Today’s News December 3, 2015

• Chairman of U.S. House Foreign Affairs Subcommittee: “Either [Turkey] Shouldn’t Be in NATO or We Shouldn’t”

  Congressman Dana Rohrabacher – Chairman of the House Foreign Affairs Subcommittee on Europe, Eurasia, and Emerging Threats – wrote last week:

  Not radical Islam, but the Russians have been portrayed to us as the villains in this chapter of history. Yet our government demonstrates a lack of will, incompetence, or both, in confronting the most monstrous of the radical Islamic marauders now spilling vast quantities of innocent blood in the Middle East – as well as in Africa and France.

   

  When Russia courageously stepped into the breach we should have been applauding its willingness to confront ISIS. Instead, we continue to denigrate Russians as if they were still the Soviet Union and Putin, not Islamic terrorists, our most vicious enemy.

   

  So now we see the travesty of a harsh condemnation of the Russians for introducing air strikes against terrorists who will murder Americans if they get the chance.

   

  Yes, Russia does this to protect Syria’s authoritarian Assad regime, which has close ties to Moscow. So what?

   

  Assad, like Iraq’s Saddam Hussein, is no threat to the United States or the Western world. If Assad is forced out of power he will eventually be replaced by an Islamic terrorist committed to raining down mayhem on Western countries.

   

  Today we witness the spectacle of American decision- makers, in and out of the Obama administration, joining forces with a Turkish regime that grows more supportive of the radical Islamist movement. There is ample evidence of President Erdogan’s complicity in ISIS’s murderous rampage through Syria and Iraq.

   

  Yet, we hold our public rebukes for the Russians, who are battling those terrorists. A Russian plane on an anti-terrorist mission did violate Turkish airspace, just as Turkish planes have strayed into Greek airspace hundreds of times over the last year. This overflight was no threat to Turkey. Still, it was shot down, as was a Russian helicopter on the way to rescue the downed Russian pilot.

   

  Why do Americans feel compelled to kick Russia in the teeth? Russia’s military is attacking an enemy that would do us harm. Why ignore the hostile pro-terrorist maneuvering of Turkish strongman Erdogan?

   

  President Obama is wrong. American politicians who try to sound tough at Russia’s expense in this case are not watching out for the long-term interests of the United States by undermining those fighting our primary enemy, Islamic terrorists.

   

  Russia should be applauded. Instead, it is being castigated for doing what our government is unwilling to do to confront the terrorist offensive now butchering innocent human beings from Africa, to the Middle East, to the streets of Paris.

   

  If being in NATO means protecting Erdogan in this situation, either he shouldn’t be in NATO or we shouldn’t.

  Rohrabacher is actually 100% right on this one …

  Related:

  Turkey Tries to Lure NATO Into War Against Russia

  

  

  

  

• The Fall Of America Signals The Rise Of The New World Order

  Submitted by Brandon Smith via Alt-Market.com,

  “The contemporary quest for world order will require a coherent strategy to establish a concept of order within the various regions and to relate these regional orders to one another.” — Henry Kissinger, “Henry Kissinger On The Assembly Of A New World Order”

   

  “[P]art of people’s concern is just the sense that around the world the old order isn’t holding and we’re not quite yet to where we need to be in terms of a new order that’s based on a different set of principles, that’s based on a sense of common humanity, that’s based on economies that work for all people.” — Barack Obama

   

  “We reiterate our strong commitment to the United Nations (UN) as the foremost multilateral forum entrusted with bringing about hope, peace, order and sustainable development to the world. The UN enjoys universal membership and is at the center of global governance and multilateralism.” — Fifth BRICS Summit Declaration

   

  “We support the reform and improvement of the international monetary system, with a broad-based international reserve currency system providing stability and certainty. We welcome the discussion about the role of the SDR in the existing international monetary system including the composition of SDR’s basket of currencies. We support the IMF to make its surveillance framework more integrated and even-handed.” — Fifth BRICS Summit Declaration

  Here is where many political and economic analysts go terribly wrong in their examination of current global paradigms: They tend to blindly believe the mainstream narrative rather than taking into account conflicting actions and statements by political and financial leaders. Even in the liberty movement, composed of some of the most skeptical and media savvy people on planet Earth, the cancers of assumption and bias often take hold.

  Some liberty proponents are more than happy to believe in particular mainstream dynamics. They are happy to believe, for example, that the growing “conflict” between the East and West is legitimate rather than engineered.

  You can list off quotation after quotation and policy action after policy action proving that Eastern governments, including China and Russia, work hand in hand with globalist institutions like the International Monetary Fund, the Bank of International Settlements, the World Bank and the U.N. toward the goal of global governance and global economic centralization. But these people simply will not listen. They MUST believe that the U.S. is the crowning villain, and that the East is in heroic opposition. They are so desperate for a taste of hope they are ready to consume the poison of false dichotomies.

  The liberty movement is infatuated with the presumption that the U.S. government and the banking elites surrounding it are at the “top” of the new world order pyramid and are “clamoring for survival” as the U.S. economy crumbles under the facade of false government and central banking statistics. How many times have we heard over the past year alone that the Federal Reserve has “backed itself into a corner” or policy directed itself “between a rock and a hard place?”

  I have to laugh at the absurdity of such a viewpoint because central bankers and internationalists have always used economic instability as a means to gain political and social advantage. The consolidation of world banking power alone after the Great Depression is a testament to this fact. And even former Fed Chairman Ben Bernanke has admitted (at least in certain respects) that the Federal Reserve was responsible for that terrible implosion, an implosion that conveniently served the interests of international cartel banks like JPMorgan.

  But the Federal Reserve is no more than an appendage of a greater system; it is NOT the brains of the operation.

  In his book “Tragedy And Hope,” Carroll Quigley, Council on Foreign Relations member and mentor to Bill Clinton, stated:

  "It must not be felt that these heads of the world’s chief central banks were themselves substantive powers in world finance. They were not. Rather, they were the technicians and agents of the dominant investment bankers of their own countries, who had raised them up and were perfectly capable of throwing them down. The substantive financial powers of the world were in the hands of these investment bankers (also called “international” or “merchant” bankers) who remained largely behind the scenes in their own unincorporated private banks. These formed a system of international cooperation and national dominance which was more private, more powerful, and more secret than that of their agents in the central banks."

  In “Ruling The World Of Money,” Harper’s Magazine established what Quigley admitted in “Tragedy And Hope” — that the control of the global economic policy and, by extension, political policy is dominated by a select few elites, namely through the unaccountable institutional framework of the BIS.

  The U.S. and the Federal Reserve are mere tentacles of the great vampire squid that is the new world order. And being a tentacle makes one, to a certain extent, expendable, if the trade will result in even greater centralization of power.

  The delusion that some people within the liberty movement are under is that the fall of America will result in the fall of the new world order. In reality, the fall of America is a necessary step towards the RISE of the new world order. The Rothschild-owned financial magazine The Economist reaffirmed this trend of economic “harmonization” in its 1988 article “Get Ready For A World Currency By 2018,” which described the creation of a global currency called the “Phoenix” over three decades:

  "The phoenix zone would impose tight constraints on national governments. There would be no such thing, for instance, as a national monetary policy. The world phoenix supply would be fixed by a new central bank, descended perhaps from the IMF. The world inflation rate — and hence, within narrow margins, each national inflation rate — would be in its charge. Each country could use taxes and public spending to offset temporary falls in demand, but it would have to borrow rather than print money to finance its budget deficit. With no recourse to the inflation tax, governments and their creditors would be forced to judge their borrowing and lending plans more carefully than they do today. This means a big loss of economic sovereignty, but the trends that make the phoenix so appealing are taking that sovereignty away in any case."

   

  "…The phoenix would probably start as a cocktail of national currencies, just as the Special Drawing Right is today. In time, though, its value against national currencies would cease to matter, because people would choose it for its convenience and the stability of its purchasing power."

  We are now on the cusp of the “prediction” set forth by The Economist over 27 years ago. The BRICS nations, including Vladimir Putin’s Russia, have all consistently called for the formation of a global reserve currency system under the direct control of the IMF and predicated on the basket methodology of the SDR. This new global system, as The Economist suggested, requires the marginalization of existing power structures and the end of sovereign economic control. Governments around the world including the U.S. would be at the fiscal mercy of the new financial high priests through the use of insidious debt based incentives given or withheld at the whim of the IMF.

  China is set to be inducted into the SDR basket in 2015, with specific economic changes to be made by September 2016, a development I have been warning about for years. The "vote" is in and the decision has been finalized.  While some in the mainstream media are playing off the rise of the Yuan as meaningless, IMF head Christine Lagarde presents the shift as a major event, not for China, but for the IMF and the SDR which she proudly refers to as the "currency of currencies".

   

  The addition of China to the SDR, I believe, is the next trigger event for the continuing removal of the dollar as the world reserve currency. The monetary shift may explode with speed if Saudi Arabia follows through with a possible plan to depeg from the dollar, effectively ending the petrodollar status the U.S. has enjoyed for decades.

  This is, of course, the same IMF-controlled SDR system that Putin and the Kremlin have called for, despite the running fantasy that Putin is somehow an opponent of the globalists.

  Putin continues to press the “U.S. as bumbling villain” narrative, while at the same time supporting globalist institutions and the internationalization of economic and political governance. While many people were overly focused on his “calling out” of the U.S. and its involvement in the creation of ISIS in his recent speech at the U.N., they seemed to have completely overlooked his adoration of the United Nations and the development of a global governing body. Putin often speaks at cross purposes just as Barack Obama does — one minute supporting sovereignty and freedom, the next minute calling for global centralization:

  "Russia is ready to work together with its partners to develop the UN further on the basis of a broad consensus, but we consider any attempts to undermine the legitimacy of the United Nations as extremely dangerous. They may result in the collapse of the entire architecture of international relations, and then indeed there will be no rules left except for the rule of force."

   

  "Dear colleagues, ensuring peace and global and regional stability remains a key task for the international community guided by the United Nations. We believe this means creating an equal and indivisible security environment that would not serve a privileged few, but everyone."

  Putin also proclaimed his support for the UN's fight against "climate change", the same climate change which Secretary of State John Kerry argued was a "contributing factor" in the crisis in Syria and the rise of ISIS.  I have written in the past on the fraud of "man made climate change (global warming)" and will not enter that tangent here now, but the point remains that Putin is fully on board with said fraud like all other puppet politicians around the globe:

  "…One more issue that shall affect the future of the entire humankind is climate change. It is in our interest to ensure that the coming UN Climate Change Conference that will take place in Paris in December this year should deliver some feasible results. As part of our national contribution, we plan to limit greenhouse gas emissions to 70–75 percent of the 1990 levels by the year 2030."

   

  "It is indeed a challenge of global proportions. And I am confident that humanity does have the necessary intellectual capacity to respond to it. We need to join our efforts, primarily engaging countries that possess strong research and development capabilities, and have made significant advances in fundamental research. We propose convening a special forum under the auspices of the UN to comprehensively address issues related to the depletion of natural resources, habitat destruction, and climate change. Russia is willing to co-sponsor such a forum."

  one more issue that shall affect the future of the entire humankind is climate change. It is in our interest to ensure that the coming UN Climate Change Conference that will take place in Paris in December this year should deliver some feasible results. As part of our national contribution, we plan to limit greenhouse gas emissions to 70–75 percent of the 1990 levels by the year 2030. – See more at: http://www.russianmission.eu/en/news/president-vladimir-putin-addresses-…

  It is indeed a challenge of global proportions. And I am confident that humanity does have the necessary intellectual capacity to respond to it. We need to join our efforts, primarily engaging countries that possess strong research and development capabilities, and have made significant advances in fundamental research. We propose convening a special forum under the auspices of the UN to comprehensively address issues related to the depletion of natural resources, habitat destruction, and climate change. Russia is willing to co-sponsor such a forum. – See more at: http://www.russianmission.eu/en/news/president-vladimir-putin-addresses-…

  Indeed, it has been Putin’s intention all along to support and defend the internationalist framework while at the same time participating in the theatrical East versus West false paradigm:

  "In the BRICS case we see a whole set of coinciding strategic interests.

   

  First of all, this is the common intention to reform the international monetary and financial system. In the present form it is unjust to the BRICS countries and to new economies in general. We should take a more active part in the IMF and the World Bank’s decision-making system. The international monetary system itself depends a lot on the US dollar, or, to be precise, on the monetary and financial policy of the US authorities. The BRICS countries want to change this."

  The Chinese support the same agenda of an IMF managed economic world:

  The world economic crisis shows the "inherent vulnerabilities and systemic risks in the existing international monetary system," Gov. Zhou Xiaochuan said in an essay released Monday by the bank. He recommended creating a currency made up of a basket of global currencies and controlled by the International Monetary Fund and said it would help "to achieve the objective of safeguarding global economic and financial stability."

  It is rather interesting how the desires of the BRICS seem to directly coincide with the designs of international bankers. This Hegelian dialectic is perhaps the most elaborate public distraction of all time, with the ultimate solution to the artificially engineered problem being a single “multilateral” but centrally dictated world economic system and world government, i.e., the new world order.

  Again, the globalists at the BIS and the IMF require a diminished U.S. dollar, greatly reduced U.S. living standards and a much smaller U.S. geopolitical footprint before they can establish and finalize a single publicly accepted global elitist oligarchy.

  If you cannot understand why it seems that the Federal Reserve and U.S. government appear hell-bent on self-destruction, then perhaps you should consider the facts and motivations at hand. Then, you’ll realize it is THEIR JOB to destroy America, not save America. When you are finally willing to accept this reality, every disastrous development since the inception of the Fed a century ago, as well as all that is about to happen in the next few years, makes perfect sense.

  This is not to say that the ultimate endgame of the new world order will result in victory. But the cold, hard, concrete evidence shows that internationalists do have a plan; they are implementing that plan systematically; and all major governments around the world are participating in that plan. This plan involves the inevitable collapse and reformation of America into a Third World enclave, a goal that is nearly complete, as I will outline in my next article.

  As the U.S. destabilizes, we are not escaping the clutches of the Federal Reserve system, only trading out one totalitarian management model for another. It is absolutely vital that the liberty movement in particular finally and fully embrace this reality. If we do not, then there will truly be no obstacle to such a plan’s success and no end to the tyrannies of the old world or the new world.

  

  

  

  

  

• Did Something Blow Up in Junk?

  Submitted by Jeffrey Snider of Alhambra Investment Partners

  Did Something Blow Up in Junk?

  There isn’t much as far as confirmation, but it increasingly appears as if “something” just hit the triple hooks (CCC) in the junk bond bubble. At least as far as one view of it, Bank of America ML’s CCC implied yield, there was a huge selloff that brought the yield to a new cycle high (low in price) above even the 2011 crisis peak.

  

  Now, this had occurred before on August 13 amidst the growing carnage in the “dollar” run through the PBOC and China. The published rate for that day was just over 16% and a similarly huge jump, but that was quickly revised (no reason given) to actually less than the day before. Further, that pricing revision applied to BofAML’s Master II HY index, as well, which had also been initially published in an explosion that day only to erased quickly after.

  

  This time, the CCC index is by itself in showing “something.” Neither the Master II nor the S&P/LSTA Leveraged Loan 100 are following suit. Whether or not that suggests another pricing problem isn’t clear, but the fact that the CCC index actually surged Monday to 16.61% and was reported again yesterday at 16.60% begins to indicate this was an actual trading outcome. In other words, as junk bonds have been the leading edge to the domestic end of the “dollar” run, this demands close and ongoing scrutiny in light of a potential escalation.  After all, this is just another indication of how advanced the deterioration has become, when the “usual” carnage and selloff is no longer noteworthy, giving way to only the (possibly) spectacular.

  

  

  

  

  

  

• Leaked Memo Reveals EU Plan To Suspend Schengen For Two Years

  Earlier today we reported that in a dramatic and, what to many may seem unfair variation of “carrot and stick” negotiations conducted by European bureaucrats, the EU threatened Greece with indefinite suspension from the Schengen passport-free travel zone unless it overhauls its response to the migration crisis by mid-December, as frustration mounted over Athens’ reluctance to accept outside support.

  The slap on the face of the Greeks was particularly painful because this warnings of an temporary expulsion from the EU happens just days after Turkey not only got a €3 billion check from Europe because it has been far more “amenable” in negotiating the handling of the hundreds of thousands of refugees that exit its borders in direction Europe, but also was promised a fast-track status in negotiations to be considered for EU accession and visa free travel. Ironically, it is also Turkey which is the source of virtually all Greek refugee headaches as the following map shows.

  

   

  We summarized the situation earlier as follows:

  “not only do the Greeks suffer under the weight of 700,000 refugees crossing into its borders from Turkey and headed for a “welcoming Germany” which is no longer welcoming, now they have to suffer the indignity of being ostracized by their own European “equals” who are being remarkably generous with non-EU member Turkey, which may very well be funding ISIS by paying for Islamic State oil and thus perpetuating the refugee crisis, while threatening to relegate Greece into the 4th world, and with visa requirements to get into Europe to boot!”

  However, it appears there is much more to this story than merely a case of vindication against the Greeks.

  As Steve Peers from EU Law Analysis writes, according to a leaked Council memo, Europe’s intention is to put the framework in place for a comprehensive suspension of Schengen for all countries, for a period as long as two years, not just Greece in the process effectively undoing the customs union aspect of the European Union, which also happens to be its backbone.

  The following is Council document 14300/15, dated 1 December 2015. It’s entitled ‘Integrity of the Schengen area‘, and addressed to Coreper (the body consisting of Member States’ representatives to the EU) and the Council – presumably the Justice and Home Affairs ministers meeting Thursday 3 and Friday 4 December.

  The first three parts aren’t exceptional, but part 4 calls for the start of a process to officially allow the reimposition of internal border controls in the Schengen area for up to two years. Legally, this has to be triggered by ‘serious deficiencies’ in the border control of a particular Member State.

   

  This has been reported as a plan to suspend Schengen as regards Greece. But the wording of the document suggests a much broader intention – applying to the whole of Schengen. This intention is clear from the reference to continuing in force the border controls that many Member States have imposed this autumn, which can only be imposed for a maximum period of six months. The purpose of using the ‘serious deficiencies’ clause, instead of the normal clause on suspending Schengen, is clearly to allow a much longer suspension period. It may be that not every internal border would be subject to checks, but the intention seems to be to issue a blank cheque to this effect.

  Document follows:

  INTRODUCTION

  The migratory and refugee crisis has put the application of the Schengen acquis and of the asylum acquis under severe pressure during the last years, with an unprecedented influx of migrants over the last months. In this context, several Member States have temporarily reintroduced border control at their internal borders, with reference to a serious threat to public policy or internal security as provided for by the Schengen Borders Code. Temporary controls at internal borders have also been carried out by a Member State for reasons related to terrorism, following the attacks in Paris on 13 November 2015. In addition, some Member States have taken specific measures to reinforce the control at their external borders.

  In its Conclusions of 9 November 2015 on measures to handle the refugee and migration crisis, the Council has identified a number of measures to implement fully the orientations already agreed by the European Council [1]. These measures address a wide range of issues, including in particular reception capacities, hotspots, relocation, return, readmission, resettlement,  lack of cooperation of migrants, contingency planning, the functioning of the Schengen area, external and internal borders, smuggling in human beings, visa policy, a common information strategy and the use of the Integrated Political Crisis Response (IPCR).

  In the Conclusions adopted on 20 November 2015 on Counter-Terrorism after the Paris terrorist attacks by the Council and Member States meeting within the Council it was agreed to implement reinforced measures for the purpose of fighting terrorism, including strengthening controls at external borders[2].

  Under point 9 of its Conclusions of 9 November 2015, the Council decided “to conduct at the December Justice and Home Affairs Council, on the basis of the 8th bi-annual reporting by the Commission, a thorough debate on the functioning of the Schengen area (1 May 2015 – 31 October 2015) and on the lessons learned from temporary reintroductions of controls at internal borders”.
  In Coreper on 26 November 2015 the Commission indicated, however, that the said 8th bi-annual report would not be ready for the meeting of the JHA Council in December 2015, but would be integrated in the future border package. The Presidency concluded that Ministers would be invited to hold a debate on the functioning of the Schengen area on the basis of a Presidency paper.

  With a view to preparing this debate, the Presidency issued a questionnaire on lessons learned from temporary introductions of controls at internal borders [3]. The Presidency has prepared the present paper in the light of replies from Member States, having in mind also major issues that have been raised during recent months regarding the functioning of the Schengen area, with a focus on border controls.

  ISSUES FOR DISCUSSION

  The Presidency invites the Council to hold a debate on the functioning of the Schengen area and to address in particular the following issues related to internal and external border controls.

  1. Consultations between Member States – Based on the information available to the Presidency, it appears that, in situations where some Member States have applied recently Article 25 of the Schengen Borders Code to reinstate temporarily controls at internal borders, there has not been sufficient prior consultation with other Member States.  The same has been noticed for technical reinforcement of borders between border crossing points, for changes in national policies leading to filter migrants at border crossing points and for organizing the transit of migrants from one border to next.  This has severely hindered the possibility for neighbouring countries to prepare themselves for changes in migratory routes and for all Schengen countries to handle migratory flows in a coherent manner.

  In addition, procedures approved by Coreper in March 2015 for improved information sharing on temporary reintroduction of border controls at internal borders have not been fully respected in all cases.

  The Presidency proposes that:

  • even in emergency situations falling under Article 25 of the Schengen Borders Code and requiring immediate action, a Member State deciding to temporarily reintroduce internal border controls should make all efforts to inform neighbouring Member States sufficiently in advance to allow neighbouring Member States to adjust to the new situation and, where possible, to cooperate to reduce the negative impact of the reintroduction of internal border controls;
  • Member States reconfirm their commitment to fully apply the procedures for improved information sharing on temporary reintroduction of border controls at internal borders agreed in Coreper in March 2015. [4]

  2. Securing external borders – A number of irregular migrants entering the EU, or exiting an EU country to re-enter later in the EU, pass through the so-called “green land borders” (the parts of the land borders between border crossing points). According to Frontex, more than 1,2 million illegal border crossings have been detected at the EU external borders for January – October 2015, an increase of 431% compared with the corresponding period in 2014. In addition, a number of illegal crossings have not been registered. The exact figure is unknown.

  Also in the context of the fight against terrorism, the Council concluded on 20 November 2015 that control at the external borders which are most exposed should be strengthened “in particular by deploying, when the situation so requires, rapid border intervention teams (RABITs) and police officers in order to ensure systematic screening and security checks”.

  In view of the critical situation that the EU is currently confronted with, the Presidency proposes that:

  • considerably more efforts should be made to prevent illegal border crossings (entry and exit) through the external “green land borders” and to ensure that external borders are crossed only at the border crossing points referred to in Article 4, subject to the exceptions in Article 4(2), of the Schengen Borders Code;
  • RABITs are deployed as necessary for that purpose. This is at present  particularly relevant for external land borders in relation to the Western Balkan countries route;
  • A Frontex operation at the northern borders of Greece be deployed without delay to address severe difficulties encountered with neighbouring countries.

  3. Increasing checks regarding illegal migration – Irregular migrants who have entered the Schengen area and have not been registered at their arrival should not be able to stay in that area undetected for long periods of time.

  The Presidency proposes that:

  • the possibilities for checking persons inside the Schengen area, including by the use of relevant databases, are fully exploited to ensure that irregular migrants are detected and registered and their cases processed.

  4. Addressing serious deficiencies in external border controls – Several Member States have recently reintroduced temporarily internal border control pursuant to Articles 23-25 of the Schengen Borders Code. Under these provisions, a Member State may not implement such controls for more than a total period of six months. A prolongation of this situation would require the adoption by the Council, upon a proposal from the Commission, of a recommendation in accordance with Article 26 of the Schengen Borders Code. Such recommendation may be adopted in exceptional circumstances to address a situation where a Schengen evaluation has identified persistent serious deficiencies relating to external border control and the measures referred to in Article 19a of the Schengen Borders Code are not effective. Where in such cases the overall functioning of the area without internal border control is put at risk, and insofar as the exceptional circumstances constitute a serious threat to public policy or internal security within the area without internal border control or within parts thereof, the period for the reintroduction of internal border control may be extended up to a total maximum of two years.

  On this basis, the Presidency:

  • proposes that the Council invites the Commission to consider presenting a proposal as appropriate pursuant to Article 26 of the Schengen Borders Code for a Council recommendation that one or more Member States decide to reintroduce border control at all or at specific parts of their internal borders;
  • considers that, at the same time, all possible measures should be taken aimed at strengthening the normal functioning of the Schengen area, in particular by reinforcing the control of external borders.

  

  

  

  

  

• China Captures Its "Victory Over Smog" With Dramatic Time Lapse Video

  After days of hazardous pollution forced people to wear masks and huddle indoors, residents of Beijing turned their attention to the mayor, Wang Anshun, and his bold vow last year to clear the air. As JapanTimes reports, Wang said, if pollution wasn’t brought under control by 2017, he would cut off his own head and present it to the country’s leadership. So, imagine his relief, when after pollution levels hit 20x WHO's risk limit, a cold front – as caught on tape below –  swept away the choking smog (and saved his neck).

   

   

  The smog surged in northern China on Monday during President Xi Jinping’s visit to Paris, where he vowed to work with U.S. counterpart Barack Obama and other world leaders to stem carbon emissions and fight climate change. The capital raised its pollution alert to orange — the second-highest level — for the first time in 13 months on Sunday, the same day that the Chinese government said it had met pollution-reduction targets for the year.

  Late Tuesday, winds began to flush the smog from the region and, by Wednesday morning, PM2.5 levels in Beijing had plunged to single digits. But the skies couldn’t clear before people began mocking local officials who had so frequently vowed to control the pollution.

  “The mayor has vowed on his own head to control the smog, but we still have to rely on the wind to control it,” Sichuan People’s Radio wrote on its official Weibo account.

  

  

  

  

  

• JeB SaNTa…

  

  

  

  

  

• Here's Why "Philanthropic" Mark Zuckerberg Will Place Facebook Shares In A For-Profit LLC

  Submitted by Mike Krieger via Liberty Blitzkrieg blog,

  Yesterday, all the media hoopla over Mark Zuckerberg’s announcement to “give away” 99% of his Facebook shares to philanthropic causes, came and went in the expected torrent of internet commentary. However, what you might have missed are the specifics around how he decided to safeguard those shares, and how unusual the for-profit LLC structure is for a charity.

  Bloomberg reports:

  The decision by Mark Zuckerberg and his wife, Priscilla Chan, to gradually give away 99 percent of their Facebook fortune is big news not just for the huge sum involved—about $46 billion—but for how the couple chose to achieve their philanthropic goal. Rather than set up a private foundation or charitable trust as Bill and Melinda Gates did, the Chan Zuckerberg Initiative will be structured as a limited liability corporation.

   

  It’s a highly unusual step for a massive philanthropy. “I’ve never seen someone set up an LLC exclusively for a philanthropic purpose before,” says Jane Wales, vice president of philanthropy and society at the Aspen Institute. “Normally they set up a foundation for the tax advantages of doing so.” Here are some significant ways that LLC status will shape what Zuckerberg and Chan do with their wealth.

   

  1. There won’t be limits on lobbying

   

  It seems clear the Chan Zuckerberg Initiative will put money to work in politics. Facebook, in its official description of its founder’s new LLC, noted that “making private investments and participating in policy debates” will be part of the mission. In a public letter Zuckerberg wrote to his newborn daughter, Max, he likewise emphasized an appetite for pushing a policy agenda: “We must participate in policy and advocacy to shape debates.” If the charitable venture had been set up as a traditional tax-exempt foundation—what is called a 501(c)(3)— it wouldn’t have freedom to lobby lawmakers or engage in other political activities. The Internal Revenue Service prohibits tax-exempt groups from “directly or indirectly participating in, or intervening in, any political campaign on behalf of (or in opposition to) any candidate for elective public office.”

  There you go. As many expected, it appears this move is less about charity, and more about ensuring that Zuckerberg, the oligarch, is able to frame U.S. government policy in any way that he, and his billions, so desire.

  It appears Zuckerberg has carefully studied the Warren Buffet playbook.

  

  

  

  

  

• China Services PMI Jumps To 4-Month High (And Drops Near 2015 Lows)

  Just like Chinese Manufacturing, the Services PMI surveys from official sources and Caixin contradict each other. Providng hope for every bull, bear, and greater fool, official government data suggests the services economy is doing great and stimulus is working as it jumps to 4-month highs. However, Caixin’s Services PMI shows a sudden drop near 2015 lows suggesting the need for moar stimulus now… take your pick, it’s all farce!

   

  

   

  Yuan (on- and off-shore) are both flat following the fixing but stocks are reversing yesterday’s divergence (CSI-300 and Shanghai flat to lower, ChiNext and Shenzhen jumping higher).

   

  Charts: Bloomberg

  

  

  

  

  

• Mexico Faces Its Biggest Corporate Default In Two Decades As Construction Giant Misses Bond Payment

  Back in August, we said that “Something Is Very Wrong At Mexico’s Largest Construction Company…” 

  “Let’s say, for argument’s sake, that you’re a big company in an emerging market and suddenly, a commodities crash for the ages and a “surprise” devaluation by the world’s engine for global growth and trade sends your country’s currency into a veritable tailspin,” we wrote. “If that were the case, just about the worst possible situation you could find yourself in would go something like this (adapted from Bloomberg): “Eighty-five percent of [your] backlog is denominated in the [home currency], which plunged to a record low this week [and] almost half of [your] debt is in foreign currencies, mostly dollars.”

  That was the situation facing Empresas ICA SAB which had just spooked bond investors by selling a key 3% stake in an airport operator for $56 million in order to pay down debt.

  Well, after turning in its worst quarter in nearly a decade and a half in October, Empresas ICA SAB missed an interest payment this week in what Bloomberg says is “just a prelude to what’s likely to be the biggest default in Mexico in at least two decades.” Some $31 million in debt service payments came due on Monday and the company elected to utilize a 30-day grace period to try and make the payment.

  “Under the terms of the indenture governing the 2024 Notes, the use of the 30-day grace period does not result in an event of default,” the company said, cheerfully. 

  Carlos Legaspy, a money manager who holds ICA bonds due in 2017, 2021 and 2024, wasn’t as optimistic: “Do I think they’re going to pay within 30 days? No. The 30 days are not going to make any difference.” Here’s a look at the 2024s:

  

  And the 2021s and 2017s:

  

  And as for the equity, well, no luck there either: 

  

  Moody’s is disgusted. “The use of the 30-day grace period does not constitute an event of default in itself, however, it reflects the precarious liquidity of the company and is a likely precursor to more formal refinancing process or distressed exchange,” the ratings agency said on Wednesday, on the way to downgrading ICA to Caa3, from B3. Here’s more: 

  The negative outlook reflects the ongoing uncertainty as the company enters this new phase of negotiations with its creditors, payment risk on upcoming interest and debt maturity payments, and the possibility that missed coupon payments beyond grace period results in a more formal debt restructuring filing. The outlook also entails the possibility that recovery for bondholders will not be commensurate within the Caa3 rating, leading to further downgrades. For example, recovery could be affected if the company launches a distressed exchange resulting in lower than anticipated recovery or if as a result of a distressed sale of assets the company is not able to raise cash enough to cover outstanding debt.

  S&P, who apparently concurs with Carlos Legaspy’s assessment of ICA’s prospects, also cut the company by three levels on Wednesday, noting that there’s a “high probablity” that the 30-day grace period will not help when it comes to avoiding default. 

  “The Mexico City-based builder, which hired Rothschild & Co. as a financial adviser in October, has struggled to shore up its finances as a collapse in oil prices prompted the government to cut spending,” Bloomberg goes on to say, adding that “the peso’s slide has swelled the company’s obligations.” Here’s how ICA compares to previous defaults in Mexico:

  

  “If ICA does not make payment within 30 days, it would be considered an event of default,” BoAML reminds us, before noting that what you’re likely to get is a cross-default on the 2017s and 2021s (shown above). For any BofA clients who may be concerned, don’t worry, your broker apparently has enough sense to avoid defaulted bonds: “we’re underweight on ICA’s bonds on liquidity concerns.”

  In the end, it will be haircut time for creditors and this will go down as just one more example of what happens when the EM growth story shrivels up and dies. We’ll close with another quote from Carlos Legaspy, who is aggravated at ICA’s handling of the liquidity crunch: 

  “It’s extremely frustrating. It shows that they’re kind of flying a little bit by the seat of their pants and that’s always not comforting.”

  

  

  

  

  

• Visualizing The Greatest Economic Collapses In History

  The very first major economic collapse in recorded history occurred in 218-202 BC when the Roman Empire experienced money troubles after the Second Punic War. As a result, bronze and silver currencies were devalued. As HowMuch.net depicts in the video below economic collapses date back thousands of years. While many countries today still feel the effects of the most recent Global Financial Crisis, it is important to note that economic troubles are not unique to the present-day, but rather date back to some of the oldest civilizations.

   

   

  Crisis by Type

  While no two crises are exactly the same, economic collapses can be categorized into the following types:

  • Fiscal: inability of the government to finance its regular activities

  • Credit: reduction in the general availability and accessibility of loans

  • Financial: value of financial institutions or assets suddenly drop

  • Currency: doubt as to whether a country’s central bank has enough reserves to maintain the country’s fixed exchange rate

  • Economic: country experiences sudden downturn brought on by a financial crisis

  • Hyperinflation: extremely rapid period of inflation, usually caused by fast printing of money

  • Supply Side Shock: unexpected event that changes supply of product, resulting in a sudden change in price

  • Speculative Bubble: spike in asset value with a particular industry caused by exaggerated expectations of future growth

  • Stock Market Crash: sudden decline of stock prices across a large part of the market

  The first collapse that occurred in the Roman Empire in the year 202 BC would be classified as a currency collapse. 235 years later, the Roman Empire experienced a financial crisis, caused by the decrease in land prices thereby making difficult for borrowers to pay back loans. As a result, interest loans from the wealthy became scarce.  

  Below is a look at some instances in which each of the other seven types of crisis above were experienced either globally or by a specific country.

  Fiscal: The European debt crisis has been ongoing since 2009 when Greece, Portugal, Ireland, Spain and Cyprus had trouble repaying their government debt.

  Credit: The Crisis of 1763 began in Amsterdam with the collapse of Leendert Pieter de Neufville and spread to Germany and Scandinavia.

  Economic: From 1050-1100, Europe experienced economic decline, mainly due to the Great Invasions. This economic collapse ends in the 12th century with innovations in agriculture and textiles.  

  Hyperinflation: From 235-285 AD, emperors in the Roman Empire devalued currency rather than make unpopular budget cuts.

  Supply Side Shock: In 1970, the world’s major industrial countries entered into an energy crisis, with countries facing substantial petroleum shortages, real and perceived, as well as elevated prices.

  Speculative Bubble: After several years of a booming internet industry, stocks began to sharply decline in 1999, affecting major economies, including U.S., Germany, Great Britain, and Italy.  

  Stock Market Crash: The Wall Street Crash of 1929, or Black Tuesday, was the most devastating stock market crash in the history of the U.S.

   

  Surviving Collapses

  Despite the devastating effects throughout time, economies were able to recover from multiple collapses. For instance, the Roman Empire experienced currency and hyperinflation crises over five centuries while various countries in Europe have endured a number of crises over the last millennium. Below is a list of countries ranked by the amount of crises survived per country.

  • 1 crisis: South Africa, Israel, Mexico, Indonesia

  • 2 crises: India, Chile, Thailand, New Zealand

  • 3 crises: Australia, Canada, Japan, Brazil, Ukraine, Latvia, Estonia, Lithuania

  • 4 crises: Argentina, Andorra

  • 5 crises: China, Russia, Romania

  • 6 crises: Algeria, Morocco, Libya, Tunisia, Sweden, Norway

  • 7 crises: Finland

  • 8 crises: Ireland

  • 9 crises: Macedonia, Albania, Bosnia and Herzegovina, Turkey, Bulgaria, Serbia

  • 10 crises: Croatia, Switzerland, Germany, Croatia, Cyprus, Slovenia

  • 11 crises: Austria, Greece, Netherlands

  • 13 crises: Spain, Italy, Portugal

  • 26 crises: United States

  With only 239 years of existence as a country, the United States has experienced double the number of crises as Spain, Italy, and Portugal, which are much older societies. This equates to approximately one crisis every 9 years! Over time, the United States developed a boom-to-bust economic cycle, commencing with the Panic of 1819 when a depression was caused by bank failures. These cycles vary with time and severity. Given the strength of the U.S. economy and sophistication of its capital markets, the U.S. is able to have shorter cycles by effectively adjusting policy when the economy expands and contracts. Under this cycle theory, one would expect the next U.S. economic collapse to occur in 2025, probably much sooner.   

  Patterns of the Past

  When the Industrial Revolution began in Europe in the 18th and 19th centuries, timing between economic collapses became notably shorter. Instead of having over 100-200 years of crisis-free periods, the 19th century began to see a sharp decline in the length of time, with a crisis occurring approximately once every decade. While the length of time has varied between collapses, it is evident that economic collapses became not only more frequent, but also more widespread. The first instance of a global crisis was experienced across Europe and the U.S. in 1873-1879 in which multiple countries experienced a worldwide price recession called the Long Depression. Over one hundred years later, stock markets around the world crashed during Black Monday, beginning in Hong Kong. Progress in technology and telecommunications has created greater accessibility among countries in the present-day. As a result, the ripple effects of events, both good and bad, spread faster and are sometimes unavoidable.

  Source: HowMuch.net

  

  

  

  

  

• Turkey's Geopolitical Value

  Submitted by Guillermo Valencia, founding partner of MacroWise

  Turkey’s Geopolitical Value

  “Who controls the food supply controls the people? who controls the energy can control whole continents? who controls money can control the world.”

        – Henry Kissinger

  Europe’s energy dependency

  Gas distribution is a powerful motive behind the Syrian war.

  The biggest gas importer in the world is the European Union (EU), which invests around 263 billion dollars a year in this energy resource. Main exporters to Europe are Russia and Norway.

  Due to the current Ukrainian conflict, dependency on Russia as the main gas supplier has become a risk for the national safety of the countries that comprise this political community.

  Avoiding dependence of gas coming from Russian is a top priority for the European Union

  The latter has exposed the need to build gas pipelines that are not under Russian control, reason why the European Union has been exploring alternatives to diversify the supply. Among their options, there are countries that have the world’s greatest gas reserves. On one hand, there are Eurasian countries like Iran and Qatar? on the other hand, there is the Caucasian region with territories such as Azerbaijan and Turkmenistan.

  

   

  The gas pipelines that would connect the Caucasus and Iran, and that are priority for the European Union are the following:

  Nabucco and Transcaspia: It connects Azerbaijan with Eastern Europe, passing through Turkey. This gas pipeline exists, but Azerbaijan’s reserves are not enough to cover the energy demand of the European Union. The construction of the transoceanic gas pipeline through the Caspian Sea would connect the supply from Turkmenistan and Kazakhstan with Europe. These countries barely make up 3% of global gas exports.

  Qatar-Saudi Arabia-Syria-Turkey: Qatar exports 11% of global gas. Building this gas pipeline will be a direct threat to Russia’s supremacy over the control of gas. Syria and Russia have been military allies since the Cold War. Furthermore, Syria’s government’s circle of power is comprised of Alawites, a Shiite sect. Iran is not only the Shiite epicenter, but also provides military support to Syria.

  Turkey, Saudi Arabia, Qatar, the United States, the European Union and other Gulf countries have supported several rebel groups against the regime of Bashar al-Asad, indirectly contributing to the strengthening of the Islamic State within the region.

  Islamic (Iran-Iraq-Syria-Lebanon): Iran has gas reserves comparable to Russia. Building a gas pipeline that goes through Iraq, Syria and Lebanon and ends in the Mediterranean is a diversification alternative for the European Union. The motives for the United States and the European Union to lift the economic embargo on Iran lies in its strategic value. In turn, the country has been asked not to enrich nuclear power plants.

  After the fall of Saddam Hussein (Sunni dictator), and the withdrawal of the United States’ troops from Iraq, a power void was left in this mostly Shiite country. Said void allowed for Iran’s geopolitical expansion and the creation of the Islamic State as a reactionary Sunnite force to the Shiite expansion in the region.

  The consequences of power’s hidden snag

  One of the consequences of these power struggles was the strengthening of the Islamic State, a Frankenstein that is out of its creators’ control, and is now a common enemy to the U nited States, the European Union, Russia and Iran. Turkey, Saudi Arabia, Qatar and other Persian Gulf countries have been pressured by their western allies to fight this group. Nonetheless, these countries have common interests with the Islamic State within Iraq and Syria.

  Low oil prices and geopolitical + Iranian deal could make the Gulf countries currency pegs very fragile.

  Turkey is the next key region in this conflict, since the only alternative gas pipeline that supplies Russia, and comes from Asia (Nabucco), passes through Turkey. Future conflicts between Turkey and Russia will be part of the Russian strategy within the region. The only difference is that Turkey belongs to NATO and scaling the conflict will have global repercussions. Beyond predicting the next conflict, the key point is that the geopolitical risk is not priced in the region. Saudi Arabia, Kuwait, Qatar, credit default swaps (CDS) below 100 bps and Turkey and Russia CDS at 270 bps levels are not reflecting the geopolitical tension in the region.

  

  

  

  

  

• "Equities Peak 12-18 Months After A Peak In Margins; We Are Now 15 Months After The Peak In Margins"

  Two months ago, we looked at historical examples of what happens with the US economy any time corporate profit margins suffer a drop as large as the one experienced over the past 12 months when margins have plunged by (at least) 60 bps. The outcome: a recession on 5 out of 6 prior occasions.

  

   

  And while the economy is already feeling the recessionary impact of sliding margins as predicted in early October, with the manufacturing ISM printing at its lowest level since the recession, an even more important question is what happens to the stock market now that margins have peaked. On this topic, most have been mum with the usual “answer” being that margins will keep rising. Alas, as even Goldman recently showed they won’t.

  So assuming margins have peaked in this cycle, what does that mean for stocks? For the very simple answer we go to Credit Suisse according to which “equities peak 12-18 months after a peak in margins.” 

  Where are we now? “we are now 15 months after the peak in margins.”

  

  So, give or take three more months?

  

  

  

  

  

• The One Record That Was Broken On Black Friday That Mainstream Media Will Not Be Excited About

  While overall retail sales disappointed following President Obama's impassioned plea to Americans that the world is in grave danger from terrorists but they should go about their usual business of spend-spend-spend-ing on Black Friday, it appears they did buy one thing. As USA Today reports, more Americans had their backgrounds checked purchasing guns on Black Friday than any day on record, according to data released by the FBI this week.

  Friday's purchases came the same day as the mass shooting incident in Colorado Springs that killed three people and injured nine others.

  On Saturday, President Obama called for tighter controls of "weapons of war" in the wake of the Planned Parenthood shooting.

  "This is not normal," Obama said. "We can't let it become normal. If we truly care about this — if we're going to offer up our thoughts and prayers again, for God knows how many times, with a truly clean conscience — then we have to do something about the easy accessibility of weapons of war on our streets to people who have no business wielding them. Period. Enough is enough."

  As USA Today reports,

  The National Instant Criminal Background Check System processed 185,345 requests on Nov. 27, one of the largest retail sales days in the country.

   

  "This was an approximate 5% increase over the 175,754 received on Black Friday 2014," wrote Stephen Fischer, the FBI's chief of multimedia productions. "The previous high for receipts were the 177,170 received on 12/21/2012."

   

  Previous spikes for background checks, conducted before a gun buyer can obtain a firearm, occurred after prominent mass shootings, like in December 2012 in the wake of the Sandy Hook Elementary School shooting.

  *  *  *

  It appears Thanksgiving is a popular time in America to reaffirm the right to bear arms as other Black Friday shopping days in 2014, 2013 and 2012 occupied the FBI's "top 10" list of the most background checks processed in a 24-hour period.

  

   

  But the overall trend of rising background checks continues…

  

   

  *  *  *

  Of course, today's mass shooting in San Bernardino, CA already brought comments from Hillary…

  I refuse to accept this as normal. We must take action to stop gun violence now. -H https://t.co/SkKglwQycb

  — Hillary Clinton (@HillaryClinton) December 2, 2015

  

  

  

  

  

• The Deep State & The War On Cash

  Submitted by Bill Bonner of Bonner & Partners (annotated by Acting-Man.com's Pater Tenebrarum),

  An Attention-Grabbing Headline

  “The first shot in the War on Cash?”

  The headline caught our attention. We’d just finished researching and writing about the “Deep State” for the latest issue of our monthly publication, The Bill Bonner Letter.

  This is something you’re likely to hear more about. The Deep State describes the way the U.S. government really works, rather than the way it’s supposed to work.

  Over the years – hardly noticed by the press or the public – a group of insiders has taken control of Washington.

   

  

  Originally the term “Deep State” was coined to describe various anti-democratic coalitions within the political system of Turkey (Turkish: derin devlet). In them meantime the term is widely used to describe all types of “state-within-the-state” type arrangements, the real power behind the throne, so to speak.

   

  Some of them are familiar government hacks and politicians. Some, largely anonymous, are in the private sector. And some represent foreign governments, foreign businesses (notably banks), and foreign organizations.

  These zombies and cronies – who number in the thousands – have much more power and authority than 100 million voters. Research shows that if they want legislation, they get it.

  Voters, on the other hand, get what they want only rarely… and probably only because the insiders want the same thing. The insiders get the money, too. The tens of trillions of dollars diverted into boondoggle bailouts, QE, and ZIRP, for example – they had to go to someone.

  And now the Deep State is setting itself up to get even more…

   

  

  Now you know why it had such large eyes and such big teeth …

   

  Two Kinds of “Cash”

  Dr. Matthew Partridge in our London office reports for Money Week magazine that a small Swiss bank has become the first retail bank in the world to charge customers negative interest on their deposits.

  A number of central banks – including the Swiss National Bank – have already taken benchmark interest rates below zero. But, beginning next year, Alternative Bank Schweiz (ABS) will be the world’s first bank to pass those negative rates on to customers.

   

  

  Alternative Bank Schweiz is a so-called “sustainable” bank that tries to save the planet by funding all sorts of “green” and “ethical” investments. The “ethical investment” fad is in our opinion largely based on exploiting people’s gullibility (the same principle is at work in expensive bottled water and many “bio food” items). This is not meant to cast aspersions on ABS specifically, since there exist of course also organizations and individuals in this field who are genuinely trying to do good. We are instinctively wary of do-gooders and world improvers though, as they usually either strive to enlist the coercive power of the State or thrive on exploiting the innate guilt of first world populations (guilt over having it better than others and allegedly destroying the planet in the process).

   

  In a letter to its customers, ABS said it would charge account holders 0.125% a year to hold their “cash” deposits to protect its profit margins. And anyone with 100,000 Swiss francs ($97,316) or more on deposit will have to pay 0.75% a year. Let’s stop here for a moment and clarify…

  There are “cash deposits” and there is “cash.” Cash deposits are an oxymoron. If you say you have cash in the bank, you are mistaken. The bank doesn’t really hold “your” cash. It owes you money. If it goes broke, you’ll stand in line with other creditors to get it (subject to whatever guarantees may be in place… and however well they may work).

  Cash in hand is different. It is physical. Paper. You can do what you want with it. And you don’t pay a negative interest rate. Which is why the feds want to ban cash. They say it will make it easier for them to stimulate the economy.

  As long as you can hold physical cash, you have an easy way to escape negative interest rates: You just take the money out of the bank and put it in your home safe. But if physical cash is illegal, you have no choice. You have to keep “your money” on deposit at the bank… and take whatever negative rate the bank imposes on you.

   

  

  Sheer insanity: the Swiss National Bank has set three month LIBOR at an average of minus 75 basis points.

   

  Total Control

  Of course, the idea that taking away your money will stimulate economic growth is ridiculous. As former banker, hedge fund manager, and expert on the fiat money system Warren Mosler recently told Bonner & Partners Investor Network subscribers:

  “First, central bankers have got the interest rate thing backward. They think lowering rates will somehow stimulate the economy.

   

  But negative interest rates are just a tax. You start off with a certain amount of money – say, $100. If the rate is negative 1%, then you have $99 at the end of a year.

  Isn’t there some theory that says when people’s money goes away, and they have less, they spend less?”

  If negative rates don’t really encourage spending, why bother? This brings us to the real danger of banning cash… and perhaps the real reason the feds want to do it – more control.

  Reports William N. Griggs at The Free Thought Project under the headline “Drone Pilots have Bank Accounts and Credit Cards Frozen by Feds for Exposing U.S. Murder”:

  “For having the courage to come forward and expose the drone program for the indiscriminate murder that it is, four vets are under attack from the government they once served.

  The U.S. Government failed to deter them through threats of criminal prosecution, and clumsy attempts to intimidate their families. Now, four former Air Force drone operators-turned-whistleblowers have had their credit cards and bank accounts frozen, according to human rights attorney Jesselyn Radack.

   

  ‘My drone operators went public this week and now their credit cards and bank accounts are frozen,’ Radack lamented on her Twitter feed. This was done despite the fact that none of them has been charged with a criminal offense – but this is a trivial formality in the increasingly Sovietesque American National Security State.”

   

  

  The four former drone pilots and whistle-blowers whose electronic financial life was simply erased as punishment for their audacity to inform the public about the murderous practices of the drone program. No court order or indictment was required – the State simply flipped a switch, depriving them of the means to defend themselves. Land of the Free, indeed.

   

  If we are forced to keep our money in the bank… and cash is outlawed… the Deep State will have total economic control over us all.

   

  

  

  

  

  

• UK Passes Vote To Begin Syria Airstrikes

  And just like that another country has decided it would send its fighter planes in the already congested skies above Syria, when moments ago the UK parliament decided, in a 397 to 223 vote, to begin airstrikes on Syria.

  According to the vote, U.K. lawmakers backed Prime Minister David Cameron’s plan to extend air strikes against Islamic State from Iraq into Syria, after the opposition Labour Party split over whether to support military action.

  The House of Commons in London voted in favor of a motion by Cameron’s government authorizing action. Lawmakers had earlier rejected an amendment that would have blocked the use of military force.

  The 10 1/2 hours of debate saw many tetchy speeches and interventions, but the best received came from Labour foreign-affairs spokesman Hilary Benn, ending the debate by taking the opposite side of the argument from his leader, Jeremy Corbyn, a career-long opponent of military interventions.

  “We must now confront this evil,” Benn said, as Corbyn sat in silence beside him. “It is now time for us to do our bit in Syria.”

  What the RAF’s fighters will instead confront upon their campaign, which is set to begin imminently, is a lot of Russian dogfighters, each armed with Air to Air missiles thanks to Turkey, making the probability of a deadly chance encounter above Syria that much higher.

  

  

  

  

• 2 Suspects Dead (1 Male, 1 Female), 3rd Detained After Mass Shooting Leaves 14 Dead, 17 Wounded In San Bernardino

  Update 10: AP reports, a law enforcement official says a workplace dispute probed as possibility in California shooting. Officials say gunmen were probably American citizens "not terrorists."

  NY Daily News has a few thoughts…

  Fusillade à #SanBernardino: la une du @NYDailyNews https://t.co/1xc5TwxTDK pic.twitter.com/HokRyq29jg

  — Carole Aoun (@caroleaoun) December 3, 2015

  Update 9: Police confirm an explosive device was found inside the building where the shooting took place. 2 suspects dead (1 male, 1 female), 3rd person detained after running from SUV shootout scene (unclear if involved in shooting). 1 officer wounded.

  #SanBernardino police chief: Third person was seen running from SUV scene, person is detained. Unknown if involved pic.twitter.com/oFniWLpGIu

  — BuzzFeed News (@BuzzFeedNews) December 3, 2015

  1 male, 1 female suspect dead after #SanBernardino shooting : https://t.co/z2gq7cVtZR pic.twitter.com/xvNoMDgUHZ

  — ABC 4 News (@abc4utah) December 3, 2015

  #SanBernardino Shooting: Bomb squad continues to investigate possibly-explosive device at Inland Regional Center pic.twitter.com/Hv3O55GTMS

  — Intl. Business Times (@IBTimes) December 3, 2015

  Update 8: Authorities are serving search warrants at a building in Redlands, where on of the suspects may be originally from.

  Authorities are serving search warrants at a building in Redlands, @SereneOnScene reports. #breaking #pursuit LIVE: https://t.co/d0126ZB5CX

  — CBS Los Angeles (@CBSLA) December 3, 2015

  Update 7: The San Bernardino Police chief Burguan tweets that "suspects are down" and one officer is wounded. Unclear if any are still on the loose.

  Suspects are down, one officer wounded. Details still unfolding.

  — Chief Jarrod Burguan (@SBPDChief) December 3, 2015

  And here is an audio recording of the gun battle which took place earlier:

  We just received this AUDIO capturing some of the gun battle sent by a witness on #snapchat. #SanBernardino pic.twitter.com/xE4546XHDs

  — Gadi Schwartz (@GadiNBCLA) December 3, 2015

   

  Update 6: Still more conflicting information, this time from the chief of police according to whom while 2 suspects are being "dealt with" (which supposedly means one killed and one down), while one is still possibly at large. The police is currently searching for the third suspect.

  UPDATE: Police in #SanBernardino: 2 suspects down after police chase, possibly one outstanding. "still very active situation."

  — Breaking News Feed (@pzf) December 3, 2015

  MORE: 1 possible suspect still outstanding in #SanBernardino shooting: https://t.co/cbh6uXffkp pic.twitter.com/EHYdlj8qs3

  — ABC News (@ABC) December 3, 2015

  Update 5: the latest from NBC confirms that while one suspect in custody, the number of suspects shot has grown to two which may account for all three of the original suspects reported at the original crime scene.

  BREAKING: 1 suspect in custody, 2 shot in #SanBernardino shooting that killed at least 14 https://t.co/jUael0Kzyk pic.twitter.com/GnwmVplfl6

  — NBC News (@NBCNews) December 2, 2015

  There is a conflicting report according to which one suspect is still at large and has barricaded in a nearby home.

  #BREAKING: One Suspect Still at Large in #SanBernadino

  — Breaking911 (@Breaking911) December 3, 2015

  San Bernardino police: "I believe there is still possibly a suspect outstanding"

  — Breaking911 (@Breaking911) December 3, 2015

  According to a third report, a pipe bomb was recovered from the suspect SUV.

  MORE: Law enforcement officials say pipe bomb was recovered from suspects in SUV https://t.co/ZKzS7ojK0f pic.twitter.com/iBopyUorxK

  — RT America (@RT_America) December 2, 2015

   

  Update 4: According to CBS, one of the suspects is now down and another one is in custody, while a SWAT team prepares to search the suspect's bullet-ridden SUV

  BREAKING: Police say one suspect down, one in custody, @CBSLA reports; SWAT team has yet to approach vehicle. pic.twitter.com/rRb10HFKfi

  — CBSN (@CBSNLive) December 2, 2015

  UPDATE: Armored shield approaching dark-colored SUV. #breaking #pursuit LIVE: https://t.co/d0126ZB5CX pic.twitter.com/K3ttso3UCz

  — CBS Los Angeles (@CBSLA) December 2, 2015

   

  Here's Obama:

  Watch: @POTUS speaks to @CBSNews on the shooting in San Bernardino. https://t.co/pA56EzrzUW https://t.co/SO0cE5nfCX

  — The White House (@WhiteHouse) December 2, 2015

  Update 3: High speed chase underway on freeway and reports of arrests made. This has culminated with a shoot out with the police, in which a black SUV probably belonging to the suspect has been perforated by gunfire with helicopter cameras showing that at least on suspect has been shot while an officer is also down after the suspect ran away.

  

   

  Heavily shot-up SUV…

  

   

  Someone is down:

  I haven't seen anything like this on Live TV since the Hollywood Bank Shootout. San Bernardino just had a shootout. pic.twitter.com/DoJSnSj9cz

  — Hi_I'm_RICHIEEEE (@rizman1) December 2, 2015

  Police  described the case as "a domestic terrorist type situation" at the moment, and a Bomb Threat Reported at Loma Linda University Medical Center in San Bernadino.

  They got somebody #SanBernardino More shots fired! They are calling for EMTS pic.twitter.com/WR7yOtbzFM

  — Blake Dearing (@DeletedElite) December 2, 2015

  Just north of the 10 freeway, on San Bernardino Ave., there have been shots fired between officers and suspects. pic.twitter.com/KoPJ1JSmbI

  — reported.ly (@reportedly) December 2, 2015

  Update 2: Police confirm:

  • *POLICE SAY UP TO THREE PEOPLE OPEN FIRE IN CALIF.
  • *POLICE SAY UP TO 14 PEOPLE MAY BE DEAD IN CALIF.
  • *POLICE SAY UP TO 14 PEOPLE MAY BE WOUNDED

  Update 1: The three suspects are believed to be armed with AK-47-type weapons, a local law enforcement official told CNN

  Police storming Inland Center earlier…

   

  Looks like @DHSgov Homeland Security is circling the #SanBernardino area. pic.twitter.com/h63V7GXIZQ

  — Mr. Green (@Mario_Greenly) December 2, 2015

   

  As we previously noted,

  Police are investigating a report of shots fired in San Bernardino. As CBS LA reports, San Bernardino Fire officials are reporting at least 20 victims and 12 reported casualties in a shooting in the 1300 block of South Waterman. Authorities are advising all motorists to stay away from the area around the Inland Regional Center, a center serving people with developmental disabilities in San Bernardino and Riverside counties.

  The Inland Regional Center is a sprawling three-story center serving people with developmental disabilities in San Bernardino and Riverside counties. The non-profit private agency, whose site crashed due to traffic due to news of the shooting, employs nearly 700 people and serves more than 30,000 residents with developmental disabilities for ages ranging from infants to seniors 60 years and older, according to the center’s Facebook page.

  Investigators were searching the building and have yet to clear it. Police said there were reports of one to three shooters involved.

  Marcos Aguilera's wife was in the building when the gunfire erupted. He said a shooter entered the building next to his wife's office and opened fire.

  "They locked themselves in her office. They seen bodies on the floor," Aguilera said, adding that his wife saw ambulances taking people out of the building on stretchers.

  According to the latest update, police confirm three shooters at large wearing masks, body armor and armed with rifles.

  The ATF and the FBI have arrived on the scene of the shooting.

  San Bernardino is deploying heavily armed cops to universities, hospitals, and Planned Parenthood.

  According to the latest news, the Waterman discount mall in San Bernardino, CA has been evacuated.

  *  *  *

  Live Feeds…

  ABC Breaking News | Latest News Videos

  Police looking for 3 white males dressed in military gear. At least 20 injured (and latest reports say 12 dead).

  SBFD units responding to reports of 20 victim shooting incident in 1300 block of S. Waterman. SBPD is working to clear the scene.

  — San Bernardino Fire (@SBCityFire) December 2, 2015

  Hard Closure at Orange Show Rd/ Waterman and Park Center Circle in San Bernardino. AVOID THE AREA POLICE ACTIVITY!

  — SB County Sheriff (@sbcountysheriff) December 2, 2015

  .@SanBernardinoPD has confirmed an active shooter in the area of Orange Show Rd/ Waterman Ave near Park center. #SBCSD assisting.

  — SB County Sheriff (@sbcountysheriff) December 2, 2015

  #Breaking Eye witness: A man came in started shooting, she and a group hid inside her office, they saw multiple bodies on the ground.

  — Natasha Fatah (@NatashaFatah) December 2, 2015

   

  The scene of the crime

  

   

  Police presence is building…

  

  

  

  

  

  #SanBernardino La police recherche 3 tireurs en tenue militaire. Au moins 12 morts pic.twitter.com/X0aomkOqpv

  — Breaking3zero (@Breaking3zero) December 2, 2015

  #BREAKING: Active shooter on loose in San Bernardino. Reports of 20 victims. https://t.co/jD63swrFzF #kprc2 pic.twitter.com/5KRPj6z6UH

  — KPRC 2 Houston (@KPRC2) December 2, 2015

  #SanBernardino pic.twitter.com/CSq4SQgtFy

  — Bradd Jaffy (@BraddJaffy) December 2, 2015

  BREAKING: Reports for as many as 12 people fatally shot in San Bernardino… https://t.co/UVR343oIRD pic.twitter.com/7CK9LvB5yU

  — ABC 7 Chicago (@ABC7Chicago) December 2, 2015

  Putting today's shooting in context, there have been 334 days and 351 mass shootings so far this year, not including this one.

  

   

  And here is Hillary

   

   

  I refuse to accept this as normal. We must take action to stop gun violence now. -H https://t.co/SkKglwQycb

  — Hillary Clinton (@HillaryClinton) December 2, 2015

  

  

  

  

  

• Syria Decoded: Explaining The Conflict In One Infographic

  Decoding the war in Syria is not for the faint of heart. 

  The situation on the ground is, and always has been, impossibly convoluted. The hodgepodge of rebels, militants, and jihadists battling Assad’s army for control of the country would be confusing enough on its own without having to take into account the myriad state sponsors that fund, arm, and train the opposition. 

  In addition to covert (and we use that term loosely because at this juncture, the fact that the US and its regional allies are backing the Sunni extremists operating in the country is just about the worst kept secret in the geopolitical universe) support, numerous world powers are engaged in overt military ops. Russia is in the skies above western Syria while the US, France, and (soon) Britain are flying in the east. Turkey conducts bombing runs along its border with Syria and Iran has a heavy troop presence operating under cover of Russian airstrikes. 

  Meanwhile, Ankara has been accused of enabling the Islamic State crude trade and it seems at least possible that ISIS oil eventually ends up in Israel as part of the same cargoes that contain Kurdish oil.

  Finally, the YPG is waging an honest war against Islamic State and would probably be even more successful than they already are if their “allies” in Washington were serious about the fight. 

  Oh, and al-Qaeda is around too, surviving off aid to al-Nusra from Saudi Arabia and Qatar. 

  For those looking to make sense of it all, we present the following infographic which should go some ways towards untangling what has become one of the most complex, convoluted wars in recent memory.

  

  

  

  

  

  

• Stocks Plunge Back To Bonds' Reality Amid Crude Carnage

  "Do Not Panic"…

  It appears 20 victims is just not enough to warrant a massive short-squeeze like Paris!!

  Stocks caught down to bonds' reality…

  

   

  And some longer-term (post-FOMC) context…

  

   

  Before the US opened though, China saw massive divergence in performance…

  

   

  This was the worst day for stocks in 3 weeks with high-flyer Trannies the biggest loser (as crude collapsed)…

  

   

  Futures show the action a little clearer…

  

   

  Leaving all major indices (apart from the NASDAQ's late save) in the red on the week…

  

   

  Stocks decoupled from USDJPY as ADP hit and tumbled with Crude…

  

   

  Treasury yields were mixed with the long-end flat and short-end higher (the belly was worst with 5Y +4.5bps, 30Y unch, 2Y +3bps)

  

   

  The USD jumped to 12 year highs after ADP hit but rapdily slipped lower during Crude's collapse, Yellen's speech, and the mass shooting…

  

   

  Commodities saw a gap down after ADP reported and the USD surged…

  

   

  This was WTI's worst day in 2 months and lowest close since August 27th…

  

   

  Charts: Bloomberg

  

  

  

  

• The End Of Keynesian Orthodoxy

  Submitted by Jeffrey Snider via Alhambra Investment Partners,

  On November 9, the OECD issued its twice-yearly Economic Outlook statbook, updated for projections into Q3 for most national economic accounts. Despite past enthusiasm for global prospects in 2015, the narrative has not-so-subtly shifted, a major transformation coming from an orthodox bastion like the OECD.

  Global growth prospects have clouded this year. Global growth has eased to around 3%, well below its long-run average. This largely reflects further weakness in emerging market economies (EMEs). Deep recessions have emerged in Brazil and Russia, whilst the ongoing slowdown in China and the associated weakness of commodity prices has hit activity in key trading partners and commodity exporting economies, and increased financial market uncertainty.

   

  Global trade growth has slowed markedly, especially in the EMEs, and financial conditions have become less supportive in most economies.

  It is difficult to simply accept these limitations lacking comprehensive causative processes put forth, but the fact that they are at least being recognized represents a (small) step forward. These are portrayed as if they are “things” of themselves; commodity price collapse, “financial market uncertainty”, global trade growth collapse, etc. Despite the unexamined “mystery” of all those, or maybe because of that intentional obtuseness, the OECD still expects global growth to accelerate in 2016 and really 2017. That is, of course, the same pattern that plays out year after year after year, only 2015 has already held more than the typical amount of setbacks and “unconnected” financial mysteriousness.

  To this point, the organization is unwilling to see anything more than a visible economic problem for EM’s alone. Brazil and Russia have their recessions, and China its unexplained slowdown, but the rest of the “developed” world is expected to remain rather steady in growth (well, except Canada perhaps?) no matter all the global turmoil. It is the stated “risks”, however, that suggest much about the inner turmoil at these economic outposts:

  Growth would also be hit in the euro area, as well as Japan, where the short-run impact of past stimulus has proved weaker than anticipated and uncertainty remains about future policy choices.

   

  There are increasing signs that the anticipated path of potential output may fail to materialise in many economies, requiring a reassessment of monetary and fiscal policy strategies.

  So while the OECD isn’t quite ready to throw in the towel globally, they are, significantly, at least contemplating how much of their baseline is already wrong and inapplicable. This is a marked and remarkable shift from the OECD position from just before the “dollar’s” mid-2014 turn. From the May 2014 version:

  On the other hand, the pace of growth in the major emerging market economies has slowed. Part of this deceleration is benign, reflecting cyclical slowdowns from overheated starting positions – the growth rates now seen in China are undoubtedly more sustainable from both economic and environmental perspectives than the double-digit pace of a few years ago. However, managing the credit slowdown and the risk that built up during the period of easy global monetary conditions could be a major challenge.

   

  The likelihood of some of the most worrisome events that have preoccupied markets and policymakers in recent years has diminished. Risks are overall better balanced although still tiled to the downside. Financial tensions in emerging markets are one risk that could blow the global recovery off course and have bigger spillovers than anticipated It is not the only one. Falling inflation in the euro area could turn into deflation. Geopolitical risks have also increased since the start of the year.

  Despite suggesting those “risks” to the global economic forecast, and thus providing again recognition that even the OECD saw the unifying financial or monetary element, the “dollar”, as early as then, they went on, as always, to just dismiss them in their projections.

  Global growth and trade are projected to strengthen at a moderate pace through 2014 and 2015.

   

  Activity in the OECD economies will be boosted by accommodative monetary policies, supportive financial conditions and a fading drag from fiscal consolidation

   

  Growth in many of the large emerging market economies (EMEs) is expected to remain modest relative to past norms, with tighter financial and credit conditions and past policy tightening taking effect and supply-side constraints also damping potential ouput.

  And worst of all, the usual orthodox nonsense and buzzwords:

  Normal demand-side accelerator-type mechanisms, healthier corporate balance sheets and reduced uncertainty should help business investment to strengthen gradually, and thereby push up trade intensity.

  Needless to say, there is far too much of financial and economic nightmare in 2015 to be so complacent about not just 2017 but just the rest of this year – Canada, Brazil and Japan already fraying the ragged edges of even the latest outlook. That also includes the US as it has almost assuredly fallen into a manufacturing recession already. From this, we are supposed to ignore just how well that fits within this damning global economic context. The only way to project gradual global recovery is if the US manufacturing recession is a “thing” all its own, unrelated to any of the innumerable other “things” that have shown up this year; commodity price collapse, “financial market uncertainty”, global trade growth collapse, etc.

  Recent manufacturing readings for the US have only confirmed the recessionary presence, meaning it is left to individual subjectivity as to how to place it within meaningful context.

  The U.S. manufacturing sector contracted in November, falling to its worst levels since June 2009, when the economy was still in the midst of a recession, according to an industry report released on Tuesday.

   

  The Institute for Supply Management (ISM) said its index of national factory activity fell to 48.6, the first time the index has been below 50 since November 2012, after reading 50.1 in October. The reading was for expectations of 50.5, according to a Reuters poll of 77 economists.

  And how does CNBC provide said meaning?

  Frugal consumers are also holding back growth.

  

  From the OECD’s perspective, these were all just “risks” in 2014 and downplayed at that. Now that they are no longer risks but reality, and much worse reality than when even contemplated as risk, they are still treated as just risks? Such confusion stems from the anti-scientific process at the heart of economics. The discipline starts with a predetermined endpoint and then works backwards to fill in commentary and meaning. In other words, Janet Yellen says the economy will be terrific next year (after saying the same last year) and that is the defining quality for everything from there to now. Anything that gets in the way of reaching that future goalpost is “transitory” or an anomaly – no matter how regular these aberrations have become.

  In fact, they are everywhere all over the globe and demonstrate what should be a quite alarming coincidence and even coordination. How is it that the US PPI would so closely track the Chinese version if everything contained within each are nothing more than isolated variances of no particular concern, especially in the global context? If nothing else, it is just blind common sense that would realize even generically the desperate coincidence of so many financial irregularities this year as the global economy, and especially global trade, follows them. Again, these are no longer just risks.

  The resistance to such an awakening is understandable if still lamentable. If recession is truly the looming assurance, as it increasingly appears, that would mean not just the end of the recovery but the end of “accommodation” as a given force. In other words, Janet Yellen and the OECD start backwards from their endpoint because of their unshakable faith in monetarism, a faith that actually defines how they think an economy does work (and how they produce the core assumptions in their models); should that path from here to there completely unravel, so, too, does their assumed power and philosophy. So they and the media look upon what has already unraveled and claim instead that it has not; the recovery remains intact even though it has ended in a larger and larger portion of the world, including the US.

  

  

  

  

  

Digest powered by RSS Digest