Dec 19

Today’s News December 19, 2015

  • The New York Times Just Memory-Holed This Devastating Obama Admission

    By Sean Davis, co-founder of The Federalist

    The New York Times Just Memory-Holed This Devastating Obama Admission

    “Obama indicated that he did not see enough cable television to fully appreciate the anxiety after the attacks in Paris and San Bernardino.”

    A story published by the New York Times late Thursday night caused some major media waves. The story, which was written by reporters Peter Baker and Gardiner Harris, included a remarkable admission by Obama about his response to the recent terror attacks in Paris and San Bernardino, California.

    By Friday morning, however, the entire passage containing Obama’s admission had been erased from the story without any explanation from the New York Times. Here’s the passage that was included in the story when it was published Thursday night, courtesy of CNN’s Brian Stelter:

    In his meeting with the columnists, Mr. Obama indicated that he did not see enough cable television to fully appreciate the anxiety after the attacks in Paris and San Bernardino, and made clear that he plans to step up his public arguments. Republicans were telling Americans that he is not doing anything when he is doing a lot, he said.

    The version of the New York Times story that was published early Thursday evening indicated that Obama knew he was out of touch with the country on terrorism, and he thought that was due to not watching enough television. Obama critics immediately pounced on the stunning admission from the president, expressing shock that he would claim that a lack of TV time was the real reason for him not understanding Americans’ anxiety about terrorism.

    As of Friday morning, however, the passage containing Obama’s admission was gone. Newsdiffs.org, a web site which captures changes made to online news stories, indicates that the major revision to the NYT story happened late on Thursday night, several hours after the story was published (text with a red background and strike-through is text that was eliminated from the story; text with a green background is text that was added to the story since its last revision):

     

    The unexplained deletion of that major passage wasn’t the only significant change made to the story since it was first published. New York Times editors also changed the story’s headline four separate times, according to Newsdiffs.org. Each headline revision either put Obama in a better light or put the GOP in a worse one.

    The original headline when the story was first published was “Obama Visiting National Counterterrorism Center.” Less than two hours later, the headline was “Obama, at Counterterrorism Center, Offers Assurances On Safety.” Then the headline was changed to “Frustrated by Republican Critics, Obama Defends Muted Response to Attacks.” Two hours later, the headline was once again revised to “Under Fire From G.O.P., Obama Defends Response to Terror Attacks.” The most recent headline revision, which accompanied the deletion of the passage where Obama admitted he didn’t understand the American public’s anxiety about terrorism, now reads, “Assailed by G.O.P., Obama Defends His Response To Terror Attacks.”

     

     

    Baker and Gardiner, the two reporters who authored the NYT story, have yet to explain why Obama’s admission about being out of touch with the public on terrorism was deleted from their story.

    UPDATE: The New York Times claimed in a statement late Friday morning that its deletion of the Obama passage was not “unusual” and that it was merely “trimmed for space in the print paper”:

    The problem with this explanation is that it doesn’t make any sense when you review the first major online revision, which Newsdiffs.org archived at 10:21 p.m. EST. In that version, only one substantive revision was made: the paragraph about Obama not watching enough cable TV was removed and replaced with two paragraphs about Obama’s plan to combat ISIS.

    The section that was removed contained 66 words. The section that was added in its place contained 116 words. If the New York Times was indeed “trimming for space” in that particular revision, it will need to explain why its revision to that section added 50 words.

  • The Farsi Awakens

    If you like your nuclear-capable weapons, you can keep your nuclear-capable weapons…

     

     

    Source: Investors.com

  • When All Else Fails, Erdogan Calls Israel

    Submitted by Shoshana Bryen via The Gatestone Institute,

    • Erdogan came to office in 2003 with a policy of "zero problems with neighbors," but has since led Turkey to problems with most, if not all, of them.

    • Turkey's foreign policy choices and current crises have combined to make Erdogan reach out to Israel for help.

    • Israel has weighed the price and found it acceptable: Israel will pay Turkey $20 million; Turkey will expel the Hamas leadership from Istanbul and will buy Israeli gas.

    • The restoration of relations with Israel is less a political reconciliation than an admission of the utter bankruptcy of Turkey's last five years of diplomatic endeavor.

    The announcement of the restoration of Israel-Turkish relations should be seen in the context of Turkey having nowhere else to go.

    Turkey's relations with Israel have been strained, to put it mildly, since 2010 when, through a non-profit organization, Turkey funded the 2010 Gaza Flotilla aimed at breaking the Israeli-Egyptian blockade of the Hamas-ruled Gaza Strip.

    After a bloody confrontation, which ended in the deaths of nine Turks, Turkey demanded that Israel be tried in the International Criminal Court (ICC) and subjected to UN sanction. The ICC ruled that Israel's actions did not constitute war crimes. In addition, the UN's Palmer Commission concluded that the blockade of Gaza was legal, and that the IDF commandos who boarded the Mavi Marmara ship had faced "organized and violent resistance from a group of passengers," and were therefore required to use force for their own protection. The commission, however, did label the commandos' force "excessive and unreasonable."

    Turkey's President Recep Tayyip Erdogan had already in the past show hostility towards Israel. Already in 2009, then Prime Minister Erdogan denounced Israel's President Shimon Peres publicly at the Davos World Economic Forum. "When it comes to killing, you know very well how to kill. You know very well how to kill." When Hamas was thrown out of Damascus, Erdogan invited Hamas leaders Khaled Mashaal and Ismail Haniyeh to put the terrorist organization's "West Bank and Jerusalem Headquarters" in Istanbul.

    Speaking at the Paris rally in January 2015, after the murderous attack on the Charlie Hebdo offices and the terrorist murder of four Jews in a kosher supermarket, Turkey's Foreign Minister Ahmet Davutoglu said, "Just as the massacre in Paris committed by terrorists is a crime against humanity, Netanyahu… has committed crimes against humanity." Erdogan, speaking in Ankara, said he could "hardly understand how he (Netanyahu) dared to go" to the march in the French capital. Just last month, Davutoglu told an audience, "Israel kneels down to us."

    Not exactly.

    Turkey's foreign policy choices and current crises have combined to make Erdogan reach out to Israel for help. Erdogan came to office as Prime Minister in 2003 with a policy of "zero problems with neighbors," but has since led Turkey to problems with most, if not all, of them. Alon Liel, former Director General of the Israeli Foreign Ministry said, "Turkey didn't do very well in the last five years in the region. Turkey needs friends."

    That is an understatement.

    Turkey helped Iran evade international sanctions, but has since fallen out with the Islamic Republic of Iran over its support of Syria's Bashar Assad. A Muslim Brotherhood supporter, Erdogan was close to Egypt's former President, Muslim Brotherhood member Mohamed Morsi, and has been an outspoken adversary of President Abdel Fattah el-Sisi. Turkey was and remains a conduit for arms and money for various parties to the Syrian civil war. The U.S. has demanded that Erdogan seal Turkey's border with Syria, which he has not done. Turkey also has bombed Kurdish fighters; deployed its forces to Iraqi territory and declined to remove them; and sold ISIS oil on the black market. There are allegations that the Turkish government knew sarin gas was transferred to ISIS across Turkish territory. In November, Turkey shot down a Russian military jet, in the biggest move down the current slide of Turkish-Russian relations, which began when Vladimir Putin stepped in to prevent the collapse of Syria. [This is on top of historical animosity between Turkey, the successor to Muslim Ottoman rule, and Russia, the self-proclaimed defender of the Christian Orthodox Church.]

    Russia, furious at the downing of its plane, instituted a series of economic sanctions against Turkey, the most important of which is suspension of the TurkStream project, designed to boost Russian gas exports to Turkey. Turkey is the second-largest importer of Russian gas, after Germany.

    As a corrective to all of Turkey's "problems with neighbors," Erdogan raised the possibility of renewed relations with Israel — which is currently finalizing the mechanism for developing large offshore natural gas fields. Erdogan told Turkish media last week that normalization of ties with Israel would have benefits for Turkey. Insisting that Israel must still end the blockade of Gaza (not happening), apologize, and pay reparations for the flotilla, Erdogan nevertheless made clear his desire for progress — or at least for Israeli gas.

    Which way will Turkish President Erdogan go on Israel?
    Left: Erdogan (then Prime Minister) shakes hands with then Israeli Prime Minister Ariel Sharon, on May 1, 2005. Right: Erdogan shakes hands with Hamas leader Ismail Haniyeh on January 3, 2012.

    It's not as if Turkish-Israel relations were ever entirely severed. Since the flotilla confrontation, Turkey-Israel trade doubled in the past five years, to $5.6 billion. While arms deals signed prior to 2010 have been put on hold, trade in civilian chemicals, agricultural products, and manufactured goods has increased. And, in one of those "only in the Middle East" stories, Turkish businesses have been shipping goods to Israel by sea, then trucking them across the country to Jordan and beyond, in order to avoid having to ship overland through Syria.

    The basis for increased trade, including gas sales, is there, and Israel has weighed the price and found it acceptable. Israel will pay Turkey $20 million; Turkey will expel the Hamas leadership from Istanbul and will purchase Israeli gas.

    After entering office in 2003, Erdogan offered Turkey as a model for democratic governance in a Muslim country. President Obama called him one of the foreign leaders with whom he was most comfortable. But Turkey's was always a double game. The restoration of relations with Israel is less a political reconciliation than an admission of the utter bankruptcy of Turkey's last five years of diplomatic endeavor.
     

  • "It's Hot Out There" – Here's Why In One Visualization

    “It’s not just warm, but very warm,” exclaims one east coast ski resort owner, adding “I can’t remember it ever being like this here.” But why? As WSJ reports, two weather occurrences – the Arctic Oscillation and El Niño – are combining to shake up temperatures from coast to coast in the U.S., bringing springlike conditions to the Northeast for much of this month and leaving parts of the West colder and wetter than usual.

    Typically this time of year, Arctic Oscillation would bring cold air to the Eastern U.S., bringing temperatures down. But so far this year, the oscillation has stayed much farther north, allowing warm air from the south to fill the void, said Mike Halpert, deputy director of the National Oceanic and Atmospheric Administration’s climate prediction center.

     

     

    The other factor is El Niño, a periodic climate cycle in which sea surface temperatures over the eastern Pacific become warmer than usual. The effects from changes in Arctic Oscillations generally last only a few weeks, but the balmy weather in the Northeast could continue because of the El Niño effect, experts say.

     

    El Niños push the subtropical and polar jet streams, which help define weather around the world, to the north. The result is that the southern U.S. gets rain that normally falls in Central and South America, while the Northeast and Midwest get a reprieve from winter as the polar jet stream is pushed up into Canada.

    “If people are nervous, they should be nervous.”

    The current El Niño is on track to rank among the top three strongest since record-keeping began in 1950, according to federal climatologists.

    “The El Niño impact is not dominating yet,” said Bill Patzert, a climate scientist with NASA’s Jet Propulsion Laboratory in Pasadena, Calif. “It’s like the tale of two climates here.

    And since every failure of central planning to achieve its  seasonally-adjusted  economic targets must be blamed on something, even something as ridiculous as the weather, regardless if it is “too cold” like in the past two years, or “too hot”, now we know why Q4 GDP will be crap!

  • Peter Schiff: "Mission Accomplished"

    By Peter Schiff of EuroPacific Capital

    Mission Accomplished

    On May 1, 2003 on the flight deck of the USS Abraham Lincoln then President George W. Bush, after becoming the first U.S. president to land on an aircraft carrier in a fixed wing aircraft (in a dashing olive drab flight suit), declared underneath an enormous “Mission Accomplished” banner that “major combat operations” in Iraq had been concluded, that regime change had been effected, and that America had prevailed in its mission to transform the Middle East. 13 years later, after years of additional combat operations in Iraq, and a Middle East that is spiraling out of control and increasingly disdainful of America’s influence, we look back at the “Mission Accomplished” event as the epitome of false confidence and premature celebration.

     

    The image of W on the flight deck comes to mind in much of the reaction to this week’s decision by the Federal Reserve to raise interest rates for the first time in nearly a decade. While many in the media and on Wall Street talked of a “concluded experiment” and the “dawning of a new era,” few realize that we are just as firmly caught in the thickets of failed policy as were Bush, Cheney, and Rumsfeld in the misunderstood quagmire of 2003 Iraq.
     
    In its initial story of the day’s events, The Washington Post (12/16/15) declared that by raising the Fed Funds rate to one quarter of a percent The Fed is “ending an era of easy money that helped save the nation from another Great Depression.” Putting aside the fact that 25 basis points is still 175 points below the near 2.0% rate of core inflation that the government has reported over the past 12 months (and should therefore be considered undeniably easy), the more important question to ask is into what environment the Fed is apparently turning this page.
     
    Historically, the Fed has begun its tightening cycles during the early stages of expansions, when the economy had enough forward momentum to absorb the headwinds of rate increases. But that is not at all the case this time around.
     
    Prior to the recent Great Recession, there had been six recessions since 1969, and over those episodes, on average 13.3 months passed from the time the recession ended to when the Fed felt confident enough in the recovery to raise rates. (The lag time was just 3.5 months in the four recessions between 1971 and 1991). (The National Bureau of Economic Research, US Business Cycle Expansions and Contractions, 4/23/12) 
     
    But after the recession of 2008 – 2009, the Fed waited a staggering 78 months to tighten the monetary levers. Those prior tightening cycles also occurred at times when GDP was much higher than it is today. Over the prior six occasions GDP, in the quarter when the Fed moved, averaged a robust 5.3%. While the current quarterly GDP is still unknown, the data suggests that we will get a figure between 1% and 2% annualized. (Bureau of Economic Analysis)

     
    Another key difference is the level of unemployment at the time the hikes occurred. As they started tightening much earlier in the expansion cycles, unemployment at the times of those prior recoveries tended to be high but falling. The average unemployment rate at the time the six prior tightenings occurred was 7.5%. But that average rate had fallen to 5.1% (a level that most economists consider to be “full employment”) an average of 42 months after the initial Fed tightening. In other words, those expansions were young enough and strong enough to absorb the rate hikes while still bringing down unemployment. (Bureau of Labor Statistics; Federal Reserve Bank of NY)
     
    Our current unemployment rate has already fallen to 5.0% (mostly because workers have dropped out of the labor force). Few economists allow for the possibility that it could fall much lower. This is particularly true when you acknowledge the rapidly deteriorating economic conditions that we are seeing today.
     
    As I stated in my most recent commentary, there is a growing troth of data that shows that the U.S. economy is rapidly losing momentum. Some data points, such as the inventory to sales ratio and the ISM manufacturing data suggest that a bona fide recession may be right around the corner (among them, this week’s truly terrible manufacturing PMI and industrial production numbers, a very weak Philly Fed Outlook, the weakest service sector PMI of the year, a big drop in the Kansas City Fed Manufacturing Index, and the announcement that the Third Quarter current account deficit had “unexpectedly” increased 11.7% to post the widest gap since the fourth quarter of 2008, are just the latest such indicators).
     
    Given that the U.S. economy has, on average, experienced a recession every six years, the 6.5-year longevity of the current “expansion” should be raising eyebrows, even if the data wasn’t falling faster than a bowling ball with wings.
     
    So what happens when the Fed postpones its first rate hike until the death throes of a tepid recovery rather than doing so at the beginning of a strong one? If unemployment starts ticking up during an election cycle, can anyone really expect the Fed to follow through with its projected additional rate hikes and allow a full-blown recession to take hold prior to voters casting their ballots? All of this strongly suggests that this week’s rate hike was a “one-and-done” scenario that does nothing to extricate the Fed from the monetary trap it has created for itself.
     
    Another big question is why the Fed decided to move in December, after doing nothing for so long. Clearly the markets were surprised and confused by the Fed’s failure to pull the trigger in September, when the economy appeared, at least to those who chose to ignore the bad data, to be on relatively solid footing. At that time, the Fed suggested that it needed to see more improvement before green lighting a liftoff. And while I tend not to place much stock in the pronouncements of most economists, one would be hard-pressed to find anyone who would claim that the data in December looks better than it did in September.
     
    A much more likely explanation is that through its rhetoric the Fed had inadvertently backed itself into a corner. Even though the Fed would have preferred to leave rates at zero, the fear was that failure to raise them would damage its credibility. After having indicated for much of the past year that they had believed that the economy had improved enough to merit a rate increase later in 2015, to continue do to nothing would suggest that the Fed did not actually believe what it was saying. This was an outcome that they could not abide. If we could doubt them about their economic pronouncements, perhaps they have been equally disingenuous with their professed ability to shrink their balance sheet over the next few years, contain inflation if it ever reared its ugly head, or to prevent financial contagion from spreading during a new recession.
     
    In truth there should be very little confidence that a new era has begun. A symbolic 25 basis point credibility-saving gesture, coming just two weeks before year-end, is really a non-event. It’s the equivalent of a credibility Hail Mary, with the Fed desperately trying to infuse confidence into a “recovery” that for all practical purposes has already ended.
     
    The question will be whether such a small move will be enough to push an already slowing economy into recession that much sooner. Over the past seven years the U.S. economy has become dependent on zero percent interest rates. But as with the famous Warren Buffet bathing suit maxim, these dependencies won’t be fully revealed until the tide rolls out and those zero percent rates are taken away. The bigger question is how quickly the Fed will reverse course. Will it move once it becomes painfully obvious to everyone that we are headed into another recession, or will it wait until we are officially knee deep in a contraction that is even bigger than the last one?
     
    The new rounds of rate cutting and Quantitative Easing that the Fed will have to unleash will echo the military “surge” in Iraq in 2007. Those fresh troops were needed to roll back the chaos that the Administration had ignored for so long. But just as that surge only bought us a few years of relative calm, look for the gains brought about by our next monetary surge to be even more transitory. That is a development for which virtually no one on Wall Street is preparing.

  • "Quad Witches, Bitches" – Stocks Crash On OpEx

    CNBC was awash with "Remain Calm" comments today as yesterday's carnage extended into today post-option-expiration misery.. "I would call this a rather stable sell-off" and stocks are "in a bit of a funk" were among them… but for those buying the well-sponsored rip post-Yellen, here's what you get:

    Quad-Witch Bitches:. The last two days are the worst since Black Monday for stocks, and just as we warned a week ago, Yellen's confidence-inspiring rate-hike was undone by 'technicals' in the so-called market:

    The irony will be if, regardless of what the Fed does, the subsequent move is driven not by the market's read through of monetary policy but by the "pin" in this massive $1.1 trillion option expiry, the biggest in many years, one which if recent market action is an indicator, suggests the stop loss strike level will be taken out in the process setting the "psychological" stage for market participants who will look at the drop in the market, and equate it with a vote of no confidence in what the Fed is doing, potentially forcing the Fed to backtrack in less than 2 days!

     

    Whether this happens remains to be seen, and we are confident the Fed's "arm's length" market-moving JV partner, Citadel, is currently scrambling to prevent any imminent selloff. However, considering Kolanovic' track record of hinting at key risk inflection risk, it is quite likely that whatever the ultimate closing price on December 16 and, more importantly, December 18, volatility may very soon have an "August 24" type event.

    The "quad's" outcome – bloodbath. 

     

    With S&P 500 Futures breaking the 2,000 level after-hours…

     

    Post-Yellen, bonds are outperforming notably.

     

    Post-Fed… not exactly confidence-inspring…

     

    The Dow is down 700 points from post-Yellen exuberance… Nasdaq broke 5,000; Dow nears 17,000; and S&P 2,000 was defended with valor…

     

    Leaving everything Red for the week…

     

    Trannies are down 18% YoY… the fastest accelerating drop since Lehman…

     

    FANGs all red post-Fed…

     

    Stocks caught down to credit markets – as credit crashes…

     

    Equities still have a long way to go…

     

    Treasury yields (most notably the longer-end) ripped lower after the Fed… but remain higher on the week…

     

    With a dramatic "policy error" style flattening of the yield curve…

     

    The USDollar rose over 1% on the week but the last 24 hours has seen some fading as carry trades were unwound en masse, driving JPY higher…

     

    Commodities were very mixed this week. Silver, gold, and copper surged today

     

    Silver's best day in 11 weeks…

     

    Crude collapsed to fresh cycle lows…

     

    Charts: Bloomberg

  • Canadians Sell Cans Of "Rocky Mountain Air" To Choking Chinese

    The Chinese are so desperate for clean air – amid the most disgusting pollution in history – that they have turned to buying cans of fresh air to breathe during the most smog-filled days. With low oil prices crushing their economy, Canada has begun to export another resource as CNBC reports Alberta-based Vitality Air is selling "Rocky Mountain air" to the Chinese for $10 to $20 per can.

    Facing this…

     

    The Chinese have turned to this…

     

    Canada may be struggling with low oil prices, but China's latest environmental crisis is proving to be a lucrative opportunity for another of its natural resources – Rocky Mountain air.

    Alberta-based Vitality Air has been cashing in on Beijing's worsening air quality problems, selling aluminum cans of "fresh clean air and oxygen" from the picturesque Rocky Mountains for around $10 to $20 each.

     

    Vitality Air's China representative Harrison Wang said told MailOnline that they sold out almost instantly after marketing the product on China's e-commerce website Taobao. They'll be sending another 700 bottles to China in the coming weeks, topping their first 500-bottle shipment.

     

    "We have sold everything, and we now have a bunch of customers and people wanting to be our distributors," Harrison said.

    As CNBC reports,

    Founders Moses Lam and Troy Paquette admitted to Canadian media that the project first started as a joke, selling their first sealable food bag of air for 99 cents on eBay. The then sold a second bag that raked in $168 Canadian dollars ($122).

     

    They launched Vitality Air shortly afterward.

     

    But for those who are still laughing at the idea of selling air that usually comes for free, the website reminds us that bottled water also used to be a punchline: "The truth is we've begun to appreciate the clean, pure and refreshing taste of quality water," the website reads. "Air is going the same way."

     

    "Just like bottled water, premium air is a growing industry because people are noticing the difference."

    *  *  *

    How long before Canadian air is taxed…?

  • On Conspiracy Theories

    Submitted by HardScrabbleFarmer via The Burning Platform blog,

    “In many nations, rational people end up believing crazy things, including (false) conspiracy theories. Those crazy thoughts can lead to violence, including terrorism. Many terrorist acts have been fueled by false conspiracy theories, and there is a good argument that some such acts would not have occurred in the absence of such theories. The key point—and, in a way, the most puzzling and disturbing one—is that the crazy thoughts are often held by people who are not crazy at all.”

    Cass Sunstein- White House Office of Information and Regulatory Affairs

    If you don’t know who Cass Sunstein is, or what he does now would be a good time to do some research. Not only because of his position with the White House and the power that entails, but because he understands quite clearly what problems are posed by people who, in his own words are, “…neither ignorant, not ill-educated. On the contrary they can be spectacularly well informed…”

    Conspiracy theories are, in short, the belief that others conspire in secret to commit criminal acts. They do, no secret there. In fact the majority of prisoners in Federal Penitentiaries are serving time not for a specific crime, but for conspiracy to commit a felony, more simply discussing their intentions with another person in secret. It must be difficult indeed to simultaneously prosecute large numbers of people for the very activity that you are assigned to debunk and then somehow explain to people that it’s dangerous to believe in them. Yes, yes, you can imagine them saying, other people do engage in conspiracies, but we never would and you’d have to be crazy to even consider it.

    Point taken, Mr. Sunstein.

    Prior to the advent of the Internet there were few places where people could openly engage in any discussion of the misgivings they had about certain events. Mailing lists, fringe publications, but no open forum for expressing doubt and discovering the fundamental and underlying reasons behind such thoughts. Mr. Sunstein has often argued that the reason most people believe in conspiracy theories is because it makes them feel safe, a notion that is as hard to believe as the one that says the government would never engage in a conspiracy. If anything, the dawning realization that those entrusted to care for and protect you are engaged in a pattern of behaviors that are not only dangerous, but wantonly destructive to the very values and beliefs we hold most dear. To believe in a conspiracy committed by a government that is powerful, that is actively spying on it’s own people without legal justification and that appears immune to the law is not reassuring or comforting, it is terrifying. It is also, based on what we actually know for a fact, common sense

    Let’s begin by covering a few basics-

    Operation Northwoods

    In 1962 the Department of Defense acting in cooperation with the Joint Chiefs of Staff submitted a paper detailing covert operation by either the CIA or other Government operatives to commit acts of terrorism against innocent American civilians, specifically to either hijack US commercial aircraft, shoot down commercial aircraft, attacks and kill US soldiers at Guantanamo or an attack on the Organization of American States with the intent of blaming the actions on Cuba in order to destabilize or overturn the government. These plans were signed and submitted by a host of top ranking US Military officials including the Chairman of the Joint Chiefs of Staff Lyman Lemnitzer and submitted to the Secretary of Defense, Robert McNamara who would later play a large role in the US war in Viet Nam.

    None of the people involved in the research, planning, drafting or submission of this authorized government conspiracy was ever charged with a crime or held accountable. In fact the chief defense has always been that it was rejected by then President John F Kennedy, rendering further discussion null and void. Think about it for a moment and decide for yourself what the implications of such a plan mean for people who are, in the words of Cass Sunstein, spectacularly well informed, i.e conspiracy theorists. The government of the United States of America, using top secret clearance and taxpayer dollars actively plotted to murder innocent Americans in acts of terror in order to instigate a war on false grounds. To know this, according to the leading expert on conspiracy theories, makes us feel safer.

    Incontrovertible proof that the government does in fact engage in criminal conspiracies that target innocent civilians in order to promote government sanctioned programs or military actions while it’s criminal participants escape justice has now been established as a fact, not a theory. Why this important piece of American history is unknown to most people is not puzzling, it is because it has been deliberately pushed off to the side, dismissed as irrelevant or pointless because it didn’t happen. Conspiracy theories do not require action, however, only the conspiracy.

    One of the greatest issues the Government has in dealing with the conspiracies currently circulating is the ease with which the Internet allows them to propagate. While the vast majority of Americans have never heard of the Gulf of Tonkin, quite a few have heard the term “9/11 was an inside job” or know that something is not quite right about Sandy Hook. The ubiquitous nature of cell phone cameras has given people the ability to see for themselves without having to look through the lens of the MSM and depend upon sanitized news coverage to inform them of the details of various events taking place around the troubled world. The time when the government was kept in check by the 5th estate has long ago ceased to restrain them. The news organizations have become a tool of the establishment rather than a check on their power. The only option left is for either whistle blowers to come forward or citizen journalists to investigate on their own time and dime.

    The MSM

    Proof TV Media 100% Fake – Fake/Green Screen Compilation…

    The Illusion of the Mainstream Media (MSM). #BreakTheIllusion

    The sheer number of poorly faked news stories gives rise to the legitimate question, how many fake stories were done well? Why would any news organization feel that it is necessary to use false coverage to report actual news? It makes no sense to falsify something in order to tell the truth, so something else must be in play. The participants and producers are clearly aware of what they are doing when they use props or green screens, and since they are doing it without informing the viewing public it wouldn’t be unfair to call it a conspiracy. The more often these events are uncovered the less trust anyone feels in the institutions and representatives that commit these frauds on an unsuspecting population. Whether it is for altruistic or evil ends is irrelevant, the duplicity is it’s own crime and since it is done in secret, involving multiple parties we are left with little room to consider it as anything other than a conspiracy. That isn’t a theory, it’s a fact.

    We live in an era that seems to be on the cutting edge of human civilization due to the proliferation of technically sophisticated gadgetry, but in many ways were are as ignorant and intellectually shallow as we have ever been, pacified by our good fortune, stable diets and creature comforts, bereft of the intellectual curiosity that has been the hallmark of cultures at their zenith. Grand sounding memes have been the trademark of great cultures, from Pax Romana to Rule Britannia. They are utilized to galvanize a people or a nation and lead them to greater heights and achievements or they serve as an epitaph on the gravestones of Empires, like Blood and Soil or Liberte’, Egalite’, Fraternite’. Numerous cultures experience a tumultuous birth, a meteoric rise and blossoming and slowly and inexorably decline into decadence and degeneracy.

    Those who sit at the top of an empire in decline often employ the same tactics that their predecessors have used throughout history in order to remain in power; suppression of dissent, violent retaliation against those who resist, open condemnation of those who are often the most stalwart supporters of the earlier forms of the same government and eventually the emptying of the treasury and plundering of resources while the masses suffer. The employ various techniques of coercion and dependency as well as draconian measures in security and intelligence. One of the hallmarks of a failing regime is the way they turn a blind eye to the flagrant criminality of those at the top while increasingly stifling even the mildest forms of dissent at the bottom. Employing men like Cass Sunstein to float the idea that conspiracy theories are the seedbed of violent terrorist cells is only the beginning.

    Many people believe that the restriction on free speech, the rise of the PC movement, the talk of microaggressions and safe spaces are about protecting marginalized minorities when in fact they are nothing more than tools used to entrench the positions of power, to eliminate resistance to their aims and objectives and to silence, once and for all every voice that fails to sing in the chorus of the State. The reason men like Cass Sunstein are employed by the State is because the veil has begun to fall. When people begin to question the veracity of the government, the next step, logically, is to question the legitimacy of the institutions that keep it in power. It is not a safe or reassuring thing to believe that your government is capable of plotting to kill you or those you love for it’s own ends, it is frightening, and demoralizing. It is also the first step in reclaiming our sovereignty. Just as no rational person would want to remain in a relationship with someone who repeatedly lies and cheats, neither would they be expected to offer allegiance to a State that would do worse.

    Few people live in the natural world, experiencing the outdoors daily through all weather, dealing with real issues of life and death, the cycles of the seasons, the endless tasks associated with meeting our most fundamental needs, from feeding ourselves to teaching our own children the values and lessons that resonate with how we wish to live. For the rest of our population there is endless hours of mindless distraction, inhumane workplaces in unnatural environments far removed from the basic needs of life. We spend more time with people we hardly know than the ones we love the most, we eat food that we have no connection with and that fails to nourish, we depend more and more on a government that is further and further away from us, both in distance and in understanding, in short we have become disconnected from our own lives. Perhaps the first step in rectifying our situation is to begin to look at the world not as it could be, but how it is. To see things for what they are, to discard the falsehoods, no matter how pleasant they may seem in order to embrace the truth regardless of how painful it may be. And that’s not a theory, that’s a reality.

    In closing I offer a speech filled with optimism in the face of desperation, hope in a time of bitter loss, and an appeal to the better part in all of us that calls out to be heard in times like these.

    No man thinks more highly than I do of the patriotism, as well as abilities, of the very worthy gentlemen who have just addressed the House. But different men often see the same subject in different lights; and, therefore, I hope it will not be thought disrespectful to those gentlemen if, entertaining as I do, opinions of a character very opposite to theirs, I shall speak forth my sentiments freely, and without reserve. This is no time for ceremony. The question before the House is one of awful moment to this country. For my own part, I consider it as nothing less than a question of freedom or slavery; and in proportion to the magnitude of the subject ought to be the freedom of the debate. It is only in this way that we can hope to arrive at truth, and fulfil the great responsibility which we hold to God and our country. Should I keep back my opinions at such a time, through fear of giving offence, I should consider myself as guilty of treason towards my country, and of an act of disloyalty toward the majesty of heaven, which I revere above all earthly kings.

    Mr. President, it is natural to man to indulge in the illusions of hope. We are apt to shut our eyes against a painful truth, and listen to the song of that siren till she transforms us into beasts. Is this the part of wise men, engaged in a great and arduous struggle for liberty? Are we disposed to be of the number of those who, having eyes, see not, and, having ears, hear not, the things which so nearly concern their temporal salvation? For my part, whatever anguish of spirit it may cost, I am willing to know the whole truth; to know the worst, and to provide for it.

    I have but one lamp by which my feet are guided; and that is the lamp of experience. I know of no way of judging of the future but by the past. And judging by the past, I wish to know what there has been in the conduct of the British ministry for the last ten years, to justify those hopes with which gentlemen have been pleased to solace themselves, and the House? Is it that insidious smile with which our petition has been lately received? Trust it not, sir; it will prove a snare to your feet. Suffer not yourselves to be betrayed with a kiss. Ask yourselves how this gracious reception of our petition comports with these war-like preparations which cover our waters and darken our land. Are fleets and armies necessary to a work of love and reconciliation? Have we shown ourselves so unwilling to be reconciled, that force must be called in to win back our love?

    Let us not deceive ourselves, sir. These are the implements of war and subjugation; the last arguments to which kings resort. I ask, gentlemen, sir, what means this martial array, if its purpose be not to force us to submission? Can gentlemen assign any other possible motive for it? Has Great Britain any enemy, in this quarter of the world, to call for all this accumulation of navies and armies? No, sir, she has none. They are meant for us; they can be meant for no other. They are sent over to bind and rivet upon us those chains which the British ministry have been so long forging. And what have we to oppose to them? Shall we try argument? Sir, we have been trying that for the last ten years. Have we anything new to offer upon the subject? Nothing. We have held the subject up in every light of which it is capable; but it has been all in vain.

    Shall we resort to entreaty and humble supplication? What terms shall we find which have not been already exhausted? Let us not, I beseech you, sir, deceive ourselves. Sir, we have done everything that could be done, to avert the storm which is now coming on. We have petitioned; we have remonstrated; we have supplicated; we have prostrated ourselves before the throne, and have implored its interposition to arrest the tyrannical hands of the ministry and Parliament. Our petitions have been slighted; our remonstrances have produced additional violence and insult; our supplications have been disregarded; and we have been spurned, with contempt, from the foot of the throne. In vain, after these things, may we indulge the fond hope of peace and reconciliation. There is no longer any room for hope. If we wish to be free² if we mean to preserve inviolate those inestimable privileges for which we have been so long contending²if we mean not basely to abandon the noble struggle in which we have been so long engaged, and which we have pledged ourselves never to abandon until the glorious object of our contest shall be obtained, we must fight! I repeat it, sir, we must fight! An appeal to arms and to the God of Hosts is all that is left us!

    They tell us, sir, that we are weak; unable to cope with so formidable an adversary. But when shall we be stronger? Will it be the next week, or the next year? Will it be when we are totally disarmed, and when a British guard shall be stationed in every house? Shall we gather strength by irresolution and inaction? Shall we acquire the means of effectual resistance, by lying supinely on our backs, and hugging the delusive phantom of hope, until our enemies shall have bound us hand and foot? Sir, we are not weak if we make a proper use of those means which the God of nature hath placed in our power.

    Three millions of people, armed in the holy cause of liberty, and in such a country as that which we possess, are invincible by any force which our enemy can send against us. Besides, sir, we shall not fight our battles alone. There is a just God who presides over the destinies of nations; and who will raise up friends to fight our battles for us. The battle, sir, is not to the strong alone; it is to the vigilant, the active, the brave. Besides, sir, we have no election. If we were base enough to desire it, it is now too late to retire from the contest. There is no retreat but in submission and slavery! Our chains are forged! Their clanking may be heard on the plains of Boston! The war is inevitable²and let it come! I repeat it, sir, let it come.

    It is in vain, sir, to extenuate the matter. Gentlemen may cry, Peace, Peace²but there is no peace. The war is actually begun! The next gale that sweeps from the north will bring to our ears the clash of resounding arms! Our brethren are already in the field! Why stand we here idle? What is it that gentlemen wish? What would they have? Is life so dear, or peace so sweet, as to be purchased at the price of chains and slavery? Forbid it, Almighty God! I know not what course others may take; but as for me, give me liberty or give me death!

    Patrick Henry

  • MSNBC Anchor Stunned By Trump-Putin Lovefest

    Following Vladimir Putin's 'endorsement' of The Donald, explaining his hope for "a more substantial, deeper relationship," with America, Trump has reciprocated the show of respect by thanking the Russian president for the "great honor." This mutual back-patting stunned MSNBC anchor Joe Scarborough, who exclaimed, Putin "is a person who kills journalists, political opponents and invades countries," to which Trump responded, silencing Scarborough, "he's running his country, and at least he's a leader, unlike what we have in our country."

    “It is always a great honor to be so nicely complimented by a man so highly respected within his own country and beyond,” the GOP presidential front-runner told supporters at a rally in Columbus, Ohio.

    "I have always felt that Russia and the United States should be able to work well with each other towards defeating terrorism and restoring world peace, not to mention trade and all of the other benefits derived from mutual respect,” he added. However, as The Hill reports,"Morning Joe" co-host Joe Scarborough was not impressed…

    Putin "is a person who kills journalists, political opponents and invades countries"

    To which Trump responded…

    "Certainly over the last couple of years they've respected him as a leader. I think he's up in the 80s, where you see Obama is in the 30s and low 40s — and he's up in the 80s," Trump said of Putin's popularity.

     

    "I don't know who does the polls, maybe he does the polls," Trump added.

    "You obviously condemn Vladimir Putin killing journalists and political opponents, right?" Scarborough asked.

    "Well I think our country does plenty of killing also, Joe, so…" Trump said, trailing off.

     

    “I would get along with him,” Trump said in September. “I would get along with a lot of the world leaders that this country is not getting along with.”

     

    He's also said Putin does not respect President Obama."Oh sure, absolutely," Trump responded.

    GOP rivals such as former Florida Gov. Jeb Bush have gone after Trump over his endorsement from Putin, who critics have blasted over his country's response to events including the situation in Ukraine.

    "To get praise from Vladimir Putin is not going to help Donald Trump," Bush told CNN on Thursday evening.

    “I would get along with him,” Trump said in September. “I would get along with a lot of the world leaders that this country is not getting along with.” He's also said Putin does not respect President Obama.

     

  • Argentinians Are Now Poorer Than Citizens Of Equatorial Guinea After Massive Devaluation

    On Wednesday evening, Argentina’s FinMin (and former head of global FX research at JP Morgan) Alfonso Prat-Gay abolished currency controls, fulfilling new President Mauricio Macri’s promise to unify the official and black market peso rates.

    The move came on the heels of central bank governor Alejandro Vanoli’s forced resignation. Macri has accused Vanoli of endangering the country’s finances by racking up some $17 billion in dollar futures which the new government attempted to renegotiate ahead of the deval.

    “For those interested in a case study of what happens after a dramatic devaluation, you now have front row seats for what is likely to be a 25-30% peso plunge,” we said two days ago. Yesterday, the peso did indeed take a nosedive as the parallel rates converged on 14 ARS/USD. 

    What does this mean for Argentinians, you ask?

    Well, as FT reports, “Argentines woke up on Thursday richer than Poles, Chileans and Hungarians [but] by bedtime they were not only poorer than all three, but also more pecunious than Mexicans, Costa Ricans and the good people of Equatorial Guinea.”

    In dollar terms, the sharp peso plunge pushed the country down eleven slots on the list of richest nations in GDP per capita terms. As the following table shows, Argentineans are now worse off than citizens of Chile, Poland, Equatorial Guinea, Hungary, Lebanon, Panama, Croatia, Kazakhstan, Costa Rica, Malaysia, and Mexico.

    More generally, the devaluation will cost the country some $167 billion in GDP. “[This is] just the latest ignominy to hit the seemingly accident-prone nation, which just over a century ago was the seventh-wealthiest country in the world on a per capita basis, ahead of the likes of Denmark, Canada and the Netherlands and five times wealthier than Brazil,” FT goes on to say.

    While the devaluation is likely the right move from a long-term perspective, in the short-run things will be painful. “The peso devaluation is a bitter pill for Argentinian households who kept their savings in pesos and for multinationals who had reported peso cash balances at the official exchange rate on financial disclosures,” Bill Adams, senior international economist at PNC Financial Services Group says.

    And with that, we’ll close with a few passages from one of the world’s greatest economic minds. This is from May 3, 2012: 

    “…press coverage of Argentina is another one of those examples of how conventional wisdom can apparently make it impossible to get basic facts right.

     

    Articles about Argentina are almost always very negative in tone — they’re irresponsible, they’re renationalizing some industries, they talk populist, so they must be going very badly. 

     

    Matt Yglesias, who just spent time in Argentina, writes about the lessons of that country’s recovery following its exit from the one-peso-one-dollar ‘convertibility law’. As he says, it’s a remarkable success story, one that arguably holds lessons for the euro zone.”

     

     

     

  • CEO To Yellen: "Let Us Tell You What We Are Seeing!!"

    With Financial Stress Index near cycle highs and macro data collapsing (in Services and Manufacturing) even CEOs are questioning Janet Yellen’s timing…

    “I don’t mean to make anybody too worried about this stuff, right?

     

    …

     

    We can speak less about stuff and pretend like everything’s just always great. I don’t think – I don’t think that’s the right way to build partnerships. I think, we tell you when things are working, we tell you when things are not working, we tell you when we make changes, we tell you when the changes are working, we tell you when the changes are not working.”

     

    …the areas that are affected by oil… the Texas markets specifically…In the first half of the year, they were pulling down total Company sales a little under 2 points…

     

    In Q3, that accelerated to 4 points, and that’s meaningful, right? It’s not just meaningful to us, I’d say it’s meaningful to anybody who’s thinking about what the US economy ought to look like…

     

    It makes me think hey, should we be calling Yellen… and saying, let us tell you what we are seeing.“

    – Restoration Hardware CEO Gary Friedman (Home Furnishing)

    h/t Avondale Asset Management

  • Yet Again, The Media Got The Facts Wrong About The San Bernardino Attacks

    Submitted by Derrick Broze via TheAntiMedia.org,

    On Wednesday, the Director of the Federal Bureau of Investigations said the agency has no evidence the married couple accused of killing 14 people in San Bernardino, California earlier this month had any connection to an active terror cell. This admission from the FBI directly contradicts media reports that immediately claimed the San Bernardino shooters were linked to Daesh (ISIS) via social media.

    Speaking at a counterterrorism conference in New York, Director James Comey said Syed Farook and Tashfeen Malik were inspired by Daesh, but were not directly involved with any specific terror group. Reuters reports that Comey believes Daesh has “revolutionized” terrorism by using social media to spread propaganda to inspire small-scale attacks.

    “Your parents’ al Qaeda was a very different model than the threat we face today,” Comey said.

    Despite the admission the couple had no connection to Daesh, Comey said Farook and Malik had shown support for “jihad and martyrdom” in private communications as early as 2013, but never in public on social media. The director also stated the FBI has “hundreds” of ongoing investigations in every state in the nation that involve potential Daesh-inspired terror plots.

    Comey also repeated his calls for ending encrypted communication based on the premise that Daesh uses encryption to plan terror attacks. “We are not going to break the Internet,” he said while challenging technology companies to stop creating services that cannot be accessed by law enforcement. Comey’s calls for breaking encrypted communications echo the recent efforts of police chiefs and attorney generals across the United States.

    Another piece of the puzzle that must be considered pertains to conflicting eyewitness accounts of the San Bernardino shooting. Although the oldstream media quickly accepted the narrative of a Muslim couple radicalized by anti-American sentiment and radical Islam, there was at least one conflicting account that should be investigated.

    Shortly after the shooting, witness Sally Abdelmageed talked to CBS News about what she saw.  Abdelmageed works at the Inland Regional Center and saw the shooters enter the building. She told CBS’s Scott Pelley that she saw what appeared to be three white men dressed in military clothes.

    “We saw three men dressed in all black military attire, with vests on, holding assault rifles, and they opened up the doors to building 3 and one of them starts to spray and shoot all over the room,” Sally Abdelmageed told Pelley.

    When asked to provide more detail about the shooters she said, “I couldn’t see a face, he had a black hat on, from my view all i could see was a black hat. A black long sleeve shirt, possibly gloves on, he had black cargo pants, the kinds with zippers and big puffy pockets. He had a huge assault rifle and extra ammo. I just saw three.”

    “You’re certain you saw three men?” Pelley asked.

    “Yes, it looked like their skin color was white. They looked like they were athletic and they appeared to be tall.”

    Her account matches the original report from Southern California’s Fox 11, which tweeted that police were searching for “3 white males dressed in military gear.” Another eyewitness expressed doubt that Farook was the culprit.

    Whatever the truth is, it seems obvious the government will use this crisis to add more fuel to the fire that is the global War on Terror. This fire — and the insanity it breeds — threatens to consume the planet, leaving behind a scorched Earth devoid of common sense and critical thinking. Avoiding catastrophe and further division of the people is going to take each and every awakened soul.

  • Islamic Blitzkrieg Coming To Germany, Arrested Jihadist Warns

    On Thursday, German authorities arrested Leeth Abdalhmeed at the refugee shelter in Unna-Massen. Abdalhmeed is suspected of having links to a Sunni terror organization.

    According to WSJ, “German authorities were alerted by a Syrian national who had seen an article on a website connecting Mr. Abdalhmeed with Islamic State.” Apparently, Abdalhmeed is actually Leith Abdul Hamid, a “midranking” Islamic State official from Deir Ezzour (where Paris “mastermind” Abdelhamid Abaaoud was Emir of war) who “ran a money-transfer operation for the terror group and was responsible for smuggling medicine and ammunition from Turkey” (where else?). 

    “We mustn’t regard refugees with a general suspicion. But it’s also true that concerns aren’t unfounded that some potential threats might be among refugees,” Wolfgang Bosbach, a lawmaker with Chancellor Angela Merkel’s Christian Democratic Union party said this week.

    As we and countless others have documented, the Paris attacks served to undermine the goodwill Europeans had shown towards the millions of asylum seekers flooding into the EU from the war-torn Mid-East. A subsequent bomb scare in Hannover that triggered the evacuation of two soccer stadiums didn’t help matters and now, German lawmakers and voters alike are pressuring Merkel to reconsider Berlin’s open-door refugee policy.

    In her keynote speech at the CDU party congress in Karlsruhe earlier this week, the iron chancellor committed to “appreciably reducing the number of refugees,” entering the country.

    Now that Berlin has promised to send 1,200 troops, a warship, and six Tornado surveillance planes to the fight in Syria, you can expect Germany to become a prime target for future ISIS attacks. 

    Indeed, a new piece from Spiegel documents the story of “Harry S.”, a jihadist from Bremen who, after returning to Germany following a three month stint in Islamic State-held territory in Syria, says the group is intent on carrying out further attacks in Western Europe and is constantly asking foreign-born fighters if they are willing to return to their home country to wage jihad.

    Harry, who made an appearance in an ISIS video depicting an execution near the ancient city of Palmyra, is now “reformed” and sharing information with German public prosecutors.

    Here’s more from the story:

    On several occasions, IS members tried to recruit volunteers for terrorist attacks in Germany. In the spring, just after he first arrived in Syria, he says that he and another Islamist from Bremen were asked if they could imagine perpetrating attacks in Germany. Later, when he was staying not far from Raqqa, the self-proclaimed Islamic State capital city, masked men drove up in a jeep. They too asked him if he was interested in bringing the jihad to his homeland. Harry S. says he told them that he wasn’t prepared to do so.

     

    Harry S. was only in IS controlled territory for three months. Yet he might nevertheless become a vital witness for German security officials. Since the Nov. 13 attacks in Paris, fear of terrorism has risen across Europe, including in Germany, and security has been stepped up in train stations and airports. And the testimony from the Bremen returnee would seem to indicate that the fear is justified. Harry S. says that, during his time in the Syrian warzone, he frequently heard people talking about attacks in the West and says that pretty much every European jihadist was approached with the same questions he had been asked. “They want something that happens everywhere at the same time,” Harry S. says.

     

    A large man with broad shoulders, Harry was trained as a fighter in Syria. He claims to have been drilled in training camps together with 50 other men: sit-ups, hours of standing in the sun and forced marches lasting the entire day. Those who gave up were locked up or beaten. His Kalashnikov, it was driven home to him, should become like his “third arm” and he was told to keep the weapon in bed with him while sleeping.

     


     

    The insights of the Bremen convert into Islamic State are of interest for security officials. Harry S. is the first returnee who can offer insight into the roles played by two notorious German-speaking jihadists who have joined Islamic State: Mohamed Mahmoud, an Islamist from Austria, and the former Berlin rapper Denis Cuspert (aka Deso Dogg). Rumors that they were recently killed in Syria have thus far not been confirmed by German officials.

     

    Mahmoud initially attracted attention in Vienna for his radical Internet postings and spent four years in prison there. He then moved to Germany, where he founded a Salafist group called “Millatu Ibrahim” together with Cuspert. The association was banned by the German Interior Ministry three years ago, whereupon several members went underground, only to reappear as members of Islamic State in Syria and Iraq.

     

    Harry S. met both Cuspert and Mahmoud in Raqqa. He sat together in a mosque with Cuspert and says the former rapper had just come back from the front. S. said his impression was that Cuspert was more important to Islamic State as the “hero” of propaganda videos used to attract Western recruits than as a fighter. Mahmoud, he said, had more influence and would hold ideology training sessions on Fridays in Raqqa. Mahmoud, Harry S. says, is “really dangerous,” adding that he had never before met such a disturbed person. After the executions in Palmyra, S. says, Mahmoud was proud of what he’d done.

     

    There is proof of the executions in Palmyra that Harry S. claims he saw. In the summer, Islamic State released a five-and-a-half minute video that was edited in some parts like a horror film. It was the first German-language execution video released by IS and it depicts two men kneeling between antique columns with Mahmoud and another Islamist from Germany standing behind them, weapons in hand. “Merkel, you dirty dog,” Mahmoud calls into the camera. “We will take revenge.” Then they shoot the prisoners in the head; a jihad hymn plays in the background.

     

    Harry S. likewise makes a brief appearance in the video. Clad in camouflage, he carries an Islamic State flag across the picture.

    Below, find two screenshots from the execution video mentioned above (Mahmoud is the one on the left):

    And here is the video featuring the vocals of “Deso Dogg”:

    Needless to say, if “Harry S” is correct and a few Leeth Abdalhmeeds manage to slip through undetected at German refugee camps only to carry out coordinated attacks, TIME magazine’s newly-minted person of the year will suddenly become the most unpopular figure in all of Germany thanks to TIME’s runner-up:

    Put simply: all it will take to destroy the legacy of the most powerful politician in the world (with the possible exception of Putin and Xi) is one night of terror perpetrated by a handful of extremists, and as we’ve been keen to note, the odds of a few “bad apples” slipping through go up by the day:

    On the “bright” side, one or two well placed passports in the wake of an attack will surely be enough to win over the 146 lawmakers in the Bundestag who voted against German military action in Syria.

  • The Market’s Gamblers Are Pumping Air

    Submitted by David Stockman via Contra Corner blog,

    The Fed pricked the financial bubblethis week  as expected. Janet Yellen’s press conference couldn’t have been more perfect for our investment thesis at my new research publication, Stockman’s Bubble Finance Trader. It confirmed that the money printers have come to a stark dead end.

    The fact is, the global economy is deflating rapidly and the U.S. is sliding into recession. But our Fed chairman is clueless about what’s happening. She and her posse of money printers are going to get bushwhacked by reality in the year ahead.

    She insisted repeatedly that the “economic fundamentals” are sound yesterday. Even though practically everything that matters is going south. This includes business investment, exports, retail sales, industrial production, inventory ratios, commodity prices, freight volumes and much more.

    Our Keynesian school marm hangs all of her groundless optimism on the completely misleading and heavily medicated jobs numbers put out by the Bureau of Labor Statistics.

    But here’s the thing: You can’t keep saying that the US labor market is in the pink of health when there are 102 million adult Americans without jobs. Or when there are still 3% fewer full-time, full-pay breadwinner jobs than there were 16 years ago when Bill Clinton was still in the White House.

    So here’s where we stand after yesterday’s watershed moment…

    Yellen officially admitted that, after the lunacy of free money for 84 months running, the Fed is out of excuses. And that it will start draining up to $1 trillion per day from the Wall Street swamp of liquidity.

    If the Fed doesn’t follow through on this huge draining action, interest rates won’t go up, even by its trivial 25 basis points target. Its credibility would be shattered.

    But if it does start heavily draining liquidity, it will catalyze the current sell off in the massive $2.6 trillion high yield market. That in turn will pull the props out from under the stock market. Here’s why: massive debt financed stock buybacks and mergers and acquisition (M&A) deals have inflated equities to their current nosebleed heights.

    Beyond that, Yellen also admitted the Fed is out of dry powder when she stumbled and stammered on a question about the business cycle being long in the tooth. She was also reminded of the obvious fact that the Fed can’t slash interest rates in response to a recession, because it’s still effectively at the zero bound.

    So there were two takeaways yesterday. First, the clarification that the Fed has three ways to lose. And our Bubble Finance Trading strategy wins regardless. (We just sold our first position for a 73% gain this morning. And that in about a month’s time.)

    The market will plunge sharply in the coming months if…

    • The Fed fails to raise interest rates as now promised; or…
    • If it drains liquidity as now proposed; or…
    • If it is confronted with the recessionary forces and bursting bubbles that it absolutely does not see on the path ahead.

    As I warned earlier this week, the “market” staged a relief rally after the Fed’s announcement. But that was as phony as a $3 bill. It was just the work of the robo-machines and fast money traders trying to bang loose some buy orders above the 50-day and 200-day moving averages. Both are right in the 2070 range where the S&P 500 stalled out after the press conference ended.

    But here’s the more relevant chart:

    Screen Shot 2015-12-17 at 4.43.21 PM

    The S&P 500 has been chopping and turmoiling on the flat-line for a full year since it first hit yesterday’s closing price in early December 2014.

    It’s tried to rally 34 separate times since QE ended in October 2014, and has failed each time. Like Pavlov’s famous dogs, the market has been trained to buy-the-dips, and for years was handsomely rewarded.

    But that is no longer working. It’s only a matter of time before the buy-the-dips mantra morphs into “sell the dead cat bounce”. Like today’s action.

    In a selfish sense, these flagging efforts by the casino players to levitate another last gasp “rip” are welcome. They give you a chance to pick entry prices for our Bubble Finance Trader recommendations that offer even more upside when the inexorable bursting of the bubble fully incepts.

    They may even succeed in generating one last Santa Claus rally before next year’s recessionary forces spook the remaining gamblers out of the casino. Gamblers, we might add, who no longer have a friend at the Fed.

    Like Wile E. Coyote, they are just pumping air and don’t even know it…

  • Japan Still Leads The Way Towards Our ENDGAME

    japan_SI

    Successful investors live by a golden rule: what the mainstream financial media talks about is not important. They focus on what they don’t hear instead. So forget about Yellen for a second. Let go of Draghi, oil, the South African rand and Syria. That’s all in the now. But investing is about the future.

    We are convinced there is one proverbial elephant in the room in particular that will shape our future. And that elephant is Japan. The ‘widowmaker’ trade has been claiming financial lives for multiple decades now. That is, short JGBs, or Japanese Government Bonds, was so obvious a trade that it never worked. The 10-year yield currently trades at 0.3%, which is close to the all-time low. We’re still waiting for the shoe to drop.

    Will it ever drop? We believe it will. ‘Drop’ might not be the appropriate word. The accumulation of imbalances might trigger a cascade of events that will shake the world at its core. Let’s investigate some data.

    Schermafbeelding 2015-12-18 om 23.06.30

    Japan’s debt-to-GDP ratio has hit a unprecedented 230%. You probably knew that. But it doesn’t keep you awake at night. We are genetically wired to focus on acute danger. If a tiger approaches us, we focus. But if stands still and doesn’t move for years, we turn around in search for other dangers. Wise investors remind themselves constantly of the tiger though. They never let their guard down.

    What about the pace at which debt-to-GDP is ramping up? The budget deficit tells us all we need to know.

    Schermafbeelding 2015-12-18 om 23.06.52

    For six years in a row already, Japan scored around minus 8%. And given the flattish GDP, these annual percentages head straight to the public debt pile. Japan’s long term potential real GDP-growth rate is simply close to zero, given the demographics. The latest quarterly print was a minus 0.3%. This makes the debt grow even faster.

    The GDP leads us to the approach that governments used time and again in history to reduce debt loads: nominal GDP-targeting. Also known as inflation-targeting, financial repression, money printing, and monetary stimulus. The Bank of Japan (BoJ) is working hard in that respect. It already owns over 30% of the total JGB market. In a few years, Japan Macro Advisors (JMA) projects the BoJ might be holding over 60% of the total market given its current policies.

    japan_1

    What does that look like from a total balance sheet-perspective? With the BoJ also buying all kinds of non-JGB assets, the other central banks’ balance sheets just pale in comparison. We are witnessing a truly historic experiment.

    japan_2It doesn’t take an Einstein to figure out that this is totally unsustainable. The BoJ-policies will have consequences. The most likely scenario is that inflation slowly develops at first. Commodity prices could turn. The yen could take another beating. And then suddenly, inflation accelerates.

    Now, there has always been a lack of ‘demand’ for stuff in Japan. It has always been lucrative to hold cash. Yens were safe. Every year, you could buy more stuff. But as inflation develops, the growing flock of elderly will realize their government benefits are just paper promises. When the price of everything rises, as already happened in the Japanse stock market, they will realize their savings are losing value. Money will then become the hot potato. The velocity of money will rise. Suddenly, ‘demand’ will appear. Inflation accelerates. 

    Hyperinflation is a possibility. It is not yet well-understood how this develops. There are multiple theories on the process. But historically, nearly all hyperinflations have been caused by government budget deficits financed by money creation. And that condition for sure is present in Japan.

    Once the bond market realizes what is happening, the game is over. The JGB market will crash. The ‘widowmaker’ will make millionaires of the ones still hanging on. There will be a fiscal crisis. Panic develops. A banking crisis ensues, as yen denominated asset prices and the yen itself both crash.

    Japan leads the way

    The most scary prospect is that Japan is our leading indicator. Remember what we heard after the financial crisis. The US was not Japan. Europe was not Japan. There was not going to be deflation here. We were smarter. We learned Japan’s lessons. Well, as we’re heading into 2016 you would be hard-pressed to find anyone who would deny that the US, and especially Europe, both struggle with anemic growth and deflation. Despite all the extraordinary efforts of the Fed and ECB.

    Japan does lead our way. One morning, Japan’s experiment will reach its logical conclusion. The sun will rise in the East and the world will be a different place. That morning might arrive sooner than you think.

    >>> Protect Your Wealth: Download our Exclusive Gold Report

    Secular Investor offers a fresh look at investing. We analyze long lasting cycles, coupled with a collection of strategic investments and concrete tips for different types of assets. The methods and strategies are transformed into the Gold & Silver Report and the Commodity Report.

    Follow us on Facebook @SecularInvestor [NEW] and Twitter @SecularInvest

  • ISIS Axis Assemble! Turkey To Establish Military Base In Qatar

    As we never tire of reminding readers, it’s critical to understand that the conflict in Syria, as interesting and important as it is in isolation, is part of larger story. As we documented in “Mid-East Coup: As Russia Pounds Militant Targets, Iran Readies Ground Invasions While Saudis Panic,” an epochal shift is taking place in the region

    Preserving the Assad government is absolutely critical for Iran. Syria serves as a key link between Tehran and Hezbollah in Lebanon and were Damascus to fall to a Western puppet government, Iran’s so-called “Shiite crescent” would wane. Riyadh, Doha, and Ankara know this of course and would like nothing more than to push the Iranians out of the Arab Peninsula, and ideally, undercut Tehran’s influence in Iraq as well.

    The conflict in Yemen is the same story. Iran backs the Houthis and just about the last thing the Saudis, Qatar, and the UAE want to happen is for Iran to effectively establish a colony on Riyadh’s southern border with a cozy view of the  Bab-el-Mandeb. That explains why the Gulf monarchies have put so much effort into driving the Houthis back and why the they won’t likely stop until Sana’a is recaptured (even if a few MSF hospitals and a UNESCO world heritage site have to be destroyed along the way).

    In short, this is an all-out regional Sunni vs. Shiite proxy war with the US backing the Sunnis and Russia backing the Shiites. If Iran and Russia win, Tehran will have cemented its foothold in Syria and Iraq just as international sanctions are lifted. If the Saudis win, the status quo will be preserved only with a “friendly” government in Damascus and a restored Hadi regime in Yemen. 

    With the stakes so high, it’s no wonder that all sides are sparing no expense. The Saudis are pouring resources into the Yemen fight even as Riyadh’s fiscal deficit has ballooned to some 20% of GDP in the face of slumping crude prices. Qatar and Turkey are funneling weapons and money to proxy armies in Syria and Ankara is apparently willing to risk its international reputation on the way to facilitating the ISIS oil trade. Meanwhile, Russia is all-in on the air campaign in Syria and Iran has committed Hezbollah, thousands of Iraqi Shiite militiamen, and its most important generals to Assad’s cause.

    As Hezbollah advances on Aleppo under cover of Russian airstrikes, the anti-Iran/anti-Assad nexus is getting concerned. Recall that in October, Qatar hinted at direct military action in Syria when Foreign Minister Khalid al-Attiyah told CNN that “if a military intervention will protect the Syrian people from the brutality of the regime, we will do it [along with] our Saudi and Turkish brothers.”

    Well don’t look now, but Turkey is set to establish a military base in Qatar in order to help the countries “confront common enemies.” As Reuters reports, “establishment of the base, part of an agreement signed in 2014 and ratified by Turkey’s parliament in June, intensifies the partnership with Qatar at a time of rising instability and a perceived waning of U.S. interest in the region.”

    “The two countries have provided support for the Muslim Brotherhood in Egypt, backed rebels fighting to overthrow Syrian President Bashar al-Assad and raised the alarm about creeping Iranian influence in the region,” Reuters goes on to note, adding that “3,000 ground troops would be stationed at the base – Turkey’s first overseas military installation in the Middle East – as well as air and naval units, military trainers and special operations forces.”

    The deal also opens the door for Doha to establish its own base in Turkey in the future. “Turkey and Qatar face common problems and we are both very concerned about developments in the region and uncertain policies of other countries,” Turkey’s ambassador to Qatar Ahmet Demirok said. “We confront common enemies. At this critical time for the Middle East cooperation between us is vital.”

    Yes, “more cooperation” is “crtical.” Because the current level of cooperation apprently hasn’t created enough instability and outright carnage. 

    Bear in mind that this comes just as speculation is running high regarding the possibility that the US, Saudi Arabia, Qatar, and Turkey may soon look to send in tens of thousands of ground troops to Iraq (and possibly Syria). The takeaway is this: even as Germany (and next France) seem to be moving towards a more cooperative approach when it comes to coordinating with the Assad government in the war on terror, Saudi Arabia, Qatar, and Turkey’s resolve to see the Syrian government fall has only hardened. The question is whether the US will continue to back its allies in the region or follow Germany down a more conciliatory path when it comes to dealing with the Syrian “problem.”

  • Weekend Reading: All About Janet

    Submitted by Lance Roberts via RealInvestmentAdvice.com,

    Well… she did it. After eleven years of maintaining emergency rates in order to boost asset prices, valuations, speculative debt accumulation back to pre-financial crisis levels, Janet Yellen officially hiked rates this past week.

    More interesting was that while banks are getting paid more on excessive reserves, and hiked the lending rates, they have not offered to share any of their new found income with savers. Of course, that revelation should not really surprise anyone at this point.

    However, as I discussed earlier this week, there is a nagging question as to why they would raise interest rates at this late juncture in the economic cycle.

    “With economic growth currently running at THE LOWEST average growth rate in American history, the time frame between the first rate and next recession will not be long.

    Fed-Funds-GDP-5yr-Avg-Table-121715

    However, as I have stated many times in the past, it is quite likely the Fed is already well aware that we are very late in the current economic cycle. For them, the worst of all possible outcomes is being caught at the “zero bound” of interest rates when the next recession begins which removes one of the more effective policy tools at their disposal.

    For investors, there is little “reward” in the current environment for taking on excess exposure to risk assets. The deteriorating junk bond market, declining profitability and weak economic underpinnings suggest that the clock has already begun ticking. The only question is how much time is left.

    This week’s reading list is a compilation of opinions on the Federal Reserve’s latest actions and the myriad of potential outcomes that are expected. How you choose will be very important, so choose wisely.

    1) Yellen, You’re Nuts by Karl Denninger via Market Ticker

    “The effective fed-funds rate has been running at 0.15% for a bit now. To ‘raise rates’ to 0.25% the net change in system liquidity required is about 60%.

     

    This is math folks. It’s the reason The Fed has a monstrous balance sheet; they had to in order to influence rates the way they wanted to on the way down. But to reverse that policy you must unwind that which you did in exactly the same sort of fashion.

     

    So how much does The Fed have to drain themselves? I don’t know and neither do they. But that they have to reduce the amount of the ‘overfill’ in the liquidity pool by some 60% isn’t conjecture, it’s arithmetic.

     

    We’ll see if the EFF actually moves in coming days as they “desire” and where the drain comes from. But this much is certain: If the rate does move, the drain will have occurred somewhere.”

    But Also Read: Fed Raises Key Rates by Binyamin Appelbaum via NY Times

     

    2) Yellen Takes A Huge Gamble by Ambrose Evans-Pritchard via The Telegraph

    “The global policy graveyard is littered with central bankers who raised interest rates too soon, only to retreat after tipping their economies back into recession or after having misjudged the powerful deflationary forces in the post-Lehman world.”

    NGDP-Growth-121815

    But Also Read: Fed Finally Raises Rates, Pent-Up Risks Emerge by Greg Ip via WSJ

     

    3) Overoptimistic Fed Strains Credibility On Forecasts by Lindsay Dunsmuir via Reuters

    “But Fed policymakers have a mixed record in predicting the nation’s economic health, casting doubt on their ability to set a rate path that will keep one of the longest-running yet most anemic recoveries in modern history on track.

     

    An analysis of the rate-setters’ year-ahead projections over the past five years shows they have generally overestimated real GDP growth and inflation, while underestimating improvement in the unemployment rate.”

    USA-FED-FORECASTS
    But Also Read: A Fight For The Soul Of The Fed by Jeff Spross via The Week

     

    4) Rate Hike Marks Start Of Correction by Michael Gayed via Market Watch

    “Several signs are flashing red, indicating that a correction may be about to begin just as the Fed begins hiking rates. The zero-interest-rate policy has created massive distortions and a surprisingly large number of false positives when tracking historically proven leading indicators of corrections and volatility.

     

    Perhaps the time has come for the bull market in risk management to make a comeback as the Fed slowly takes the punchbowl away. Regardless of one’s opinion, quantitative inter-market relationships which over time have shown their worth are signaling to watch out.”

    But Also Read: How The Fed Just Launched The Next Bear Market by Tyler Durden via Zero Hedge

    Zero-Hedge-121715

    5) Rate Hike And The Potential For Recession by Edward Harrison via Credit Writedowns

    “So let me give you a scenario here. In an environment in which earnings are shrinking and oil prices are declining, capital investment gets cut. And then the question becomes how much residential investment and consumer consumption growth can overcome this factor.

     

    In a Goldilocks scenario low rate lock-in behavior causes borrowers to pull forward their borrowing decision, pushing up credit growth while the energy sector works through its malaise and the baton is passed to wage growth to do the heavy lifting of maintaining consumer spending . That’s what the Fed hopes will happen.

     

    In a worst case scenario, the real economy effects of the oil sector and the earnings slowdown hit the frothy commercial real estate and REIT sector, which in turn begin the widening of the contagion begun by energy high yield. Combine this with the sudden stop to lower quality energy credits I believe is inevitable and you likely have stall speed – or even recession. And that’s where subprime auto ABS, student loan securitization and US munis come into the picture for the US domestic economy. Those markets get hit in recession.”

    But Also Read: Rate Hike Will Help The Economy by Drew Greenblatt via Inc.

    MUST READS

    “Where are the customer’s yachts?” – Fred Schwed, Jr.

  • 'Twas The Hike Before Christmas

    “Christmas at my house is always at least six or seven times more pleasant than anywhere else. We start drinking early. And while everyone else is seeing only one Santa Claus, we’ll be seeing six or seven.”

    – W.C. Fields.

    ‘Twas the hike before Christmas, and all over the shop
    Short end traders were waiting for prices to drop.
    Bloomberg and Reuters, the FT all there
    To capture the moment – if Yellen would dare.

     

    Stockbrokers slept fitfully, dreaming of when
    Fed policy meant lower rates, thank you Ben;
    The hedgies, meanwhile, partied on in their yachts,
    With barely a thought of ascending Fed dots.

     

    Commodities managers searched in despair
    For solace, in cupboards, but cupboards were bare.
    BRIC managers looked at each other in shock,
    With a new acronym for EM markets – COCK.

     

    The dollar was rallying, higher and higher –
    For frontier debt markets, a funeral pyre.
    There were sellers of iron ore, zinc, copper and gold;
    What was mined or extracted got ruthlessly sold.

     

    And CNBC then went live with its anchors
    Though all in the market considered them disappointing,
    The cameras all turned to report news from Janet,
    The Fed chief who lived on a different planet.

     

    “Information received since we met in October.”
    But by now there was nobody left who was sober;
    So when she announced her first quarter-point hike,
    Since nobody heard her, all markets did spike.

     

    The Nasdaq went higher, the S&P too;
    The bond market loved it, and Treasuries flew.
    The Far East went mental and over in China
    The rally in mid-caps could not have been finer.

     

    At which point a figure in red fled the room,
    Concerned that he’d caused an untenable boom.
    The Santa Claus Rally* was with us all right –
    “Happy Christmas to all, and to all a good night!”

    *Ends December 24th.

    Source: SovereignMan.com

  • The Exception

    “Exceptional” American…

     

     

    Source: Townhall.com

Digest powered by RSS Digest