Today’s News November 20, 2015

• Caught On Tape: Russian Air Force Destroys Dozens Of ISIS Oil Trucks

  Earlier today we revisited Islamic State’s most important revenue stream: crude oil.  

  When US attack planes destroyed 116 ISIS oil trucks on November 16 (allegedly after dropping leaflets warning “innocent” drivers to scatter), it purportedly marked a shift in strategy. “Somehow”, the Obama administration had grossly underestimated the proceeds ISIS derives from the illicit oil trade while overestimating the damage US warplanes had inflicted on the group’s oil infrastructure. 

  Additionally, Bloomberg suggests the Pentagon routinely declined to take out tanker trucks for fear of collateral damage. “None of these guys are ISIS. We don’t feel right vaporizing them, so we have been watching ISIS oil flowing around for a year,” Michael Knights, an Iraq expert at the Washington Institute for Near East Policy told Bloomberg.

  There are a couple of things that should jump out at you there. First, it’s not exactly clear why it matters that the administration “underestimated” the amount of revenue ISIS derives from oil. That is, the difference between $100 million and $400 million per year would be quite meaningful if you were talking about a corporation here, but this is a terrorist group. Sure, it matters that they’re making four times more than you thought when it comes to assessing their operational capabilities (the more money you have, the more you can do), but it shouldn’t matter when it comes to formulating a strategy to cripple their ability to produce oil. It’s not like you can say “oh, well they’re only making $100 million per year, so that’s fine.. now if it’s $400 million, that’s where we’ll have to draw the line.”

  Second, since when is the US worried about collateral damage when it comes to taking out “terrorists?” As The Intercept laid bare in a series of recent investigative reports, 90% of those killed in drone strikes aren’t the target. It’s not as if the CIA isn’t aware of that statistic each and every time they pull the trigger on an MQ9 Reaper. 

  So sure, perhaps the US overestimated the effect its airstrikes were having on Islamic State’s oil production capabilities and perhaps The Pentagon was concerned with killing innocent truck drivers, but it could also be that, as Sergei Lavrov suggested earlier this week, the US has until now intentionally avoided hitting ISIS where it hurts in order to keep them in the game and ensure they can still be effective at destabilizing Assad. If you cut off the oil trade, they lose the ability to battle the regime.

  In any event, there are other pressing questions about ISIS and oil and we encourage you to read more in “The Most Important Question About ISIS That Nobody Is Asking,” but for now, we turn to Russia and The Kremlin’s efforts to dent Bakr al-Baghdadi’s wallet.

  According to  Russian General Staff spokesman Colonel General Andrey Kartapolov, “around 500 fuel tanker vehicles transporting illegal oil from Syria to Iraq for processing have been destroyed by Russia’s Air Forces.” 

  “In recent years, Islamic State (IS, formerly ISIS/ISIL) and other extremist groups have organized the operations of the so-called ‘pipeline on wheels’ on the territories they control,” Kartapolov continued, adding that “in just the first few days, [Russian] aviation has destroyed 500 fuel tanker trucks, which greatly reduced illegal oil export capabilities of the militants and, accordingly, their income from oil smuggling.” 

  Without further ado, the video from the Russian Defense Ministry:

  

  

  

  

  

• How Islamic Extremism Was Born

  Submitted by Ben Norton via Salon.com,

  

  President Ronald Reagan gestures while talking to Burhaneddin Rabbani, a spokesman for the Afghan Resistance Alliance, at the White House in Washington, June 16, 1986. (AP Photo/Dennis Cook)

  History takes no prisoners. It shows, with absolute lucidity, that the Islamic extremism ravaging the world today was borne out of the Western foreign policy of yesteryear.

  Gore Vidal famously referred to the USA as the United States of Amnesia. The late Chinese Premier Zhou Enlai put it a little more delicately, quipping, “One of the delightful things about Americans is that they have absolutely no historical memory.”

  In order to understand the rise of militant Salafi groups like ISIS and al-Qaida; in order to wrap our minds around their heinous, abominable attacks on civilians in the U.S., France, Syria, Iraq, Lebanon, Nigeria, Turkey, Yemen, Afghanistan and many, many more countries, we must rekindle this historical memory. 

  Where did violent Islamic extremism come from? In the wake of the horrific Paris attacks on Friday, November the 13, this is the question no one is asking — yet it is the most important one of all. If one doesn’t know why a problem emerged, if one cannot find its root, one will never be able to solve and uproot it. 

  Where did militant Salafi groups like ISIS and al-Qaida come from? The answer is not as complicated as many make it out to be — but, to understand, we must delve into the history of the Cold War, the historical period lied about in the West perhaps more than any other.

  How the West cultivated Osama bin Laden

  We needn’t reach back far into history, just a few decades.

  A much-circulated photo of an article published in British newspaper the Independent in 1993 exemplifies the West’s twisted hypocrisy. Titled “Anti-Soviet warrior puts his army on the road to peace,” it features a large photo of Osama bin Laden, who, at the time, was a close Western ally.

  

  The newspaper noted that bin Laden organized a militia of thousands of foreign fighters from throughout the Middle East and North Africa, and “supported them with weapons and his own construction equipment” in their fight against the USSR in the 1980s. “We beat the Soviet Union,” bin Laden boasted.

  The mujahedin, this international Islamic extremist militia organized and headed by bin Laden, is what eventually morphed into both al-Qaida and the Taliban.

  “When the history of the Afghan resistance movement is written,” the Independent wrote, “Mr Bin Laden’s own contribution to the mujahedin… may turn out to be a turning point in the recent history of militant fundamentalism.”

  Portraying bin Laden in a positive light, less than eight years before he would help mastermind the largest terrorist attack on American soil in decades, the British publication claimed that the “Saudi businessman who recruited mujahedin now uses them for large-scale building projects in Sudan.” In reality, bin Laden was setting the stages for what would be become al-Qaida.

  Unheeded warnings

  In Greek mythology, Cassandra was blessed with the power of prophecy, but cursed in that no one would ever heed her warnings. Eqbal Ahmad, the late political scientist, historian and expert in the study of terrorism, was a modern-day Cassandra.

  In a speech at the University of Colorado, Boulder in October 1998, Ahmad warnedthat the U.S. policy in Afghanistan would backfire:

  “In Islamic history, jihad as an international violent phenomenon had disappeared in the last 400 years, for all practical purposes. It was revived suddenly with American help in the 1980s. When the Soviet Union intervened in Afghanistan, Zia ul-Haq, the [U.S.-backed] military dictator of Pakistan, which borders on Afghanistan, saw an opportunity and launched a jihad there against godless communism. The U.S. saw a God-sent opportunity to mobilize one billion Muslims against what Reagan called the ‘Evil Empire.’

   

  “Money started pouring in. CIA agents starting going all over the Muslim world recruiting people to fight in the great jihad. Bin Laden was one of the early prize recruits. He was not only an Arab. He was also a Saudi. He was not only a Saudi. He was also a multimillionaire, willing to put his own money into the matter. Bin Laden went around recruiting people for the jihad against communism.

   

  “I first met him in 1986. He was recommended to me by an American official of whom I do not know whether he was or was not an agent. I was talking to him and said, ‘Who are the Arabs here who would be very interesting?’ By here I meant in Afghanistan and Pakistan. He said, ‘You must meet Osama.’ I went to see Osama. There he was, rich, bringing in recruits from Algeria, from Sudan, from Egypt, just like Sheikh Abdul Rahman. This fellow was an ally. He remained an ally.

   

  “He turns at a particular moment. In 1990, the U.S. goes into Saudi Arabia with forces. Saudi Arabia is the holy place of Muslims, Mecca, and Medina. There had never been foreign troops there. In 1990, during the Gulf War, they went in, in the name of helping Saudi Arabia defeat Saddam Hussein. Osama Bin Laden remained quiet.

   

  “Saddam was defeated, but the American troops stayed on in the land of the Ka’aba [the most sacred site of Islam, in Mecca], foreign troops. He wrote letter after letter saying, ‘Why are you here? Get out! You came to help but you have stayed on.’ Finally he started a jihad against the other occupiers. His mission is to get American troops out of Saudi Arabia. His earlier mission was to get Russian troops out of Afghanistan.”

  For bin Laden, Ahmad added, “America has broken its word. The loyal friend has betrayed. The one to whom you swore blood loyalty has betrayed you.”

  “They’re going to go for you. They’re going to do a lot more,” Ahmad warned, three years before the 9/11 attacks. “These are the chickens of the Afghanistan war coming home to roost.”

  We now know that Ahmad was right. But, like Cassandra, the powerful ignored his sagacious admonition, and suffered the horrific consequences.

  Extremist “freedom fighters”

  In the 1950s and ’60s, Afghanistan was a somewhat secular country in which women were granted relatively equal rights. What turned Afghanistan into the hotbed for extremism it is today? Decades of Western meddling.

  Throughout the 1980s, the U.S. government supported and armed bin Laden and his mujahedin in Afghanistan, in their fight against the Soviet Union. President RonaldReagan famously met with the mujahedin in the Oval Office in 1983. “To watch the courageous Afghan freedom fighters battle modern arsenals with simple hand-held weapons is an inspiration to those who love freedom,” Reagan declared.

  

  Those “freedom fighters” are the forefathers of ISIS and al-Qaida. When the last Soviet troops were withdrawn in 1989, the mujahedin did not simply leave; a civil war of sorts followed, with various Islamist militant groups fighting for control in the power vacuum. The Taliban came out on top, and established a medieval theocratic regime to replace the former “godless” socialist government.

  There are extremists in every religion, but they tend to be few in number, weak and isolated. Salafism, in its modern militarized form, has its origins in the 1920s, and even before. For decades, this movement remained weak and isolated. Yet, in the 1970s and ’80s, Western capitalist governments, particularly the U.S., came up with a new Cold War strategy: supporting these fringe Islamic extremist groups as a bulwark against socialism.

  The U.S. was by no means the only one to pursue such a strategy. Echoing the U.S. policy in Afghanistan, Israel in fact supported Hamas — now its sworn arch-enemy — when the Islamist group was first forming in the 1980s. Israel backed Hamas’ militant founder Sheikh Ahmed Yassin in order to undermine the secular socialist resistance of the Palestine Liberation Organization (PLO).

  “Hamas, to my great regret, is Israel’s creation,” a former Israeli government official told the Wall Street Journal in a 2009 article titled “How Israel Helped to Spawn Hamas.”

  This Cold War strategy ended up being successful: After the fall of the USSR, the secular socialist groups that dominated the resistance movements of the Middle East were replaced by Islamic extremists ones that had previously been supported by the West.

  It is not a coincidence that most of the secular countries in the history of the Middle East have been socialist of some sort. In contrast, the most reactionary countries — the countries where women are not granted equal rights and where the rule of law is based on Sharia — have frequently tended to be close Western allies. Why? The West was much, much more interested in preserving capitalism than it was in allowing secularism, gender equality and relative economic equality to flourish under socialism.

  Orientalist posturing

  Many pundits, including liberals, have argued that the Middle East, North Africa and Muslim-majority parts of South Asia are presently going through their parallel to the West’s Dark Age, a bloody period of religious extremism. They blame the rise of extremist groups like ISIS and al-Qaida on Islam itself, or on the Middle East’s supposedly “backward” culture, yet conveniently gloss over their own countries’ sordid histories and policies.

  There is much more than a tinge of racism in this orientalist idea that, for some reason, Muslims in the Middle East are centuries behind the englightened Christian West. This ludicrous claim does not stand up to even the most superficial historical scrutiny.

  For one, never mentioned is the fact that, only decades ago, most Middle Eastern countries were Western colonies. Their civilian populations were terrorized and brutalized by Western colonial powers.

  And, again, what were the most secular and modern governments in the history of the Middle East? It was almost always the Soviet-aligned or non-aligned leftist governments that were either enemies of the West or non-allies in the Cold War.

  Regardless of the critiques of these governments’ many problems, which is a separate issue, the reality is the Middle East was significantly more progressive and secular during the height of the Cold War than it is today. That’s not a coincidence. The U.S. and its allies destroyed secularism as part of their larger Cold War strategy.

  The Cold War bites back

  This Cold War strategy continues to bite back today, and hard. Because of this policy, we have now ended up with capitalist dystopias like those in Saudi Arabia, Qatar or the UAE — filthy rich oil states where businessmen are drowning in money while the migrant modern-day slaves upon which their economies are built die in droves, and theocratic monarchies imprison or even behead anyone who challenges the regime.

  The Gulf states remain some of the most reactionary and extremist countries on the planet, and they happen to be close Western allies. Saudi Arabia, in particular, is the fountainhead of militant Sunni Islamism — and yet the Obama administration has done more than $100 billion in arms deals with the Saudi monarchy in just five years. In fact, less than three days after the Paris attacks, the U.S. sold another $1.3 billion of bombs to Saudi Arabia — bombs it will likely use to drop on Yemen, where human rights organizations say it is committing egregious war crimes, and where the chaos created by the Saudi-led coalition is helping al-Qaida and ISIS expand into Yemen.

  Former U.S. Sen. Bob Graham has observed that modern Sunni extremist groups like ISIS and al-Qaida are “a product of Saudi ideals, Saudi money, and Saudi organizational support.” Government cables leaked by WikiLeaks demonstrate that the U.S. is well aware that al-Qaida and other Salafi groups are supported by rich Saudis.

  Let us not forget that Osama bin Laden was a millionaire businessman from a fabulously wealthy and prominent Saudi family with close ties to the kingdom’s royalty. He used that wealth to finance an international network of Islamic extremists that coalesced into al-Qaida.

  This doesn’t mean that the Saudi monarchy is pulling the strings above ISIS — which is now its enemy — but rather that its global proselytizing and funding of Wahhabi groups and institutions made these once fringe extremist groups much stronger and more mainstream.

  Ideologies are not devoid from material reality. Yes, there are extremists in every religion, but why do they not have the same power in other faiths? There is no such thing as an ideology independent of the material conditions and social forces that assert that ideology materially — that is to say, politically — in reality. Islamic extremism was violently imposed upon the Middle East through a mixture of imperial machinations and individual radicalization under tyranny and extreme poverty.

  Creating your enemies

  Western imperialism has a tendency to create its own enemies.

  Up until the 1990 Gulf War, throughout the Iran-Iraq War that consumed the 1980s, the U.S. supported Saddam Hussein — the very same dictator it would violently depose in 2003. Declassified CIA files show how the U.S. government helped Hussein when he was unleashing chemical weapons on Iranian civilians. The U.K. government allowed Hussein’s regime to create chemical weapons using agents that were sold to Iraq by British corporations. These Western-provided weapons were also used in Hussein’s campaign of genocide against the Kurds.

  Fast-forwarding two decades later, it is now widely acknowledged that the illegal U.S.-led war in Iraq — a catastrophic occupation that led to the deaths of at least 1 million people — destabilized the entire Middle East, creating the extreme conditions in which militant groups like al-Qaida spread like wildfire, eventually leading to the emergence of ISIS. The former head of intelligence for the U.S. Central Command and Joint Special Operations Command (JSOC), retired Army Lt. Gen. Michael T. Flynn,agrees. U.S. policies in Iraq “absolutely” strengthened Salafi militant groups like al-Qaida, Lt. Gen. Flynn conceded. “We definitely put fuel on a fire,” he lamented.

  New York Rep. Chuck Schumer remarked in 1991 that Saddam Hussein was “created in the White House laboratory with a collection of government programs, banks, and private companies.”

  Saddam Hussein was the first Frankenstein’s monster U.S. policy created in Iraq, al-Qaida was the second, and now ISIS is the third.

  Blaming Islam is projection

  The pundits in the West blaming Islam for the rise of extremism are projecting their own countries’ crimes onto the world’s 1.6 billion Muslims.

  The kinds of people who blame Islam and Muslims for the spread of extremism are the kinds of people who have utmost faith in Western empire. Even if they admit that it “sometimes” engages in problematic behavior, they, deep-down, believe Western empire to be fundamentally rooted in good will, in humanitarianism, in progress, in the proselytizing of civilization.

  This is the same logic that justified genocidal European colonialism, Western expansionism and Manifest Destiny, and the White Man’s Burden. And it is this same logic that promotes militarist policies and anti-Muslim and anti-refugee bigotries in response to Islamist militants’ attacks — only serving to further fuel the fire of extremism.

  These same pundits, the ones who blame Islam for the rise of ISIS and who have utmost faith in the putative good will of Western empire, would have wholeheartedly supported Osama bin Laden in the 1980s; these same pundits would have dubbed the father of al-Qaida a “freedom fighter” in his heroic battle against the evil Soviet Union.

  In the aforementioned speech, Ahmad articulated five kinds of terrorism. He lamented, however, that of these types, the focus in the media and the political system is almost always on just one: “political terror of the private group, oppositional terror” — which he points out is “the least important in terms of cost to human lives and human property.” “The highest cost is state terror,” Ahmad explained. He roughly estimated that the ratio of people killed by state terror versus those killed by individual acts of terror is, conservatively, 100,000 to one.

  If we truly want to end the abominable acts of violence perpetrated by extremist groups like ISIS and al-Qaida, we should take to heart the simple yet profoundcounsel of Noam Chomsky, another modern-day Cassandra: “Everybody’s worried about stopping terrorism. Well, there’s a really easy way: stop participating in it.”

   

  

  

  

  

  

• "People Are Worried" – Chinese Authorities Arrest 'King Of IPOs' & 'Hedge Fund Brother No. 1'

  The arrests or investigations targeting the finance industry in the aftermath of China’s summer market crash have intensified in recent weeks according to Bloomberg, creating a climate of fear among China’s finance firms and chilling their investment strategies. As one professor of Chinese economy noted, "some in the political leadership sought to find scapegoats to blame" for the market crash which along with massive intervention "created uncertainty and anxiety that can only undermine the effort to make these markets work better."

  The high-drama highway arrest of a prominent hedge fund manager. Seizures of computers and phones at Chinese mutual funds. The investigations of the president of Citic Securities Co. and at least six other employees. Now, add the probe of China’s former gatekeeper of the IPO process himself.

  About a third of China’s futures-focused hedge funds had to stop trading as regulators restricted practices such as short-selling, but as Bloomberg details,

  Howbuy Investment Management Co. in September said it stopped providing data on premature fund liquidations because the information was too sensitive. The Shanghai-based fund research firm had previously said almost 1,300 hedge funds closed this year amid the stock rout.

  The authorities’ goal was to root out practices such as insider trading as part of China’s anti-corruption campaign, and a desire by "some in the political leadership to find scapegoats to blame" for the market crash, according to Barry Naughton, a professor of Chinese economy at the University of California in San Diego.

  “Together these are creating uncertainty and anxiety that can only undermine the effort to make these markets work better,” he said by e-mail.

   

  The government’s response to the market crash was intervention: state-directed purchases of shares, a ban on initial public offerings and restrictions on previously allowed practices, such as short selling and trading in stock-index futures. Next, high-ranking industry figures came under scrutiny as officials investigated trading strategies, decried “malicious short sellers” and vowed to “purify” the market.

   

  Policy makers say “now we’re innovating, so you can all come in — using high-frequency trading, hedging, whatever — to play in our markets,” Gao Xiqing, a former vice chairman of the China Securities Regulatory Commission, told a forum in Beijing on Nov. 6. “A few days later, you say no, the rules we made are not right, there are problems with your trading, and we’re putting you in jail for a while first.”

  At least 16 people have been arrested, are being investigated or have been taken away from their job duties to assist authorities, according to statements and announcements compiled by Bloomberg News.

  In the latest probe announced last week, Yao Gang, a vice chairman at the CSRC, is under investigation for “alleged serious disciplinary violations,” the Communist Party’s Central Commission for Discipline Inspection said. Known as China’s "King of IPOs," he supervised China’s initial public offerings until earlier this year, when he changed to approve bonds and futures, according to Caixin magazine. He joins two other CSRC officials being investigated, one of whom, Zhang Yujun, was formerly the general manager of the Shanghai and Shenzhen stock exchanges.

   

  The securities regulator carried out unannounced inspections of several Chinese investment firms including Harvest Fund Management earlier this month, taking away hard drives and mobile phones, according to people familiar with the seizures. Police in Shanghai also confiscated computers and froze $1 billion of shares in listed companies connected to Xu Xiang, the manager of Zexi Investment known as “hedge fund brother No. 1,” who was arrested Nov. 1 on a highway between Shanghai and Ningbo.

   

  Among Xu’s fellow money managers who performed well this year, anxiety has been palpable following his arrest, according to hedge fund manager Lu Weidong, chairman of Xinhong Investment based in China’s southern city of Dongguan. Lu’s Fuguo No. 1 fund was the best-performer among the 236 Chinese multi-strategy hedge funds from June to August, according to Shenzhen Rongzhi Investment Consultant Co., which tracks the data.

   

  It isn’t uncommon for Chinese money managers to trade on unpublished information, according to Lu. Everybody that ever traded on such tips would “restrain themselves a bit” going forward, Lu said by phone.

   

  “People are worried,” he said.

  "The extent of this round of clampdown in the financial industry has surpassed everybody’s expectations," Hao Hong, chief China strategist at Bocom International Holdings Co. in Hong Kong.said. "Over the longer term, the clampdown on corruption in the financial industry will level the playing field in the market for smaller investors."

  However, the arrests or investigations targeting the finance industry are creating a climate of fear among China’s finance firms and chilling their investment strategies.

  

  

  

  

  

• Understanding The Power-Contest Between Aristocracies

  Authored by Eric Zuesse,

  At the core of global power stands the conflict between the Sauds and their Sunni clergy, versus the Iranians and their Shiite clergy.

  One can’t understand U.S.-Russian relations, nor much else of what is happening in the world, without knowing the relevant historical background; and the origins and nature of the Sunni war against Shiia are arguably the most essential part of that. Just how the United States came to back the Sunnis, and how Russia came to back the Shiites, in this war, will be discussed in subsequent articles.

  This great intra-Islamic conflict, little understood outside the Middle East, came into clearer-than-ever focus on 2 August 2013 when Sami Kleib at al-Monitor headlined "Saudi Arabia Tries to Cut a Deal With Russia Regarding Syria”, and he reported about Saudi Prince Bandar bin Sultan al-Saud’s trip to Moscow, as the Director of Saudi Intelligence. It was an extraordinary private meeting, because the Sauds and the Russians have been enemies ever since the Sauds allied themselves with the Americans against the atheistic Soviet Union in 1945. Kleib wrote that:

  Like all Saudi Arabian leaders, Bandar wants to deal a blow to Hezbollah and weaken Iran. And they will do anything to accomplish that, including hitting President Assad’s regime.

  But why did Saudi Arabia change its mind and decide to send Prince Bandar to a country that “supports the genocide in Syria”?

  To find the answer, first look for Iran.

  Then, Kleib noted the central point:

  Saudi Arabia faced a choice: to reach an understanding with either Iran or Russia.

  Saudi Prince Bandar — sometimes called “Bandar Bush” because he was virtually accepted as a member of the Bush family — had been forced into a position of choosing between Russia and Iran as an ally to join with the Sauds’ war to dislodge Assad from Syria; and he chose Russia to become an ally with the Sauds, instead of choosing the Sauds’ ‘fellow’-Muslims, Shiite  Iran.

  Why did the Sauds choose Russia, over Islamic Iran, to join them?

  Russia, to the Sauds, represents (even today), as Kleib put it, “the ‘capital of communist atheism’.” (After all: Putin had once been a communist, though he was now a follower of the Russian Orthodox Church.) Iran, by contrast, represents the leadership of what to the Sunni Sauds is their real competition:  Shiite Islam.

  The Thirty Years War in Europe was fought between Catholics and Protestants, two competing wings of Christendom. It was a vicious and deadly war. Both sides of it were killing for the same God — just different clergies and their respective aristocracies.

  The civil war in Iraq after Bush invaded Iraq in 2003 was between Shiites and Sunnis; and they too were killing each other for the same God — just different clergies, and their respective aristocracies.

  Before the Sauds-Salafists (Wahhabists) can defeat atheists and former atheists (Russia), and also defeat non-Islamic religionists (such as the vast majority of Europeans and Americans), they must first settle their scores against the Shiites — above all, against Iran.

  Furthermore: the fundamentalist Salafist-Wahhabist Saud family, in 1945, allied with the Christian-majority nation of America, against the atheistic Soviet Union; and, today, Russia is (reverted to its being) an overwhelmingly Christian-majority nation; so, some of the Sauds’ sheer animus against Russians has, indeed, subsided a bit. However, by contrast, Iran has become (after the 1979 ousting of the American stooge Shah) assertively Shiite, which is, perhaps, to the Sauds, even more infuriating than is atheism.

  However, it actually goes much deeper back than that: It goes back to the deal in the year 1744, that the fanatical anti-Shia cleric Muhammad ibn Abd al Wahhab and the ambitious gang-leader Muhammad ibn Saud (the founder of Saudi Arabia) made, which established simultaneously the Saudi-Wahhabist nation and the Wahhabist sect of Islam, both of which are joined-at-the-head with Saud’s descendants, so as to constitute the existing nation of, actually, Saudi-Wahhabist Arabia. (It’s actually not only Saudi. The Sauds fulfill their contract, because, if they didn’t, the Wahhabist clergy would support a revolution to overthrow them.) This deal was the most clearly and succinctly described in the 1992 U.S.-Library-of-Congress-published book by Helen Chapin Metz, Saudi Arabia: A Country Study (and the highlighting of a sentence in it here is by me, not by Metz):

  Lacking political support in Huraymila [where he lived], Muhammad ibn Abd al Wahhab returned to Uyaynah [the town of his birth] where he won over some local leaders. Uyaynah, however, was close to Al Hufuf, one of the Twelver Shia centers in eastern Arabia, and its leaders were understandably alarmed at the anti-Shia tone of the Wahhabi message. Partly as a result of their influence, Muhammad ibn Abd al Wahhab was obliged to leave Uyaynah, and headed for Ad Diriyah. He had earlier made contact with [and won over to his hatred of Shiia] Muhammad ibn Saud, the leader in Ad Diriyah at the time, and two of  [Saud’s] brothers had accompanied  [Saud] when he [in accord with Wahhab’s hate-Shiia teachings] destroyed tomb shrines [which were holy to Shiia] around Uyaynah.

   

  Accordingly, when Muhammad ibn Abd al Wahhab arrived in Ad Diriyah, the Al Saud was ready to support him. In 1744 Muhammad ibn Saud and Muhammad ibn Abd al Wahhab swore a traditional Muslim oath in which they promised to work together to establish a state run according to Islamic principles. Until that time the Al Saud had been accepted as conventional tribal leaders whose rule was based on longstanding but vaguely defined authority.

   

  Muhammad ibn Abd al Wahhab offered the Al Saud a clearly defined religious mission to which to contribute their leadership and upon which they might base their political authority. This sense of religious purpose remained evident in the political ideology of Saudi Arabia in the 1990s.

   

  Muhammad ibn Saud began by leading armies into Najdi towns and villages to eradicate various popular and Shia practices. The movement helped to rally the towns and tribes of Najd to the Al Saud-Wahhabi standard. By 1765 Muhammad ibn Saud's forces had established Wahhabism — and with it the Al Saud political authority — over most of Najd.

  So: Saudi Arabia was founded upon hatred of Shiia Muslims, and it was founded upon a deal that was made in 1744 between a Shiia-hating fundamentalist Sunni cleric Wahhab, and a ruthless gang-leader Saud, in which deal the clergy would grant the Sauds holy legitimacy from the Quran, and the Sauds would finance the spread of Wahhab’s fanatical anti-Shiia sect.

  The Sauds are thus obsessed with Iran, and with its foreign Shiite allies, such as Assad in Syria, Houthis in Yemen, and Hezbollah in Lebanon — and want them all dead, if those Shiites won’t become subservient to Sunni clerics.

  The United States is (and since 1945 has been) allied with the Sauds. But the U.S. was now reaching out to Iran, for a deal on nuclear inspections. This antagonized the Sauds. So: the Sauds were considering the possibility of becoming allied instead with Russia against both Assad and Iran. This despite the fact that America’s aristocracy (such as the Bushes – see below) is obsessed to overthrow or else cripple Russia, so as to give the U.S. aristocracy virtually a power-monopoly over the entire world.

  That meeting between Bandar and Putin on 2 August 2013 was for the big-power stakes; it was for really history-shaping stakes. If Bandar had succeeded, then the post-World-War-II era (the U.S.-Saudi alliance especially) would have definitively ended; and, going forward, a Russia-Saud alliance, including the other Sunni-controlled nations — Qatar, Bahrain, Kuwait, Turkey, etc. — would be at war to defeat Syria and other Shiite nations, especially their leader: Iran.

  The U.S. would have become odd-man-out: desperately trying to get Sunni Pakistan’s military (Pakistan’s aristocracy) to ally with the U.S. instead of with the Sauds. If Pakistan were to go with Saudi Arabia (such as, for example, the Wahhabist Taliban would hope), then Iran would be at war against not only the Arabic aristocracies to the west, but against the Pakistani aristocracy to the east. (Pakistan’s aristocracy mainly run the military, and so in order for Pakistan to go with Saudi Arabia, Pakistan’s aristocracy would be joining with, and would no longer resist, the Taliban and other Wahhabists in Pakistan. Pakistan would become a Saudi satellite state.) Also, the Afghan aristocracy, being Sunni, would be a part of the Saudi alliance (as they already largely have been, since at least 1979; Afghanistan is a Saudi satellite). Virtually the entire Islamic world would be united behind the Sauds.

  The U.S. would lose its influence in both Pakistan and Afghanistan. The EU would be the site of enormous conflicts between the old Christian majority and the flood of new Muslim refugees, most of whom would be Sunnis who would feel torn between their loyalties to Mecca versus to their new Christian-majority home-nation.

  The big losers, in other words, would be not only the clergy and aristocracy in Iran, but also the clergies and aristocracies in Europe and the U.S.

  Bandar Bush was actually angling for the defeat of the U.S., and not only of Iran. (He had been a major donor to Al Qaeda. George W. Bush’s Saudi buddy had contributed to financing the 9/11 attacks.)

  Putin said no. He refused Prince Bandar’s offer.

  The U.S. aristocracy continues trying to overthrow Putin and any nation’s leaders who cooperate with him. Previously, it was Gaddafi in Lybia, then Yanukovych in Ukraine. Now it’s Assad in Syria. Side-coups had also been attempted but failed in Venezuela, Ecuador, and possibly a few other countries.

  After the 13 November 2015 terrorist attacks in Paris, the major world leaders met at the G-20 talks; and, in conclusion of the conference, Russia’s Foreign Minister Sergei Lavrov summed up on November 17th by saying that:

  Analysis of the strikes delivered by the United States and its coalition at terrorist positions [in Syria] over the past year drives us to a conclusion that these were selective, I would say sparing, strikes and in the majority of cases spared those Islamic State groups that were capable of pressing the Syrian army. It looks like a cat that wants to eat a fish but doesn’t want to wet its feet. They want the Islamic State to weaken Assad as soon as possible to force him to step down this or that way, but they don’t want to see Islamic State strong enough to take power.

  In other words: even at the G-20 conference right after the Paris attacks, the U.S. remained more anti-Russian than anti-jihadist. Whereas the American public were vastly more anti-jihadist than anti-Russian, U.S. President Barack Obama was committed to the same policy that he had pretended — both to Russian leaders and to the American public — to be opposed to when he was running against Mitt Romney in 2012; and, as Romney put it: “This [Russia] is without question our number one geopolitical foe.” In America’s dictatorship, Obama’s repudiation of Romney’s statement turned out to have been a lie from Obama — Americans ‘elected’ there Romney merely in blackface.

  *  *  *

  In a previous article, “How America Double-Crossed Russia and Shamed the West,” I quoted the detailed account by Mary Louise Sarotte, about George H.W. Bush’s having double-crossed Soviet leader Mikhail Gorbachev in 1991 by having Bush’s agents tell Gorbachev that the U.S. had no aim of conquering Russia and that if Gorbachev would peacefully let the Berlin Wall fall and East Germany become absorbed into West Germany, then "NATO will not expand itself to the East.” However, when German Chancellor Helmut Kohl tried then to proceed that way to the end of the Soviet Union, Bush brought Kohl to Camp David and told him in private there, “To hell with that! We prevailed, they didn’t.” Kohl from that moment on worked as part of the American aristocracy’s continuing sub-rosa war to take over Russia — and NATO now virtually surrounds the eastern half of Russia. Kohl’s protégé Angela Merkel continues this.

  Bush’s successor Bill Clinton followed through on the senior Bush’s double-cross by bringing into NATO Hungary, Poland and Czech Republic. Bush’s son then brought in Bulgaria, Estonia, Latvia, Lithuania, Romania, Slovakia, and Slovenia. Obama brought in Albania and Croatia, and he’s still trying to bring in Ukraine, after his coup there in February 2014, whose aim was largely to get that big one into NATO — plus to cut off Russia’s gas-supplies into Europe, which pass through Ukraine.

  Anyone who would deny that the U.S. aristocracy aren’t rabid to take over Russia is ignoring a lot of recent history, especially the most important parts.

  As regards the Saudi obsession to defeat Iran: The billionaire Saudi Prince al-Waleed bin Talal was reported on 2 July 2015 to have said in Saudi Arabia’s newspaper Okaz (with highlighting here by myself, to indicate what I see as the most important parts):

  All my Muslim brothers and sisters must understand that it became a moral imperative for all inhabitants of war-torn Middle-East, namely Arabs, to desist their absurd hostility toward Jewish people.

   

  My sovereign, King Salman has instructed me to open a direct dialogue with Israel's intellectuals building amicable ties with our Israeli neighbors.

  The same English-language site then reported on 27 October 2015 that he said in Kuwait’s newspaper Al Qabas:

  I will side with the Jewish nation and its democratic aspirations in case of outbreak of a Palestinian Intifada (uprising) and I shall exert all my influence to break any ominous Arab initiatives set to condemn Tel Aviv, because I deem the Arab-Israeli entente and future friendship necessary to impede the Iranian dangerous encroachment. … The whole Middle-East dispute is tantamount to life and death for the Kingdom of Saudi Arabia from my vantage point, and I know that Iranians seek to unseat the Saudi regime by playing the Palestinian card, hence to foil their plots Saudi Arabia and Israel must bolster their relations and form a united front to stymie Tehran's ambitious agenda.

  I have been unable to find in English any record of a repudiation by Saudi King Salman of either of those comments. Talal’s statements come at a time when the U.S., Obama Administration, had negotiated an agreement with Iran about nuclear issues. A re-alignment of the key global aristocracies might result from this situation. The U.S. is willing to negotiate with Iran but refuses even to work together with Russia to defeat jihadists in Syria. (Or at least refused prior to the 13 November 2015 ISIS terrorism in Paris.) America’s attitude toward Russia has been unremittingly hostile, as if Russia had done anything that threatened the United States (except to respond to America’s/NATO’s aggressive moves against Russia, such as its overthrow of Ukraine’s government, next door). Clearly, America’s aristocracy have played their public as suckers; but a big debate in American politics these days is whether the U.S. should temporarily reduce its anti-Russian focus in order to increase its anti-jihadist focus after the November 13th Paris terrorist attacks.

  In order for the U.S. to end its war against Russia, a basic re-alignment of aristocracies would occur. The U.S., like Russia, would be aligned with Iran. Israel doesn’t want that to happen. Israel is aligned with the Sauds. Does Israel control U.S.? Will the American public continue to favor America’s being controlled by Israel? Will even American Jews continue to support America’s being controlled by Israel? America’s aristocratic Jews do, but will the vast majority, the others, or will they instead repudiate their aristocracies, not only American but Israeli? Or, instead, will America abandon Saudi Arabia and the other Sunni aristocracies, and Israel’s aristocracy; and, so, abandon the fundamentalist-Jewish apartheid state, and re-assert its own democracy?

  These are not only questions about America’s ideology — whether to be democratic, or instead aristocratic (as it has been since at least 1981). These questions are about America’s military and economic position in the world.

  The United States remains a part of the Saudi-Israeli-U.S. alliance; it remains fundamentally inimical to democracy. It remains as an aristocratically controlled nation, which accepts control of the public by a theocratic-aristocratic alliance via the state, and rejects control of both the aristocracy and the clergy by the public via the state. It sides especially with the aristocracy against democracy.

  However, even secular-democratic nations, such as Russia and a few others in Europe, are constantly under both aristocratic and theocratic threats. Much of Russia’s aristocracy crave to return to the Yeltsin years when the U.S. aristocracy controlled there. And Russia’s alliance with Iran is with a theocratic Shiite state, no authentic democracy.

  The key decision is for the U.S. aristocracy: whether to continue as dictators there, or, instead, abandon both the Sauds who control Arabia, and the Orthodox Jews who have come to control Israel. Barring that, there is no way in which the current soaring ‘defense’ budgets will head down again: ‘defense’ stocks will continue to rise, and services to the public will continue to erode. The world is headed for an increase in wars.

  The last U.S. President before 1981, Jimmy Carter, said recently that the United States is “just an oligarchy with unlimited political bribery being the essence of getting the nominations for president or being elected president.” Changing this will be difficult if not impossible. The global aristocracies might not ‘win,’ but dislodging them from power is extremely unlikely. Their wars will continue to be our wars.

  The world’s 80 wealthiest individuals own half of the world’s wealth, and the way that this was calculated ignored the very wealthiest people entirely, including the wealthiest of all, King Salman of Saudi Arabia, whose actual wealth is certainly well in excess of a trillion dollars. So, the true number there wouldn’t be 80 individuals, but perhaps more like only 40, many of whose personal fortunes aren’t even calculated by Forbes, etc. But regardless of whether it’s instead as large as, say, 70, the wealthiest people need to grab wealth from some of the other wealthiest people in order raise their respective rank, as studies indicate to be the main motivation for the super-rich — rank instead of money per se. For example, “the richest 8.6% own $224.5T (trillion), while the poorest 91.4% own only $38.7T.” So, stealing from even a large number of individuals in the poorest 91.4% won’t likely increase the rank of a person who is in the top 100 worldwide — they’ve got to steal from each other, in order to raise their rank. Wars are the way that’s done. It’s an essential business for the global aristocracy, especially at the global top; and so, as the world’s wealth becomes more and more concentrated, more and more weapons will be sold. There’s just no other way for it to happen. Whether any of them are willing to go so far as nuclear war is another question. Bluffing is one thing; willingness to follow through with it, is something very different.

  *  *  *

  Investigative historian Eric Zuesse is the author, most recently, of  They’re Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010, and of  CHRIST’S VENTRILOQUISTS: The Event that Created Christianity.

   

  

  

  

  

  

• Over Half Of New Yorkers Struggle To Make Ends Meet As "Tale Of Two Cities" Deepens

  Despite two years of liberal redistribution from Mayor de Blasio, the majority of New Yorkers continue to struggle to make ends meet mirroring his 2013 "tale of two cities" campaign theme. The NYTimes poll finds that only 20% are living comfortably while 51% are just getting by or finding it difficult to manage, and shows even greater disparities in quality of life across the city’s five boroughs.

   

  

   

  As The New York Times reports, an atmosphere of economic anxiety pervades all areas of the city…

  Residents of the Bronx and Brooklyn shared the most pronounced sense of economic insecurity, and the lowest confidence in local government and the police — a distinctly different experience from the rest of the city.

   

  In those boroughs, nearly three in five residents said they were straining to make ends meet. In the Bronx, 36 percent said there had been times in the past year when they did not have the money to buy enough food for their family; only one in five said they and their neighbors had good or excellent access to suitable jobs.

   

  But if the city appears divided into broad camps of haves and have-nots, it was, perhaps surprisingly, the less privileged segments of New York that shared the most positive outlook on the future.

   

  Four in 10 Brooklyn residents said their neighborhood was getting better, and 36 percent of Bronx residents said the same. Manhattanites and Staten Islanders were most likely to say things were getting worse in their area.

  Government is not seen as addressing the problems that trouble these areas: In the Bronx, only one in five respondents gave local government high marks for meeting their needs. In Brooklyn, that figure was a bit higher, at 26 percent, compared with roughly a third in Manhattan, Queens and Staten Island.

  “I feel like people who were born in this neighborhood stay here our whole lives,” Ms. Thomas said. “If it was true that we had opportunities for advancement, then all of us wouldn’t still be here 20 years from now.”

  Which reminds us of Margarent Thatcher's infamous line…

  

  

  

  

  

  

• The Beginning Of The End For The Affordable Care Act? Largest US Health Insurer May Exit ObamaCare

  Tracking the slow motion trainwreck of Obamacare has become one of our preferred hobbies: below is just a random sample of headlines covering just the most recent tribulations of the “we have to pass it to find out what’s in it” Unaffordable Care Act:

  • In Latest Obamacare Fiasco, Most Low-Income Workers Can’t Afford “Affordable Care Act”
  • The Stunning “Explanation” An Insurance Company Just Used To Boost Health Premiums By 60%
  • Your Health Insurance Premiums Are About To Go Through The Roof -The Stunning Reason Why
  • Obama Promised Healthcare Premiums Would Fall $2,500 Per Family; They Have Climbed $4,865
  • Largest Health Insurer On Colorado Exchange Abruptly Collapses
  • Co-Op Insurers Across America Are Collapsing, And Now There Is Fraud
  • “$19,000 Premiums, Up 4x Since Passage”: The ‘Crippling Effect’ Of Obamacare On The Middle Class
  • Meet The Family That Just Spent Half Its Annual Income Paying For Obamacare

  But the most surprising article we wrote was our explanation from three weeks ago explaining why “Your Health Insurance Premiums Are About To Go Through The Roof” showing that even insurance companies have been unable to earn a profit under Obamacare, as shown in the following chart:

  

   

  This was a stunning revelation because, after all, the Affordable Care Act was largely drafted by the insurance industry itself, and if for whatever reason, it itself was unable to capitalize on Obamacare, then it has truly been a disaster.

  Today we got confirmation of this when none other than the U.S.’s biggest health insurer, UnitedHealth, cut its 2015 earnings forecast with a warning that it was considering pulling out of Obamacare, just one month after saying it would expand its presence in the program.

  According to Bloomberg, “UnitedHealth Group would scale back marketing efforts for plans it’s selling this year under the Affordable Care Act, and may quit the business entirely in 2017 because it has proven to be more costly than expected.“

  This was precisely what we cautioned on November 2.

  Fast forward to today when UnitedHealth said in a statement that “the company is evaluating the viability of the insurance exchange product segment and will determine during the first half of 2016 to what extent it can continue to serve the public exchange markets in 2017.”

  Needless to say, the implications for Obamacare – which has seen a surge in tangential problems in recent months – are dire: “A pull-back would deal a significant blow to President Barack Obama’s signature domestic policy achievement. While UnitedHealth has been slower than some of its rivals to sell Obamacare policies since new government-run marketplaces for the plans opened in late 2013, the announcement may indicate that other insurers are struggling, said Sheryl Skolnick, an analyst at Mizuho Securities.

  “If one of the largest and presumably, by reputation and experience, the most sophisticated of the health plans out there can’t make money on the exchanges, then one has to question whether the exchange as an institution is a viable enterprise,” Skolnick said.

  UnitedHealth further said it suspended marketing its individual exchange plans and is cutting or eliminating commissions for brokers who sell the coverage.

  What is surprising is that for UnitedHealth, its Obamacare-facing exposure is relatively limited: the company covers fewer than 550,000 people on the Obamacare exchanges. About 9.9 million people had insurance through the U.S.- and state-run insurance markets as of June 30. This means that all other insurance companies must be getting crushed, something which the market also noticed earlier today hitting the stocks of not only hospitals, such as CYH, HCA, LPNT, THC and UHS but also home health care providers as well such as AFAM, AMED, GTIV and LHCG.

  What is perhaps even more perplexing is the abrupt shift in posture: just last month, UnitedHealth had struck a more optimistic note. I think we’ll see strikingly better performance on the insurance exchange business” next year, Chief Financial Officer David Wichmann told analysts on an Oct. 15 conference call.”

  Perhaps he had not seen the P&L? Oh well, he certainly did in the subsequently 4 weeks.

  The rest of the story is well-known and has been covered here extensively in the past: the inability of businesses to turn a profit from Obamacare has meant that about a dozen non-profit “co-op” plans created under the Affordable Care Act have failed, after charging too little to cover the cost of patients’ medical care, and because an Obama administration fund designed to stabilize the market paid out just 12.6 percent of what insurers requested. And Anthem last month said some rivals were offering premiums too low to provide the coverage patients require and book a profit.

  At the end of the day, the worst news is not for the corporations, since Obamacare is not going away any time soon. It simply means that what until now were supposedly Affordable plans under Obamacare, will soon become (even more) Unaffordable as insurer after insurer hikes premiums dramatically in order to make the biggest US governmental intrusion into the private sector in recent decades profitable to shareholders.

  Or, as we explained three weeks ago, “Your Health Insurance Premiums Are About To Go Through The Roof“

  

  

  

  

  

• The Great Fall Of China Started At Least 4 Years Ago

  Submitted by Raul Ilargi Meijer via The Automatic Earth blog,

  Looking through a bunch of numbers and graphs dealing with China recently, it occurred to us that perhaps we, and most others with us, may need to recalibrate our focus on what to emphasize amongst everything we read and hear, if we’re looking to interpret what’s happening in and with the country’s economy.

  It was only fair -perhaps even inevitable- that oil would be the first major commodity to dive off a cliff, because oil drives the entire global economy, both as a source of fuel -energy- and as raw material. Oil makes the world go round.

  But still, the price of oil was merely a lagging indicator of underlying trends and events. Oil prices didn‘t start their plunge until sometime in 2014. On June 19, 2014, Brent was $115. Less than seven months later, on January 9, it was $50.

  Severe as that was, China’s troubles started much earlier. Which lends credence to the idea that it was those troubles that brought down the price of oil in the first place, and people were slow to catch up. And it’s only now other commodities are plummeting that they, albeit very reluctantly, start to see a shimmer of ‘the light’.

  Here are Brent oil prices (WTI follows the trend closely):

  

  They happen to coincide quite strongly with the fall in Chinese imports, which perhaps makes it tempting to correlate the two one-on-one:

  

  But this correlation doesn’t hold up. And that we can see when we look at a number everyone seems to largely overlook, at their own peril, producer prices:

  

  About which Bloomberg had this to say:

  China Deflation Pressures Persist As Producer Prices Fall 44th Month

  China’s consumer inflation waned in October while factory-gate deflation extended a record streak of negative readings [..] The producer-price index fell 5.9%, its 44th straight monthly decline. [..] Overseas shipments dropped 6.9% in October in dollar terms while weaker demand for coal, iron and other commodities from declining heavy industries helped push imports down 18.8%, leaving a record trade surplus of $61.6 billion.

  44 months is a long time. And March 2012 is a long time ago. Oil was about at its highest since right before the 2008 crisis took the bottom out. And if you look closer, you can see that producer prices started ‘losing it’ even earlier, around July 2011.

  Something was happening there that should have warranted more scrutiny. That it didn’t might have a lot to do with this:

  China’s debt-to-GDP ratio has risen by nearly 50% in the past four years.

  The producer price index seems to indicate that trouble started over 4 years ago. China dug itself way deeper into debt since then. It already did that before as well (especially since 2008), but the additional debt apparently couldn’t be made productive anymore. And that’s an understatement.

  Now, if you want to talk correlation, compare the producer price graph above with Bloomberg’s global commodities index:

  

  World commodities markets, like the entire global economy, were propped up by China overinvestment ever since 2008. Commodities have been falling since early 2011, after rising some 60% in the wake of the crisis. And after the 2011 peak, they’ve dropped all the way down to levels not seen since 1999. And they keep on falling: steel, zinc, copper, aluminum, you name it, they’re all setting new lows almost at a daily basis.

  

  Moreover, if we look at how fast China imports are falling, and we realize how much of those imports involve (raw material) commodities, we can’t escape the conclusion that here we’re looking at not a lagging, but a predictive indicator. What China doesn’t purchase in raw materials today, it can’t churn out as finished products tomorrow.

  Not as exports, and not as products to be used domestically. Neither spell good news for the Chinese economy; indeed, the rot seems to come from both sides, inside and out. And no matter how much Beijing points to the ‘service’ economy it claims to be switching towards, with all the debt that is now deflating, and the plummeting marginal productivity of new debt, most of it looks like wishful thinking.

  And that is not the whole story either. Closely linked to the sinking marginal productivity, there is overleveraged overcapacity and oversupply. It’s like the proverbial huge ocean liner that’s hard to turn around.

  There are for instance lots of new coal plants in the pipeline:

  China Coal Bubble: 155 Coal-Fired Power Plants To Be Added To Overcapacity

  China has given the green light to more than 150 coal power plants so far this year despite falling coal consumption, flatlining production and existing overcapacity. [..] in the first nine months of 2015 China’s central and provincial governments issued environmental approvals to 155 coal-fired power plants — that’s 4 per week. The numbers associated with this prospective new fleet of plants are suitably astronomical.

   

  Should they all go ahead they would have a capacity of 123GW, more than twice Germany’s entire coal fleet; their carbon emissions would be around 560 million tonnes a year, roughly equal to the annual energy emissions of Brazil; they would produce more particle pollution than all the cars in Beijing, Shanghai, Tianjin and Chongqing put together [..]

  And new car plants too:

  China’s Demand For Cars Has Slowed. Overcapacity Is The New Normal.

  For much of the past decade, China’s auto industry seemed to be a perpetual growth machine. Annual vehicle sales on the mainland surged to 23 million units in 2014 from about 5 million in 2004. [..] No more. Automakers in China have gone from adding extra factory shifts six years ago to running some plants at half-pace today—even as they continue to spend billions of dollars to bring online even more plants that were started during the good times.

   

  The construction spree has added about 17 million units of annual production capacity since 2009, compared with an increase of 10.6 million units in annual sales [..] New Chinese factories are forecast to add a further 10% in capacity in 2016—despite projections that sales will continue to be challenged. [..] “The players tend to build more capacity in hopes of maintaining, or hopefully, gain market share. Overcapacity is here to stay.”

  These are mere examples. Similar developments are undoubtedly taking place in many other sectors of the Chinese economy (how about construction?!). China has for example started dumping its overproduction of steel and aluminum on world markets, which makes the rest of the world, let’s say, skittish. The US is levying a 236% import tax on -some- China steel. The UK sees its remaining steel industry vanish. All US aluminum smelters are at risk of closure in 2016.

  The flipside, the inevitable hangover, that China will wake up to sooner rather than later, is the debt that its real growth, and then it’s fantasy growth, has been based on. We already dealt extensively with the difference between ‘official’ and real growth numbers, let’s leave that topic alone this time around.

  Though we can throw this in. Goldman Sachs recently said that even if the official Beijing growth numbers were right -which nobody believes anymore- ”Chinese credit growth is still running at roughly double the rate of GDP growth”. And even if credit growth may appear to be slowing a little, though we’d have to know the shadow banking numbers to gauge that (and we don’t), that hangover is still looming large:

  China Bad Loans Estimated At 20% Or Higher vs Official 1.5%

  

  [..] While the analysts interviewed for this story differ in their approaches to calculating likely levels of soured credit, their conclusion is the same: The official 1.5% bad-loan estimate is way too low.

   

  The Bank for International Settlements cautioned in September that China’s credit to gross domestic product ratio indicates an increasing risk of a banking crisis in coming years. “A financial crisis is by no means preordained, but if losses don’t manifest in financial sector losses, they will do so via slowing growth and deflation, as they did in Japan,” said Chu. “China is confronting a massive debt problem, the scale of which the world has never seen.”

  Charlene Chu [..]

   

  and her colleagues at Autonomous Research in Hong Kong take a top-down approach. They estimate how much money is being wasted after the nation began getting smaller and smaller economic returns on its credit from 2008. Their assessment is informed by data from economies such as Japan that have gone though similar debt explosions. While traditional bank loans are not Chu’s prime focus – she looks at the wider picture, including shadow banking – she says her work suggests that nonperforming loans may be at 20% to 21%, or even higher.

  Looking at the producer price graph, we see that the downfall started at least 44 months ago, and that 52 months is just as good an assumption. And we know that debt rose 50% or more since the downfall started. That does put things in a different perspective, doesn’t it? (Probably) the majority of pundits and experts will still insist on a soft landing at worst.

  But for those who don’t, please consider the overwhelming amount of deflationary forces that is being unleashed on the world as all that debt goes sour. As the part of that debt that was leveraged vanishes into thin air.

  It’s ironic to see that it’s at this very point in time that the IMF (Christine Lagarde seems eager to take responsibility) seeks to include the yuan in its SDR basket. Xi Jinping’s power over the exchange rate can only be diminished by such a move, and we’re not at all sure he realizes to what extent that is true. Chinese politics are built on hubris, and that goes only so far when you free float but don’t deliver.

  To summarize, do you remember what you were doing -and thinking- in mid-2011 and/or early 2012? Because that’s when this whole process started. Not this year, and not last year.

  China’s producers couldn’t get the prices they wanted anymore, as early as 4 years ago, and that’s where deflationary forces came in. No matter how much extra credit/debt was injected into the money supply, the spending side started to stutter. It never recovered.

  

  

  

  

  

• Subprime Auto Lending Soars As Fed Report Shows Spike In Loans To Underqualified Borrowers

  When last we checked in on America’s auto loan bubble (which recently ballooned past the $1 trillion mark) the “visionary” ex-Santander execs over at Skopos Financial had just finished selling some $154 million in paper backed by a collateral pool wherein 75% of the loans were made to borrowers with credit scores less than 600. 

  14% of the loans were made to borrowers with no credit score at all.

  That deal followed a $150 million securitization the company sold earlier this year in which a fifth of the borrowers had FICOs between 351 and 500. 

  What this represents is the resurrection of the infamous originate to sell model that was instrumental in exacerbating the housing bubble. Put simply: if you can offload the credit risk to investors, you don’t really care who you’re loaning money to. It’s moral hazard at its finest and it’s enabled by Wall Street’s securitization machine. 

  Skopos’ latest abomination of an ABS deal came just weeks after Comptroller of the Currency Thomas Curry warned that what’s happening in the auto loan market “reminds [him] of what happened in mortgage-backed securities in the run-up to the crisis.”

  Obviously the market isn’t nearly as large, but auto loan-backed ABS supply is expected to grow 25% this year. Here’s an up to date look at consumer ABS supply:

  

  Auto loan-backed issuance will only grow as the bubble expands … and boy oh boy, is it expanding: 

  

  Of course in order to keep the US car sales “miracle” alive and thus perpetuate the ridiculous myth of an American auto renaissance, lenders will need to continue to lower their underwriting standards. After all, the pool of creditworthy borrowers is finite and so in order to expand it, you need to make inelligible borrowers eligible and that means the proliferation of subprime lending. 

  In what amounts to evidence that the subprime auto problem is indeed growing, The New York Fed’s Quarterly Report on Household Debt and Credit (out today) shows that lenders extended more than $110 billion in auto loans to borrowers with credit scores below 660 over the past six months alone. You can view that figure in context by taking a look at the following chart:

  

  But don’t worry, because Phil Lebeau and Experian’s perma-auto-loan bull and senior director of automotive finance Melinda Zabritski will tell you that talk of a subprime auto loan bubble is nonsense (from a CNBC interview earlier this month): 

  Zabritski: “I don’t see a bubble in subprime loans. This is a very steady market in terms of loans to high-risk borrowers.”

  

  

  

  

  

• The Greatest Racket Of All Time

  Submitted by Pater Tenebrarum via Acting-Man.com,

  The Successes of the Global War on Terror

  One would think that the so-called “Global War on Terror”, which has been given fresh impetus by the Paris attacks, must be going swimmingly. What else could explain the great enthusiasm with which it is pursued? It may be recalled that it started in earnest after the WTC attack – also a declaration of war, as it was put at the time.

  As is often the case when Islamist fundamentalists strike, the actual attackers immolated themselves on occasion of the attack itself, making it impossible to exact retribution. Except by proxy, that is. This was playing right into the hands of those who had planned the attacks. It seems to us that they have ultimately succeeded beyond their wildest dreams. Not to put too fine a point to it, our wise political leaders have evidently been outfoxed by a bunch of turbaned cave dwellers and goat buggerers in the Hindu Kush.

   

  

  Steve Bell on the reaction to the Paris attacks.

  To wit, between 2013 and 2014, the global death toll from terrorist attacks has increased by yet another 80%, setting a new sad record. So 15 years of bombing places far and wide to smithereens, engaging in extremely costly “nation building” exercises, droning assorted terrorist groups so thoroughly that selected Al Qaeda leaders can by now boast of having been killed up to 17 times (only to miraculously reappear again), have produced this by way of bottom line results:

   

  The result to date of 15 years of “Global War on Terrorism” – there is more terrorism than ever before – click to enlarge.

   

  This is eerily reminiscent of the US government’s “War on Poverty”, which stopped the decline in poverty dead in its tracks the moment it began, or the even worse effort known as the “War on Drugs”, which has done nothing to decrease the drug epidemic, but has given birth to the largest and most brutal criminal cartels the world has ever seen. Can people really be that stupid? Unfortunately the answer is yes, they can. This is only half of the answer though.

   

  

  Death by terrorism in 2014. Not a single Western country even makes the list (and even now, France would not make it). The biggest number of victims can be found in places like Iraq and Nigeria. Boko Haram has killed even more people than ISIS in 2014 (the deaths in Iraq are not exclusively attributable to IS) – click to enlarge.

   

  The Greatest Racket of All Time

  The other half of the answer has been already been supplied decades ago by the legendary Smedley Butler: War is a racket. However, most people are blissfully unaware of how big a racket it actually is. It is in fact the greatest scam ever – even the more recent “climate change” scam is comfortably put in the shade by it.

  Why are all Republican presidential candidates (apart from two exceptions) and Democratic front-runner Billary alike loudly screeching for more war, in spite of the sobering evidence? When confronted with such seemingly intractable questions, it is usually a good idea to follow the money. Should the mafia be aware of the associated statistics, it is presumably green with envy. Readers should definitely take the time to read Tom Engelhardt’s recent article “It’s a $cam” in its entirety. Below we are presenting just a handful of morsels from the first few paragraphs:

  “Let’s begin with the $12 billion in shrink-wrapped $100 bills, Iraqi oil money held in the U.S. The Bush administration began flying it into Baghdad on C-130s soon after U.S. troops entered that city in April 2003. Essentially dumped into the void that had once been the Iraqi state, at least $1.2 to $1.6 billion  of it was stolen and ended up years later in a mysterious bunker in Lebanon. And that’s just what happened as the starting gun went off.

   

  It’s never ended. In 2011, the final report of the congressionally mandated Commission on Wartime Contracting estimated that somewhere between $31 billion and $60 billion taxpayer dollars had been lost to fraud and waste in the American “reconstruction” of Iraq and Afghanistan.

   

  In Iraq, for instance, there was that $75 million police academy, initially hailed “as crucial to U.S. efforts to prepare Iraqis to take control of the country’s security.” It was, however, so poorly constructed  that it proved a health hazard. In 2006, “feces and urine rained from the ceilings in [its] student barracks” and that was only the beginning of its problems. When the bad press started, Parsons Corporation, the private contractor that built it, agreed to fix it for nothing more than the princely sum already paid.

   

  […]

  Typically enough, the Khan Bani Saad Correctional Facility, a $40 million prison Parsons also contracted to build, was never even finished.

   

  […]

  And why stick to buildings, when there were those Iraqi roads to nowhere paid for by American dollars? At least one of them did at least prove useful  to insurgent groups moving their guerrillas around (like the $37 million bridge  the U.S. Army Corps of Engineers built between Afghanistan and Tajikistan that helped facilitate the region’s booming drug trade in opium and heroin).

   

  […]

  The U.S. Agency for International Development (USAID) hired  an American nonprofit, International Relief and Development (IRD), to oversee an ambitious road-building program meant to gain the support of rural villagers. Almost $300 million later, it could point to “less than 100 miles of gravel road completed.” Each mile of road had, by then, cost U.S. taxpayers $2.8 million, instead of the expected $290,000, while a quarter of the road-building funds reportedly went directly to IRD for administrative and staff costs. Needless to say, as the road program failed, USAID hired IRD to oversee other non-transportation projects.”

  (emphasis added)

   

  

  Snapshot taken at a meeting of death merchant cronies.

   

  The article continues in this vein and believe it or not, the above was just the harmless stuff. It becomes even more absurd as one reads on. Not only do the numbers become ever more staggering, the failures become concomitantly greater and more bizarre (such as the $43 million compressed natural gas station in Afghanistan, similar to one built in neighboring Pakistan for $300,000, located in an area bereft of infrastructure capable of delivering natural gas; or the $8.4 billion pumped into an Afghan “drug eradication program”, which was followed by a hitherto unbroken string of record opium harvests).

  That is however not all. Even more astounding is the fact that most of the individuals who demonstrably bear personal responsibility for these cases of fraudulent theft of taxpayer funds have not only not been sanctioned, but have in fact been rewarded and promoted. As Engelhardt puts is:

  “In short, there turns out to be much good fortune in the disaster business, a fact which gives the whole process the look of a classic swindle in which the patsies lose their shirts but the scam artists make out like bandits.”

  We have long had a cynical view of government and its endless follies and outrages. There is little that can surprise us anymore. We must confess though that the sheer size and audacity of this racket still manages to impress us.

  The war on terror is the best racket yet – it is a gift that will likely keep on giving for a very long time. It possesses a certain fateful inevitability: Western governments go about poking assorted hornet’s nests, until the hornets come swarming out to sting us, providing fresh reasons to expand the war.

   

  

  Vicious circle

   

  This is not meant to imply that one shouldn’t defend oneself against terrorism, but it might be a good idea to reevaluate the strategy (as Justin Raimondo noted, at this juncture, simply quarantining IS may be worth considering). Doing more of what clearly hasn’t worked so far is certainly likely to keep the above mentioned racket going, but based on the evidence it isn’t going to achieve much else.

   

  Miscalculations Coming Home to Roost

  The conflict in Syria specifically has been characterized by miscalculations galore. It seems everybody is finally realizing that IS may be more of a threat than was hitherto assumed. As a number of governments in the region that are allied with the West have found out, they are in a situation akin to that the sorcerer’s apprentice found himself in. The spirits they have summoned are now ignoring their commands – and they can no longer get rid of them.

   

  

  Good doggie…doggie?

   

  Arab potentates aren’t the only ones in the region beginning to wonder what they have cultivated next door in their eagerness to see Syrian tinpot despot Assad toppled. Even the Grand Poobah of Turkey has recently begun to sound a bit worried.

   

  

  Lettuce water this tender green shoot a bit….ouch!

  Cartoon via tribune.gr

   

  Addendum: Deep State Piping Up, Resurgent Putin

  Meanwhile, Deep State representatives are once again sensing an opening. They have already reiterated their nonsensical, nay, downright dangerous demand to do away with encryption on a “just trust us” basis (see the assessment of cyber-security specialist Brian Krebs here). The idea is totally hare-brained, i.e., par for the course for government bureaucrats.

  And wouldn’t you know, it’s all Edward Snowden’s fault, for having provided proof of the unconstitutional misdeeds of certain spook agencies. Presumably he has magically caused the French authorities to ignore warnings about the terrorists and the planned attacks they received from at least three different foreign intelligence services by inundating them with his traitor-rays from Moscow.

  Finally, in an exceedingly amusing development, Vladimir Putin appears to have morphed overnight from pariah and enemy du jour to the “go to man”/ “hottest ticket in town” on fighting IS (or the “problem solver who cannot be ignored”, as the FT averred). Not that he is doing anything different – he is also poking the hornet’s nest and getting stung in return. However, everybody knows he is different in at least one respect.

  As we remarked to a friend recently, whatever one thinks of Putin, it is clear that he is an implacable enemy of Islamist radicals. The Chechen war stands as a monument to his Machiavellian ruthlessness in dealing with such people. So-called collateral damage definitely wasn’t on his mind much. In order to pacify the place, he simply ordered his military to raze the capital Grozny. Once Grozny was reduced to sufficiently small pieces of rubble, the army combed the surrounding landscape and shot everything that moved funny. Then a sort of local mafia boss was installed as the new governor, to ensure the place remained pacified.

   

  

  Grozny after Putin makeover.

  Photo via hubpages.com

   

  We suspect that the Middle East is a different kettle of fish though. Restoring something akin to the decades of pan-Arab nationalist oppression seems a highly dubious proposition. Too much has happened, and the place is packed with armed groups that will continue to be at each other’s throats no matter what.

  Putin is merely acting in line with old KGB traditions though. Here is an excerpt from a 20 year old newspaper report on how the KGB treated Islamist kidnappers aligned with Hezbollah who had taken Soviet diplomats hostage in Lebanon and had made the mistake of killing one of them:

  “The incident began when four Soviet diplomats were kidnapped last September by Muslim extremists who demanded that Moscow pressure the Syrian government to stop pro-Syrian militiamen from shelling rival Muslim positions in the northern Lebanese city of Tripoli. The militiamen, the Jerusalem paper said, did not cease their attacks, and the body of one of the Soviet diplomats, Arkady Katkov, was found a few days later in a field in Beirut.

   

  The KGB then apparently kidnapped and killed a relative of an unnamed leader of the Shi’ite Hezbollah (Party of God) group, a radical, pro-Iranian group that has been suspected of various terrorist activities against Western targets in Lebanon.

   

  Parts of the man’s body, the paper said, were then sent to the Hezbollah leader with a warning that he would lose other relatives in a similar fashion if the three remaining Soviet diplomats were not immediately released. They were quickly freed.

   

  The newspaper quoted “observers in Jerusalem” as saying: “This is the way the Soviets operate. They do things – they don’t talk. And this is the language Hezbollah understands.”

  (emphasis added)

  One could probably call that an exchange of messages of increasing intensity.

   

  

  G 20 meeting – Putin the rediscovered “problem solver”. As an old KGB hand, he can at least be relied on to be utterly ruthless when combating Islamic extremists.

  Photo credit: FOCUS Online/Wochit

   

  Of course there remain differences over Assad’s fate, but they may be smaller than appears on the surface. Perhaps Syria will end up partitioned at some point, with Assad’s Alawite clan controlling the part that contains Russia’s Mediterranean port.

   

  Conclusion

  It seems it is high time for a strategic rethink in the GWoT, but powerful forces are arrayed against it. Apart from the fact that a truly huge racket is at stake, the situation is also reminiscent of the proverbial guy with the hammer – everything looks like a nail to him. So we should reasonably expect more of the same, only in even grander style (as the so-called “surge” has shown, any successes tend not only to be temporary, but have a habit to soon give way to even greater disasters).

  At least we can all be comforted by recent news that there is no reason to worry about the euro zone. As Mish relates, Keynesian economist Nouriel Roubini has rediscovered the broken window fallacy by arguing that the Paris attacks will “help the euro zone economy”. What is it with these geniuses? Paul Krugman has made similar arguments after the WTC attack and the Katrina hurricane. Obviously, it would be best if we just nuked all our cities. We’d have growth out the wazoo!

  However, this is perhaps less surprising than it should be. No-one can accuse Keynesians (regardless which prefixes adorn them by way of sect differentiation, i.e., New, neo-, post-,…) of being founts of economic literacy. After all, their master thought aimless ditch digging and pyramid building were viable “economic policies”.

   

  

  

  

  

  

• China's "Minksy Moment" – $1.2 Trillion In Ponzi Financing

  Early last month in “Chinese Cash Flow Shocker: More Than Half Of Commodity Companies Can’t Pay The Interest On Their Debt,” we highlighted a report from Macquarie which showed that for many Chinese corporates, debt service payments have simply become too much to bear in the current environment.

  As Macquarie put it “more than half of the cumulative debt in [the commodities space] was EBIT-uncovered in 2014, and all sub-sectors have their share in the uncovered part, particularly for base metals (the big gray bar on the right stands for Chalco), coal, and steel.”

  

  In short, last year about CNY2 trillion in debt was in danger of imminent default. 

  To be sure, this shouldn’t exactly come as a surprise. Lackluster demand (both domestic and international) combined with an acute excess capacity problem and an enormous amount of leverage spells disaster and as the growing number of defaults we’ve seen in China this year underscores, Beijing’s habit of bailing out anyone and everyone and the unspoken directive that compels Chinese banks to roll bad debt may no longer be enough to keep a lid on things. Meanwhile, multiple rate cuts are proving to be too little, too late. 

  So what do you do when you can’t service your debt? Well, you either default or you go into full ponzi mode and take out new loans to pay the interest on your old loans. Don’t look now, but that’s exactly what’s happening in China. 

  As Bloomberg reports, Chinese borrowers are set to take out some CNY7.6 trillion in new loans this year just to pay interest on their existing borrowings. That’s according to Beijing-based Hua Chuang Securities Co., whose data Bloomberg used to construct the following chart:

  

  Here’s more: 

  Chinese companies are struggling to generate the cash flow needed to service their obligations as economic growth slows to the weakest pace in 25 years and corporate profits shrink. While the debt burden has been eased by six central bank interest-rate cuts in 12 months and a tumble in corporate borrowing costs to five-year lows, the number of defaults in China’s onshore corporate bond market has increased to six this year from just one in 2014.

   

  China Shanshui Cement Group Ltd. became the latest company to default on yuan-denominated domestic notes last week as overcapacity in the industry hurt profits and a shareholder dispute stymied financing. State-owned steelmaker Sinosteel Co., which pushed back an interest payment on a bond last month, postponed it again this week.

  And so, as we pointed out more than 18 months ago, China is about to reach its Minsky Moment. Recall what Morgan Stanley said last March:

  It is clear to us that speculative and Ponzi finance dominate China’s economy at this stage. The question is when and how the system’s current instability resolves itself. The Minsky Moment refers to the moment at which a credit boom driven by speculative and Ponzi borrowers begins to unwind. It is the point at which Ponzi and speculative borrowers are no longer able to roll over their debts or borrow additional capital to make interest payments. Minsky states this usually occurs when monetary authorities, in order to control inflationary impulses in the economy, begin to tighten monetary policy. We would add that this monetary tightening often begins to occur at the time when the size of speculative and Ponzi borrowings have become so large that the demand for additional capital to keep these borrowers afloat becomes greater than the supply of such capital. We believe that China finds itself today at exactly this juncture.

  To be sure China is is certainly doing its best to forestall this eventuality. The PBoC for instance, is not seeking to tighten monetary policy and deflation is a bigger risk than inflation. Additionally, the local government debt swap program is a sweeping effort to address provincial governments’ inability to make interest payments on LGVF financing which in many cases came with punitive rates. 

  So while we may not have reached the breaking point just yet (i.e. the point at which borrowers can no longer obtain new financing to pay the interest on their existing obligations), we’re getting there and were it not for the flood of liquidity (the tightening effect of PBoC FX interventions notwithstanding) unleashed by a series of RRR cuts and the implementation of various short- and medium-term lending ops, China probably would have gone over the edge long ago. For a preview of what comes next (and some of what you’ll read below is already happening), here’s Morgan Stanley again:

  The unwind of this credit boom is likely in progress, and we expect it to pick up speed over the coming months and quarters. It will likely involve a steady drip of defaults and near-defaults as insolvent borrowers finally become illiquid. Market rates for all assets except central government bonds and central bank bills will likely continue to rise, reflecting increasing market fears of default by shaky borrowers. Asset values will likely begin to deteriorate as stressed borrowers attempt to sell assets to stay afloat. As a result, banks and other financial entities could begin to increase provisioning for bad debts and to reduce credit availability by gradually tightening credit standards. This could lead to a credit crunch where credit to the economy is choked off for all but the safest borrowers.

  Xi’s determination to show the world that China is set to liberalize capital markets will only serve to accelerate this dynamic as a free(er) market means allowing for more defaults.

  You were warned.

  We close with a quote from Shi Lei, the Beijing-based head of fixed-income research at Ping An Securities Co. who spoke to Bloomberg and who we imagine may be “summoned” for daring to offer the following assessment of the situation:

  “Some Chinese firms have entered the Ponzi stage because return on investment has come down very fast. As a result, leverage will be rising and zombie companies increasing.”

  

  

  

  

  

• What Money Means

  Submitted by Adam Taggart via PeakProsperity.com,

  There's no doubt that money is important. There's good reason why most of us devote a huge percentage of our lives to pursuing it.

  But there's much about money that is misunderstood.

  Many among the masses don't realize the intense and coordinated efforts currently being waged by central planners to trap and devalue our savings through financial repression. They're being fleeced without being aware of it — working harder and harder for less and less.

  Many others overvalue the impact money has on our happiness. They make all sorts of sacrifices in pursuit of money, but remain poor in the things that truly matter.

  In our new book Prosper!: How to Prepare for the Future and Create a World Worth Inheriting, we examine closely what true wealth is. Yes, money absolutely plays a critical part in it; but it is only one of several pillars — one of 8 Forms of Capital — that we identify as required for a rich life. Good health, purposeful work, meaningful relationships, a resilient lifestyle, self-worth, a supportive community — all of these ingredients are as important as money for overall happiness.

  We wrote Prosper! as a resource that those already "awake" to these insights can use to share with family and friends who aren't yet aware of them.

  And since money is a universal attention-grabber as a topic, we're making our chapter on Financial Capital available here for free — as a means of engaging someone you care about in the discussion. We think it's one of the best digests of what happening right now with our money system:

   

  

  

  

  

  

• THe LoNe RaNGeR…

  .

  Leader of the “Free World”

  

  

  

  

• American Police Kill 3 People Per Day, Over 1000 So Far In 2015

  Submitted by Jennifer Baker via TheAntiMedia.org,

  The Guardian’s effort to track fatal shootings by American police, known as ‘The Counted,’ reached the 1000 mark this week. With an average of more than three Americans shot and killed by police per day, this shocking statistic should be a wake-up call to the gun-toting vigilante justice that’s being trained into United States police forces.

  In a country where its citizens are innocent until proven guilty in a court of law, the nation’s police force operates as the judge, jury, and executioner at least three times a day by taking the lives of citizens without significant accountability for their actions.

  The United States government and U.S. citizens have never before had a comprehensive record of the number of people killed by law enforcement. Former U.S. attorney general, Eric Holder described the absence of a National data collection system to track fatal police shootings as “unacceptable.”

  Until journalists began tracking fatal police shootings this year, the only way that information was collected was by a ‘voluntary’ program run by the FBI through which law enforcement agencies may or may not choose to submit their annual count of “justifiable homicides,” which it defines as “the killing of a felon in the line of duty.”

  Between 2005 and 2012 just 1,100 of America’s 18,000 police agencies chose to voluntarily report a “justifiable homicide” to the FBI.

  For comparison, according to the National Law Enforcement Officers Memorial Fund, 35 Police Officers have died on the job in firearm-related incidents in 2015.

  Saudi Arabia, known worldwide for its public beheadings, executed only 90 people in the entire year of 2014 according to reports by Amnesty International, when an average of over 90 people are killed by American police forces every 30 days.

  To further put the scale of this crisis into perspective, as the world rushes to war over the tragic deaths of 129 people killed earlier this week in Paris, United States police forces kill that many American citizens about every 40 days.

  The crisis is clear. The United States trains its police officers to act as public executioners with a laundry list of worn out excuses and aggressive police unions at the ready to battle any public backlash and assist Officers with avoiding accountability for their actions.

  A complete dismantling and total reconstruction of current policing systems seem the only available answer.

  

  

  

  

• Dear Syrian Refugees: You Are Welcome In Baltimore, Mayor Says

  If there’s one thing that’s become abundantly clear in the six days since ISIS operatives turned the streets of Paris into a warzone and massacred dozens of concertgoers at the Bataclan, it’s that when it comes to lawmakers’ support for the sheltering of Syrian refugees, murdering Westerners on camera is one thing, but staging an all-out assault on civilians in the French capital is entirely another. 

  As of Thursday, more than half of US state governors have come out against the Obama administration’s plan to resettle 10,000 Syrian asylum seekers in the US and a recent poll suggests that some 53% of Americans oppose the plan as well. 

  You can expect the backlash to grow with each new ISIS propaganda clip threatening attacks on US soil. There have been two this week alone, with the first containing an explicit threat against Washington DC and the second a veiled threat against New York. How credible those threats are we have no idea (ask Langley), but both of the videos were plastered all over the mainstream US media which probably drove a metaphorical stake through the heart of Obama’s refugee plan. 

  While it’s true that states can’t physically prevent refugees from being relocated within their borders, House Speaker Paul Ryan is moving to stop the resettlement plan in its tracks and you can bet that GOP governors will do everything in their power to make the relocation process as difficult as possible for the federal government and that resistance could well be contagious, creating ill-will towards refugees. 

  However, in a world where hostility towards Syrian migrants is growing by the day, there’s one city that wants asylum seekers to know that they are welcome: Baltimore. 

  Here’s a statement out earlier this week from Mayor Stephanie-Rawlings Blake:

  Baltimore, Maryland and the United States have proud traditions of welcoming refugees seeking assistance from crises around the world. There are few among us who can claim that their ancestors were indigenous to the United States. Welcoming immigrants and New Americans is a critical part of my strategy to grow Baltimore, and I hope that refugees from Syria will look to our city as a potential place to call home.

   

  

  So there you go Syrian refugees, there’s hope for you in America after all. 

  That said, we do encourage you to scope out the neighborhood before deciding that Baltimore is the place you want “to call home,” because depending on where you are in the city and what the current state of race relations happens to be, you might wonder why you ever left the Middle East…

  

  

  

  

  

  

• Hillary Clinton's Aides Demand Comedy Club Remove Video Making Fun Of Her

  Submitted by Mike Krieger via Liberty Blitzkrieg blog,

  The one upside of Hillary Clinton becoming President, is that her endless stream of stupidity will result in more content for this writer than I could ever imagine.

  Hot off her recent debate performance in which she claimed that the reason she is owned by Wall Street is because of 9/11, her aides are now demanding a Hollywood comedy club take down a video of comedians mocking her.

  Just in case you have any doubt about what a Hillary presidency would look like, we learn from Judicial Watch:

  In what appears to be a first for a serious presidential contender, Hillary Clinton’s campaign is going after five comedians who made fun of the former Secretary of State in standup skits at a popular Hollywood comedy club.

   

  A video of the short performance, which is less than three minutes, is posted on the website of the renowned club, Laugh Factory, and the Clinton campaign has tried to censor it. Besides demanding that the video be taken down, the Clinton campaign has demanded the personal contact information of the performers that appear in the recording. This is no laughing matter for club owner Jamie Masada, a comedy guru who opened Laugh Factory more than three decades ago and has been instrumental in launching the careers of many famous comics. “They threatened me,” Masada told Judicial Watch. “I have received complains before but never a call like this, threatening to put me out of business if I don’t cut the video.”

   

  Masada told Judicial Watch that, as soon as the video got posted on the Laugh Factory website, he received a phone call from a “prominent” person inside Clinton’s campaign. “He said the video was disgusting and asked who put me up to this,” Masada said. The Clinton staffer, who Masada did not want to identify, also demanded to know the names and phone numbers of the comedians that appear in the video. Masada refused and hung up. He insists that the comedy stage is a sanctuary for freedom of speech no matter who is offended. “Just last night we had (Emmy-award winner) Dana Carvey doing Donald Trump and it was hilarious,” Masada said.

  Now watch the video, accurately titled: Hillary Clinton vs. the First Amendment

   

   

   

   

  Let’s now make sure this video benefits from a huge Streisand effect.

   

  Should someone this thin-skinned, someone so weak she demands a safe space from humor, ever be considered for the Presidency?

   

  

  

  

  

  

• Fed's Fischer Unleashes Schrodinger's FedSpeak – We Dare You To Make Sense Of This

  If you had any confidence in your ability to understand The Fed's future course of action, Fed vice-chair Stanley Fischer just destroyed it in a speech in San Francisco that beggars belief in its CYA hedgedness…

  While we continue to scrutinize incoming data, and no final decisions have been made, we have done everything we can to avoid surprising the markets and governments when we move, to the extent that several emerging market (and other) central bankers have, for some time, been telling the Fed to "just do it."

   

  Fed meetings are now 'getting interesting' as possible rate hike discussed

   

  In the relatively near future probably some major central banks will begin gradually moving away from near-zero interest rates

  All of this was said without a big "wink."

  So let's break down the confusion:

  First, this…

  • FISCHER: FED HAS TAKEN NO FINAL DECISION ON TIMING OF LIFTOFF (ok makes sense, data-dependent and all that)

  But…

  • *FISCHER: SOME MAJOR CENTRAL BANKS TO RAISE RATES IN NEAR FUTURE (well The ECB, BoJ, PBOC aren't so that means The Fed will? But you just said you hadn't decided yet?)

  Then this…

  • *FISCHER: FED HAS DONE EVERYTHING IT CAN TO AVOID SURPRISING MKT (by telegraphing a rate-hike in December – just like you did in September – even though you 'surprised' everyone then and just seconds ago said you hadn't decided… and had)

  And finally this…

  • *FISCHER SAYS FOREIGN CENTRAL BANKERS HAVE TOLD FED 'JUST DO IT'

  Ok, so greenlight from everyone else – it's on – do not be surprised… but then again we haven't decided yet so don't bet on it.

  * * *

  Is it any wonder that Gold and Treasuries were bid today as it becomes ever more clear that The Fed is entirely lost and a policy error is looming.

  

  

  

  

  

• The Stunning Visualization Of The World's 3 Billion Barrel Oil Glut

  While talk of record backlogs of supertankers and an unprecented 3 billion barrels of crude oil stock-piles sound impressive – and are weighing on crude prices – the following stunning image provides some context for just what this means…

   

  If the 3 billion barrels of crude oil gluttiness was put into tankers, the line would reach a stunning  530 kilometers…

  

  Source: @JavierBlas

  *  *  *

  As we previously noted, via Bloomberg,

  Oil stockpiles have swollen to a record of almost 3 billion barrels because of strong production in OPEC and elsewhere, potentially deepening the rout in prices, according to the International Energy Agency.

   

  This “massive cushion has inflated” on record supplies from Iraq, Russia and Saudi Arabia, even as world fuel demand grows at the fastest pace in five years, the agency said. Still, the IEA predicts that supplies outside the Organization of Petroleum Exporting Countries will decline next year by the most since 1992 as low crude prices take their toll on the U.S. shale oil industry.

   

  “Brimming crude oil stocks” offer “an unprecedented buffer against geopolitical shocks or unexpected supply disruptions,” the Paris-based agency said in its monthly market report. With supplies of winter fuels also plentiful, “oil-market bears may choose not to hibernate.”

   

  Total oil inventories in developed nations increased by 13.8 million barrels to about 3 billion in September, a month when they typically decline, according to the agency.

   

  

   

  The pace of gains slowed to 1.6 million barrels a day in the third quarter, from 2.3 million a day in the second, although growth remained “significantly above the historical average.” There are signs the some fuel-storage depots in the eastern hemisphere have been filled to capacity, it said.

  And the backlog of SuperTankers continues to surge – to record highs for this time of year…

  31 very large crude carriers head to U.S. ports, highest since last May and most for time of year in data going back to 2013, ship tracking information compiled by Bloomberg shows.

   

  

   

  In fact some firms ar enow breaking charters…Frontline terminates long term charter for tanker Mindanao

   

  Frontline agreed with Ship Finance International Limited to terminate the long term charter for Suezmax tanker Mindanao, and will receive a compensation payment of approximately $3.3 million from Ship Finance for termination of current charter

   

  Following this termination, the number of vessels on charter from Ship Finance will be reduced to 14 vessels, including 12 VLCCs and two Suezmax tankers

   

  The stock buffer is bearish and will probably set a lid on how much higher prices can go in 2016,” Torbjoern Kjus, an analyst at DNB ASA in Oslo, said by phone. “There’s a sizeable risk that we could run totally full,” in terms of storage capacity, he said

  

  

  

  

  

• The Most Important Question About ISIS That Nobody Is Asking

  The question of how the Islamic State funds its sprawling caliphate has been discussed in the past: we first broke down the primary driver of ISIS revenue well over a year ago, in September 2014, when we explained that “ISIS uses oil wealth to help finance its terror operations.”

  

  Daily Signal’s Kelsey Harkness explained the breakdown as follows:

  According to the Iraq Energy Institute, an independent, nonprofit policy organization focused on Iraq’s energy sector, the army of radical Islamists controls production of 30,000 barrels of oil a day in Iraq and 50,000 barrels in Syria. By selling the oil on the black market at a discounted price of $40 per barrel (compared to about $93 per barrel in the free market), ISIS takes in $3.2 million a day.

   

  The oil revenue, which amounts to nearly $100 million each month, allows ISIS to fund its military and terrorist attacks — and to attract more recruits from around the world, including America.

  Most importantly, we added that to be successful in counterterrorism efforts, “the U.S. and its allies must “push the Islamic State out of the oil fields it has captured and disrupt its ability to smuggle the oil to foreign markets.”

  None of this was surprising to anyone, but what was quite surprising is that it took the allied forces over a year to take the oil revenue threat seriously and begin targeting the Islamic State’s oil infrastructure in earnest.

  Today, in an article titled “Why US Efforts to Cut Off Islamic State’s Funds Have Failed” Bloomberg tries to explain just how it is that despite a more than a year long campaign, ISIS funding remains as strong as ever, and notes that “the latest round of airstrikes are directly related to the administration’s new math. “You have to go after the oil, and you have to do it in a serious way, and we’ve just begun to do that now,” citing Benjamin Bahney, an international policy analyst at the Rand Corp., a U.S. Department of Defense-funded think tank.

  To be sure, there are other sources of revenue: Bloomberg correctly notes that “even if the U.S. finally weakens the group’s oil income, Bahney and other analysts in the U.S., the Middle East, and Europe contend, Islamic State has resources beyond crude—from selling sex slaves to ransoming hostages to plundering stolen farmland—that can likely keep it fighting for years.”

  Still, without a doubt, the dominant source of funds for the terrorists is oil, and not just oil, but a well-greased logistical machine that keeps thousands of barrels moving from unknown pumps to even refineries, and ultimately to smugglers who operated out of Turkey and other countries.

  Here is Bloomberg:

  Most often refined in Syria, the group’s oil is trucked to cities such as Mosul to provide people living under its black banner with fuel for generators and other basic needs. It’s also used to power the war machine. “They have quite an organized supply chain running fuel into Iraq and [throughout] the ‘caliphate,’ ” says Michael Knights, an Iraq expert at the Washington Institute for Near East Policy, using the militant group’s religiously loaded term for itself. Because the U.S. apparently believed the real money for Islamic State came primarily via selling refined oil, rather than crude, last year’s strikes heavily targeted refineries and storage depots, says Bahney. He and other experts say that strategy missed an important shift: Militants increasingly sell raw crude to truckers and middlemen, rather than refining it themselves. So while Islamic State probably maintains some refining capacity, the majority of the oil in IS territory is refined by locals who operate thousands of rudimentary, roadside furnaces that dot the Syrian desert.

  Here is where it gets interesting: Bloomberg cites Pentagon officials who acknowledge “that for more than a year they avoided striking tanker trucks to limit civilian casualties. None of these guys are ISIS. We don’t feel right vaporizing them, so we have been watching ISIS oil flowing around for a year,” says Knights. That changed on Nov. 16, when four U.S. attack planes and two gunships destroyed 116 oil trucks.

  So any qualms about vaporizing “innocent civilians” promptly disappeared when the Pentagon realized that its 1+ year long campaign had been an epic debacle, that a suddenly surging ISIS was stronger as ever, and most importantly, that its critical revenue lifelines had been largely untouched for years. Perhaps they weren’t innocent civilians after all.

  It is still unknown if this recent crackdown on “dumping oil”, or crude which dramatically lowers the price of oil in global markets – it certainly is an odd coincidence that the price of Brent and WTI began its tumble last fall, just when the Islamic State made its dramatic appearance on the world scene – will have an effect and cut off the primary source of funds to ISIS.

  But what we have been wondering for months and what we hope some enterprising journalist will soon answer, is just who are the commodity trading firms that have been so generously buying millions of smuggled oil barrels procured by the Islamic State at massive discounts to market, and then reselling them to other interested parties.

  In other words, who are the middlemen.

  What we do know is who they may be: they are the same names that were quite prominent in the market in September when Glencore had its first, and certainly not last, near death experience: the Glencores, the Vitols, the Trafiguras, the Nobels, the Mercurias of the world.

  To be sure, funding terrorist states is not something that some of the most prominent names in the list above have shied away from in the past.
  

  Which one (or ones) are the guilty parties – those who have openly breached terrorism funding laws – we don’t know: it may be one, or more of the above, or someone totally different.

  At this point, however, three things are certain: whoever the commodity trading house may be that is paying ISIS-affiliated “innocent civilians” hundreds of millions of dollars for their products, they are perfect aware just who the source of this deeply discounted crude is. Crude so deeply discounted, in fact, it results in massive profits for the enterprising middleman who are engaging in openly criminal transactions.

  The second certainty: whoever said middleman is, it is very well known to US intelligence services such as the NSA and CIA, and thus to the Pentagon, and thus, the US government.

  The third certainty is that while the US, and Russia, and now France, are all very theatrically bombing something in the Syrian desert (nobody really knows what), the funding of ISIS continues unabated as someone keeps buying ISIS oil.

  We wonder how long until someone finally asks the all important question regarding the Islamic State: who is the commodity trader breaching every known law of funding terrorism when buying ISIS crude, almost certainly with the tacit approval by various “western alliance” governments, and why is it that these governments have allowed said middleman to continue funding ISIS for as long as it has?

  

  

  

  

  

• Nike Just Did It

  Having suffered a little recently on the heels of retailer concerns, Nike – the best performer in The Dow this year – is surging back towards all-time record highs after unleashing a new share buyback program (upping the limit from $8bn to $12bn), a stock split and a dividend boost.

  • *NIKE SETS $12B SHARE BUYBACK, 2-FOR-1 STOCK SPLIT, BOOSTS DIV
  • *NIKE SEES CURRENT $8B SHARE BUYBACK COMPLETED BEFORE FY16 END
  • *NIKE, 14% BOOST IN QTRLY DIV & 2-FOR-1 STOCK SPLIT

   

  

   

  Statement:

  NIKE, Inc. (NYSE:NKE) announced today that its Board of Directors approved a new four-year, $12 billion program to repurchase shares of NIKE’s Class B Common Stock. The Company anticipates that the current $8 billion share repurchase program will be completed before the end of fiscal 2016, and the new program will commence upon the completion of the current program.*

  Repurchases under the Company’s new program will be made in open market or privately negotiated transactions in compliance with Securities and Exchange Commission Rule 10b-18, subject to market conditions, applicable legal requirements, and other relevant factors. This share repurchase plan does not obligate the Company to acquire any particular amount of common stock, and it may be suspended at any time at the Company’s discretion. NIKE had approximately 678 million shares of Class B Common Stock outstanding as of November 16, 2015.

  “In a growing sports industry, NIKE is the clear leader,” said Mark Parker, President and CEO of NIKE, Inc. “We are built for growth, while also staying committed to creating shareholder value over the long term. We’ve proven it time and again, having returned over $23 billion to shareholders over the last 14 years through share repurchases and dividends. Moving forward, we see even greater potential for NIKE as we continue to unlock new markets, new experiences and new products.”

  The Board of Directors also declared a quarterly cash dividend on the Company’s outstanding Class A and Class B Common Stock of $0.32 per share, on a pre-split basis, payable on January 4, 2016 to shareholders of record at the close of business on December 9, 2015. The dividend represents a 14 percent increase over the previous pre-split quarterly rate of $0.28 per share. This is the fourteenth year in a row the Company has increased its annual dividend, over which time the dividend has increased by a factor of more than 10.

  The Board of Directors also approved a two-for-one split of both NIKE’s Class A and Class B Common shares. The stock split will be in the form of a 100 percent stock dividend payable on December 23, 2015 to shareholders of record at the close of business December 9, 2015.

  Upon completion of the split, the outstanding shares of NIKE’s Class A and Class B Common Stock will increase to approximately 353 million and 1.36 billion, respectively, based on the outstanding shares as of November 16, 2015. The Company expects its common stock to begin trading at the split-adjusted price on December 24, 2015.

  

  

  

  

  

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