’s view of ‘trade wars’ during the Q&A after the recently announced measures by US President Trump. This comes in the context of the ECB Jan minutes stating that “…the balance of risks to the global economic expansion was considered to remain tilted to the downside… uncertainty regarding the policy outlook in some major economies, including the risk of an increase in trade protectionism, continued to constitute downside risks.” However, as if often the case with Draghi it is likely that he will adopt a non-committal tone and state that the ECB are monitoring events abroad.
As far as other political issues are concerned, Sunday’s inconclusive Italian election result will also likely be a talking point given the success of the populist ‘anti-Euro’ parties. However, both the Northern League and MS5 have scaled back their desire for a EUR-referendum with the leader of the former stating that a vote on the issue would be ‘unthinkable’. That’s not to say that both parties (should they obtain power) wouldn’t opt for reform of the Euro-area but it is unlikely to impact the ECB’s thought process at this stage with the matter currently more of an issue for domestic Italian assets.
There’s also a possibility that Draghi will be asked about the Bank’s view on the EUR exchange rate given how much of a focus it was last time round. However, since then, the EUR has seen little deviation from Jan levels on a trade-weighted basis and as such, Draghi may opt to reiterate his previous stance of labelling it as “a source of uncertainty and it is too early to say whether FX moves have had a pass-through effect”.
Here is a selection of analysts’ views on bonds and the euro ahead of the meeting, via Bloomberg:
Barclays
Changes to forward guidance are coming but in “small doses,” strategist Cagdas Aksu writes in a note
Sees ECB dropping the asymmetric forward guidance in QE first, coming as early as this week
Societe Generale
The meeting should confirm a gradual shift in the policy outlook, loosening forward guidance slightly, according to strategists including Jorge Garayo
Remain bearish on euro rates, with the belly of the curve having further room to re-price
NatWest Markets
Minor alterations are in the cards for forward guidance, but base case is for no change, according to analysts including Anna Tokar
“It appears there is little reason to disrupt the markets at the moment, when the ECB views the current pricing as fair”
See Draghi making further mention of the strong euro in the question and answer session
Rabobank
“Any adjustment to the forward guidance will have a minimal impact given the market has already accepted the fact that the program will be wound down between end-September and December this year,” said strategist Matthew Cairns
“The material lack of wage growth and still-low inflation expectations will serve to keep a lid on a sustained, significant rise in yields”
In summary:
-
Unanimous expectations look for the ECB to leave its three key rates unchanged
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ECB set to discuss a dropping of their current easing bias
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Macro projections unlikely to be subject to major revisions
And finally here is ING’s guide to trading tomorrow’s ECB meeting…
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- Trump Trade Wars Are A Perfect Smokescreen For A Market Crash
Authored by Brandon Smith via Alt-Market.com,
First, I would like to say that the timing of Donald Trump’s announcement on expansive trade tariffs is unusual if not impeccable.
I say this only IF Trump’s plan was to benefit establishment globalists by giving them perfect cover for their continued demolition of the market bubbles that they have engineered since the crash of 2008.
If this was not his plan, then I am a bit bewildered by what he hopes to accomplish. It is certainly not the end of trade deficits and the return of American industry. But let’s explore the situation for a moment…
Trump is in my view a modern day Herbert Hoover. One of Hoover’s first actions as president in response to fiscal tensions of 1929 was to support increased tax cuts, primarily for corporations (this was then followed in 1932 by extensive tax increases in the midst of the depression, so let’s see what Trump does in the next couple of years). Then, he instituted tariffs through the Smoot-Hawley Act. His hyperfocus on massive infrastructure spending resulted in U.S. debt expansion and did nothing to dig the U.S. out of its unemployment abyss. In fact, infrastructure projects like the Hoover Dam, which were launched in 1931, were not paid off for over 50 years. Hoover oversaw the beginning of the Great Depression and ended up as a single-term Republican president who paved the way socially for Franklin D. Roosevelt, an essential communist and perhaps the worst president in American history.
This is not to say Hoover was responsible for the Great Depression. That distinction goes to the Federal Reserve, which had artificially lowered interest rates and then suddenly raised them going into the economic downturn causing an aggressive bubble implosion (just like the central bank is doing right now). But Hoover did actually aid the Fed in their undermining of economic stability by pursuing policies which were poorly timed.
I’m hitting readers with all of this because I am growing rather tired of the contingent of Trump apologists in the liberty movement scrambling to defend every single Trump action no matter how illogical. These people should know better. Sorry, but Trump is not “playing 4D chess” against the globalists. His primary initiatives have only served so far to create a useful distraction away from the globalists.
The disturbing key to all of this is the fact that many of Trump’s policies are things that I and many others have argued for in the past. The problem is, he is implementing them out of order and with bad timing, which will only make such policies appear destructive in the end, rather than constructive.
In terms of the implementation of tariffs, the people who are defending this action at this time do not seem to understand the basics of international trade. Tariffs can only be enacted from a position of economic strength and resource development. This strength comes from internal self-sufficiency in production; meaning, in order for the U.S. to force a trade balance (which is what tariffs are supposed to do) the U.S. must have a strong industrial base and MUST be capable of producing most if not all necessary goods and goods in broad demand.
The fact is, U.S. manufacturing has been utterly outsourced by the very corporations Trump just gave a 10% tax cut to, and rebuilding that industrial base would take decades. Why? Because there are no incentives for corporations to bring manufacturing back.
As I already stated, Trump is instituting potentially solid policies but he is doing so out of order. Tax cuts for corporations should have been enacted only as an incentive for manufacturing jobs to be returned to America. Instead, corporations got tax cuts for absolutely nothing. And will those tax cuts go towards more jobs or innovation? Nope. They will be going to pay off unprecedented corporate debts, and stock buybacks, most of which were accrued through borrowing from the Federal Reserve.
Will this stock buyback bonanza even generate new highs in the Dow? Probably not. But I’ll explain why that is later.
If Trump had given tax incentives for corporations to bring manufacturing back into the U.S., and then given those corporations a few years to make the shift, only then would tariffs have been an effective action. But as the situation stands now, we have minimal tangible production in this country, and, historic debts held by the same overseas competitors that Trump is now seeking to “teach a lesson.”
Debt is the next issue which needs to be addressed before tariffs can ever be implemented in a practical way. In terms of national debt, rather than setting up a plan to reduce U.S. debt expenditures, Trump is increasing debt by reducing taxes while at the same time increasing spending. Trump did not take a hard stand on the debt ceiling debate as he originally claimed he would, and so, the debt train continues unabated.
Who is going to purchase this debt, I wonder? Over the past several years the largest buyer of U.S. treasury debt was the Federal Reserve through fiat money creation. Now, the Fed has tapered quantitative easing and is dumping their balance sheet at a rate faster than anyone expected. The Fed is pulling the plug on its artificial support of the economy.
The next largest buyers are major foreign central banks in countries like China, Japan and to some extent the supranational EU. If the debt buyers of last resort are now the very same countries Trump is seeking to enact tariffs over, how do you think this little theater will end? Yes, with a dump of U.S. treasury bonds and perhaps the dollar as world reserve by those nations.
But what about the U.S. consumer? Isn’t the consumer market in America so enticing that nations like China would “never dare” dump U.S. debt or the dollar? No, not really. If we are talking about a trade “war,” then a country like China, which has a vast manufacturing base and which has also been building up its own domestic consumer market, would be willing to make the sacrifice. America would be hurt far more by the threat of debt default and the loss of the dollar’s international buying power than China ever would be by the loss of American consumers. With tariffs being implemented, they may lose the American consumer anyway.
Our retail market is hardly as appetizing as it was 10 years ago given the decade of drudgery Americans have endured, with the largest number ever of working age citizens no longer participating in the jobs market, as well as real worker wages in continued decline while the American consumer is now more indebted than at any other time in history.
All of these negative effects are weighing down our economy while the Federal Reserve is quickly deflating the fraudulent markets that the establishment used during the Obama administration to argue that America was “in recovery.” Of course, alternative economists have known since the beginning that this was a lie, and that the only thing propping up the economy and stock markets was central bank manipulation.
The Fed under Jerome Powell has made it crystal clear that they WILL be raising interest rates and cutting the Fed balance sheet, perhaps more than their dot plots had indicated in the past. Without low rates and a steadily rising balance sheet we have already seen the results. Stocks in particular have gone crazy compared to the past few years, dumping nearly 10% one week, spiking about half that the next week. One thing is certain, the supposedly endless bull market induced by the Fed years ago is now over. Stocks are in heart attack mode.
It is no coincidence that the first two times the Fed reduced its balance sheet the Dow plunged over 1,000 points. The latest dump of $23 billion at the end of February resulted in a drop of around 1,500 points. It is too early in this process to know what the trend will be, but it seems to me that stocks are being steam valved down every month. With a marked decline just after a balance sheet dump, followed by a less impressive dead cat bounce the week after.
In the meantime, Trump’s “trade war” is now being blamed in the mainstream for the decline in stocks that the Fed is actually responsible for. As I have always said, Trump is the ideal scapegoat for the inevitable economic crisis the central bankers have staged. Trump’s tariffs might exacerbate the problem, just as Hoover’s policies did in the beginning of the Great Depression, but the blame rests squarely on the Federal Reserve and central banks around the world. Will the average person understand this dynamic once the dust settles on our financial system? Probably not.
So, to summarize, while Trump has indeed set in motion policies that conservatives in general tend to approve of, he has done so in an impractical way that will ultimately be blamed for a market crash the Fed created. If conservative ideals such as limited government and sovereign trade protection get the blame for an unprecedented economic crisis then this could sabotage conservatism for generations to come. If elections are still even a factor as this crisis unfolds, the chances of the public accepting a socialistic nightmare regime after Trump exits the White House are high. And, the banking elites that conjured the whole mess will escape once again without any punishment.
The question we must ask is this – Is Trump aware that his policies are creating a perfect distraction for those same banking elites? I believe we will know for certain the answer to that before 2018 is over.
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- John Kerry, State Dept In Crosshairs As House Intel Committee Enters "Phase Two" Of Investigation
The House Select Committee on Intelligence has John Kerry in its crosshairs – as Congressional investigators explore what involvement, if any, the former Secretary of State had in the unverified “Steele dossier” which relied on intelligence from high level Kremlin officials at a time when US-Russia relations were deteriorating.
Assembled by former British spy Christopher Steele, the “dossier” is actually a collection of memos which contain both wildly salacious claims and loosely factual information – much of it based on hearsay or public knowledge.
Steele was paid $168,000 by opposition research firm Fusion GPS, while Fusion was funded by the DNC and the Clinton campaign. The FBI, however, had previously agreed to pay Steele $50,000 if he could verify the dossier’s claims – which he was unable to do.
Still, the FBI used Steele’s dossier – a collection of 17 memos, in their application for a FISA warrant to spy on Trump advisor Carter Page – and via “unmasking,” his associates.
After the House Intel Committee majority released their four-page “FISA memo” detailing how senior officials at the FBI and DOJ used the unverified and highly biased Steele dossier to obtain a FISA warant, and the House Intel Committee minority released their own “counter memo,” the investigation moved into Phase II.
Phase II
House Intel Committee chair Devin Nunes (R-CA) gave us a peek behind the curtain in early February, telling Fox’s Bret Baier “We are in the middle of what I call phase two of our investigation, which involves other departments, specifically the State Department and some of the involvement that they had in this.”
#BREAKING: Devin Nunes says this is just the first memo to be released. He says there will be another one dealing specifically with the State Department’s role in everything that happened. pic.twitter.com/kpHVDQ44WX
— Ryan Saavedra 🇺🇸 (@RealSaavedra) February 3, 2018
https://platform.twitter.com/widgets.js
While it is unclear what role the State Department may have in surveillance abuses, the Washington Examiner‘s Byron York noted last month that former MI6 spy, Christopher Steele, was “well-connected with the Obama State Department,” according to the book Collusion: Secret meetings, dirty money, and how Russia helped Donald Trump win” written by The Guardian correspondent Luke Harding.
Harding notes that Steele’s work during the World Cup soccer corruption investigation earned the trust of both the FBI and the State Department:
The [soccer] episode burnished Steele’s reputation inside the U.S. intelligence community and the FBI. Here was a pro, a well-connected Brit, who understood Russian espionage and its subterranean tricks. Steele was regarded as credible. Between 2014 and 2016, Steele authored more than a hundred reports on Russia and Ukraine. These were written for a private client but shared widely within the State Department and sent up to Secretary of State John Kerry and to Assistant Secretary of State Victoria Nuland, who was in charge of the U.S. response to the Ukraine crisis.
Shedding more light on the subject is longtime Kerry colleague and Steele pal, Jonathan Winer – who penned a Feb. 8 op-ed in the Washington Post entitled “Devin Nunes is investigating me: Here’s the Truth”
From Winer – along with a Senate Judiciary Committee criminal referral of Christopher Steele – we learned that several Clinton allies were also connected to both the dossier and the Kerry State Department.
Winer notes that “in late September [2016], I spoke with an old friend, Sidney Blumenthal, whom I met 30 years ago when I was investigating the Iran-contra affair for then-Sen. Kerry and Blumenthal was a reporter at The Post. At the time, Russian hacking was at the front and center in the 2016 presidential campaign. The emails of Blumenthal, who had a long association with Bill and Hillary Clinton, had been hacked in 2013 through a Russian server.
While talking about that hacking, Blumenthal and I discussed Steele’s reports. He showed me notes gathered by a journalist I did not know, Cody Shearer, that alleged the Russians had compromising information on Trump of a sexual and financial nature.”
Winer also describes a meeting with Christopher Steele during which he learned that Steele’s sources were pointing to collusion between Trump associates and the Kremlin – which also allegedly hacked the DNC.
In September 2016, Steele and I met in Washington and discussed the information now known as the “dossier.” Steele’s sources suggested that the Kremlin not only had been behind the hacking of the Democratic National Committee and the Hillary Clinton campaign but also had compromised Trump and developed ties with his associates and campaign.
Winer’s op-ed corroborates the series of events outlined in a criminal referral for Steele issued by Senate Judiciary Committee Chairman Chuck Grassley (R-IA) and Lindsey Graham (R-SC), which asks the DOJ to investigate Steele for allegedly lying to the FBI about his contacts with the media.
Winer gives Blumenthal’s memos to Steele…
While we’ve known for a while that Steele used Kremlin officials for information contained in the infamous “Steele dossier,” Winer’s op-ed reveals that he gave Steele memos from Clinton operative Sydney Blumenthal – which originalted with Clinton “hatchet man” Cody Shearer.
Winer claims he didn’t think Steele would share the Clinton-sourced information with anyone else in the government.
“But I learned later that Steele did share them — with the FBI, after the FBI asked him to provide everything he had on allegations relating to Trump, his campaign and Russian interference in U.S. elections,” Winer writes.
Deeper Kerry Connections
As Journalist Sara Carter notes, “Also in September, 2016 Steele briefed Winer on the dossier at a Washington Hotel, according to an expose recently published in The New Yorker. Winer prepared his summary and shared it with former Assistant Secretary for European and Eurasian Affairs Victoria Nuland and Jon Finer, who was then chief of staff Kerry. Kerry was then briefed by Finer several days later, according to the report.
- Northeastern Study: Schools Safer Than In '90s, Shootings "Not An Epidemic"
Authored by Barry Donegan via TruthInMedia.com,
Northeastern researchers James Alan Fox and Emma Fridel released a new study claiming that mass school shootings are not on the rise, that mass shootings are happening at a historically typical pace, and that shooting deaths in schools have been on the decline since peaking in the 1990s.
The study entitled “The Three R’s of School Shootings: Risk, Readiness, and Response” by Lipman Family Professor of Criminology, Law, and Public Policy James Alan Fox and doctoral student Emma Fridel, which is set to be published in The Wiley Handbook on Violence in Education: Forms, Factors, and Preventions in June of 2018, compiled data on school shootings from USA Today, the FBI’s Supplementary Homicide Report, Congressional Research Service, Gun Violence Archive, Stanford Geospatial Center and Stanford Libraries, Everytown for Gun Safety, a Mother Jones compilation of shooting statistics, and an NYPD active shooters report.
While each of those reports define a mass and school shooting differently, Fox said that according to his examination of the totality of the data, since 1996, 16 multiple-victim shootings have taken place in schools, defined as shooting incidents in which there were 4 or more victims and at least 2 fatalities excluding the perpetrator. Fox defined 8 of those shootings, involving deaths of 4 or more victims excluding the perpetrator, as mass shootings, which mirrors the 1980s FBI definition of mass murder, The Washington Post noted.
Fox also said that, including school shootings below the threshold of a mass shooting, four times as many children were fatally shot in schools in the 1990s compared to the present day. He also added that an average of 10 students per year die to gunfire in schools in the United States, meaning that bicycle accidents and pool drownings are significantly greater threats to the lives of schoolchildren.
source: Northeastern University
“There is not an epidemic of school shootings,” said Fox.
Incidentally, Professor Fox is a supporter of gun control legislation and said that he believes that banning bump stocks and raising the legal age to purchase tactical rifles from 18 to 21 could help reduce overall gun crime. However, he claimed that these policy changes would do little to impact mass shootings.
“The thing to remember is that these are extremely rare events, and no matter what you can come up with to prevent it, the shooter will have a workaround,” he said. Fox also noted that there have only been five times in the past 35 years in which a person between the ages of 18 and 20 used a tactical rifle along the lines of an AR-15 to carry out a mass shooting.
Fox slammed the idea of arming teachers, calling it “absurd” and said, “I’m not a big fan of making schools look like fortresses, because they send a message to kids that the bad guy is coming for you—if we’re surrounding you with security, you must have a bull’s-eye on your back. That can actually instill fear, not relieve it.”
Emma Fridel pointed out that many security policies aimed at stopping mass shootings have been ineffective. She said that mass shooting drills have not been shown to work in studies and that students find them traumatizing. She also noted that many mass shootings have taken place at schools with metal detectors and other security precautions, as shooters have found ways around them, such as targeting students outside during fire drills or ambushing security guards at the front door to gain entry.
“These measures just serve to alarm students and make them think it’s something that’s common,” Fridel claimed.
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