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[Markets] Tolerance Cuts Both Ways: Freedom For The Speech We Hate

Authored by John Whitehead via The Rutherford Institute,

Tolerance cuts both ways.

This isn’t an easy pill to swallow, I know, but that’s the way free speech works, especially when it comes to tolerating speech that we hate.

The most controversial issues of our day - gay rights, abortion, race, religion, sexuality, political correctness, police brutality, et al. - have become battlegrounds for those who claim to believe in freedom of speech but only when it favors the views and positions they support.

Free speech for me but not for thee is how my good friend and free speech purist Nat Hentoff used to sum up this double standard.

This haphazard approach to the First Amendment has so muddied the waters that even First Amendment scholars are finding it hard to navigate at times.

It’s really not that hard.

The First Amendment affirms the right of the people to speak freely, worship freely, peaceably assemble, petition the government for a redress of grievances, and have a free press.

Nowhere in the First Amendment does it permit the government to limit speech in order to avoid causing offense, hurting someone’s feelings, safeguarding government secrets, protecting government officials, insulating judges from undue influence, discouraging bullying, penalizing hateful ideas and actions, eliminating terrorism, combatting prejudice and intolerance, and the like.

Unfortunately, in the war being waged between free speech purists who believe that free speech is an inalienable right and those who believe that free speech is a mere privilege to be granted only under certain conditions, the censors are winning.

We have entered into an egotistical, insulated, narcissistic era in which free speech has become regulated speech: to be celebrated when it reflects the values of the majority and tolerated otherwise, unless it moves so far beyond our political, religious and socio-economic comfort zones as to be rendered dangerous and unacceptable.

Indeed, President Trump - who has been accused of using his very public platform to belittle and mock his critics and enemies while attempting to muzzle those who might speak out against him - may be the perfect poster child for this age of intolerance.

Even so, Trump is not to blame for America’s growing intolerance for free speech.

The country started down that sorry road long ago.

Protest laws, free speech zones, bubble zones, trespass zones, anti-bullying legislation, zero tolerance policies, hate crime laws and a host of other legalistic maladies dreamed up by politicians and prosecutors (and championed by those who want to suppress speech with which they might disagree) have conspired to corrode our core freedoms, purportedly for our own good.

On paper - at least according to the U.S. Constitution - we are technically free to speak.

In reality, however, we are only as free to speak as a government official - or corporate entities such as Facebook, Google or YouTube - may allow.

Free speech is no longer free.

What we have instead is regulated, controlled speech, and that’s a whole other ballgame.

Just as surveillance has been shown to “stifle and smother dissent, keeping a populace cowed by fear,” government censorship gives rise to self-censorship, breeds compliance, makes independent thought all but impossible, and ultimately foments a seething discontent that has no outlet but violence.

The First Amendment is a steam valve. It allows people to speak their minds, air their grievances and contribute to a larger dialogue that hopefully results in a more just world.

When there is no steam valve - when there is no one to hear what the people have to say - frustration builds, anger grows and people become more volatile and desperate to force a conversation. By bottling up dissent, we have created a pressure cooker of stifled misery and discontent that is now bubbling over and fomenting even more hate, distrust and paranoia among portions of the populace.

Silencing unpopular viewpoints with which the majority might disagree - whether it’s by shouting them down, censoring them, muzzling them, or criminalizing them - only empowers the controllers of the Deep State.

Even when the motives behind this rigidly calibrated reorientation of societal language appear well-intentioned - discouraging racism, condemning violence, denouncing discrimination and hatred - inevitably, the end result is the same: intolerance, indoctrination and infantilism.

The police state could not ask for a better citizenry than one that carries out its own censorship, spying and policing.

This is how you turn a nation of free people into extensions of the omniscient, omnipotent, omnipresent police state, and in the process turn a citizenry against each other.

So where do we go from here?

If Americans don’t learn how to get along - at the very least, agreeing to disagree and respecting each other’s right to subscribe to beliefs and opinions that may be offensive, hateful, intolerant or merely different - then we’re going to soon find that we have no rights whatsoever (to speak, assemble, agree, disagree, protest, opt in, opt out, or forge our own paths as individuals).

The government will lock down the nation at the slightest provocation.

Indeed, the government has been anticipating and preparing for civil unrest for years now, as evidenced by the build-up of guns and tanks and militarized police and military training drills and threat assessments and extremism reports and surveillance systems and private prisons and Pentagon training videos predicting the need to impose martial law by 2030.

Trust me: when the police state cracks down, it will not discriminate.

We’ll all be muzzled together.

We’ll all be jailed together.

We’ll all be viewed as a collective enemy to be catalogued, conquered and caged.

Indeed, a recent survey concluded that a large bipartisan majority of the American public already recognizes the dangersposed by a government that is not only tracking its citizens but is also being controlled by a “Deep State” of unelected government officials.

Thus, the last thing we need to do is play into the government’s hands by turning on one another, turning in one another, and giving the government’s standing army an excuse to take over.

So let’s start with a little more patience, a lot more tolerance and a civics lesson on the First Amendment.

What this means is opening the door to more speech not less, even if that speech is offensive to some.

It’s time to start thinking for ourselves again.

It’s time to start talking to each other, listening more and shouting less.

Most of all, as I make clear in my book Battlefield America: The War on the American People, it’s time to make the government hear us—see us—and heed us.

This is the ultimate power of free speech.

Published:3/23/2018 10:35:14 PM
[Markets] Gallup: Only 7% of K-12 teachers want to carry guns in the classroom A new poll asked teachers how they would like to deal with gun control.
Published:3/23/2018 10:15:26 PM
[Markets] Visualizing The Rising Problem Of Crypto Theft (And How To Protect Yourself)

Part of the appeal of cryptocurrency is that it exists “outside” of the system.

Using complex cryptography and decentralized ledgers, Visual Capitalist's Jeff Desjardins explains, a blockchain can operate independently from the world’s most powerful countries, corporations, and banking institutions.

While this detachment from authority is extremely powerful, existing almost exclusively in the digital realm does have its drawbacks.


Today’s infographic from CryptoGo shows that as cryptocurrencies rise in prominence, so does its appeal to hackers, criminals, and other bad actors.

With millions of dollars being stolen via crypto theft, investors and other dabblers in cryptocurrency must take precautions to protect their assets for the long haul.

Courtesy of: Visual Capitalist

Crypto theft comes in many different forms, and at least $225 million of cryptocurrency has been stolen as of mid-2017.

There are various forms of crypto theft that have made this possible, including brute forcing, phishing, phone-porting, mining malware, and Ponzi schemes.


Here are the most prominent forms of crypto theft:

Brute Forcing

This is the form of hacking that most are familiar with. It involves automated software that simply tries different passwords until one works.


Using your phone number and a little “social engineering”, a hacker can convince a customer service rep that they are actually you. This allows them to reset your password and access your funds.


In this case, a hacker will send you suspicious links through email or social media messages. By clicking on one of those links, malware is installed.

Ponzi Schemes

Multi-level marketing schemes that provide signing bonuses. These eventually collapse when prices change or signups stop. Once over, the thieves takes the money and run.

Mining Malware

Hackers hijack a computer’s power to mine cryptocurrency remotely.

Protecting Yourself

Crypto theft can be prevented by taking appropriate precautionary measures.

These include using encrypted backups to hold private keys and other data, using proper anti-virus software for crypto, and opting for multi-factor authentication.

Further, other general measures can also be taken to protect assets, such as holding only small amounts of cryptocurrency in hot wallets, using safety deposit boxes to store USB and private paper keys, turning off SMS authentication and email recovery options, and diversifying holdings through various exchanges.

Published:3/23/2018 10:15:07 PM
[Markets] US Doubles Down As Empire Declines

Authored by Kevin Zeese and Margaret Flowers via,

US empire is in decline. Reports of the end of the US being the unitary power in world affairs are common, as are predictions of the end of US empire. China surpassed the United States as the world economic leader according to Purchasing Power Parity Gross National Product, and Russia announced new weapons that can overcome the US’ defense systems.

What is happening in the United States, in response, is to do more of what has been causing the decline. As the Pentagon outlined in its post-primacy report, the US’ plan is more money, more aggression and more surveillance. Congress voted nearly unanimously to give the Pentagon tens of billions more than it requested. Military spending will now consume 57% of federal discretionary spending, leaving less for basic necessities. The Trump administration’s new nominees to the State Department and CIA are a war hawk and a torturer. And the Democrat’s “Blue Wave” is composed of security state candidates.

The US is escalating an arms race with Russia and China. This may create the mirror image of President Reagan forcing Russia to spend so much on its military that it aided in the break-up of the Soviet Union. The US economy cannot handle more military spending, worsening austerity when most people in the US are in financial distress.

This is an urgent situation for all people in the world. In the US, we carry an extra burden as citizens of empire to do what we can to oppose US imperialism. We must be clear that it is time to end wars and other tools of regime change, to become a cooperative member of the world community and to prioritize the needs of people and protection of the planet.

There are a number of opportunities to mobilize against US empire: the April 14-15 days of action, the Women’s March on the Pentagon in October and the mass protest planned against the military parade in November.

Turmoil in Foreign Policy Leadership

This week, President Trump fired Secretary of State Tillerson, nominated CIA director Mike Pompeo for the State Department and chose Gina Haspel to replace Pompeo at the CIA. As we write this newsletter, National Security Adviser H.R. McMaster is on the verge of being fired [since been fired and replaced by uber-hawk John Bolton]. The deck chairs are being rearranged on the Titanic but this will not correct the course of a failing foreign policy.

The Pompeo and Haspel nominations are controversial. Pompeo believes torturers are patriots. He is a war hawk on every conflict and competing country, including Russia and especially Iran. And, unlike Tillerson, who stood up to Trump on occasion, Pompeo kisses-up to Trump, defending his every move. Haspel led a CIA black site torture center and ordered destruction of evidence to obstruct torture investigations.

The Democrat’s record on torture is not good. President Obama said he would not prosecute Bush era torturers, infamously saying, “we need to look forwards as opposed to looking backwards.” John Brennan who was complicit in Bush-era torture, withdrew under pressure from becoming CIA director in 2008, instead becoming Deputy National Security Adviser, which did not require confirmation. After Obama’s re-election, Brennan became Obama’s CIA director.

Brennan was inconsistent on whether torture worked. He tried to elevate Haspel, but the controversy around her prevented it. When the CIA spied on the US Senate Intelligence committee over their torture report, Brennan originally lied, denying the spying, but was later forced to admit it. He was not held accountable by either the Democrats or Obama.

Haspel headed a black site in Thailand where torture was carried out. She ordered the destruction of 92 secret tapes documenting torture even thoughthe Senate Judiciary requested the tapes, as had a federal judge in a criminal trial. According to a federal court order, the tapes should have been turned over to comply with a FOIA request. Counsel for the White House and CIAsaid the tapes should have been preserved. Haspel’s actions should lead to prosecution, not to a promotion as head of the agency, as CIA whistleblower John Kiriakou, who exposed torture and served time in prison for it, reminds us.

The Trump nominations leave the Democrats on the cusp of a complete surrender on torture in an election year. Caving on torture by approving Pompeo and Haspel will anger Democratic voters and risk the high turnout need for their anticipated 2018 “Blue Wave”.

Republican Senator Rand Paul says he will oppose both nominees. If all the Democrats oppose, the Senate will be split 50-50, requiring one more Republican to block the nominees. Fifteen Democrats supported Pompeo’s nomination as CIA director, so Democratic opposition is not ensured. Will Democrats oppose torture or be complicit in normalizing torture?

Democrat’s Security State Blue Wave

Militarism and war are bi-partisan. When Trump submitted a military budget, the Democrats almost unanimously joined with the Republicans to increase the budget by tens of billions of dollars. But, that is not all, a series of investigative reports by the World Socialist website reported the Democratic Party is becoming the party of military and intelligence candidates.

The series identifies more than 50 military-intelligence candidates seeking the Democratic nomination in 102 districts identified by the Democratic Congressional Campaign Committee as targets for 2018. The result, as many as half of all new congressional Democrats could come from the national security apparatus. An example is the victory in Pennsylvania by Conor Lamb, an anti-abortion, pro-gun, pro-drug war, ex-Marine, which is being celebrated by Democrats.

The Sanders-Democrats, working to make the Democratic Party a progressive people’s party, are being outflanked by the military-intelligence apparatus. In the end, Democratic Party leadership cares more about numbers than candidate’s policy positions.

Patrick Martin writes:

If on November 6 the Democratic Party makes the net gain of 24 seats needed to win control of the House of Representatives, former CIA agents, military commanders, and State Department officials will provide the margin of victory and hold the balance of power in Congress. The presence of so many representatives of the military-intelligence apparatus in the legislature is a situation without precedent in the history of the United States.

Just as Freedom Caucus Tea Party representatives hold power in the Republican Party, the military-intelligence officials will become the powerhouse for Democrats. This takeover will make the Democrats even more militarist at a dangerous time when threats of war are on the rise and the country needs an opposition party that says ‘no’ to war.

What does this mean? Kim Dotcom might be right when he tweeted, “The Deep State no longer wants to rely on unreliable puppets. They want to run politics directly now.” What does it mean politically? There is no two-party system on militarism and war. Those who oppose war are not represented and must build a political culture to oppose war at home and abroad.

US Foreign Policy Elites in Denial About Russia’s New Weapons

There is dangerous denial among US foreign policy elites about the Russian weapons systems announced by Putin in his state of the union speech last week. Military-intelligence analyst the Saker compares the US’ reaction to the five stages of grief: denial, anger, bargaining, depression, acceptance. US elites are in the first two stages.

The US does not have an adequate defense to the weapons announced by Putin. As the Saker writes, “Not only does that mean that the entire ABM [Anti-Ballistic Missile] effort of the USA is now void and useless, but also that from now US aircraft carrier battle groups can only be used against small, defenseless, nations!” US leadership cannot believe that after spending trillions of dollars, Russia has outsmarted their military with ten percent of their budget.

Former Secretary of Defense William Perry exemplifies this denial, claiming Putin’s weapons are “phony,” exaggerated and do not really exist. Then he blames the Russians for starting an arms race. Of course, in both the National Security Strategy and Nuclear Posture Review, published before the Putin speech, the US announced an arms race.

US political and military leadership brought this on themselves. The US’ leaving the SALT treaty in 2002 and expanding NATO to cover the Russian border led to Russia’s development of these new weapons.

Further, Obama, and now Trump, support spending more than a trillion dollars to upgrade nuclear weapons. Perry falsifies history and blames Russia rather than looking in the mirror, since he was defense secretary during this era of errors.

The new Russian weapons systems do not have to lead to an unaffordable arms race. The US should re-evaluate its strategy and find a diplomatic path to a multi-polar world where the US does not waste money on militarism. We can divest from the military economy and convert it to civilian economic investment, as the US has many needs for infrastructure, energy transition, health care, education and more.

US global dominance is coming to an end. The issue is how will it end? Will the US hang on with an arms race and never-ending wars, or it will it wind down US empire in a sensible way. The Saker writes:

The Russian end-goal is simple and obvious: to achieve a gradual and peaceful disintegration of the AngloZionist Empire combined with a gradual and peaceful replacement of a unipolar world ruled by one hegemon, by a multipolar world jointly administered by sovereign nations respectful of international law. Therefore, any catastrophic or violent outcomes are highly undesirable and must be avoided if at all possible. Patience and focus will be far more important in this war for the future of our planet than quick-fix reactions and hype. The ‘patient’ needs to be returned to reality one step at a time. Putin’s March 1st speech will go down in history as such a step, but many more such steps will be needed before the patient finally wakes up.

As of now, the Pentagon and US leadership are in denial and not ready to face reality. The people of the United States, in solidarity with people of the world, must act now to end the war culture and convince US leadership that a new path is necessary.

Published:3/23/2018 9:51:51 PM
[Markets] "Just A Few More Pips" - Watch The Hong Kong Dollar!

Authored by Jeffrey Snider via Alhambra Investment Partners,

On Page 1, Chapter 1 of the Central Banker Crisis Handbook it states very clearly, “do not make it worse.” It’s something like the Hippocratic oath where monetary authorities must first assess what their actions might do to an already fragile system. It’s why they take great pains to try and maintain composure, appearing calm and orderly while conflagration rages all around. The last thing you want to do is confirm the run.

In modern times, that’s been taken to extremes where officials just outright lie – nothing to see here.

Inflation hysteria has subsided to a considerable degree, thankfully. Going back to January 26 or so, markets aren’t quite as ready to embrace the lie as they were through all of last year. People are now paying attention to LIBOR-OIS when all they needed was the HKMA.

Less than two weeks ago, on March 8, Norman Chan, CEO of Hong Kong’s monetary authority, issued a statement. It was the usual stuff about how HK has built up an enormous reserve buffer able to withstand any convertibility issues (how’d that work out in China with their much larger pile of forex?) Further, Chan says that HKD’s vomit-inducing drop is as much a good thing as any other kind of thing.

The world is getting so much better, he wrote, so HKD’s outflows are merely restoration of normality. So far so good. Many people will buy that because the logical fallacy of appeal to authority is often unquestioned. Central bankers, we are conditioned to believe, know their stuff.

But he titled his message:

Stay calm on the weakening of the Hong Kong dollar

D’oh. Today it’s 7.848, and just a few more pips to obligated intervention, perhaps as soon as Monday, maybe even tomorrow (though I suspect they’ve been in the market already).

The more interesting part is CNY, or how it’s correlation (inverse) with HKD has now definitively broken (nearly two months). Whether it has permanently will be determined, I believe, by what happens at the 7.85 trigger. As I write for tomorrow:

You didn’t really need LIBOR-OIS to suggest global dollar conditions are escalating the wrong way.

There was repo and collateral (including gold) in September..

Cross currency basis in December...

Stock market liquidations sweeping across the globe in January...

And now this.

The one common trend through all of that was HKD.

Why aren’t HKD traders remaining calm?

For one, HKMA has never been here before. They quite literally don’t know what they are doing.


Published:3/23/2018 9:16:20 PM
[Markets] Paul Ehrlich: "Collapse Of Civilisation Is A Near Certainty Within Decades"

Authored by Damian Carrington via The Guardian,

Fifty years after the publication of his controversial book The Population Bomb, biologist Paul Ehrlich warns overpopulation and overconsumption are driving us over the edge...

A shattering collapse of civilisation is a “near certainty” in the next few decades due to humanity’s continuing destruction of the natural world that sustains all life on Earth, according to biologist Prof Paul Ehrlich.

In May, it will be 50 years since the eminent biologist published his most famous and controversial book, The Population Bomb. But Ehrlich remains as outspoken as ever.

Prof Paul Ehrlich of Stanford University. Photograph: Alamy Stock Photo

The world’s optimum population is less than two billion people – 5.6 billion fewer than on the planet today, he argues, and there is an increasing toxification of the entire planet by synthetic chemicals that may be more dangerous to people and wildlife than climate change.

Ehrlich also says an unprecedented redistribution of wealth is needed to end the over-consumption of resources, but “the rich who now run the global system – that hold the annual ‘world destroyer’ meetings in Davos – are unlikely to let it happen”.

The Population Bomb, written with his wife Anne Ehrlich in 1968, predicted “hundreds of millions of people are going to starve to death” in the 1970s – a fate that was avoided by the green revolution in intensive agriculture.

Many details and timings of events were wrong, Paul Ehrlich acknowledges today, but he says the book was correct overall.

“Population growth, along with over-consumption per capita, is driving civilisation over the edge: billions of people are now hungry or micronutrient malnourished, and climate disruption is killing people.”

Ehrlich has been at Stanford University since 1959 and is also president of the Millennium Alliance for Humanity and the Biosphere, which works “to reduce the threat of a shattering collapse of civilisation”.

“It is a near certainty in the next few decades, and the risk is increasing continually as long as perpetual growth of the human enterprise remains the goal of economic and political systems,” he says. “As I’ve said many times, ‘perpetual growth is the creed of the cancer cell’.”

It is the combination of high population and high consumption by the rich that is destroying the natural world, he says. Research published by Ehrlich and colleagues in 2017 concluded that this is driving a sixth mass extinction of biodiversity, upon which civilisation depends for clean air, water and food.

High consumption by the rich is destroying the natural world, says Ehrlich. Photograph: Paulo Whitaker/Reuters

The solutions are tough, he says.

“To start, make modern contraception and back-up abortion available to all and give women full equal rights, pay and opportunities with men.

“I hope that would lead to a low enough total fertility rate that the needed shrinkage of population would follow. [But] it will take a very long time to humanely reduce total population to a size that is sustainable.”

He estimates an optimum global population size at roughly 1.5 to two billion,

But the longer humanity pursues business as usual, the smaller the sustainable society is likely to prove to be. We’re continuously harvesting the low-hanging fruit, for example by driving fisheries stocks to extinction.”

Ehrlich is also concerned about chemical pollution, which has already reached the most remote corners of the globe.

“The evidence we have is that toxics reduce the intelligence of children, and members of the first heavily influenced generation are now adults.”

He treats this risk with characteristic dark humour:

“The first empirical evidence we are dumbing down Homo sapiens were the Republican debates in the US 2016 presidential elections – and the resultant kakistocracy. On the other hand, toxification may solve the population problem, since sperm counts are plunging.”

Plastic pollution found in the most remote places on the planet show nowhere is safe from human impact. Photograph: Conor McDonnell

Reflecting five decades after the publication of The Population Bomb (which he wanted to be titled Population, Resources, and Environment), he says: “No scientist would hold exactly the same views after a half century of further experience, but Anne and I are still proud of our book.” It helped start a worldwide debate on the impact of rising population that continues today, he says.

The book’s strength, Ehrlich says, is that it was short, direct and basically correct. “Its weaknesses were not enough on overconsumption and equity issues. It needed more on women’s rights, and explicit countering of racism – which I’ve spent much of my career and activism trying to counter.

“Too many rich people in the world is a major threat to the human future, and cultural and genetic diversity are great human resources.”

Accusations that the book lent support to racist attitudes to population controlstill hurt today, Ehrlich says. “Having been a co-inventor of the sit-in to desegregate restaurants in Lawrence, Kansas in the 1950s and having published books and articles on the biological ridiculousness of racism, those accusations continue to annoy me.”

But, he says: “You can’t let the possibility that ignorant people will interpret your ideas as racist keep you from discussing critical issues honestly.”

More of Paul and Anne Ehrlich’s reflections on their book are published in The Population Bomb Revisited.

Published:3/23/2018 8:43:30 PM
[Markets] U.S. Stocks End Worst Week in Years U.S. stocks suffered their worst week in more than two years, signaling mounting investor anxiety over whether factors from restrictive trade policies to rising interest rates could disrupt the nine-year ... Published:3/23/2018 8:43:30 PM
[Markets] After the Bell: As Dow Drops 425 Points, Reasons for Hope and Fear The Dow Jones Industrial Average suffered its worst week since 2016. •...and explain why Western Digital (WDC) was the S&P 500's worst performer. The stock market is tumbling on concerns about a trade war, but nothing else is...and that could be a problem. Published:3/23/2018 8:19:33 PM
[Markets] Chinese Newspaper: Beijing Should Prepare For War In The Taiwan Straits

On Thursday, a leading Chinese state-run newspaper announced the unthinkable: Beijing must prepare for “a direct military clash” over self-ruled Taiwan after a mid-level U.S. official arrived in Taipei on Tuesday, angering senior officials in Beijing.

The atmosphere in Beijing started to get heated when Alex Wong, US deputy assistant secretary of state for East Asian and Pacific affairs, arrived in Taipei on Tuesday. Wong became the first senior State Department official of the Trump administration to visit Taiwan since Washington approved the Taiwan Travel Act, which has already roiled ties and brought new pressures to Sino-US relations (refers to international relations between the U.S and China).

Interesting enough, with trade war tensions escalating between Beijing and Washington, the pivot by the Trump administration over Taiwan has made the situation much worse.

Local media reports cited Wong as stating the United States’ commitment to Taiwan has never been stronger, and that Washington will get international organizations to strengthen ties with Taipei.

“Taiwan can no longer be excluded unjustly from international fora. Taiwan has much to share with the world,” Wong said at a reception attended by Taiwan President Tsai Ing-wen, a member of the pro-independence Democratic Progressive Party.

“I can assure you, the United States government and the United States private sector will do their part to ensure Taiwan’s stellar international example shines brightly,” he added.

In response, the senior editor of the Global Times declared China had to “strike back” against “Washington’s implementation of the Taiwan Travel Act.”

“We must strike back against Washington’s implementation of the Taiwan Travel Act. First, Beijing should not invite senior officials of the US Department of State and Defense who visit Taiwan, to the mainland during their terms. For instance, Wong should not be invited to the mainland until he no longer occupies the post. Senior Taiwan officials who visit the US and meet publicly with high-level US officials should be treated alike. This won’t make the mainland suffer diplomatically. After all, Beijing and Washington have various channels to communicate.” 

The editor then said,

China can pressure the US in other areas of bilateral cooperation: for example, the Korean Peninsula issue and Iran nuclear issue. China can also set itself against the US in international organizations such as the UN. In addition, China needs to move fast to establish diplomatic ties with allies of Taiwan to further squeeze the island’s space in the international community.”

At the end of the piece, the editor dropped the mother of all bombshells, “Mainland [China] must prepare itself for a direct military clash in the Taiwan Straits.”

The mainland must also prepare itself for a direct military clash in the Taiwan Straits. It needs to make clear that escalation of US-Taiwan official exchanges will bring serious consequences to Taiwan. This newspaper has suggested that the mainland can send military planes and warships across the Taiwan Straits middle line. This can be implemented gradually depending on the cross-Straits situation.

Preventing the Taiwan independence movement and promoting unification through peaceful ways can be costly, perhaps costing more than the short-term loss brought about by forceful unification. It’s a misunderstanding to think that peaceful unification will be a harmonious and happy process. The Taiwan authority will only turn around when left with no choice. Sticks matter more than flowers on the path to peaceful reunification.

China Uncensored provides us with the knowledge that the People’s Liberation Army (PLA) has already made the preparations to invade Taiwan by 2020.

Earlier this week, the New Straits Times reported that China sailed its aircraft carrier through the Taiwan Strait, in response to Wong’s Taipei trip.

Taiwan said Wednesday it had scrambled jets and sent ships to track a Chinese aircraft carrier which passed through the Taiwan Strait as Beijing’s leader gave the island a fierce warning against separatism. The Liaoning and accompanying vessels entered Taiwan’s air defence zone on Tuesday, the same day Chinese President Xi Jinping delivered a blistering nationalistic speech – warning against what he called any attempts to split China.  

While the Global Times says China should prepare for military action against Taiwan, it is becoming increasingly obvious that the Trump administration coupled with military–industrial complex is preparing for the next great war in the East. This time around, perhaps, we have gained an important clue that war with China starts with Taiwan.

Published:3/23/2018 8:19:33 PM
[Markets] Dropbox IPO succeeds amid market volatility, with more tests to come Dropbox Inc. shares shone amid a stormy market Friday that capped a week of red ink, which could signal safe waters ahead for market debuts as $3 billion in initial public offerings prepare to price next week.
Published:3/23/2018 7:08:25 PM
[Markets] Dropbox IPO succeeds amid market volatility, with more tests to come Dropbox Inc. shares shone amid a stormy market Friday that capped a week of red ink, which could signal safe waters ahead for market debuts as $3 billion in initial public offerings prepare to price next ... Published:3/23/2018 7:08:24 PM
[Markets] Are Central Banks About To Open The Floodgates For Gold And Cryptocurrency?

Authored by Alex Deluce via,

Recently Switzerland’s Central Bank Swiss National Bank garnered headline glory by reporting a record $55 billion (54 billion francs) profit last year, which exceeds even the annual profit of Apple and the combined profit of JP Morgan and Berkshire Hathaway. The central bank’s strong result was aided by record profit on its equity holdings, bond prices, and its weaker currency.

SNB earned 8% of GDP last year

SNB’s stupendous results made one wonder how the central bank emerged as a major money manager with a nearly $800 billion portfolio of bonds and stocks. Of note, unlike other central banks such as ECB, BOJ and FED, SNB’s balance sheet largely comprised of foreign assets, with 49 billion francs of its profits generated from its foreign assets, while the central bank could net only about three billion francs from its gold holdings and another two billion francs from its Swiss franc positions. It is widely believed that SNB has been preventing Swiss franc from drastic appreciation by printing more francs and infusing them into global markets to buy bonds and stocks. The hefty profit of 54 billion francs clocked last year translates into 8% of Switzerland’s GDP. Thus one can surmise that the central bank made substantial PROFIT OUT OF THIN AIR.

While SNB’s gold holdings resulted in only about three billion francs of profit last year, various central banks turned out to be aggressive buyers of gold in 2017, having purchased 414.9 tons, as against 95.1 tons bought in 2016. Investors were in full focus when data from World Gold Council revealed that the central banks purchased 117.7 tons during October and November 2017 alone. It is well known that central banks prefer gold as protection against black swan economic events.

Welcome to Digital Gold

Amidst central banks’ active reserve management skills, as elucidated above, a former central banker with the South African Reserve Bank believe in 2018, G7 central banks will start buying cryptocurrencies to propel their foreign reserves. Considering the recent popularity and upsurge witnessed in prices of cryptocurrencies, the former central banker predicts the special drawing rights and G7 country currencies will be forced to alter their foreign reserve weightages by ultimately including a basket of cryptocurrencies.

Considering bitcoin was designed to enact as digital gold, he reckons G7 central banks will witness bitcoin and other cryptocurrencies turning out to be biggest international currency by market capitalization. It is felt that such massive popularity of cryptocurrencies can force central banks to call for emergency meetings to exercise their prerogative to deviate from the existing investment policy for reserve management and hence ultimately central bank money could pour into cryptocurrencies.

Centralized Vs Decentralized digital currencies

Resonating the vast popularity of cryptocurrencies, it has been reported that Russia is working on a government-run cryptocurrency, while other leading countries including the US, China, Japan and Canada are either exploring or actively working on some form of digital currency. Similarly, central banks from Singapore to Sweden have been pondering the feasibility of issuing digital versions of their own money. It is felt digital currencies could cut out middlemen and banks. 

Alluding to the rapidly evolving area of central banks’ interest in digital currencies, Bank for International Settlement has come out with a report this month titled: “Central bank digital currencies”. The report published by BIS’ two committees viz.: Committee on Payments and Market Infrastructures and Markets Committee suggests central banks should carefully consider the implications for financial stability and monetary policy of issuing digital currencies.

Terming Central bank digital currencies (CBDC) as a potentially new form of digital central bank money, the BIS report underscores two main CBDC variants viz.: a wholesale (for use in financial market) and a general purpose (for use by the general public).

The following picture puts CBDC in the context of other types of money. The diagram focuses on the mix of four fundamental properties viz.: issuer (central bank or other), form (digital or physical), accessibility (widely or restricted) and technology (token or account based):

The BIS report notes cash and many digital currencies are token-based, while reserve account balances and most forms of commercial bank money are account-based.

The authors believe the wholesale variant would limit access to a predefined group of users, while the general purpose one would be widely accessible. The authors reckon the wholesale CBDCs, combined with the use of distributed ledger technology, may enhance settlement efficiency for transactions involving securities and derivatives. The report highlights that wholesale CBDCs might be useful for payments but more work is needed to assess the full potential.

The following table captures a comparative analysis of properties across existing and potentially new forms of central bank money:

Taking a macro view post the implementation of CBDC, the BIS report has come out with a stylized balances sheet of the central bank after the introduction of CBDC, duly reflecting the demand for CBDC and its enhanced assets holdings. The balance sheet clearly underscores the dominant role played by central bank digital currency, as it is projected to form a substantial share of central banks’ liabilities:

Thus it is clearly evident that Bank for International Settlements is keeping pace with the opportunity in the central bank digital currencies...

Published:3/23/2018 7:08:23 PM
[Markets] Council On Foreign Relations President: "Goodbye, LIberal World Order"

Whatever one thinks of Trump, love him, loathe him, mock him or respect him, he's managed to do one thing - in the one year that he's been president, his ad hoc, haphazard, chaotic, irrational and unpredictable style of governance may have thrown the country, its institutions, its "establishment", and certainly the press for loop, but it has also achieved one other thing: it has made the "globalists" conclude that the "liberal world order" which they created - which has resulted in the greatest accumulation of wealth by the fewest number of people; in the greatest political, social, ethnic, economic and financial polarization in recent history; in a global debt load that has put the world on the verge of financial catastrophe (only offset by constant central bank "confidence" injections); and which the "Trump vote" was a protest against - is almost over.

And nobody says it better than Richard Haass, president of the Council on Foreign Relations, in the following essay:

Liberal World Order, R.I.P.

After a run of nearly one thousand years, quipped the French philosopher and writer Voltaire, the fading Holy Roman Empire was neither holy nor Roman nor an empire. Today, some two and a half centuries later, the problem, to paraphrase Voltaire, is that the fading liberal world order is neither liberal nor worldwide nor orderly.

The United States, working closely with the United Kingdom and others, established the liberal world order in the wake of World War II. The goal was to ensure that the conditions that had led to two world wars in 30 years would never again arise.

To that end, the democratic countries set out to create an international system that was liberal in the sense that it was to be based on the rule of law and respect for countries’ sovereignty and territorial integrity. Human rights were to be protected. All this was to be applied to the entire planet; at the same time, participation was open to all and voluntary. Institutions were built to promote peace (the United Nations), economic development (the World Bank) and trade and investment (the International Monetary Fund and what years later became the World Trade Organization).

All this and more was backed by the economic and military might of the US, a network of alliances across Europe and Asia, and nuclear weapons, which served to deter aggression. The liberal world order was thus based not just on ideals embraced by democracies, but also on hard power. None of this was lost on the decidedly illiberal Soviet Union, which had a fundamentally different notion of what constituted order in Europe and around the world.

The liberal world order appeared to be more robust than ever with the end of the Cold War and the collapse of the Soviet Union. But today, a quarter-century later, its future is in doubt. Indeed, its three components – liberalism, universality, and the preservation of order itself – are being challenged as never before in its 70-year history.

Liberalism is in retreat. Democracies are feeling the effects of growing populism. Parties of the political extremes have gained ground in Europe. The vote in the United Kingdom in favor of leaving the EU attested to the loss of elite influence. Even the US is experiencing unprecedented attacks from its own president on the country’s media, courts, and law-enforcement institutions. Authoritarian systems, including China, Russia, and Turkey, have become even more top-heavy. Countries such as Hungary and Poland seem uninterested in the fate of their young democracies.

It is increasingly difficult to speak of the world as if it were whole. We are seeing the emergence of regional orders – or, most pronounced in the Middle East, disorders – each with its own characteristics. Attempts to build global frameworks are failing. Protectionism is on the rise; the latest round of global trade talks never came to fruition. There are few rules governing the use of cyberspace.

At the same time, great power rivalry is returning. Russia violated the most basic norm of international relations when it used armed force to change borders in Europe, and it violated US sovereignty through its efforts to influence the 2016 election. North Korea has flouted the strong international consensus against the proliferation of nuclear weapons. The world has stood by as humanitarian nightmares play out in Syria and Yemen, doing little at the UN or elsewhere in response to the Syrian government’s use of chemical weapons. Venezuela is a failing state. One in every hundred people in the world today is either a refugee or internally displaced.

There are several reasons why all this is happening, and why now. The rise of populism is in part a response to stagnating incomes and job loss, owing mostly to new technologies but widely attributed to imports and immigrants. Nationalism is a tool increasingly used by leaders to bolster their authority, especially amid difficult economic and political conditions. And global institutions have failed to adapt to new power balances and technologies.

But the weakening of the liberal world order is due, more than anything else, to the changed attitude of the US. Under President Donald Trump, the US decided against joining the Trans-Pacific Partnership and to withdraw from the Paris climate agreement. It has threatened to leave the North American Free Trade Agreement and the Iran nuclear deal. It has unilaterally introduced steel and aluminum tariffs, relying on a justification (national security) that others could use, in the process placing the world at risk of a trade war. It has raised questions about its commitment to NATO and other alliance relationships. And it rarely speaks about democracy or human rights. “America First” and the liberal world order seem incompatible.

My point is not to single out the US for criticism. Today’s other major powers, including the EU, Russia, China, India, and Japan, could be criticized for what they are doing, not doing, or both. But the US is not just another country. It was the principal architect of the liberal world order and its principal backer. It was also a principal beneficiary.

America’s decision to abandon the role it has played for more than seven decades thus marks a turning point. The liberal world order cannot survive on its own, because others lack either the interest or the means to sustain it. The result will be a world that is less free, less prosperous, and less peaceful, for Americans and others alike.


Published:3/23/2018 6:34:08 PM
[Markets] ‘We need to take care of our military’: It’s a good time for defense contractors Weeks after the White House released its budget request, which provided a massive increase in defense spending, Congress took over and added even more money in what amounts to a spending spree on major weapons systems. Published:3/23/2018 6:20:51 PM
[Markets] Stocks End Worst Week in Years U.S. stocks suffered their worst week in more than two years, signaling mounting investor anxiety over whether factors from restrictive trade policies to rising interest rates could disrupt the nine-year ... Published:3/23/2018 6:20:46 PM
[Markets] 2.8 Million Hong-Kongers Got A HK$4,000 Cash Handout Today

With Trump signing a record $1.3 trillion spending bill, of which $700 billion is set to go to the military, average Americans are wondering if they will each get some cash, or at least an army tank, from the government. And, if they were resident of Hong Kong instead of the US today, the answer would be yes (to the cash that is, not the tank), as the local government is literally making money rain.

Today, more than 2.8 million Hong-Kongers who did not benefit from this year’s budget will receive a cash handout of HK$4,000 (US$510) each from the government, following intense public and political pressure on Financial Secretary Paul Chan Mo-po to further share the bumper HK$138 billion surplus announced in last month’s budget, the SCMP reported . And faced with demands to do more for the needy, the government decided to fork out an extra HK$11 billion in handouts.

Financial Secretary Paul Chan said the new scheme shows the government’s goal of caring for the community. “[We are] trying to cover more people who may not directly benefit from the budget,” he said at a press conference on Friday. What he meant is that his is just another way to short-circuit conventional economics and directly bribe the population.

Protesters calling for cash handouts and measures to benefit the poor during the announcement of the 2018 budget. Photo: Catherine Lai/HKFP

Asked by reporters, Chan said he would not promise that there will be similar handouts in the future. Secretary for Labour and Welfare Law Chi-kwong said he could not give an exact date when residents could receive the benefits, but said he hoped it will happen before the next budget is issued.

Predictably, handing out cash to some but not others leads to anger, and Chan in his financial blueprint – the first by the government of Chief Executive Carrie Lam Cheng Yuet-ngor – dished out a combination of salary and profits tax rebates and increased old age and disability allowances for at least two million Hongkongers. The 2018 budget was criticised by many, including lawmakers from both camps, for neglecting specific groups, in particular low-income people who pay no taxes, do not own property and do not receive government benefits.

Asked if the new measure was made after receiving pressure from both camps, Chan responded that he said he would look into further measures two days after the budget was issued.

“[W]e mainly heard the voices in society, and we reflected calmly after listening to these voices and opinions. We agreed that the budget’s caring and sharing component could provide wider coverage,” he said.

Democratic Party lawmaker James To said he welcomed the new measure (duh): “We do not want the government to give cash handouts every year, but the original budget was unfair,” he said. “The Financial Secretary has to think about not giving land rates rebate to big corporations.”

What he meant is that he wants the government to give cash handouts every year.

* * *

According to a poll conducted by the University of Hong Kong’s public opinion program one to two days after the budget announcement, the 500 people surveyed gave the budget 42.8 marks out of 100, meaning satisfaction with the government’s financial strategy plunged to a seven-year low.

Which explains the highly popular cash handout.

However the money is distributed today, Hong Kong has now set a very dangerous precedent, one where the government literally has to hand out cash to quell public anger. Call it pork for the people, which is great as long as government funding is cheap and ample - like in the case of the US and its $1.3 trillion porkulus package - however one the money dries out, such "universal cash handouts" just happen to be the fastest road to a revolution by a suddenly disgruntled "free shit" army.

Published:3/23/2018 6:20:46 PM
[Markets] CryptoWatch: Bitcoin holds steady as equity markets tumble The No. 1 digital currency failed to capitalize on a good start to the week, trading lower Friday, as technical indicators and overall market sentiment weighed on digital currencies. However, given the late plunge in equities, cryptocurrencies losses were kept to a minimum.
Published:3/23/2018 5:27:18 PM
[Markets] The S&P 500 index is perilously close to falling under its closely watched 200-day moving average The S&P 500 index flirted with a close below an important, long-term trend line as selling intensified late-Friday on the back of trade-war fears. The S&P 500 index ended down 55.43 points, or 2.1%, at ... Published:3/23/2018 5:27:18 PM
[Markets] Raytheon's Laser-Dune-Buggy Blasts Drone-Swarm Out Of The Sky

Earlier this year, Raytheon boasted in a press release about combining a solid-state laser with an advanced variant of the company’s Multi-Spectral Targeting System (MTS) of sensors — mounted on a militarized all-terrain Polaris light-vehicle. The press release describes the vehicle as an “agile, mobile, and effective” war machine to protect troops from weaponized unmanned aerial vehicle (UAV) threats.

Raytheon said its “engineers and physicists are doing something that has never been done before,” and frankly, the militarized laser dune buggy looks like it is straight out of the Mad Max movies.

“Basically, we’re putting a laser on a dune buggy to knock drones out of the sky,” said Dr. Ben Allison, director of Raytheon’s high-energy laser program.

“It’s actually a little more complicated than that,” Allison added.

Allison’s team has managed to mount a high-energy laser with an advanced variant of Raytheon’s Multi-Spectral Targeting System (MTS), an advanced package of electro-optical/ infrared (EO/IR), laser designation, and laser illumination capabilities integrated into a single sensor onto the bed of a Polaris MRZR.

As stated by Allison, the concept of laser blasting drones from the sky with dune buggies was conceived from a meeting with Raytheon’s CEO Chairman Tom Kennedy last year. Kennedy expressed his disbelief to Allison when an allied nation [most likely Israel] used the Patriot missile system to intercept cheap weaponized drones outfitted with grenade-like munitions.

Typical quadcopters used by terrorist groups are worth several hundred dollars, while Patriot missiles cost about $2 million per rocket.

“That cost-to-kill ratio is high,” explained Allison, “but the threat is clear. So, the question became, ‘What can we do for a counter-UAS system using a high-energy laser, and do it quickly. We didn’t want to go out and do a bunch of research and development. We wanted to take the assets and capabilities Raytheon has today and use them to really affect this asymmetrical threat. We settled on a small system that’s hugely capable.”

Here is Raytheon’s Laser Dune Buggy versus a Drone in action: 

According to Raytheon’s latest press release, around forty-five unmanned aerial vehicles and drones were blasted out of the sky, downed by the company’s “advanced high-power microwave and laser dune buggy.” The field training exercise known as Maneuver Fires Integrated Experiment was recently conducted at Fort Sill, Oklahoma.

Raytheon states that high-ranking military and defense industry officials spectated the field training exercise to grasp an understanding of new “ways to bridge the Army’s capability gaps in long-range fires and maneuver short-range air defense.”

Highlights from the event include:

  • Raytheon’s high-power microwave system engaged multiple UAV swarms, downing 33 drones, two and three at a time.

  • Raytheon’s high energy laser, or HEL, system identified, tracked, engaged and downed 12 airborne, maneuvering Class I and II UAVs, and destroyed six stationary mortar projectiles.

Within the press release, it seems as Raytheon was testing yet another high-energy gun at Fort Still — separate from the laser dune buggy. Raytheon describes the weapon as a “directed energy system emits an adjustable energy beam that, when aimed at airborne targets such as drones, renders them unable to fly.”

“The speed and low cost per engagement of directed energy is revolutionary in protecting our troops against drones,” said Dr. Thomas Bussing, Raytheon Advanced Missile Systems vice president. “We have spent decades perfecting the high-power microwave system, which may soon give our military a significant advantage against this proliferating threat.”

“Our customer needed a solution, and they needed it fast,” said Dr. Ben Allison, director of Raytheon’s HEL product line. “So, we took what we’ve learned and combined it with combat-proven components to rapidly deliver a small, self-contained and easily deployed counter-UAV system.”

Interesting enough, we reported on Tuesday, the Army is scrambling to plug the gap in short-range defenses. In doing so, the Army is testing its Mobile High Energy Lasers (MEHEL) mounted on the M1126 Stryker armoured personnel carriers in Europe. The Stryker-mounted MEHEL is designed for short-range aerial threats, such as weaponized drones.

U.S. Soldiers from the Field Artillery Squadron, 2nd Cavalry Regiment are now equipped with newly developed laser weapon MEHEL mounted on 8×8 Stryker armoured vehicle. The Stryker with MEHEL 2.0 was presented for the first time on General Dynamics Land Systems booth during the AUSA exhibition in Washington D.C. in October 2016 equipped with a 5kW beam director.

The 5 kW laser project is part of the Mobile Experimental High Energy Laser. It represents an advance over a previous laser tested in 2016, and will lead into more powerful, longer ranging anti-drone, anti-missile laser systems. The Stryker-mounted MEHEL has proven to be extremely efficient in eliminating enemy drone targets, and its use in Europe will help the U.S. Army to assess emerging concepts, technologies and interoperability.

With millions of commercial and hobby drones buzzing in the skies around the world, it seems like the Pentagon has taken notice of the growing threat that these drones could be soon weaponized. After all, the Pentagon has more than 800 military bases around the world...

It is increasingly evident that the United States Department of Defense (DoD) and its allies cannot afford to use a $2 million Patriot missile to blast a $500 drone from the sky. As a result, to lower the cost-to-kill ratio, the Pentagon has decided to start strapping drone-killing lasers to its war machines. As we have said before, you are starting to get the picture of how the next war will be fought... Have you prepared? 

Published:3/23/2018 5:27:17 PM
[Markets] Peter Schiff: There's A Big Problem With The Economy, "Americans Are Broke"

Authored by Mac Slavo via,

Financial analyst Peter Schiff says there’s a big problem with the economy even though the mainstream media is reporting that rising interest rates are a good thing.  The problem, however, is that Americans are broke, and those interest rates could have a major impact on some of our wallets.

“The bad news is, we are going to live through another Great Depression and it’s going to be very different. This will be in many ways, much much worse, than what people had to endure during the Great Depression,” Schiff says.

“This is going to be a dollar crisis.”

“When you are talking about the magnitude of the debt we have, that extra money [raising interest rates] is big. That’s going to be a big drain on the economy to the extent that we have to pay higher interest to international creditors...

...a lot of this phony GDP is coming from consumption, while the average American who is consuming is deeply in debt and they are going to impacted dramatically in the increase in the cost of servicing that debt...

...given how much debt we have, and how much debt is going to be marketed the massive increase in supply will argue for interest rates that are higher.” –Peter Schiff

Retail sales “unexpectedly” fell again in February even though most media outlets are touting a booming economy that can support raising the interest rates. It was the third straight monthly drop and the first time the US economy has seen three straight months of declining retail sales since 2012.

Sales fell 0.1% in February even though analysts had expected an uptick of 0.3%. According to CNBC, households cut back on purchases of motor vehicles and other big-ticket items, pointing to a slowdown in economic growth in the first quarter. But Peter Schiff won’t sugarcoat this one for us: Americans are broke.

And the worse things get, the less investors seem to notice.

What makes matters even worse is two Fridays ago, we got the “too good to be true” and “just what the doctor ordered” Goldilocks jobs report that said 1 million people got jobs. Schiff said this “good news” report doesn’t make any sense, actually.

“So why didn’t any of those million people take their paychecks and spend them at a retailer? I mean, Trump is talking about all the great jobs, and all the raises that people have, and all the tax cuts. Why are retail sales down for three months in a row?” –Peter Schiff

Unfortunately, we also saw Americans running up record high levels of debt at the same time that the government is running massive deficits.

Last month, the New York Fed released the latest data on US household debt, revealing it has grown to a record $13 trillion. So yes, Americans have been spending, but they’ve been putting a lot of it on plastic. Credit card balances grew by $24 billion in the last quarter of 2017 alone. Could it be that Americans have maxed out the plastic?

At some point, a house of credit cards will collapse.

Schiff is hard on Donald Trump too, and rightfully so.  Lower taxes are always a good thing, the lower the better, in fact.  But Republicans refused to cut any government spending while instead, increasing it to the point of running massive deficits, making them worse than Democrats when it comes to being fiscally conservative.

The cold truth is that a backup plan is needed, and most Americans don’t have that.  Many would be in some serious trouble during a financial downturn, and the country is most definitely headed that way.

Published:3/23/2018 4:33:41 PM
[Markets] Stop saying the Dow is moving in and out of correction! That is not how stock-market moves work Market technicians generally define a correction as a 10% decline from a recent peak in an asset. But once that security slips in to correction phase, that trend is viewed as in force until it trades above ... Published:3/23/2018 3:53:38 PM
[Markets] In Warning To Iran, Israel Releases Video Of 2007 Airstrike On Syrian Nuclear Facility

In the latest warning to Iran that it means business, Israel has released a video of an airstrike it conducted on a suspected Syrian nuclear reactor in 2007. Until this week, Israel refused to officially acknowledge the operation for over a decade. 

"During the night of September 5th and 6th, 2007, the Israeli Air Force destroyed a nuclear facility in its last stages of construction in the Deir ez-Zor region in Syria, 280 miles north-east of Damascus," reads a statement from the IDF. "Four F-16 jets eliminated a nuclear threat not only to Israel, but to the entire region."

The IDF released previously classified footage, images and intelligence documents from the operation - revealing how Israel monitored the site before the attack, suggesting that it could become operational within months. 

One report, dated 30 March 2007, said: “Syria has set up, within its territory, a nuclear reactor for the production of plutonium, through North Korea, which according to an (initial) worst-case assessment is liable to be activated in approximately another year.”

The military said that following the four-hour operation, the reactor “had been totally disabled”, and the damage done “was irreversible”. -The Guardian

Israel said that the decision to strike the alleged nuclear facility was based on information from the Military Intelligence Directorate, which had been monitoring the site for two years. 

The black and white aerial images from the Syrian desert show a box-shaped structure close to the Euphrates river. The video shows the structure's demise.

Syria, a member of the Nuclear Non-Proliferation Treaty since 1968, has consistently denied that it has pursued a nuclear weapons program - and said that the Dier ez-Zor facility was non-operational and contained no nuclear material. 

Media reports at the time posited that it was an undeclared reactor being built by North Korea - however following its bombing, the nuclear watchdog IAEA concluded that the complex resembled a reactor building, and pointed the finger at the Syrian government for a lack of transparency. 

On Wednesday morning, Israel's intelligence minister, Yisrael Katz, directly warned Iran that the reactor raid in Syria provided a clear message that "Israel will never allow nuclear weapons to countries like Iran who threaten its existence." 

The defence minister, Avigdor Lieberman, stopped short of suggesting the possibility of a similar strike on Iranian facilities, but made clear the 2007 attack proved Israel was willing and able to act militarily. -The Guardian

“The motivation of our enemies has grown in recent years, but so too the might of the (Israel Defence Forces),” he said. “Everyone in the Middle East would do well to internalize this equation.”

Israel sought to further justify the strike, noting that ISIS had captured the region with the reactor in it during Syria's civil war. 

“The security implications of a nuclear reactor falling into the hands of Isis or other extremist groups during the war in Syria are vast,” said the IDF. 

As a reminder, in September 2016 in the aftermath of Obama's Iran Deal, Russia started construction of a new, $10 billion nuclear power plant in Iran.  Iran already runs one Russian-built nuclear reactor at Bushehr, its first. Russia signed a deal with Iran in 2014 to build up to eight more reactors in the country. Or maybe not, as Israel has made it clear it will never allow this to happen.

Published:3/23/2018 3:53:37 PM
[Markets] Market Extra: Stop saying the Dow is moving in and out of correction! That is not how stock-market moves work Market technicians generally define a correction as a 10% decline from a recent peak in an asset. But once that security slips in to correction phase, that trend is viewed as in force until it trades above its previous peak.
Published:3/23/2018 3:06:07 PM
[Markets] Dow ends down over 400 points, Nasdaq falls below 7,000 level on trade-war fears Dow ends down over 400 points, Nasdaq falls below 7,000 level on trade-war fears Published:3/23/2018 3:06:06 PM
[Markets] Carnage... Everywhere

"It'll be fine" they said... "You buy the dip" they said..."just follow my tracks"...


Post-Powell, Gold is the big winner...


Only Nasdaq remains in the green for the year, as Small Caps joined the rest in the red this week...


But it was an ugly week for global markets.

Chinese stocks slammed (but rescued late on Friday by The National Team)...


Chinese commodities carnaged...




Europe was eviscerated...


And back in 'Murica, things were just as bad...




Nasdaq worst but everything was carnage!


Today was chaos - futures show the desperation: three algo ramps fail and we crash into the lows...


The Dow broke its triangle, broke below key averages, and is down over 10% from its record highs (in correction)...

The Dow record intraday high on 1/26/18 was 26616.7.


The S&P crashed to its 200DMA...


As FANGMAN stocks were all ugly, led lower by Facebook...


Facebook is at its lowest since July...


Banks were not quite as ugly as tech but almost...


VIX spiked above 26... a long way from the flash crash on payrolls...


Credit markets were a bloodbath in IG...


And EU HY spreads are blowing out...


High Yield Bond ETF crashed to its lowest since 11/16/16...


As bank credit risk spiked above Feb highs...


Shit is getting real...


Treasury yields ended the week lower, tumbling in the afternoon today as stocks slumped...


10Y Yields tumbled to their lowest since Feb 9th this week... This is the 21st daily close in a row with a 2.8x% handle.


The Dollar tried to bounce yesterday but ended at the lows of the week and lowest since Feb 20th... This is the first down week in the last five weeks...


Bitcoin managed to scramble into the green for the week, after cryptos erased their losses from G-20 concerns...


While Chinese commodities crashed; as the dollar tumbled, the energy complex ripped higher along with PMs (as copper tumbled)...


Gold was the best performing precious metal as Palladium tumbled...


WTI/RBOB had a big week but note (lower pane) that as selling pressure hit stocks, the energy sector dumped into the red on the week...


Finally, this is far from over!!! "It's baked in the cake"...


Say goodbye to The Shanghai Accord

Published:3/23/2018 3:06:05 PM
[Markets] Dow off 300, Nasdaq down 120 as stock losses accelerate late Friday Dow off 300, Nasdaq down 120 as stock losses accelerate late Friday Published:3/23/2018 2:36:31 PM
[Markets] Capitol Report: There’s one topic Trump just doesn’t tweet about anymore President Donald Trump isn’t known for reticence with his tweeting habit. But there’s one topic he’s just not tweeting about anymore.
Published:3/23/2018 2:36:31 PM
[Markets] Here’s why stock-market investors are fixating on the threat of a trade war The stock market bounced back from a round of trade worries earlier this month, only to get hammered again on Thursday as the Trump administration took aim at China. Here’s what’s in play. Published:3/23/2018 2:36:28 PM
[Markets] BofA Flips: "The Risk Is That Global Growth Slows A Lot More Than Consensus Believes"

Who would have thought that all it would take for banks to turn from raging permabulls to cautious bears is just a modest 10% drop in the stock market from all time highs.

And yet, in a note today, that's roughly the metamorphosis that Ritesh Samadhiya of BofA's underwent when in a note to client, he puked all over the bank's broader, and bullish economic and market outlook, and instead said that "we think the risk is that nominal global growth SLOWS a lot more than consensus believes." To be fair, Ritesh had been warning about the threat of deflationary forces for a while, so at least since January, his caution has been spot on.

Here are the details:

What we think – slower growth, little inflation

We are NOT buyers of the tight labor markets-higher wages-higher inflation-higher bond yields story (check out insignificant wage growth in Japan and Australia – both with very tight labor markets with very high labor force participation rates as examples of the weakening link between unemployment and wage growth).

We think the microfoundations of the wage setting process are not properly appreciated by macro investors/analysts. (If you work for an industry with just a few, large names, try asking your boss for a substantial bonus.)

We think the risk is that nominal global growth SLOWS a lot more than consensus believes – Three Chinese leading indicators are falling – the Bloomberg China Monetary Conditions index (CHBGMCI)...

... the China credit Impulse 12-month Change (CHBGREVA)...

... and the China Marshallian K (gap between M2 growth and nominal GDP growth).

Global economic surprises are falling, and so are some leading indicators in the US. Asset prices that reflect global growth are stalling (Dr Copper, Dr Halliburton, Dr. Sotheby’s etc).

We disagree with the bearish bond consensus.

And now we wait for other internal BofA groups to follow in Ritesh' footsteps, eventually spilling over to other banks who will then be forced to cut their S&P targets, which however may take a while especially since Wall Street "thought leader" Goldman still expects 3 more rate hikes in 2018, a forecast which is imploding before our very eyes with every percent drop in the S&P.

Published:3/23/2018 2:36:27 PM
[Markets] Stocks sink late Friday and the Dow Theory is about to flash a major sell sign Stocks sink late Friday and the Dow Theory is about to flash a major sell sign Published:3/23/2018 2:06:13 PM
[Markets] The Ratings Game: Nike pulls back in North America in order to grow Nike has tightened distribution in North America as part of an effort to revive business in the region.
Published:3/23/2018 2:06:13 PM
[Markets] "Baked In The Cake" - Why LIBOR's Blowout Has Already Done Its Damage

The global funding market crisis is getting worse and its contagion is starting to show up in assets that 'mom and pop' care about. Bank stocks are being battered...

Following bank credit risk's spike...

And European High Yield risk has exploded to one-year highs...

European stress is worse than US for now, as Charlie Diebel, head of rates at Aviva Investors, notes:

"The longer it [LIBOR-OIS increase] goes on, the more pronounced the effects are going to be...

It complicates the efforts of policymakers because in Europe we still have QE (quantitative easing), but we have some sort of tightening coming at the same time."

And Investment Grade credit risk is soaring to six-month wides in EU and US...

Simply put, LIBOR doesn't need to blow out any more for the pain to emerge...

As one veteran credit-trader exclaimed: the bank credit pain "is baked in the cake" as the lagged reaction to short-term funding needs (and soaring costs) creeps into those so-called fortress balance sheets.

Published:3/23/2018 2:06:12 PM
[Markets] President Trump says he has signed $1.3 trillion spending bill but is 'unhappy' President Trump says he has signed $1.3 trillion spending bill but is 'unhappy' Published:3/23/2018 1:09:47 PM
[Markets] Retirement Weekly: News and analysis for those planning for or living in retirement Retirement news and analysis.
Published:3/23/2018 1:09:46 PM
[Markets] Intraday Update: Gold Loves Tariffs, Even If Stocks Don't Yes, the VIX has been rising—it was trading at just under 23 at 1:34 p.m. today—but it’s nowhere near the highs it hit back on Feb. 9, when it traded at 50.30. To Phases & Cycles Technical analyst Ron Meisels, that could be a sign that the market correction is nearing its end. Yesterday's market decline, despite being the largest since Feb. 8, saw the VIX close at 23.81. Published:3/23/2018 1:09:46 PM
[Markets] Merkel, Macron "Convinced" Moscow Orchestrated Skripal Poisoning

French President Emmanuel Macron and German leader Angela Merkel said Friday following a meeting of the European Council that UK Prime Minister Theresa May had shared "proof" of Russia's involvement in the assassination attempt against former Russian spy Sergei Skripal and his daughter, the two leaders said during a joint press conference in Brussels on the sidelines of a meeting of the European Council.

But although the evidence was purportedly convincing - and all three leaders are in agreement that Russia was the only reasonable culprit, and that they would help support an investigation into the matter - the EC opted not to take any immediate action against Moscow, TASS reported.

In a statement, the EC said it "agrees with the United Kingdom government's assessment that it is highly likely that the Russian Federation is responsible and that there is no plausible alternative explanation."

"The European Council condemns in the strongest possible terms the recent attack in Salisbury, expresses its deepest sympathies to all whose lives have been threatened and lends its support to the ongoing investigation."

"The use of chemical weapons, including the use of any toxic chemicals as weapons under any circumstances, is completely unacceptable, must be systematically and rigorously condemned and constitutes a security threat to us all. Member States will coordinate on the consequences to be drawn in the light of the answers provided by the Russian authorities. The European Union will remain closely focused on this issue and its implications," the document said.

As a sop to the Russia hawks, the gathering of EU leaders agreed to bolster cooperation with NATO to strengthen its resilience to chemical, biological, radiological and nuclear-related risks, and hybrid threats, including in the areas of cyber, strategic communication and counter-intelligence.


The European Council invited the European Commission and the High Representative to take this work forward and report on progress by the June European Council.

After arriving Thursday in Brussels, May told reporters and her fellow European leaders "it is clear that the Russian threat does not respect borders and indeed the incident is Salisbury was part of a pattern of Russian aggression against Europe and its near neighbors from the western Balkans to the Near East."

During a joint press conference, Merkel and Macron said they'd been given evidence by the UK to support its claims. Merkel said the reports were "well grounded," RT reported.

"[UK Prime Minister] Theresa May has provided us with some results [of the investigation]," German Chancellor Angela Merkel said at the joint press conference with French President Emmanuel Macron in Brussels on Friday. She added that the two countries will follow the British probe into the poisoning of the former Russia-UK double agent "closely" and are "convinced" that the conclusions that were made by the investigators so far are "already well-grounded."

Meanwhile, Macron said "there is no… plausible explanation" to the Salisbury incident other than Russia being behind the attack. He added that "all EU member states agree" on that allegation.

* * *

During a separate meeting earlier this week, EU foreign ministers expressed solidarity with the UK, but also declined to take any further action against Moscow - although there was disagreement between nations.

German foreign minister called Russia "a difficult partner" but also noted that "dialogue" with Moscow ought to continue. London and Moscow should sift through the evidence "bilaterally" Maas said.  Austrian Foreign Minister Karin Kneissl argued the accusations against Russia were premature, and refused to back London, per  Strategic Culture.

Spain’s Alfonso Dastis stressed the need for more evidence before reaching conclusions. He believes the EU should wait until the OPCW conducts a thorough examination of all elements involved.

At the same time, representatives from Warsaw - who have recently proven eager to attack Moscow given even the thinnest of pretexts - expressed solidarity with London.

Skripal, 66, and his 33-year-old daughter have been in critical condition since the March 4 attack, when they were found unconscious on a bench outside a shopping center in Salisbury. Skripal had worked as a double agent for the UK intelligence agency MI6 and was jailed in Russia in 2006 for spying for Britain. He was later freed as part of a spy swap in which Russia released four spies in exchange for 10 Russian agents.

Russia has repeatedly denied its involvement and rejected UK demands to issue an explanation for how the Soviet-era nerve agent - known as Novichok - made its way to London.

However, the EU did agree to withdraw its ambassador to Moscow, saying the envoy will return to Brussels "for consultations" as several member states ponder whether to follow the UK's lead and expel their diplomats. The UK expelled 23 Russian diplomats in response to the attack, prompting a proportional response from Moscow.

Ireland, Denmark, Lithuania and the Czech Republic are also considering further measures, including the expulsion of diplomats, CNN reported.

Published:3/23/2018 1:09:45 PM
[Markets] Watch: Trump news conference on spending bill Watch: Trump news conference on spending bill Published:3/23/2018 12:24:53 PM
[Markets] Watch the Trump press conference on the spending bill Until Friday morning, the White House had said that President Donald Trump would sign the $1.3 trillion spending bill that has gone through both the House and the Senate. Then Trump himself tweeted he ... Published:3/23/2018 12:24:53 PM
[Markets] AZ Lawmaker: "We Might Need To Build A Wall Between California And Arizona"

Authored by Mac Slavo via,

It sure doesn’t seem like Arizona approves of California’s sanctuary cities and one GOP Lawmaker hammered that point home. Marth McSally, in what was likely a tongue in cheek moment, proposed building a wall around California to protect the state of Arizona from their neighbor’s disastrous policies.

McSally announced her bid for Senate to replace Senator Jeff Flake (R) earlier this year. Flake is retiring at the end of this Congress. Other candidates in the primary include former Maricopa County, Arizona, Sheriff Joe Arpaio and former state Senator Kelli Ward (R).

When first hearing her quote, one could assume she wanted Arizona protected from those feeling the housing crisis and high taxation in California But  McSally, a congresswoman representing Arizona was referring to the “dangers of the southern border” and the sanctuary cities that California has allowed to infect the Golden State. Sanctuary cities are municipalities that do not cooperate with federal immigration enforcement.

“As we look in Arizona, we often look into the dangers of the southern border,” McSally said during a round-table discussion about “sanctuary cities” Tuesday at the White House. But if these dangerous policies continue out of California, we might need to build a wall between California and Arizona as well to keep these dangerous criminals out of our state,” she said, smiling, and perhaps a little sarcastically.

She added that California can’t just “provide sanctuary for these criminals and think that it’s only impacting California dangerously.” McSally’s comments come on the heels of the announcement that the federal government is suing the state of California (state government) for failing to enforce their laws.

The Trump administration’s “America First” policy is a thorn in the side of many states that use illegal immigrants as votes to elect far-left Communists.

California’s governor, Jerry Brown (D), was upset that he has to follow others’ rules while making California almost unbearable with the number of rules, laws, and regulations he demands the residents of the Golden State adhere to, Brown became the offended hypocrite everyone knew he was in the wake of the federal lawsuit over sanctuary cities.  Try not to choke on California’s hypocrisy.  Never forget that the state (and Democrats in general) loves laws, just not the laws of others.

“You called this an act of war from the federal government,” a reporter began asking Brown. Brown immediately looked confused. “An act of war? That’s pretty strong. But I reciprocate that comment,” Brown responded.

Published:3/23/2018 12:24:52 PM
[Markets] Patients can’t afford life-saving medications under new health plan change Many people may only realize they are affected in the next month or two, creating a pressing financial issue with no clear or immediate solution.
Published:3/23/2018 11:44:06 AM
[Markets] Here It Comes: China About To Launch "Tens Of Billions" More In Tariffs

This morning the market has been on edge and traders are obssessed with just one question: how will China retaliate to Trump's trade war and tariffs... further. After all, the initial response of a modest 15-25% tariff on $3 billion in 128, mostly agricultural, products, seemed laughably small and appeared to be more of a warning shot than a real response to Trump's $50BN in Section 301 tariffs.

One answer was revealed moments ago when as we reported that China’s ambassador to the US Cui Tiankai did not rule out the possibility of scaling back purchases of Treasuries in response to Trump's tariffs.

“We are looking at all options,” he said, when asked whether China would consider reduced purchases of Treasuries. “That’s why we believe any unilateral and protectionist move would hurt everybody, including the United States itself. It would certainly hurt the daily life of American middle-class people, and the American companies, and the financial markets.”

But the more likely reaction is that China will simply escalate with a "brute force" tit-for-tat retaliation, and as Citi notes, the editor-in-chief of the state-controlled Chinese newspaper Global Times, Hu Xijin, just tweeted: "I learned that Chinese govt is determined to strike back."

More importantly, he explained the confusion over the "disproportionate" $3 billion response, noting that "Friday's plan to impose $3b tariffs is simply to retaliate to tariffs on steel and aluminum products", i.e. a response to the previous, Section 232 round of tariffs, and has nothing to do with the latest round of $50 billion in Section 301 tariffs.

Instead, Hu warns that "China's retaliation lists against the 301 investigation will target US products worth $ tens of billions. It is in the making."

Or, in other words, China's real retaliation - one which is guaranteed to infuriate Trump with its proportionality and lead to further tit-for-tat responses - is about to hit.

As a reminder, here is a list of the main US exports to China, which - if this warning is accurate - are about to be crushed.

Published:3/23/2018 11:44:05 AM
[Markets] US Indexes Fell Sharply—Is a Trade War with China in the Offing? After the Federal Reserve’s rate hike of 25 basis points on March 21, 2018, another key event impacted the major US indexes. On March 22, 2018, President Trump announced the imposition of retaliatory tariffs on up to $60.0 billion on China’s imports. The SPDR S&P 500 ETF (SPY), the SPDR Dow Jones Industrial Average ETF (DIA), and the PowerShares QQQ ETF (QQQ) fell ~2.5%, ~2.9%, and ~2.5%, respectively, on the day. Published:3/23/2018 11:44:05 AM
[Markets] Need to Know: ‘I don’t think this is a trade war,’ says Wall Street veteran Need to Know: ‘I don’t think this is a trade war,’ says Wall Street veteran Published:3/23/2018 11:10:22 AM
[Markets] How to invest in water: A long-term bet on an essential commodity with limited supply World Water Day has triggered a flurry of reports and analyses on the challenge facing many countries in managing their supply, as incidents of drought increase and climate change makes dry regions even dryer
Published:3/23/2018 11:10:21 AM
[Markets] "We're Looking At All Options" - China Signals It Could Slash Treasury Buys

After concerns about devaluation were allayed modestly by PBOC's fix overnight, China’s ambassador to the U.S. wouldn’t rule out the possibility of the Asian nation scaling back purchases of Treasuries in response to tariffs imposed by President Donald Trump.

US equities reacted immediately...

Though Treasury yields are modestly lower after the comments...


As Bloomberg reports, ambassador Cui Tiankai told Bloomberg Television, when asked whether China would consider reduced purchases of U.S. Treasuries...

We are looking at all options...

That’s why we believe any unilateral and protectionist move would hurt everybody, including the United States itself. It would certainly hurt the daily life of American middle-class people, and the American companies, and the financial markets.

As a reminder, China is America’s biggest foreign creditor. It held $1.17 trillion in Treasuries as of January, or about 19 percent of all foreign holdings of U.S. government securities.

In the interview, Cui reiterated the Chinese position that the nation doesn’t want a trade war but is prepared to respond if the situation escalates.

The Dow just took out the Feb 8th close...

Published:3/23/2018 11:10:21 AM
[Markets] Dow briefly breaks below February low in bearish sign, as stocks take a leg lower in afternoon trade The Dow Jones Industrial Average saw losses accelerate in Friday afternoon trade, pushing the blue-chip gauge beneath its lows of early February. The Dow was off about 52 points recently, or 0.2%, at 23,898, ... Published:3/23/2018 11:10:20 AM
[Markets] What autonomous vehicle companies are doing in the wake of Sunday's fatal Uber crash The deadly wreck involving an experimental Uber is being investigated by the National Transportation Safety Board. Published:3/23/2018 10:23:32 AM
[Markets] Billionaire entrepreneur H. Wayne Huizenga dies at 80: reports Billionaire entrepreneur H. Wayne Huizenga dies at 80: reports Published:3/23/2018 10:23:30 AM
[Markets] Top Ten: Weekend roundup: Facebook | Trade wars | AbbVie’s costly disappointment What Facebook’s data breach really means, Trump’s trade gambit and what may be an expensive embarrassment for a drug giant.
Published:3/23/2018 10:23:30 AM
[Markets] Mr. Market Weakens U.S. Negotiating Position With China

Via Global Macro Monitor,

Last week we were thinking about pulling together a post using game theory to predict the outcome of the Trump administration’s tariff announcement.   JP Morgan beat us to it, however.

More interesting is the JPM quant’s assertion that Trump will – or should – avoid launching a trade war at all costs, not least of all because he wants to avoid impeachment, which would be far more likely if Trump “destabilizes global markets” impairing the administration’s ‘market scorecard’ and likely leading to an election loss. And, as Marko adds, “lost elections open a path to impeachment, and other complications.”  – JP Morgan, via Zero Hedge

China’s Strategy

There is no doubt, in our opinion,  the Chinese government understands this.  That they have Mr. Market on their side, which will punish President Trump with a bear market if the U.S. takes a hard line and chooses a trade war.   President Trump has tied his success to a soaring stock market.

Today’s 700 plus decline in the Dow is a case in point.  Market volatility dilutes U.S. bargaining power and may make the path to an outcome much more unstable.  Thus more volatility.  A classic feedback loop.     

President Xi may calculate another 3,000 points shaved off the Dow, and the U.S. will capitulate.

We are not so sure this White House,  Mr. Navarro, in particular,  is as rational as JP Morgan believes.  Nor is it so easy to control the genie once she is out of the bottle.

S&P500 Tips Over

As we suspected, and as our analog instructed,  the S&P500 tipped over the “Navarro Falls” on Monday, and the sell-off got some real legs today.    The JFK-Trump S&P analog continues to track on a directional basis like clockwork with the Trump S&P now almost 3 percent below the JFK S&P 344 trading days after election day.

The Trade War Nobody Wants

The conventional wisdom of the market pundits is the tariffs are just an opening position, it is all noise, and will be over quickly.  Upon hearing all this we immediately thought it was the same thinking at the beginning of World War I,  the war nobody wanted.

We prepared to write something up, but our good friend, Greg McKenna, down in Australia beat us to the punch.  Here is his profound thinking in the Friday morning commentary.

Source:  Greg McKenna @gregorymckenna 

That is big thinking, folks.  Greg is one smart dude.

Deep State

We suspect it will not be long before we hear an official pronouncement the “deep state” is behind this sell-off.  In fact, there are already whispers of such in the market.   Just sayin’.

Published:3/23/2018 10:23:29 AM
[Markets] These 5 charts show how trade war fears are rattling the markets Fears of rising protectionism and a trade war between the world’s two largest economies have started to take hold of investors’ risk appetite, with a classic flight to so-called haven assets dominating ... Published:3/23/2018 10:23:29 AM
[Markets] U.S. new-home sales pick up in February U.S. new-home sales pick up in February Published:3/23/2018 9:44:59 AM
[Markets] The New York Post: Firefighter dies fighting blaze on Bruce Willis–Edward Norton movie set in Harlem A firefighter was killed late Thursday while battling a blaze that broke out at a Harlem building where film crews were shooting a new Edward Norton and Bruce Willis movie, police and fire sources said.
Published:3/23/2018 9:44:59 AM
[Markets] Dow Trades Higher as Nike Jumps, Nasdaq Slips Stocks are mixed on Friday, with Nike shares giving a lift to the Dow Jones Industrial Average and with Wall Street attempting to shake off Donald Trump's move to slap tariffs on up to $60 billion worth ... Published:3/23/2018 9:44:59 AM
[Markets] Breaching The Public Trust - Facebook Is The Beginning

Authored by Tom Luongo,

Last night I was chatting with a friend while waiting for my daughter. She told me her phone now informs her when her bills are due.  Now, that may not seem like a big deal, but it is when you realize that she never told her phone to do that.

Her phone is scanning her emails and letting her know her when her electric bill is due.

I told her Google likely pushed down an update which she agreed to without realizing it (or getting the opportunity to opt-out of) which authorized them to not only scan her inbox but set up alerts for her.

She was angry about it, and rightfully so.

This is why I don’t use any of the Google apps on my Android phone.  Outlook for email, Opera for my browser.  Office for my productivity apps.  It was a conscious choice.  I moved to Android under protest because Microsoft willfully destroyed Windows Phone.

I know it’s not much better, but at least Microsoft appreciates my business, now, for the first time in their miserable existence.

And I wasn’t willing to shell out $600+ for a comparable iPhone.  Pennywise and pound-foolish, I know, but no one’s perfect.

As a hardware-savvy guy I know when software is over-burdening hardware and why.

And I can tell you the data harvesting on my phone was so out of control by Facebook and Google that it became nigh unusable on wake-up.  Upwards of a minute or two would go by before the phone was usable because so much data was being harvested off it before it would deign to allow me to use it.

I will switch to the iPhone when I can justify the money.

Once I deleted Facebook and all its crap from my phone, it miraculously became almost functional again.  I could answer calls as they came in.  I could reply to texts and approve blog comments/pingbacks.

I will never reinstall Facebook on any device I own.

Harvest This!

I am mostly post-Facebook anyway.  And once I get phone numbers for the few people I contact via Messenger, I’ll likely only log in to get the schedule at my local game shop.

I talked about this phenomenon back in October, presaging the backlash to their current brand-killing troubles.

So, watching people who have made the decision to simply end their relationship with Facebook is fascinating.  Some do so because they are rightfully fearful of Mr. Creepyberg’s weird need to vacuum up all the data about everyone...

The biggest problem with Facebook is it’s all fake intimacy; a pale simulacra of real life interactions with people you are supposed to care about…

The people I truly value mostly feel about Facebook the way I do.

That’s what makes them people I value.

They value the value of their closely-held opinions and don’t dilute it by publicly sharing their banality.  They realize that being friends is more than dropping political stink bombs in someone’s digital living room and saying, “I dare you to not breathe.”

So, here you are on a platform that is supposed to be all about you and the last thing anyone really wants to be on Facebook is … themselves.

Because who has time for that anymore?  Especially when this technology we’re all so addicted to is rendered unusable and the simplest of interactions takes ten times longer than it used to.

And this inconvenience was acceptable when it wasn’t obvious that your soul was being sucked up into the Facebook data vacuum and sold to any John with a fiver hanging out of his zipper.  But it is.

“Hey Mark, there’s an extra ten in it for you if you include their porn preferences.”

But now that that cat is out of the bag, Facebook’s advertisers and competitors can virtue signal and piggy-back on the #DeleteFacebook bandwagon.  Competition and all that.  As a free-marketeer I’m both horrified and vindicated by this.

So, take toxic interactions, politically-biased feed population to heighten anxiety and rapacious data harvesting, shake and stir and the resultant explosion of anger was predictable.

Post-Peak Facebook

Facebook will not recover from this.  In fact, we’ve likely reached peak ‘free’ social media in general.  The blockchain, like Steemit, is our way forward.  This has been brewing for months as the Left and the power-broker class go through the various stages of Post-Election Stress Disorder.

They have increasingly outed themselves as the insectoid monsters we’ve always known them to be.  But, again, we put up with it because we thought their being private companies would give us some control over their worst impulses.

Boy, were we wrong.

What started as a great thing to bring people together to communicate in an increasingly fragmented society has turned into an evil, Orwellian monstrosity feeding the power fantasies of the worst people on Wall St. and K Street.

Facebook, Google and Twitter are the epicenter for The Culture War being foisted on us by the psychotic and the powerful.  And their products have to be rejected for us to have any chance regaining control of the narratives that circumscribe our lives.

Use them for your own purposes, but not one inch further.  If Facebook is still good for your business, stay with it.  I’ll use YouTube for as long as they’ll let me.  But, I have no illusions about making money off the platform directly.

To me YouTube is nothing more than a repository of my screeds against it and everything the people who own and operate it stand for.

In this month’s issue of the Gold Goats n’ Guns Investment Newsletter I explained why we’ve reached this tipping point in a piece entitled, Slouching Towards Oceania:

In the open market of ideas, they have lost. As long as this didn’t have profound
political consequences they were okay with making money off of our discontent.

So, while they [social media companies] weren’t built with the intention of shutting out those who weren’t down with the plan of frogmarching us towards global oligarchic control, they have that power now.

And they are using it, revealing the ugly, authoritarian mindset that was always there, masked by a thin veneer of civility, safe in the knowledge that the power rested with them.

And then Trump won.


That’s the real reason for the outrage at Facebook’s casual attitude towards our data.  We knew this was being used against us.  But, it was a Faustian bargain.  We get ‘free’ communications, they get our data.

But, to then silence us because that data didn’t help elect Hillary and complete the circle of salt to trap us demons within, the gloves came off and we were to be punished for our sins against their ideas of decency.

Creepyberg’s mea culpa on CNN didn’t see him taking any true responsibility for this.  He never cared about his customers.

Facebook was always a propaganda platform and government intelligence agency masquerading as a social network.  So is Twitter.   So is Google.  Why do you think the Chinese and Russians banned them from their countries and fostered their own analogues?

It’s powerful stuff this big data in the global game of Control the Narrative.

They also represent the worst kind of real Fascism — the merging of corporate and state power — because it’s personal.  It uses your personal faults and kinks, your moments of weakness and short-comings as weapons to bind you down, keep you from making a living, marginalize you and, ultimately, un-person you.

And if Creepyberg and the vampires on Madison Avenue think they can recover their business after such a sincere violation of the public’s trust they are in for one hell of a rude awakening.

And that’s the real irony here.  For while Antifa and the left scream about how Trump is destroying the media and with it our democracy,  the truth is the legacy and social media companies are destroying themselves by thinking they are immune to the anger of their users.

The Clinton Ouroborous

But the big question is why this scandal?  And why this scandal now?  The outing of Cambridge Analytica may be payback for them helping elect Trump.  Creepyberg and Facebook are past their peak with those Democrats need to win elections — younger voters — so turning on them makes a certain kind of sense.

The Clintonistas/Obama-babies, under pressure from failing to destroy Trump, regain control of the narrative and preserve the status quo, are turning on each other now.

Like sharks in a feeding frenzy markers are being called in left and right, silences are breaking, confidences betrayed (Oh, the delicious irony of that!).

Nikolas Sarkozy was indicted for profiting off of destroying Libya?  Cambridge Analytica going down?  Now Facebook?  All in a span of a few days since Andrew McCabe was fired on Friday?

People like this don’t get outed unless there are major changes happening behind the scenes.  Hillary’s statements last week while she was stumbling around India may have finally been the last straw for those she failed so completely in November 2016.

And it’s time to cut her loose.  And in order to do that, the people complicit in her crimes are being thrown to the wolves to satisfy our anger and soothe the restless natives pre-mid terms.

I’ve been saying for months that Hillary’s popularity would have to drop below a certain critical threshold for her to be indicted.   That she would have to become a true liability to the cause of globalism for the sharks to finally feed in the grandest breakdown of the Prisoner’s Dilemma the world has ever seen.

*  *  *

To support work of this caliber and ensure my ability to produce it, please sign up at my Patreon to get access to both the Private Blog and the Gold Goats ‘n Guns Investment Newsletter.

Published:3/23/2018 9:44:58 AM
[Markets] Dow industrials up triple digits in opening half-hour Friday Dow industrials up triple digits in opening half-hour Friday Published:3/23/2018 9:17:03 AM
[Markets] Economic Report: New-home sales chug higher in February A measure of sales of newly-built homes rose slightly, but previous months’ tallies were revised higher, amid a groundswell of demand for housing.
Published:3/23/2018 9:17:02 AM
[Markets] ‘I don’t think this is a trade war,’ says veteran Wall Street strategist The Dow is trying to decide if it’s done diving, after yesterday’s 724-point plunge. Veteran strategist Marc Chandler seems to have “Bridge Over Troubled Water” on his playlist, and he provides our call ... Published:3/23/2018 9:17:02 AM
[Markets] New Home Sales Tumble For 3rd Straight Month - Worst Streak In 4 Years

After a surprise  rebound in existing home sales (even as condo sales slumped), new home sales were expected to rebound in Feb from their 7.8% plunge in January, but grossly disappointed, dropping 0.6% MoM - the 3rd monthly drop in a row.

This is the first time new home sales declined for 3 straight months since Q1 2014

New home sales are up just 0.5% YoY...

Purchases rose in two of four U.S. regions, including a 9 percent gain in the biggest region, the South; sales fell 17.6 percent in second-largest region, the West

And while existng home sales popped, new home sales slumped to 618k - the lowest since October...


Median sales price increased 9.7% YoY to $326,800

Bloomberg notes that steady hiring and elevated consumer confidence are expected to support demand for housing, but borrowing costs are picking up and property-price appreciation continues to outpace wage growth. That's crimping affordability, especially for younger residents and first-time buyers.

Published:3/23/2018 9:17:01 AM
[Markets] Trump tweet suggests omnibus veto is possible Trump tweet suggests omnibus veto is possible Published:3/23/2018 8:06:49 AM
[Markets] NewsWatch: ‘I don’t think this is a trade war,’ says veteran Wall Street strategist The Dow doesn’t look like it’s done diving yet, even after yesterday’s 724-point plunge. Veteran strategist Marc Chandler seems to have “Bridge Over Troubled Water” on his playlist, and he provides our call of the day.
Published:3/23/2018 8:06:49 AM
[Markets] The Dow Jones Industrial Average Is Crumbling -- Here's Some Top Advice The stock market is under severe pressure. Here are some tips to take. Facebook is also having an awful week. Published:3/23/2018 8:06:47 AM
[Markets] U.S. stock-index futures pare losses; Dow, S&P 500 turn positive U.S. stock-index futures pare losses; Dow, S&P 500 turn positive Published:3/23/2018 7:24:18 AM
[Markets] Bond Report: Treasury yields steady a day after 10-year drops most in 6 months on trade worries Treasury yields on Friday are little changed in Friday trade, but were mostly lower for the week, as a swoon for global stocks appeared to intensify on worries about escalating trade tensions between China and the U.S.
Published:3/23/2018 7:24:17 AM
[Markets] Trader Shares "A Few Ideas For Avoiding A Friday Faceplant"

From Bloomberg macro commentator, Richard Breslow

Don’t mistake this as a trade recommendation, but it is all right to do nothing. Trading when you believe you have an edge is when it is time to step in. If you are there, then go for it. But trading merely because things are moving around is a day-trading concept, not an investment thesis.

It’s important to match trading style, objectives and realistic liquidity assumptions to how you view volatility vs risk. They are very much not the same thing. Made even more so if you think the Fed equity put has been eliminated. It hasn’t, just moved some.

I guess I would be more excited about jumping in if I could construct a more coherent explanation for precisely what is going on. And if I can’t come up with some half-baked theory I’m willing to run with, I’m willing to bet neither can a lot of other people. Even if they are more than willing to be adamant that it all boils down to one thing. It doesn’t.

And while I have lots of ideas of what, gun to my head, I’d do right now, I’m not sure there is any special advantage to blithely concluding this has all been noise or is the start of the big one. And that question is where you should be starting. Your correlation matrix depends upon it. Which matters mightily if you are busy doing X because of Y. Unless you just want to keep entertained by leaning on some very obvious, and close, chart points. And I fully understand the temptation. In fact...

Another thing to keep reminding yourself is the importance of considering the source. In the pure QE world it was easy for everyone to be an expert on everything. We knew how each act of the play, let alone the whole thing, was going to end. It’s trickier at the moment. And every market analyst who tells us about the intricacies of Middle East negotiations one day may not be as au fait with the market dynamics of the Dalian iron ore exchange the next. At the moment, I’m treating the word “because” with unusual circumspection.

There is one tangentially related issue I can’t get out of my head. Yesterday, Bloomberg News had an article about Russia’s plans to further mimic other sovereign wealth funds by having its National Wellbeing Fund take on more risk, including stocks. It may not be useful today, but think about it when someone wonders just who might consider buying a dip. Or what the implications are for a sovereign wealth fund that thinks it can invest big but be able to sell quickly.

Now go read the news and decide what your plans are for the day.

Published:3/23/2018 7:24:16 AM
[Markets] Treasury yields steady a day after 10-year drops most in 6 months on trade worries Treasury yields on Friday are little changed in Friday trade, but were mostly lower for the week, as a swoon for global stocks appeared to intensify on worries about escalating trade tensions between China ... Published:3/23/2018 7:24:16 AM
[Markets] Need to Know: ‘I don’t think this is a trade war,’ says veteran Wall Street strategist The Dow doesn’t look like it’s done diving yet, even after yesterday’s 724-point plunge. Veteran strategist Marc Chandler seems to have “Bridge Over Troubled Water” on his playlist, and he provides our call of the day.
Published:3/23/2018 6:52:20 AM
[Markets] At least one person has been killed in French supermarket hostage-taking: report At least one person has been killed in French supermarket hostage-taking: report Published:3/23/2018 6:52:20 AM
[Markets] Wall Street Reacts To Trade Wars

Four words sum up the broad consensus from financial analysts with regard the escalating trade wars: "This can turn ugly..."

China responded overnight, to Trump's first $50 billion volley (retaliatory or not) in the trade war, with what many are calling a warning shot with a targeted $3 billion set of tariffs on US products. Chatter about yuan devaluation (the ultimate next stage in the trade war) were stymied as PBOC fixed modestly lower and offshore yuan is bouncing back a little.

However, broadly-speaking, none of this is positive and The FT provides a quick roundup of what analysts are saying about the brewing trade war between the world’s two largest economies.

ING Asia Pacific chief economist Robert Carnell:

If the tariffs go ahead as planned, then we believe China will retaliate. It is impossible to imagine that they cannot. And then we expect the US to retaliate further.

This can turn ugly on a global scale very quickly. And synchronous global growth or not, markets are right to be pricing in a more subdued outlook.

Although this trade dispute is largely a US-China one, it has the potential to embroil much of the Asian region.

ANZ economists Raymond Yeung and Daniel Wilson:

Chinese authorities will stand firm as an advocate for globalisation but will respond to the US’s announcement on a bilateral basis. It will not devalue its currency.

Although the face value of the US tariff will be small, President Trump may push other countries to take sides, resulting in a divided world. The scale of the trade war would be broadened. This is the biggest risk lying ahead.

Our major worry is whether President Trump’s tactical approach will spill over to the rest of the world. He deliberately relates trade measures to foreign policy.

JPMorgan Asset Management global market strategist Hannah Anderson:

The equity market will bear the brunt of the market reactions. Most impacted will be the US, Korea, and Taiwan as companies domiciled in these markets make up a significant portion of the global production chain of Chinese exports.

The effects are likely to be felt more strongly in the US and increase in both consumer and producer prices. Exports are extremely important to the Chinese economy, but have been trending less so in recent years and the U.S. has been shrinking as a share of China’s export market.

Other than the potential modest inflationary impact on U.S. consumer prices, which could bias the Fed toward a more hawkish stance, impact in the bond market is like to be limited.

The Economist Intelligence Unit global chief economist Simon Baptist:

The initial list of products proposed by China should be seen as a minimum opening retaliation, showing that China will prefer to keep any trade war contained and within World Trade Organisation parameters, but it has clearly left the door open to expand these if US actions escalate.

Excluding consumer goods such as iPhones from the tariffs won't protect US consumers from price increases. China is so integral to global supply chains for many products that a good portion - but not all - of the tariff impact will be passed onto US consumers.

China’s swift response to Trump’s tariff announcement and the departure of national security adviser HR McMaster from the White House “seem to have been the last straws” for the dollar against the yen, Westpac senior currency strategist Sean Callow said, adding that the break through the ¥105 mark was “disturbing”.

*  *  *

Put another way - more to come!

Published:3/23/2018 6:52:19 AM
[Markets] Global stocks slide, yen jumps, as trade war fears grip markets The threat of a global trade war sent stock markets sliding and investors rushing for the safety of currencies like the yen and government bonds on Friday, after U.S. President Donald Trump announced tariffs on up to $60 billion of Chinese goods. Another bruising week for stocks <.MIWD00000PUS> has left global equity markets heading for their first quarterly loss since early 2016 after a spike in volatility, nervousness about rising inflation and the specter of a trade war spooked investors enjoying a multi-year bull run. Published:3/23/2018 6:52:19 AM
[Markets] Asian markets plunge as Trump's trade war heats up Asian markets plunge as Trump's trade war heats up Published:3/23/2018 6:03:21 AM
[Markets] Currencies: Dollar hits lowest yen level since 2016 election as trade-war woes spark turmoil The dollar dropped against most major currencies on Friday, sliding to its lowest level against the yen since the U.S. election in 2016 in a flight to so-called haven assets as the trade rhetoric between Trump and China hardened.
Published:3/23/2018 6:03:16 AM
[Markets] Global Stocks Tumble as China Fires Back in Trump Trade War Global stocks tumbled, with markets in Asia losing all of their year-to-date gains, as China declared it's "not afraid" of an escalating trade war with the United States following President Trump's ... Published:3/23/2018 6:03:16 AM
[Markets] "It Sucks" - Senate Passes $1.3 Trillion Omnibus Spending Bill

Despite threats from Rand Paul and a handful of other conservative Senators, the upper chamber easily passed the long-awaited $1.3 trillion omnibus spending bill early Friday morning - sending a bill that would lock in federal funding for the rest of the fiscal year, which ends in September, to President Trump's desk.

The final 65-32 vote resulted from a week of all-night bargaining sessions and repeated delays before the text of the 2,000+ page bill was released Wednesday morning.


Paul and other conservatives complained that the budget would've been adamantly rejected by Republicans if Obama was still in the White House. Republicans touted an $80 billion increase in military spending - which Trump touted as the largest increase in military spending ever - while Democrats highlighted an additional $63 billion in domestic spending, per Bloomberg.

Senator John Kennedy, a Louisiana Republican who opposed the bill, also hinted that he too might try to force a shutdown by delaying the vote after criticizing the vote's "price tag".

"It sucks," Kennedy said of the spending measure. "No thought whatsoever to adding over a trillion dollars in debt."

In a move that infuriated his fellow Senators, Sen. Jim Risch of Idaho almost sunk the bill after learning that it included language to name an Idaho forest for Cecil Andrus, the former Democratic governor and Carter administration Interior Secretary who died last year. Andrus and Risch were longtime political rivals, per the Wall Street Journal.

The unceasing squabbling over the bill frustrated many lawmakers, including Bob Corker, who loudly complained about the repeated delays to the vote, per Politico.

"This is ridiculous. This is juvenile," fumed Sen. Bob Corker, who asked McConnell for an explanation of why the chamber was in at midnight. "What has occurred over the last 11 hours that keeps us here voting on a bill that we all know is going to pass?"

The $1.6 billion funding for border security is far less than the Trump administration had demanded. Less than half of that money will be used to build about 33 miles of fencing and levees along Texas' border with Mexico. The White House had initially demanded $25 billion. meanwhile, Democrats won several major concession - particularly regarding immigration enforcement inside the US. The bill provides for minimal increases in funding for enforcement officers.

Democrats and Republicans also struck a compromise on control, rolling in the bipartisan "Fix NICS" legislation that will bolster reporting by federal agencies to the database for gun-buyer background checks. It also explicitly allows the Centers for Disease Control and Prevention to research the causes of gun violence.

The bill also includes $21 billion for infrastructure projects and an additional $4 billion to combat opioid addiction.

One of the biggest obstacles to reaching the agreement was the status of funding for a Hudson River tunnel between New York and New Jersey. Advocates, mainly Democrats and Republicans representing the two states, argued it is one of the most important infrastructure projects in the U.S. But Trump has insisted on removing money for the project, known as Gateway, from the spending plan.

In a decision that is sure to anger commuters in a region that comprises one-fifth of the country's GDP, Trump successfully killed funding for the "Gateway" project - that is, the construction of a new tunnel underneath the Hudson River that connects New York City and New Jersey. Democratic leader Chuck Schumer - who represents New York - assured angry voters that the two states would be able to access funding equal to about half of the $900 million initially requested through Amtrak and grants that don't require approval from the Department of Transportation.

Another $75 million was allocated to train teachers and school officials to respond to attacks. It will also pay for metal detectors and other equipment, while creating anonymous systems for reporting possible threats to schools.

Funding to combat Russian interference in the upcoming midterm elections was included in the spending package, as was $600 million to build a rural broadband network, per WSJ.

As conservatives railed against the budget bill, Majority Leader Mitch McConnell described the bill as "legislation that neither side sees as perfect, but which contains a host of significant victories and important achievements on behalf of the American people." Among them, he said, are a 15% increase in military spending and funding to combat an opioid epidemic as well as a down payment toward Mr. Trump’s border wall. The National Institutes of Health and Head Start - a popular child-care program - also received more spending.

The deal is the first installment of an informal two-year spending agreement worked out between McConnell, Schumer and Trump that will lift federal spending above curbs set in 2011.

President Trump's budget director Mick Mulvaney assured reporters that the president will sign the bill - and he has all day to do so.

But while the odds that the bill will be signed into law are extremely high, conservative lawmakers are still trying to convince Trump to reject it, forcing a shutdown that would grant them more leverage in trying to force concessions from both moderate Republicans and Democrats.

Published:3/23/2018 6:03:15 AM
[Markets] Go ahead and #DeleteFacebook. But here’s the change we really need. Even Cher has joined an online movement to quit Facebook over the Cambridge Analytica privacy breach. But it won't solve the bigger problem. Published:3/22/2018 4:54:46 PM
[Markets] Nike swings to loss, but sales beat expectations; shares rise Nike swings to loss, but sales beat expectations; shares rise Published:3/22/2018 4:54:44 PM
[Markets] Earnings Results: Micron earnings and outlook beat, chip maker plans to increase production space Micron Technology Inc. is still experiencing big financial gains from elevated demand for its memory chips, an earnings report showed Thursday, and the company is looking to spend some of that money to increase production.
Published:3/22/2018 4:54:44 PM
[Markets] After the Bell: Dow Slumps 700 Points as Markets Prepare for Trade War The Dow Jones Industrial Average suffered its largest drop since Feb. 8 today. • ...take a look at Coca-Cola (KO), the best performing stock in the Dow today. The ostensible reason was President Donald Trump's announcement of tariffs against China. Published:3/22/2018 4:54:43 PM
[Markets] Snowden Explains Deep State's Influence On Presidents Obama, Trump

Authored by Jay Syrmopoulos via,

Famed whistleblower Edward Snowden was recently interviewed by Italian publication La Repubblica. The publication noted the 5-year mark of Snowden’s historic act of blowing the whistle on the NSA’s expansive surveillance programs and that “many thought he would end up very badly, but when he connects via videolink for this interview with la Repubblica, he seems to be doing very well: the frank smile and peaceful face of someone who is easy in his mind.”

In an excerpt from the exclusive interview, Snowden explained how the presidencies of both Obama and Trump are shaped by the Deep State following an illuminating question by journalist Stefania Maurizi.

Stefania Maurizi: 

We saw that President Obama, who was an outsider to the US military-intelligence complex, initially wanted to reign in the abuses of agencies like the CIA and the NSA, but in the end he did very little. Now we see a confrontation between president Trump and so-called Deep State, which includes the CIA and the NSA. Can a US president govern in opposition to such powerful entities?

Edward Snowden: 

Obama is certainly an instructive case. This is a president who campaigned on a platform of ending warrantless wiretapping in the United States, he said “that’s not who we are, that’s not what we do,” and once he became the president, he expanded the program.  He said he was going to close Guantanamo but he kept it open, he said he was going to limit extrajudicial killings and drone strikes that has been so routine in the Bush years. But Obama went on to authorize vastly more drone strikes than Bush. It became an industry.

As for this idea that there is a Deep State, now the Deep State is not just the intelligence agencies, it is really a way of referring to the career bureaucracy of government.

These are officials who sit in powerful positions, who don’t leave when presidents do, who watch presidents come and go, they influence policy, they influence presidents and say: this is what we have always done, this is what we must do, and if you don’t do this, people will die.

It is very easy to persuade a new president who comes in, who has never had these powers, but has always wanted this job and wants very, very badly to do that job well. A bureaucrat sitting there for the last twenty years says: I understand what you said, I respect your principles, but if you do what you promised, people will die. It is very easy for a president to go: well, for now, I am going to set this controversy to the side, I’m going to take your advice, let you guys decide how these things should be done, and then I will revisit it, when I have a little more experience, maybe in a few months, maybe in a few years, but then they never do.

This is what we saw quite clearly happen in the case of Barack Obama: when this story [of Snowden exposing the NSA’s mass surveillance] came forward in 2013, when Obama had been president for five years, one of the defences for this from his aides and political allies was: oh, Obama was just about to fix this problem!  And sure enough, he eventually was forced from the wave of criticism to make some limited reforms, but he did not go far enough to end all of the programs that were in violation of the law or the constitution of the United States. That too was an intentional choice: he could have certainly used the scandal to advocate for all of the changes that he had campaigned on, to deliver on all of his promises, but in those five years he had become president, he discovered something else, which is that there are benefits from having very powerful intelligence agencies, there are benefits from having these career bureaucrats on your side, using their spider web over government for your benefit.

Imagine you are Barack Obama, and you realise – yes, when you were campaigning you were saying: spying on people without a warrant is a problem, but then you realise: you can read Angela Merkel’s text messages. Why bother calling her and asking her opinion, when you can just read her mind by breaking the law? It sounds like a joke, but it is a very seductive thing. Secrecy is perhaps the most corrupting of all government powers, because it takes public officials and divorces them from accountability to the public.

When we look at the case of Trump, who is perhaps the worst of politicians, we see the same dynamic occurring. This is a president who said the CIA is the enemy, it’s like Nazi Germany, they’re listening to his phone calls, and all of these other things, some claims which are true, some claims which are absolutely not.  A few months later, he is authorizing major powers for these same agencies that he has called his enemies.

And this gets to the central crux of your question, which is: can any president oppose this?  The answer is certainly. The president has to have some familiarity going in with the fact that this pitch is going to be made, that they are going to try to scare him or her into compliance. The president has to be willing to stand strongly on line and say: ‘I was elected to represent the interests of the American people, and if you’re not willing to respect the constitution and our rights, I will disband your agency, and create a new one’. I think they can definitely be forced into compliance, because these officials fear prison, just like every one of us.

Published:3/22/2018 4:54:42 PM
[Markets] With just two days to go, countries have no clue whether they'll be affected by Trump's tariffs Top steel suppliers Brazil, South Korea and Japan say the Trump administration still has no process for applying for tariff exemptions. Published:3/22/2018 2:27:16 AM
[Markets] Mark Zuckerberg ‘sorry’ for Facebook data scandal, says he would testify Mark Zuckerberg ‘sorry’ for Facebook data scandal, says he would testify Published:3/22/2018 2:27:14 AM
[Markets] Asia Markets: Most Asian markets strengthen after Fed raises rates Asian stock markets outside mainland China strengthened Thursday, after the Federal Reserve raised interest rates but stopped short of signaling a faster pace of increases for this year.
Published:3/22/2018 2:27:13 AM
[Markets] [$$] Asian equities wobble in wake of Fed’s interest rate rise Thursday 05.25 GMT Asia-Pacific equities fluctuated on Thursday following the US Federal Reserve’s decision to raise rates, while the dollar extended the previous day’s losses. Japan’s Topix swung between ... Published:3/22/2018 2:27:13 AM
[Markets] US Threatens Sanctions For European Firms Participating In Russian Gas Pipeline Project

As previewed overnight, the U.S. State Department is warning European corporations that they will likely face penalties if they participate in the construction of Russia's Nord Stream 2 gas pipeline, on the grounds that "the project undermines energy security in Europe", when in reality Russia has for decades been a quasi-monopolist on European energy supplies and thus has unprecedented leverage over European politics, at least behind the scenes.

As many people know, we oppose the Nord Stream 2 project, the US government does,” said State Department spokeswoman, Heather Nauert at a Tuesday press briefing. “We believe that the Nord Stream 2 project would undermine Europe's overall energy security and stability. It would provide Russia [with] another tool to pressure European countries, especially countries such as Ukraine.”

And speaking of Ukraine, recall that in 2014, shortly after the US State Department facilitated the presidential coup in Ukraine, Joe Biden's son Hunter joined the board of directors of Burisma, Ukraine's largest oil and gas company. Surely that was merely a coincidence.

The project which began in 2015 is a joint venture between Russia's Gazprom and European partners, including German Uniper, Austria's OMV, France's Engie, Wintershall and the British-Dutch multinational Royal Dutch Shell. The pipeline is set to run from Russia to Germany under the Baltic Sea - doubling the existing pipeline's capacity of 55 cubic meters per year. 

Nauert said that Washington may introduce punitive measures against participants in the pipeline project - which could be implemented using a provision in the Countering America's Adversaries Through Sanctions Act (CAATSA).

“At the State Department, we have spent a lot of time speaking with our partners and allies overseas to explain to them the ramifications of CAATSA and how an individual or a company or a country can run afoul against CAATSA and fall into sanctions," Nauert said. "We don't tend to comment on sanctions actions but we've been clear that firm steps against the Russian energy export pipeline sector could – if they engage in that kind of business – they could expose themselves to sanctions under CAATSA.” 

Several EU nations, particularly Germany, have repeatedly expressed interest in participating in Nord Stream 2, however the pipeline has been opposed by several minor bloc nations, including Poland, Latvia, Lithuania, Romania and Hungary. Ukrainian authorities are also staunchly against the project, as it bypasses Ukraine and would impact them monetarily. 

Of note, CAATSA - approved last Summer, was recently used by the U.S. Treasury Department to impose penalties against 19 Russian individuals and five Russian entities, including Russia's Federal Security Service and the Main Intelligence Directorate (GRU) for their alleged interference in the 2016 U.S. presidential race. 


As Alex Gorka of the Strategic Culture Foundation wrote, on March 15, a bipartisan group of 39 senators led by John Barrasso (R-WY) sent a letter to the Treasury Department. 

They oppose NS2 and are calling on the administration to bury it. Why? They don’t want Russia to be in a position to influence Europe, which would be “detrimental,” as they put it. Their preferred tool to implement this obstructionist policy is the use of sanctions. Thirty-nine out of 100 is a number no president can ignore. Powerful pressure is being put on the administration. Even before the senators wrote their letter, Kurt Volker, the US envoy to Ukraine, had claimed that NS2 was a purely political, not commercial, project.

No doubt other steps to ratchet up the pressure on Europe will follow.

Published:3/22/2018 2:27:13 AM
[Markets] White House cancels Trump public events for Wednesday because of weather White House cancels Trump public events for Wednesday because of weather Published:3/21/2018 8:11:45 AM
[Markets] Get ready for most competitive spring home buying season since the Great Recession Tight inventory is fueling rapid appreciation in home prices, despite rising rates.
Published:3/21/2018 8:11:45 AM
[Markets] Stock-market futures drift lower as investors await Fed decision U.S. stock-index futures pointed to a slightly weaker open on Wall Street on Wednesday, with traders hesitant to make any big moves ahead of the Federal Reserve forecasts that could help outline the future ... Published:3/21/2018 8:11:44 AM
[Markets] Deutsche Bank Plunges To 16-Month Lows, Bank Credit Risk Spikes

Deutsche Bank shares are down 5%, at their lowest since Nov 2016 (near post-crisis lows), after warning that euro strength and higher funding costs will weigh on revenue in the securities unit this quarter (just a week after the lender voiced optimism about the outlook for the year).

Bloomberg reports that the company’s corporate and investment bank unit faces a 300 million-euro ($368 million) headwind from the currency effect and 150 million euros from higher funding costs, Chief Financial Officer James von Moltkesaid at an investor conference in London on Wednesday.

The reaction was a swift 5% plunge in the stock...

Heading back towards 2016 post-crisis lows...

Marcus Schenck, co-head of the corporate and investment bank, said at a separate event in London Wednesday that the lender still has some work to do convincing its shareholders it’s turnaround is on track.

“John has always made it very clear. Look, this is not a one-quarter journey. This is a several-year journey,” Schenck said. “We think we’re on the right path with that journey. But we definitely are a show-me case.”

We suggest "some work" is perhaps an understatement.

However, it's not just Deutsche that has been showing signs of strain recently in the credit markets... Many of the major prime brokers are seeing CDS breaking out...


And more ominously, US financial credit risk is flashing red while bank stocks shrug it off (for now)...

This will not end well.

Published:3/21/2018 8:11:44 AM
[Markets] One more job that robots are taking away from humans: social media influencer The growing popularity of Lil Miquela has experts questioning whether a social media influencer needs to be a real human being.
Published:3/21/2018 7:11:55 AM
[Markets] Facebook, Alphabet and tech giants face hefty new EU taxes under proposal Facebook, Alphabet and tech giants face hefty new EU taxes under proposal Published:3/21/2018 7:06:19 AM
[Markets] Jerome Powell, Amazon, Salesforce and FedEx - 5 Things You Must Know U.S. stock futures turn mixed on Wednesday as Wall Street preps for the first interest rate decision from Federal Reserve Chairman Jerome Powell. Published:3/21/2018 7:06:18 AM
[Markets] China Unveils How It Will Retaliate To US Tariffs, USDJPY Snaps

While it will hardly come as a surprise considering that trade wars always evolve in an escalating tit-for-tat manner, the WSJ reports that just hours ahead of Trump's announcement of as much as $60 billion in tariffs targeting Beijing, China is preparing to hit back with its own countertariff aimed at President Donald Trump’s support base, including levies targeting U.S. agricultural exports from farmbelt states in retaliation to the mounting trade offensive from Washington.

At the same time, and in hopes of avoiding further escalation, Beijing is also reportedly weighing concessions, including easing restrictions on foreign investments in securities firms and insurance companies.

In taking a stick-and-carrot approach, President Xi Jinping is seeking to avoid escalating trade tensions with the Trump administration.

“Any Chinese response to new U.S. tariffs would be measured and proportional,” said a Chinese official involved in policy-making.

Should the carrot not work, China's "stick" is said to target U.S. exports of soybeans, sorghum and live hogs.

Soybean harvest in Illinois last September

And while we said that the news should not come as a surprise, it appears that to FX-trading algos, that's precisely what the WSJ report was, as it sent both the USDJPY and AUDUSD sliding.


Earlier today, the WSJ confirmed previous reports that the White House is preparing to crack down on what it says are improper Chinese trade practices by making it significantly more difficult for Chinese firms to acquire advanced U.S. technology or invest in American companies, individuals involved in the planning said.

The administration plans to release on Thursday a package of proposed punitive measures aimed at China that include tariffs on imports worth at least $30 billion.

The tariffs won’t be imposed immediately, rather, U.S. industry will be given an opportunity to comment on which products should be subject to the duties. As part of the package, the White House will announce possible investment restrictions by Chinese firms in the U.S. and will direct the Treasury Department to outline rules governing investment from China.

Final details of the plan, including the amount of imports to be hit by tariffs, remain in flux, those involved with the discussions said. While the rough amount and rationale for the tariffs are expected to be disclosed on Thursday, the final decisions will come once U.S. industry has had its say, they said.

As a reminder, last week we laid out the most likely Chinese imports that will likely be targeted by Trump. To do this, Goldman looked at imports from China in 57 categories. The answer is shown in the table below.

These are the items that are most likely to see their prices spike as a result of the tariffs: Power tools and electrical appliances top the list, based on a substantial bilateral trade deficit, higher tariffs applied in China versus the US, and high share of imports going to final (in this case, consumer) use.

Sporting goods, toys, jewelry, and consumer electronics like TVs rank highly, for the same general reasons. However, in most of these categories, imports from China constitute a large share of total domestic sales of these products.

Expect price of the abovementioned imports - and sectors - to rise sharply in the coming months should trade war not be avoided in the last moment.

Published:3/21/2018 7:06:17 AM
[Markets] London Markets: FTSE 100 loses ground as retailers drop, with Fed decision in focus U.K. stocks drop Wednesday, with investors wary of taking on risky bets before they find out whether the Fed is ushering in another interest-rate hike, and before data on the U.K. labor market is released.
Published:3/21/2018 5:42:51 AM
[Markets] Austin Serial Bomber Dead: Blows Himself Up After Shootout With Police

Update: President Donald Trump has tweeted his congratulations to law enforcement and all involved in stopping the bomber.



* * *

The Austin serial bomber suspected of delivering six homemade bombs to locations around Austin this month, killing two people, has died after blowing himself up. Less than an hour after CBS Austin  released photographs of the suspect at a Fed-X facility, media reported of an officer-involved shooting on I-35 in Round Rock.

Police have identified the dead suspected bomber as a 24-year-old white male, according to the Associated Press.

As CBS Austin reported, police were closing in on the suspect when he killed himself by detonating some sort of explosive device in his car, according to CBS Austin's source. People in the area reported hearing the explosion, the New York Times reported.

According to KVUE, the FBI and police tracked the bomber to a hotel in the Round Rock area using cell phone technology, security video, store receipts before 'engaging him' around 3 am on Wednesday. Then, as officers pursued the suspect a device was detonated, before a volley of gunfire.

CBS Austin reported that police pursued the bomber until he drove his car into a ditch off I-35. As officers approached, the bomber detonated a bomb in his car, killing himself and injuring an officer. CBS added that an 11-year veteran SWAT officer fired on the suspect. He has since been placed on administrative leave. 

Austin Police Chief Brian Manley says the incident that led to the suspect's death will be investigated by the Austin Police Monitor and the Texas Rangers.

The confrontation came just hours after CBS published CCTV showing images from a surveillance video from the FedEx Office store on Brodie Lane in South Austin which helped investigators zero in on the suspect.

According to the Daily Mail, the images show a man - possibly wearing a wig and gloves - delivering two packages around 7.30pm on Sunday. One of the packages subsequently exploded on a conveyor belt at a FedEx sorting facility outside of San Antonio in Schertz.


The other was intercepted at a facility near Austin airport and was later confirmed to contain a bomb.



Authorities believe the same person is connected to the two packages that surfaced Tuesday is also responsible for the four other explosions that began on March 2nd, killing two people and injuring six.

Austin Police Department tweeted that they were working on an officer-involved shooting near the highway, but gave no further details.

I-35 is closed while a massive presence of law enforcement - including Austin Police, FBI and ATF investigators - processes the scene, which involved officers firing at the suspect. Several helicopters were seen hovering overhead.

While reports surfaced last night that police had discovered surveillance footage of what could be the bombing suspect, CNN added that police had been tracking the man for between 24-36 hours.

Police warn that, though the bomber is dead, there might be more bombs out there. Police don't know what the bomber has been up to over the past 24 hours, and have warned the community to be vigilant.

The bomber's motive is still unclear

Live feed:

Published:3/21/2018 5:42:50 AM
[Markets] Global Stocks Steady as Investors Prep for Fed, Eye Next Move in Facebook Saga Global stocks, and U.S. futures, were little-changed Wednesday as investors adopted a cautious tone ahead of today's interest rate decision from the Federal Reserve and continued to eye developments in ... Published:3/21/2018 5:42:50 AM
[Markets] Market Extra: Ach du meine Güte! Germany’s DAX forms ‘death cross’ chart pattern A bearish chart pattern known as a “death cross” has appeared this week in the charts for two major equity benchmarks — Germany’s DAX and the Stoxx Europe 600.
Published:3/21/2018 4:46:59 AM
[Markets] Want your children to be charitable? Do this The best way to encourage kids to give is different for boys versus girls.
Published:3/21/2018 4:21:23 AM
[Markets] Two Days To Trade Wars: Can Stupidity Be Avoided?

Authored by Mike Shedlock via MishTalk,

US steel and aluminum tariffs start Friday. Germany's economy minister is in D.C. But Trump has stringent demands.

No one wins trade wars. The notion is ludicrous.

I have more on the "meaning of win" in a moment. But first let's consider the Eurointelligence view.

This is not a trade war the EU can ever win, as Wolfgang Munchau points out in his FT column. If the EU were to put up a big fight over this, with a long list of sanctions on Friday, the US would immediately respond with a tariff on car imports. It would be the equivalent of the Fool's Mate in chess, Munchau argues. Donald Trump is right in his assertion that trade wars are easy to win - if your opponent is sufficiently desperate and addicted to the export of manufactured goods, like Germany is. When we said that a current account surplus of 8% (or probably higher) is not sustainable, it was not meant as a statement of right or wrong. Unsustainable means that it will end at some point - through either adjustment or force.

Spiegel magazine had a story over the weekend that there is a glimmer of hope. It was one of those short Spiegel news stories, something they picked up from a single source, but not quite worthy of a full-length article. The story says the US will make three specific demands as a pre-condition for exempting the EU from the steel and aluminium tariffs. The first is that the EU caps steel output at 2017 levels. The story did not reveal the metric, whether in volume or value. The second is that the EU take anti-dumping measures against China, and agrees to cooperate with the US in questions of international trade policy. And, to top it all, the Europeans will have to deliver proof that they are on the way to meeting their Nato commitments on defence spending. The latter is an impossible demand to meet since no such proof can exist. The German grand coalition, for example, is making no efforts to increase defence spending. The priority of the new finance minister, Olaf Scholz, is to maintain the fiscal surplus.

OK, Where's the Win?

Eurointelligence never explained how this magical "win" occurs.

Instead, Eurointelligence linked to a report by Brad Setser: Forming an Alliance With U.S. Allies Against Bad Chinese Trade Practices Won’t Be Enough to Bring the Trade Deficit Down.

There are growing calls for a global coalition of U.S. allies to pressure China to change some of its most egregious commercial practices.

That makes some sense [Mish - actually it makes zero sense - explained later], even if it is much easier said than done. It is relatively simply to get agreement that China should change many of its policies. But China doesn’t typically respond to peer pressure alone. It is relatively hard to get agreement on what to do if China doesn’t change voluntarily.

After a useless diversion into complaints about China, Setser admits this interesting tidbit:

China’s current account surplus is well below that of the Eurozone. Or that of Japan. [Mish - It's simply high with the US].

Even at 2.5 percent of China’s GDP, it is smaller, relative to China’s GDP than the current account surpluses of the United States’ security allies. ?

U.S. allies generally have much tighter fiscal policies than China. That’s a big reason why they run larger current account surpluses than China. [Mish - Not really - the reason is that Nixon closed the gold window and this is the logical result.]

Korea and Taiwan (and neutral Switzerland) also put their finger on the foreign exchange market when needed to keep their currencies weak (Korea rather egregiously in January).

As a result, the combined current account surplus of U.S. allies in Europe and Asia is close to $800 billion—well over China’s roughly $200 billion. That sum would be a bit bigger if you added in the surplus of democratic but formally non-aligned European countries like Sweden and Switzerland.

A China that behaved better commercially would no doubt help many companies. And if China lowered barriers to actual imports, overall trade with China might expand. But better commercial practices on their own aren’t enough to assure a smaller Chinese trade surplus. [Mish - On that I strongly agree with Setser]

So long as Asia and Europe’s aggregate surplus remains high, someone in the world will still need to run a large external deficit, and odds are that will still be the United States. [Mish - Once again this is a mathematical necessity!]

In Dollar Terms

See the Problem?

The US has its biggest trade deficit with China, but globally the imbalance is with Germany and Japan.

Placing tariffs in Chinese steel will so nothing but make the US more uncompetitive on exports.

Averting a Trade War

To stave off the trade war, assuming Trump sticks to his guns, the EU needs to do these three things.

  • EU caps steel output at 2017 levels.

  • EU takes anti-dumping measures against China, and agrees to cooperate with the US in questions of international trade policy.

  • EU must deliver proof that they are on the way to meeting their Nato commitments on defence spending.

If not, we have a trade war.

Easy to Win

Wolfgang Munchau say In a Trade War Germany is the Weakest Link and "If your target is Germany, then yes, a trade war is easy to win."

Munchau bases his opinion on the idea that the EU, Germany in particular, is very dependent on exporting cars at a time when Germany's diesel technology is on the verge of being worthless.

Brexit poses an additional threat as Germany is a huge net exporter to the UK.

Here's Munchau' conclusion: "This trade war is indeed easy to win. It is going to be the equivalent of the fool’s mate in chess: the game could all be over in two moves."

Meaning of Win

What does it mean to "win" a trade war?

Donald Boudreaux at the Cafe Hayek explains in his post: An Oxymoron to Beat All Oxymorons.

No two human activities are as opposite one another as are trade and war. Trade is voluntary; war is coercive. Trade is peaceful; war is violent. Trade enriches; war impoverishes.

Trade is a mutually advantageous exchange of property rights; war is a bilateral destruction and confiscation of property rights – destruction and confiscation that never are mutually advantageous and that too often, in the end, are advantageous to no one.

When trading, each party improves his welfare only by attending to, and enhancing, the welfare of others; when warring, each party improves his welfare only by attacking, and diminishing, the welfare of others. Those who trade with each other have an interest in each other’s well-being; those who war against each other have an interest in each other’s annihilation. Trade enhances life; war ends life.

What are called “trade wars” are indeed wars, but they involve only war and no trade. Every so-called “trade war” is each government making war on its own citizens, coercing them not to trade as they would otherwise peacefully trade.

The term “trade war” makes no more sense than do the terms “good evil” or “peaceful violence.” We should stop using it. We must find a better term to describe governments’ waging war upon those of their own citizens who dare to trade with others.

Curious Way to Win

As Munchau, Trump, and Peter Navarro (Trump's trade guru) see things, it is remarkably easy for Trump to win.

In reality, the only way to win is to not play the game at all.

Please reflect on this: Shall we play a game?

Published:3/21/2018 4:21:23 AM
[Markets] In One Chart: The ‘popularity’ stock ratio that warns tech’s time may be up As confidence soared among businesses, consumers and investors, popular stocks got more popular almost by virtue of already being popular. That’s an unsustainable trend, though timing its demise isn’t easy.
Published:3/21/2018 3:56:49 AM
[Markets] Suspect in Austin bombings is dead, ABC affiliate KVUE reports Suspect in Austin bombings is dead, ABC affiliate KVUE reports Published:3/21/2018 3:56:49 AM
[Markets] Soldiers In Europe Are Laser-Blasting Drones Out Of The Sky

One of the United States Army’s main priorities is the development of a transportable war machine to counter short-range aerial defense threats, such as unmanned aerial vehicles (UAV).

For about fifteen years, the Army’s inventory of military machines to defend against low-altitude and medium-altitude threats have diminished, warned Barry Pike, the Army’s program executive officer for missiles and space. Last month, he addressed more than 100 at the Association of the Army’s ‘Hot Topics’ forum on air and missile defense in Arlington, Virginia.

According to the Army News Service, the Pentagon has enjoyed decades of air superiority over all potential adversaries; however, that is rapidly changing with the worldwide proliferation of drones. Over the years, Army officials have failed to develop and deploy new high-tech weaponry for short-range aerial threats, thus creating a massive gap in short-range defenses.

It is a race against time for the Army to plug the gap in short-range defenses...

Richard P. DeFatta, director, Future Warfare Center, U.S. Army Space and Missile Defense Command spilled the beans at last month’s forum on air and missile defense and told the audience that Army soldiers are conducting field training exercises with the first-ever practical laser weapon system in Europe.

As reported by Army Recognition, a select group of U.S. soldiers from the Field Artillery Squadron, 2nd Cavalry Regiment are actively testing the high-tech laser weapon, called the Mobile High Energy Laser (MEHEL) mounted on the M1126 Stryker armoured personnel carrier. The Stryker-mounted MEHEL is designed for short-range aerial threats, such as weaponized drones.

U.S. Soldiers from the Field Artillery Squadron, 2nd Cavalry Regiment are now equipped with newly developed laser weapon MEHEL mounted on 8×8 Stryker armoured vehicle. The Stryker with MEHEL 2.0 was presented for the first time on General Dynamics Land Systems booth during the AUSA exhibition in Washington D.C. in October 2016 equipped with a 5kW beam director.


The 5 kW laser project is part of the Mobile Experimental High Energy Laser. It represents an advance over a previous laser tested in 2016, and will lead into more powerful, longer ranging anti-drone, anti-missile laser systems. The Stryker-mounted MEHEL has proven to be extremely efficient in eliminating enemy drone targets, and its use in Europe will help the U.S. Army to assess emerging concepts, technologies and interoperability.

The MEHEL laser weapon is mounted on a Stryker (Picture source U.S. Army)

The Army has not released any additional information on the MEHEL trials in Europe, although, Army Recognition specifies the location of the test is in Grafenwoehr, Germany.

During a visit at the Grafenwoehr Training Area, Germany, March 6, 2018 by Maj. Gen. Wilson A. Shoffner, Fires Center of Excellence and Fort Sill commanding general, as well as Command Sgt. Maj. Carl Fagan, the senior enlisted advisor for Fires Center of Excellence and Fort Sill, U.S soldiers of the the Field Artillery Squadron, 2nd Cavalry Regiment have showcase their knowledge and their ability to operate the new weapon.

U.S. army artillery soldiers were eager to demonstrate all they have learned, and couldn’t contain their enthusiasm regarding the unique opportunity and extreme potential of the new weapon system.  

Army Styker MEHEL laser test in Europe (source Task & Purpose) 

MEHEL is a 5kW laser system mounted on a Stryker-armored fighting vehicle chassis and serves as the primary vehicle for research and development. The Army acknowledges that high-energy lasers are a “low-cost, effective complement to kinetic energy to address rocket, artillery, and mortar, or RAM, threats; unmanned aircraft systems and cruise missiles,” said Army Recognition.

U.S. Army demonstrates MEHEL laser weapon on Stryker 8×8 armoured combat vehicle

“The MEHEL is now participating in the Joint Warfighting Assessment 2018 in Europe, which will help the Army to assess emerging concepts and technologies, and interoperability,” said Cecil A. Longino Jr., deputy director of the public affairs office for the Army Space and Missile Defense Command.

So it seems, the Army’s Stryker-mounted MEHEL system, designed to laser-blast Russian drones out of the sky, just took a major leap towards combat. Once the high-energy weapon passes its trials in Germany, there are indications that dozens of Strykers across Europe could be outfitted with this new high tech weaponry and then rapidly deployed to the Russian border. As the world concentrates on the nerve agent attack on former Russian double-agent in the United Kingdom, it is becoming increasingly obvious war is coming…

Published:3/21/2018 3:56:49 AM
[Markets] Asian Equities Bounce Back Ahead of Fed Meeting – Asian equities rose in afternoon trade on Wednesday ahead of the Federal Reserve’s meeting later in the day. Published:3/21/2018 3:56:49 AM
[Markets] Attack Against Nord Stream 2 Renewed with Vigor: Whose Interests Does It Meet?

Authored by Alex Gorka via The Strategic Culture Foundation,

Economics dictate national interests. Foreign policy is the tool used to advance it. Moscow has to fight back on all fronts, but the truth is that Washington does not care much about chemical attacks in Eastern Ghouta, the Salisbury poisoning, election meddling, or so many other fairy tales used to justify its anti-Russia policy. These are just pretexts to promote US economic interests abroad.

Gas exports to Europe present exciting opportunities but supplies from Russia are cheaper and more reliable. So the US needs to get rid of the obstacle in its way - the Nord Stream 2 (NS2) pipeline, which will carry natural gas from Russia to Germany.

Washington will do anything to achieve this cherished goal.

On March 15, a bipartisan group of 39 senators led by John Barrasso (R-WY) sent a letter to the Treasury Department. They oppose NS2 and are calling on the administration to bury it. Why? They don’t want Russia to be in a position to influence Europe, which would be “detrimental,” as they put it. Their preferred tool to implement this obstructionist policy is the use of sanctions. Thirty-nine out of 100 is a number no president can ignore. Powerful pressure is being put on the administration. Even before the senators wrote their letter, Kurt Volker, the US envoy to Ukraine, had claimed that NS2 was a purely political, not commercial, project. No doubt other steps to ratchet up the pressure will follow.

Their loyal friends in Europe chimed in almost simultaneously with the US lawmakers. Polish Foreign Minister Mateusz Morawiecki has proven himself to be a master at telling horror stories about the scariest things that might happen once the pipeline is up and running. On March 2, the speakers of parliament in Ukraine and Moldova signed a letter addressed to the chairs of the parliaments of the EU countries, warning about the repercussions. This is “a destabilizing factor” that will weaken Europe, they exclaim. Of course it is. Paying more for gas brought in on ships that can change course to head for a new destination if the price of gas elsewhere becomes more alluring will naturally make Europe stronger. Good reasoning!

On March 11, the leaders of the parliaments of Poland, Latvia, and Lithuania signed another open letter to the parliaments of the EU states to warn them against the construction of NS2.

It’s not a commercial project, they say, it’ll make you dependent on Russia. "Gazprom … is not a gas company but a platform for Russian coercion"affirms Anders Fogh Rasmussen, a former head of NATO who now works as a consultant for Ukraine. Estonia has also joined the choir as one of the strongest critics of Nord Stream. The European Commission opposes the project too, but lacks the legal grounds to prevent private investment from flowing in.

Europe needs this commodity and Russia sells it. What makes this “not a commercial deal”? Dependence? From this perspective, any customer who makes a choice then becomes “dependent” on the vendor. Who is keeping them from getting gas from other sources? The sea lanes are all open, if they need to use them. Poland and Lithuania have already built terminals for liquefied gas. But it’s more expensive and the prices in the Asia Pacific region make that market more attractive. To woo US shale-gas exporters Europeans will have to pay more. Don’t they have the right to choose what suits them best?

As practice shows, writing letters is not enough.

There are “stubborn” leaders at the helms of some European states who dare to put their national interests first. Just think about it! If “America First” is fine as a slogan, then what’s wrong with an “Austria First” policy? One daring young man who is protecting the interests of his country is Austrian Chancellor Sebastian Kurz. He openly supports the Nord Stream 2 project. And he is not alone. Germany continues to back it despite the pressure. Chancellor Angela Merkel believes that the NS2 project “poses no danger to diversification.” The German-based think tank ewi Energy Research & Scenarios has estimated that the project “has a price decreasing and welfare enhancing effect in the EU-28 overall.”

But Washington could not care less about its allies, which is clear from its opposition to this project. Its interests are self-centered. The US is not only promoting its liquefied gas supplies in Europe but is also trying to make it easier to pay for its plan to keep Ukraine in its orbit to use as a springboard right on the Russian border. Nord Stream 2 will make the gas-transit route via Ukraine redundant, depriving that country of much of the €1.8 billion (nearly 2% of its GDP) it earns annually in transit fees. The blow to the Ukrainian economy would undercut the US and EU’s financial support for Kiev. In addition, the revenue from NS2 would mean profits for Russia, thus softening the impact of the West’s sanctions. The European countries that vehemently oppose NS2 also want the US military based on their soil. And even if that presence is already there, they want more of it.

Europe is split over a lot of issues, but in the EU, NATO, and the Council of Europe there is a pro-American camp ready to dance to the US tune. And Poland and the Baltic States are happy campers. Whatever happens, they’ll snap to attention, click their heels, salute, and do as they’re told by Washington. As a result, their taxpayers will pay for US weapons although less costly and more efficient systems could be acquired elsewhere. And it is the ordinary people who’ll have to shell out for US shale gas shipped by sea instead of the much cheaper supplies coming from Russia. It’s just as simple as that. European taxpayers will have to pay for this “America First” policy unless the governments of such European states as Germany and Austria stand tall and refuse to bow to pressure.

Published:3/21/2018 2:49:00 AM
[Markets] German Spy Agency Admits North Korean Rockets Can Hit Europe

Amid a relative detente in US-North Korea relations, Germany's foreign intelligence agency told lawmakers that North Korean rockets tipped with a nuclear warhead now have the capacity to strike Germany and central Europe.


In a closed-door meeting, Deutsche Welle reports that BND Deputy Director Ole Diehl told members of parliament there is "certainty" that North Korea could now "reach Europe and Germany with its missiles," according to the Bild am Sonntag newspaper, which first reported the briefing, citing participants.

Diehl also told lawmakers that the BND considers talks between North and South Korea a positive step.

There was no immediate comment from the BND in response to the media reports.

Meanwhile, negotiations were set to convene in Finland between a senior North Korean official and representatives of the United States and South Korea, according to the South Korean Yonhap news agency. Over the weekend, officials from the US, Japan and South Korea met in Seoul to discuss the complete denuclearization of the peninsula.

Published:3/21/2018 2:18:12 AM
[Markets] Project Syndicate: U.S. has little scope to criticize Chinese power grab Allowing Xi Jinping to serve as president indefinitely may well be China’s only option to address its daunting development implementation imperatives head-on, writes Stephen S. Roach.
Published:3/21/2018 1:42:07 AM
[Markets] Asian Equities Gain Ahead of Fed Decision – Asian equities traded higher in morning trade on Wednesday as investors await the Federal Reserve’s decision on U.S. rate hikes this year. Published:3/21/2018 1:14:18 AM
[Markets] A World War Might Sound Crazy, But It Could Be America's Last Act Of Desperation

Authored by Darius Shahtahmasebi via,

Though some have been warning about the catastrophic potential for a third global conflict for years, it wasn’t until recently that these warnings became more mainstream. The calamitous nature of the violence in Syria - which has one nuclear power defending a government that has been the target of a regime change operation led by the world’s superpower - combined with 2017’s threats of “fire and fury” against another state intently pursuing a nuclear weapons supply of its own, has pushed the issue of a third world war directly into the public discourse.

While certain hotspots throughout the Middle East, Asia, and Eastern Europe (i.e. Ukraine) have seen some notable escalations in the last few years, a direct conflict between Russia and the United States is still yet to emerge. That’s because the idea of a third world war in today’s world is completely insane. If the two countries that currently possess the world’s greatest supplies of nuclear weapons go to war, there may not be a world left for the victors to inhabit after the war is done, thereby making it an unthinkable proposal.

Then again, the U.S. did just recently bomb a significant number of Russian-linked forces in Syria, reportedly killing scores of them. The targets of these air strikes were also predominantly Iranian-backed militias (just in case there weren’t enough state actors already involved in this ongoing conflict).

Speaking of Iran, Donald Trump recently fired Rex Tillerson as secretary of state and immediately appointed CIA director Mike Pompeo to replace him. Pompeo is a notable anti-Iran hawk who will almost certainly go further than Tillerson was ever prepared to go with regard to the Iranian nuclear accord, a deal Pompeo believes is “disastrous.”

There are also reports now emerging that Donald Trump is planning to oust his national security advisor, General H.R. McMaster. McMaster originally replaced anti-Iran war hawk Michael Flynn, but apparently, McMaster’s non-stop allegations against Iran were not enough to please Trump.

McMaster was not on board with Trump’s attempt to completely derail the Iranian nuclear deal.

One should bear in mind that when Donald Trump made the decision to strike the Syrian government in April of last year in what amounted to one of the year’s most important and over-publicized geopolitical events, it was McMaster who drew up the strike plan options and presented them to Trump to choose from. If this is a man not hawkish enough for Trump’s administration, his looming removal from the administration is a worrying sign of what’s to come.

Donald Trump’s Nuclear Posture Review entails that, as Katrina vanden Heuvel noted in an article published in the Washington Post:

“The United States reserves the right to unleash nuclear weapons first in ‘extreme circumstances’ to defend the ‘vital interests’ not only of the United States but also of its ‘allies and partners’ — a total of some 30 countries. ‘Extreme circumstances,’ the review states explicitly, include ‘significant non-nuclear attacks,’ including conventional attacks on ‘allied or partner civilian population or infrastructure.’ The United States also maintains a ‘portion of its nuclear forces’ on daily alert, with the option of launching those forces ‘promptly.’ [emphasis added]

Considering that a former analyst for the Council on Foreign Relations, Micah Zenko, just warned that Pentagon officials are actively searching for a “big war” against Russia and China, the trajectory we are currently on starts to make a lot more sense.

In other parts of the world, we are witnessing a new era of hostilities towards Russia. The debacle taking place in the U.K. right now, which has seen allegations of a Russian chemical attack on British soil, has prompted the U.K., U.S., France, and Germany to band together and condemn Russia for something that hasn’t even been conclusively investigated yet.

After years of constantly being painted as the enemy, Russia just declared via Twitter that a “Cold War II” has begun, and who can blame them?

A third world war might sound crazy, but it is only crazy if we fail to understand the desperation that continues to plague the men in suits who pull the strings guiding American foreign policy. Consider that the Syrian government, with Russian and Iranian backing, has managed to stabilize significant parts of the country despite all odds so that refugees can return home safely. It should be clear that the best way to solve the Syrian crisis is to discontinue America’s regime change policy in Syria and allow the people of Syria to normalize their own lives without Washington’s interference. Yet, after seven years of brutal violence, the U.S. still refuses to admit defeat in Syria. If anything, the U.S. has now officially set its sights on directly combatting Iranian influence in the country, raising the potential for significant escalations.

Maybe, just maybe, the U.S. is that desperate. Apparently, the U.S. has to remain in Syria out of necessity. It cannot afford to sit on the sidelines as Russia re-emerges as the major power broker in the region, eating up all the major contracts coming out of Syria (together with Iran) as it looks to poach American allies left, right, and center.

Additionally, Russia recently warned the U.S. that it will not tolerate Washington’s aggressive attacks on the Syrian government and will respond with strikes of their own should the U.S. military threaten Russian personnel. One should expect that eventually, there will be a point where Russia will no longer allow these attacks to go unanswered.

As America’s power and influence wane, the time will come for both Russia and China to make their mark on the global stage. Just on a side note, it should come as no surprise that Trump’s nominated ambassador to Australia, Adm. Harry Harris, is a known anti-China war hawk who recently warned Congress to prepare for a war with China.

Why should we need to prepare for a war with China? Who talks and thinks like that? A nation on a slow and inevitable decline that cannot refuse to admit defeat in almost any battle theater since World War II, that’s who.

Realistically, nobody wants a third world war, but as the U.S. increasingly thrashes to maintain its control of the global financial markets, its network of over 1,000 bases worldwide, and its status as the world’s global policemen, a third world war may be Washington’s only hope at staying afloat as the world’s top power.

Published:3/21/2018 1:14:18 AM
[Markets] The Moneyist: My husband inherited money — could I divorce him after he pays off our mortgage? This woman appears to be planning an exit from her marriage, helped by her husband’s windfall.
Published:3/21/2018 12:36:04 AM
[Markets] US And South Korea Will Resume Joint Military Drills In April

Barely a month after Treasury Secretary Steven Mnuchin said he "couldn't rule out" US forces physically boarding ships caught violating US sanctions against North Korea, RT  is reporting that, despite the recent thaw in relations between the US, South Korea and North Korea, the annual "Foal Eagle" and "Key Resolve" joint military exercises involving US and South Korea forces will begin April 1.

Signs of a breakthrough in North-South relations ahead of last month's Winter Olympics prompted the US to postpone the drills, which typically elicit a vehement condemnation from the North, as well as threats of retaliation.

But now that the Games are over, the Pentagon said the planned drills will resume as scheduled - despite North Korea's offer to freeze its missile and nuclear tests ahead of a meeting between Kim Jong Un and President Donald Trump, which Trump hastily agreed to earlier this month.

South Korea's Ministry of National Defense confirmed as much to Yonhap.

"The practice is slated to begin April 1, and it will be conducted on a similar size in previous years," the Ministry of National Defense said, according to Yonhap.

The exercises are expected to conclude toward the end of May, the Pentagon said.

"Secretary of Defense James Mattis and the Republic of Korea Minister of National Defense Song Young-moo have agreed to resume the annual combined exercises including Foal Eagle and Key Resolve which were de-conflicted with the schedule of the Olympic Games. The exercises are expected to resume April 1, 2018, at a scale similar to that of the previous years," Pentagon spokesman Colonel Rob Manning said in a statement.

The North Koreans have been notified about the drills by the United Nations Command. The Pentagon emphasized that the drills are not a response to a specific North Korean action.

"Our combined exercises are defense-oriented and there is no reason for North Korea to view them as a provocation," Lieutenant Colonel Christopher Logan, a Pentagon spokesman, said in a statement.

Lieutenant Colonel Christopher Logan, a Pentagon spokesman, confirmed that the drills would involve about 23,000 troops and 300,000 members of the South Korean military.

After a round of successful negotiations with South Korea, Kim sent a letter that was hand-delivered to Trump by a South Korean delegation inviting him to engage in direct talks.


Trump agreed to meet with Kim "sometime in May", ignoring pleas from diplomats and Pentagon officials that honoring the request would "legitimize" North Korea in the eyes of the world.

South Korea has assured the US that the North is "committed to denuclearization" of the Korean peninsula. Until this latest salvo, the North had insisted that it would never give up its nukes under any circumstances, while the US insisted that denuclearization would be a precondition for any lifting of sanctions.

Surprisingly, the North Korean leader suggested he'd be willing to countenance the latest round of military drills, even as the US offered no concessions in return.

* * *

A North Korea expert at the University of Chicago warned Tuesday that the US shouldn't believe the North when it says it would consider giving up its nukes, according to Yonhap.

"North Korea is not going to give up its nuclear weapons and China will not push North Koreans to do so. The reason is that in international politics, you could never trust anybody because you cannot be certain of what their intentions are," said  John Mearsheimer, a professor at the University of Chicago, during a lecture in Seoul.

So, what do you think? Is North Korea trying to lure Trump into a diplomatic trap with the ultimate aim of embarrassing the US? Or have the many rounds of economic sanctions imposed against the regime finally started to work?

Published:3/21/2018 12:36:00 AM
[Markets] Apple is fighting to regain its position in America's classrooms While Macs and, later, iPads were once synonymous with classroom tech, Google and Microsoft have overtaken Apple. Published:3/20/2018 10:27:10 PM
[Markets] The New York Post: New York braces for another big storm, with as much as 15 inches of snow expected March came in like a lion, and has turned into a Tyrannosaurus Rex.
Published:3/20/2018 10:27:09 PM
[Markets] Californians Flee The State In Droves Over Taxation And Housing Costs

Authored by Mac Slavo via,

Californians are bailing on the Golden State in droves as the tax burden and housing costs make the price of living unbearable for far too many. Many of those fleeing are the hearty middle-class who are being pushed into poverty by the socialist policies forced on them by the state’s elites.

The trend is a symptom of the state’s housing crunch and the ever increasing taxation. Census Bureau data show California lost just over 138,000 people to domestic migration in the 12 months ended in July 2017. Lower-cost states such as Arizona, Texas, and Nevada are popular destinations for relocating Californians.

Housing costs and the tax burden is far less impactful in pretty much any place outside of California, whose socialist policies drive up poverty and continuously erode the middle class leaving only the extremely wealthy and those in abject poverty.

The surging number of those working in Silicon Valley and still unable to afford adequate housing should be a warning about big government, but it sure doesn’t seem like anyone is taking notice as their taxes continue to rise. As governments creep toward socialism though, poverty becomes the norm, not the exception. Silicon Valley has the highest median income in the nation. But a soaring tax burden and expensive regulations have caused housing prices to increase which has also caused homelessness to surge. –SHTFPlan

“There’s nowhere in the United States that you can find better weather than here,” said Dave Senser, who lives on a fixed income near San Luis Obispo, California, and now plans to move to Las Vegas.

Rents here are crazy if you can find a place, and they’re going to tax us to death. That’s what it feels like. At least in Nevada, they don’t have a state income tax. And every little bit helps.”

Senser added that he previously lived in the east San Francisco Bay region, and said...

...housing costs and gas prices are “significantly lower in Las Vegas. The government in the state of California isn’t helping people like myself. That’s why people are running out of this state now.

USC Dornsife/Los Angeles Times Poll of Californians last fall found that the high cost of living, including housing, was the most important issue facing the state. It also found more than half of Californians wanted to repeal the state’s new gas tax, which raised fees by a whopping 40 percent further burdening those already living paycheck to paycheck.

During the 12-month period that ended in July of 2017, California saw a net loss of just over 138,000 people, while Texas had a net increase of more than 79,000 people. Arizona gained more than 63,000 residents, and Nevada gained more than 38,000.

“You can literally have a lot of buying power for the dollar in Southern Nevada versus Southern California,” said Christopher Bishop, president of the Greater Las Vegas Association of Realtors.

“So it has been a major trend over the year, year and a half, and we’re seeing it increase.”

Published:3/20/2018 10:27:08 PM
[Markets] John Mauldin: Trade Wars Could Trigger "The Next Great Depression"

Last week on Erik Townsend's Macrovoices podcast, Jim Grant, storied credit investor and founder of Grant's Interest Rate Observer, explained the reasoning behind his call that the great secular bond bear market actually began in the aftermath of the UK's Brexit vote during the summer of 2016 - when Treasury yields touched their all-time lows.

Surprisingly, Grant's call isn't rooted in the bold-faced absurdity of Italian junk bonds trading with a zero-handle (although that's certainly part of it). Rather, Grant explained, a historical analysis reveals that bond yields fluctuate in broad-based multi-generation cycles of different lengths. And given the carte blanche allotted to economics PhDs to "put the cart of asset prices before the horse of enterprise", the fundamentals are indeed worrisome.

But in this week's interview, John Mauldin offered a much more sanguine view of the landscape for markets and the global economy.

Beginning with the stock market: The "volocaust" experienced by US markets wasn't unusual, Mauldin explained. It was the 15 straight months without a 2% correction that was unusual, Mauldin said.


John Mauldin

More corrections will almost certainly follow during the coming months. But absent any signs of a recession, these should be treated as buying opportunities by investors.

Now let’s remember something: The last drawdowns that we had – the corrections if you will – were not the unusual part. They weren’t the odd part. The odd part was 15 months in a row without a 2% correction. Never happened, ever, ever. So that was the odd part.

That should have been what we were all looking at and going “this is scary.” It wasn’t a 5% or 6% correction. The type of correction we just went through was something that we normally get at least once every 12 to 18 months. You get a 5% correction every 90 days, every quarter. So that was the normal, if you will. The not normal was no corrections and just almost straight up.

And we’re going to see probably more corrections. We’re going to see more volatility. But I would argue that any correction we see now, absent indications for a potential recession, are buying opportunities. If you’re a trader you, you know, see things – when they get to the top you raise a little cash, and when they go down some it gets into your buying session. You buy some, you go back in.

Indeed, the market is probably only going to move higher, Mauldin said. Though the US economy is on the cusp of notching the second-longest growth period in its history, few people see a recession in the offing - a view shared by, among others, bond guru Jeff Gundlach.

The US market may in fact be getting a little long in the tooth. I think that’s fair to say. I think sometime this next month, or very shortly, we become the second-longest growth period in history. And it has to go for another year after that to be the longest. And it very well could.

If you’re looking for recession indicators, there just aren’t any. Several of my friends who really track this stuff – I mean they’re obsessed – and one of them has 18 recession indicators. And 17 of them are saying No. Another one has 11 recession indicators. By the way, they’re different. I found it fascinating. And the large preponderance of those are saying No.

These are nine months out – one of the interesting things is there’s only one really good longer-term recession indicator. And that’s the inverted yield curve. And we are nowhere close to an inverted yield curve in the US markets. That means when short-term rates go above long-term rates. And short-term rates have got to go up again, and again, and again. And the Fed is telling us they’re going to do that.

But that would still mean that long-term rates would have to drop an awful lot. There’s no
reason to think that we’re going to have a recession, absent something happening in Europe – Europe blowing up because of what’s happening in Italy or other places. Or China having some nasty, unexpected event. Which I don’t expect to happen. I think Xi’s got the world pretty much going the way he wants it.

However, Maudlin sees one possible catalyst that could sink the US economy into the next depression - not just a recession, Maudlin emphasizes, but a prolonged period of contraction similar to the Great Depression.

And that, Maudlin argues, is runaway protectionism that leads to a global trade war.

After all, Maudlin explains, the Great Depression was - despite all that talk about buying on margin and the Black Monday - caused by Herbert Hoover's ill-advised passage of the Smoot-Hawley tariffs.

Trade war, protectionism, if it gets out of hand, that could create a recession. And I am not unconcerned about that. I’ve said for 16–17 years in my writing, the thing that keeps me up the most at night, the thing that really worries me about the future of our economy and our kids and everything, that’s a signal for a depression, not a recession, a depression, is trade wars. Protectionism. Smoot–Hawley.

I mean, you get Herbert Hoover, who didn’t know anything, really, about a lot of the things that he was coming into, not unlike maybe some people would suggest our current president is like – he’s learning on the job. But Herbert Hoover let Smoot–Hawley get through and he signed it. And it was all over for the world. We had a depression. That worries me. In and of itself are these steel tariffs a problem? No. I mean, are some people going to lose their jobs over it because it makes their products too high? Yes.

The steel companies are already at record profits, for gosh sakes. I mean, it’s like, they don’t need any help. But it’s a little bitty market. In the grand scheme of things it’s not that big. And, by the way, under George W., he put steel tariffs in. Steel workers, now, there’s 160,000 of them.

That’s all we’ve got left. And people say, oh, my goodness, all those jobs have left. They’ve gone overseas. And I say, no they haven’t. We are producing more steel today than we have ever produced. It wasn’t the jobs that went to China or Mexico or whatever. It was technology. It’s just silly to think that you can make those jobs come back with tariffs. 80% of the manufacturing jobs that have been lost in the United States have been lost to technology.

The problem, Mauldin explains, is that manufacturing jobs in the US aren't disappearing because of free trade - they're disappearing because of technological advancements. So, the irony of the situation is that, by enforcing protectionism, the steel workers whom President Trump is trying to help will instead suffer - just like they did when George W Bush experimented with steel tariffs nearly 20 years ago.

Listen to the rest of the interview below:

Published:3/20/2018 10:04:21 PM
[Markets] Asia Markets: Asian markets bounce back ahead of Fed meeting Stock markets rose Wednesday in Asia, following modest rebounds in Europe and the U.S. that partially reversed Monday’s global declines.
Published:3/20/2018 9:52:59 PM
[Markets] Mapping The 24 States Proposing Campus "Free Speech" Bills

Authored by Nikita Vladimirov via Campus Reform,

At least 24 states have now either introduced or passed legislation defending freedom of speech on public college campuses. 

A total of eight states - Florida, North Carolina, Virginia, Kentucky, Tennessee, Colorado, Utah, and Arizona - have already passed bills into law that designed to protect free expression in higher education, with lawmakers from 16 other states campaigning to pass similar legislation.

Florida was the latest to pass such a measure, with Gov. Rick Scott signing a bill banning “free speech zones” on campuses last week. The legislation also included a "Cause of Action" mandate, allowing individuals to sue universities for violating their "expressive rights."

Kentucky is the next state that could join the list, as the State Senate recently voted to pass a bill designed to protect the free speech of students and faculty alike. 

“The problem with this free speech area is it’s not even close to a lot of activity on campus,” said Republican State Sen. Will Schroder, sponsor of the bill, according to WEKU. “It really restricts individuals to a certain location.”

Not all of the free speech bills, however, have found the necessary support to successfully navigate the legislative process.

According to the Kansas News Service, the Kansas freedom of expression measure fell just one vote short of passing the State Senate on Thursday, ultimately falling with a 20-20 vote.

“It is our intent - those of us who are voting for this bill - to protect the speech of all students, no matter their race, their color, their creed, their gender identity or their sexual orientation,” Senate President Susan Wagle commented. 

The top Democrat and the Senate Minority Leader Anthony Hensley, however, vocally opposed the legislation, arguing that he “cannot support a bill that softens punishment for hateful harassment.”

Published:3/20/2018 9:52:58 PM
[Markets] The Wall Street Journal: Trump set to propose new trade restraints, tariffs against China on Thursday The White House is preparing to crack down on what it says are improper Chinese trade practices by making it significantly more difficult for Chinese firms to acquire advanced U.S. technology or invest in American companies, individuals involved in the planning said.
Published:3/20/2018 9:14:17 PM
[Markets] Cars That Parent Us

Authored by Eric Peters via,

One of the reasons for liking old cars is they don’t try to parent you. The new stuff won’t quit trying to.

The 2018 VW Golf GTI I am reviewing this week, for instance. When you put the transmission in Reverse, the radio’s volume’s is peremptorily turned down – apparently because someone decided it wasn’t saaaaaaaaaaaaaaaaaaaaaaaaaaafe to back up while listening to the radio.

One can almost see the liver-spotted hand of your mother-in-law adjusting the volume control knob. Many new cars have this “feature” – not just new VWs.

It’s incredibly obnoxious. More so because it’s not your mother-in-law and you can’t slap her liver-spotted hand down or – better – hit the unlock button and tell the old bag to get out now if she can’t mind her own business.

Speaking of door locks...

They are just as peremptory. Some can be programmed not to be – but the default is uber peremptory. As soon as you get in and close the door, it locks. All locks. Some cars are incredibly aggressive about allowing access to the car, denying the owner access to the trunk or rear cargo area unless he very deliberately unlocks the locks, which the car slammed shut without him having asked it to.

Again, for saaaaaaaaaaaaaaaaaaaaaaafety.

The latest BMW vehicles will countermand your decision to inch the car backward with the door open – by taking the transmission out of gear and pestering you with a cloying chime that sounds kind of like this: Brrrrring! Brrrrring! Brrrrring!

Sometimes, backing up with the door open makes sound sense. You get a better idea of where the curb is and also the distance remaining between the back of your car and the car your backing up toward using your own two eyes – which have greater depth perception and peripheral vision than any fish-eye camera.

But BMW wants you to use the camera instead. No, check that. BMW insists you use the camera.  The car will not let you back up with the door cracked. The nanny cannot be told off.

There is no Off button.

And that’s the rub.

It’s one thing – an acceptable thing – for a car company to include a feature it thinks may be helpful. This isn’t a bad thing. It’s another thing when the feature isn’t wanted – and you can’t countermand the “help.”

This is, however, the new Nudge way of doing things. The mother-in-law you can’t make shut up or kick to the curb.


Which didn’t used to be the American cultural norm. You can watch sitcoms from the ‘60s to confirm this. Some readers may remember the annoying next-door neighbor in the series, Bewitched. Gladys Kravitz. She was an object of ridicule then. Today, she’s in your dashboard – and touted as the most marvelous thing since hot and cold indoor plumbing. Speaking of which. One wonders how long it will be before you’re only allowed to turn the Hot up so high – and no higher? Probably with a cloying jingle warning you it’s not saaaaaaaaaaaaaaaaaaaaaaaafe to take a shower so hot.

We are not far away from that, actually.

All washing machines now lock themselves up as soon as you start the cycle. It is not possible to add something to the wash, as was routine practice for decades. Apparently, a child went for a swim and its parent wasn’t parenting – so now we are all parented.

This is why cars have back-up cameras now, incidentally. A handful of negligent parents didn’t parent their kids – backed up over their kids, whom they’d lost track of – and now we are all parented.

More examples:

Most new Toyotas will not allow you to disengage the traction control unless you first come to a complete stop – which is extremely unhelpful if it’s blizzarding outside and the roads are slick and the very last thing you want to do is come to a complete stop as this often makes it exceedingly difficult to get moving again. Once more, there is no way to countermand the dashboard nanny.

It knows best – and it insists.

The Lane Keep Assist systems now standard in probably half the new cars on the market and soon to be standard in every car as automated car technology further infiltrates – object if you do not signal prior to making a lane change. Even if there is no reason – other than mindless obedience to a pointless protocol – to signal. For instance, the absence of any traffic in the vicinity. Not everyone lives in a busy city. Some live in the country, and sometimes, you are the only car on the road.

Signaling in that event is kind of like knocking on the door to the bathroom in your own house when you know there’s no one in the house except yourself.   

The Lane Keep Assist, however, insists.

If you don’t signal and try to change lanes, motors connected to the steering gear will countersteer to try to prevent you from changing lanes. You have to fight the computer’s determination to prevent your lane change. This is actually far more dangerous – far less saaaaaaaaaaaaaaaaaaaaaaaaafe – than not signaling a lane change when there’s no traffic around.

But nevermind.

You are supposed to use your signal – no matter the relevance of signaling.

Old cars – those made prior to early 2000s – are largely free of all this stuff. Those made prior to the ’90s are completely free of this stuff. Driving one of those cars is an almost startling experience, if you only have experience with newer cars. You are in charge – of everything. The car simply does as it’s told.

Mrs. Kravitz would have a conniption fit.

Published:3/20/2018 9:14:16 PM
[Markets] WhatsApp co-founder who made billions from Facebook now says to delete it WhatsApp co-founder Brian Acton left Facebook Inc. last year. Now he’s saying others should do the same.
Published:3/20/2018 8:40:29 PM
[Markets] Alwaleed Reveals "Secret Deal" Struck To Exit Riyadh Ritz After 83 Days

Across three months, 381 Saudis were hauled in and locked up at the Ritz-Carlton, which boasts 492 rooms, 52 acres of land, and 62,000 feet of conference space. Many left quickly.

Prince Alwaleed bin Talal's stay was among the longest. The prince says he was kept in Room 628, a 4,575-square-foot royal suite, and now in his first interview since being released, one of the world's richest men opens up to  Bloomberg TV's Erik Schatzker about his confinement by the Saudi government, and the 'secret deal' that enabled his freedom...

I saw Alwaleed in late October, the week before he became a prisoner of the state. We spent an evening at his desert camp chatting about the financial markets and U.S. politics, watching a soccer match on TV, taking a walk through the sands, and eating a late dinner in the cool midnight air. Seven weeks after his release, in mid-March, I returned to the kingdom. Alwaleed had decided to break his silence and grant me an interview on  Bloomberg Television.

We recorded the interview on a makeshift set in Alwaleed’s apartment on the 67th floor of Riyadh’s Kingdom Tower. Walking in, I wondered how candid he could be. Would he be forthcoming about life inside the Ritz-Carlton? If he’d been harmed, would he admit it? Had he been forced to accept a devil’s bargain to win his release? Would he be credible? What if the government had threatened him? Would I be able to tell?

The following is an excerpted version of our conversation, lightly edited for clarity...

Alwaleed’s detention was more mysterious than most. Of all the princes who were brought in, he alone hadn’t served in the Saudi government, where kickbacks are considered common. And unlike other businessmen, he wasn’t a government contractor and so couldn’t have overbilled the state. He made most of his wealth transparently, in real estate and as an investor in public markets.

Erik Schatzker: Why were you arrested in the first place?

Prince Alwaleed: Well, I would not use the word “arrested,” because we were invited to the king’s house and then asked to go to the Ritz-Carlton. So it was done with honor and dignity, and our prestige was maintained. Not only me; everybody else.

So the word “arrest” is fair to use for those who did commit a crime, admit their guilt?

Exactly. And reached a settlement with the government. But in my case, you know, it’s very much different.

So were there never any charges? Were you ever accused of anything?

There were no charges. Because I have a fiduciary responsibility to my shareholders in Kingdom Holding, to my friends in Saudi Arabia, and to the world community, because we have international investments all over the place, it’s very important to say that there was zero accusation and zero guilt.

You’ve described the whole ordeal as a misunderstanding. A misunderstanding over what?

When I say misunderstanding, it’s because I believe I shouldn’t have been there. Now that I’ve left, I would say that I’ve been vindicated. Yet I have to acknowledge to you, for the first time, that yes, we do have with the government a confirmed understanding, going forward.

What does that mean?

It is very confidential. I cannot get into that. But there is a confirmed understanding between the kingdom of Saudi Arabia and me personally.

Does that require you to do certain things?

Not necessarily. I cannot get into that, because it is confidential and secret between me and the government. But rest assured that this does not really handcuff me.

What did the government want from you?

I will not get into the discussions that took place between me and representatives of the government.

They must have wanted something.

I read what was written, that they wanted a chunk of A or B or C of what I have. This was all rumors.

According to one report, it was $6 billion.

I read $6 billion, I read more than that and less than that.

Did it cost you anything to leave? Did you have to pay the government any money, did you have to hand over any land, did you have to surrender any shares?

When I say it’s a confidential and secret agreement, an arrangement based on a confirmed understanding between me and the government of Saudi Arabia, you have to respect that.

I’m a Saudi citizen. But I’m also a member of the royal family. The king is my uncle. Mohammed bin Salman is my cousin. So my interest is in maintaining the relationship between us and keeping it unscratched.

You maintain your innocence. You say you didn’t sign a settlement acknowledging guilt and that you’re different.

We signed something, yes, a confirmed understanding. Some others may call it a settlement. I don’t call it a settlement, because settlement to me is an acknowledgment you’ve done something wrong.

You realize, of course, how important it is to be candid and honest with me about this, because the circle of knowledge is too wide. If a different story emerges, your credibility will suffer.


So everything you’ve told me is 100 percent true?

I have a confirmed understanding with the government, and it’s ongoing. I’ll elaborate on that: It’s an ongoing process with the government.


I need to clear my name, No. 1, and to clear up a lot of the lies. For example, when they said that I was tortured, I was sent to a prison, you know, during my 83 days in the Ritz-Carlton hotel. All these were lies. I stayed there the whole time. I was never tortured.

So you were not harmed or mistreated in any way?

Not one iota.

You’re certain that nobody else who was at the Ritz-Carlton suffered anything akin to abuse, torture, wasn’t even roughed up?

Maybe someone tried to run away or do something crazy. Maybe he was put down and controlled. Maybe. But for sure there was nothing you could call systematic torturing.

Were you allowed to talk to other detainees?

No. No two people in the Ritz-Carlton could talk to each other. Even in my case. I did not see anyone. I did not talk to anyone.


I’m a nationalist. I’m patriotic. I believe in my country. So I’m not going to have this, this irritation that happened to me create a vendetta and turn me against my uncle, my cousin, my nation, and my people.

Prince Mohammed has a grand plan for the transformation of the Saudi economy and Saudi society. Do you remain supportive?

His vision took a lot of my ideas, but he multiplied them. I had the sovereign wealth fund idea, I talked about Aramco going public. Women’s rights, women competing in society, women driving, all of these things I called for.

He’s establishing a new era in Saudi Arabia. Any person who does not support what Mohammed bin Salman is doing right now, I say, is a traitor.

*  *  *

Continue reading here...

Published:3/20/2018 8:40:21 PM
[Markets] The Wall Street Journal: Less than a third of Spotify shares will be immediately available for trading When Spotify’s shares begin trading April 3, less than one-third of them will be available for sale, a move designed in part to prevent a deluge of shares from instantly hitting the market in the streaming service’s unusual initial public offering.
Published:3/20/2018 7:59:36 PM
[Markets] Study Reveals 95% Of Finance Professionals Can't Beat The Market

Authored by Mark Perry via,

S&P Dow Jones Indices, the “de facto scorekeeper of the active versus passive investing debate,” recently released its SPIVA U.S. Year-End 2017 report (see other reports here for Europe, Latin America, Canada, Australia, India, Japan, etc.).

Here’s an overview of the SPIVA Scorecard:

There is nothing novel about the index versus active debate. It has been a contentious subject for decades, and there are few strong believers on both sides, with the vast majority of market participants falling somewhere in between. Since its first publication 16 years ago, the SPIVA Scorecard has served as the de-facto-scorekeeper of the active versus passive debate. For more than a decade, we have heard passionate arguments from believers in both camps when headline numbers have deviated from their beliefs.

And here are some highlights of the 2017 SPIVA US Scorecard (bold added):

During the one-year period, the percentage of managers outperforming their respective benchmarks noticeably increased in categories like Mid-Cap Growth and Small-Cap Growth Funds, compared to results from six months prior. Over the one-year period, 63.08% of large-cap managers, 44.41% of mid-cap managers, and 47.70% of small-cap managers underperformed the S&P 500, the S&P MidCap 400, and the S&P SmallCap 600, respectively (see table above).

While results over the short term were favorable, the majority of active equity funds underperformed over the longer-term investment horizons. Over the five-year period, 84.23% of large-cap managers, 85.06% of mid-cap managers, and 91.17% of small-cap managers lagged their respective benchmarks (see table).

Similarly, over the 15-year investment horizon, 92.33% of large-cap managers, 94.81% of mid-cap managers, and 95.73% of small-cap managers failed to outperform on a relative basis (see red highlight in table).

MP: Stated differently, over the last 15 years from 2002 to 2017, only one in 13 large-cap managers, only one in 19 mid-cap managers, and one in 23 small-cap managers were able to outperform their benchmark index.

So it is possible for some active fund managers to “beat the market” over various time horizons, although there’s no guarantee that they will continue to do so in the future. And the percentage of active managers who do beat the market is usually pretty small – fewer than 8% in most of the cases above over the last 15 years; and they may not sustain that performance in the future. For many investors, the ability to invest in low-cost, passive, unmanaged index funds and outperform 92% of high-fee, highly paid, professional active fund managers seems like a no-brainer, especially considering it requires no research or time trying to find the active managers who beat the market in the past and might do so in the future.

Here’s an analogy, perhaps it’s not perfect: Suppose you could be guaranteed to score in the 95th percentile on the LSAT, MCAT, GRE, or GMAT exam without studying for even one minute. Wouldn’t that be appealing to most people compared to the alternative of spending a lot of time studying and probably getting a lower score?

If I can out-perform 95% of active managers with a Vanguard or Fidelity index fund for almost free (.04% expense ratio), that choice to me seems easy: go with index investing. As Bethany McLean wrote in Fortune “Building a portfolio around index funds isn’t really settling for the average. It’s just refusing to believe in magic.”

Here’s a golf analogy from Burton Malkiel:

It’s true that when you buy an index fund, you give up the chance to boast at the golf course that you picked the best performing stock or mutual fund. That’s why some critics claim that indexing relegates your results to mediocrity. In fact, you are virtually guaranteed to do better than average. It’s like going out on the golf course and shooting every round at par. How many golfers can do better than that? Index funds provide a simple low-cost solution to your investing problems.

And extending the index investing-golf analogy, you can be a “scratch golfer” without even having to practice, buy expensive golf clubs, or take lessons from pros, and you also get the additional benefit of paying much lower green fees (or private club fees) than most golfers who do practice incessantly, invest in the best golf equipment and take private lessons! Sign me up for that deal!

Published:3/20/2018 7:59:36 PM
[Markets] Tinder and Bumble will never be a match, and Match may be better off for it The complicated relationship between dating apps Tinder and Bumble sparked a very public breakup.
Published:3/20/2018 7:38:11 PM
[Markets] "Their Biggest Mistake Was Going Through FedEx" - Surveillance Footage May Show Austin Bombing Suspect

With residents of the area in and around San Antonio and Austin Texas already living on tenterhooks, a fifth bomb exploded at a FedEx facility near San Antonio shortly after 12:30 am Tuesday. And while the package containing the first bomb was completely incinerated, police swiftly discovered a second parcel bomb at a separate FedEx facility in Texas which, authorities said, could yield valuable information that could lead them to a suspect.


And so it is that apparently, after chasing down more than 500 fruitless leads, investigators have obtained surveillance footage of what could be the suspect, according to Congressman Michael McCaul, the chairman of the House Homeland Security Committee.

Congressman Michael McCaul told The Associated Press on Tuesday that he's been briefed by the FBI, ATF and Austin police about the situation. But he adds that investigators are still poring through the surveillance recordings.

Austin police earlier said another suspicious package was discovered at a second FedEx center near Austin's main airport. McCaul says evidence obtained from that package if kept intact could be key in finding the bomber.

McCaul, whose district includes Austin, says he hopes the bomber's "biggest mistake was going through FedEx."

Five explosions - four of them in Austin - have killed two and seriously wounded four over the span of the last tow-and-a-half weeks. The first bombing occurred on March 2. While the first three bombs were parcel bombs delivered to homes in the city, the fourth explosion, which happened Sunday night, was triggered by a tripwire, showing an increasing level of sophistication.

Prior to uncovering the footage, one local lawmaker sarcastically declared that their best hope was that the bomber accidentally blows his or herself up.

Texas Gov. Greg Abbott announced he was releasing $265,000 in state funds to Austin police and state authorities investigating the bombings, the AP said.

Randall Rogan, a professor at Wake Forest University in North Carolina, told a San Antonio TV station that building a profile of these types of bombers can be difficult - especially if they keep their targets random.

"Until there is some sense of motivation or intent behind the bombings and until that is known that's going to make it very very difficult for everyone," Rogan said.

Published:3/20/2018 7:38:10 PM
[Markets] U.S. Stocks Regain Footing, With Tech Sector in Focus U.S. stocks rose Tuesday, a day ahead of the Federal Reserve’s policy decision, though social media stocks continued to struggle. Published:3/20/2018 7:03:25 PM
[Markets] China's Boom Reality Exposed: "Uncle He"'s Globally Synchronized 'L'

Authored by Jeffrey Snider via Alhambra Investment Partners,

Top Chinese leadership is taking further shape. With Xi Jinping’s continuing consolidation of power going on right this minute, most of the changes aren’t really changes, at least not internally. To the West, and to the mainstream, what the Chinese are doing seems odd, if not more than a little off. Unlike in the West, however, there is determined purpose that is in many ways right out in the open.

Many here had been expecting that outgoing PBOC Governor Zhou Xiaochuan would be replaced by Liu He. Called Uncle He by many close to him, it has been said that Liu was a close fried of Xi’s since the two were boys. In 2013, just after Xi took power during the 18th Communist Party Congress, Uncle He was made deputy director of China’s crucial National Development and Reform Commission (NDRC), the government’s top economic central planning agency.

Last fall, at the 19th Party Congress, Liu skipped several steps in further rise through the Communist ranks. He was placed as a member of the Communist politburo, one of only twenty-five on China’s second most powerful of governing councils.

But control over the People’s Bank of China is now passed to Yi Gang, the central bank’s current deputy. Taking over for Zhou seemed the logical next progression in Liu’s accompanying of Xi Jinping’s spreading policies. In the West already, Yi’s ascent is taken as a good sign, the sort of continuity clueless Western commentary assumes is the highest quality. This is, it is already being written, the same as Jerome Powell taking over for Janet Yellen.

That’s not what’s happening, though. Yi Gang provides the PBOC with operational continuity. A new Communist official, however, takes over one step above him on the government org chart – Liu He.

While Yi is given the central bank, Uncle He is being made one of China’s four Vice-Premiers and being handed its most powerful domestic portfolio. He will immediately be made the Chair of China’s Financial Stability and Development Commission that among other tasks oversees the coordination between the PBOC and the country’s various financial regulators.

The Financial Times classifies Yi in this new role as China’s “economic tsar.”

To “globally synchronized growth”, the expected contribution from the Chinese is straightforward. That economy is to lead the world out of the rut and malaise of the last decade. The US and European economies (mistakenly thought of as separate systems) are finally inching forward, it is believed, so the upturn in those plus China’s re-invigoration is being counted on for something like global economic synergy.

It was supposed to happen last year but didn’t. Among the major disappointments was the lack of acceleration in China. The government had expended considerable resources for “stimulus” in early 2016, both monetary as well as fiscal. As always, it was immediately accepted as powerful, successful, and clear in its intent before it ever really got started. Western Economists cannot conceive of these things in any other way; and so, they are written about only in that fashion.

In early May 2016, a strange article had appeared on the front pages of the People’s Daily, the Communist Party’s propaganda outlet. Written in the form of a Q&A with an anonymous “authoritative figure”, the very fact of its publication in that place could only mean some degree of high up official approval – if not of Xi Jinping himself.

The article was, it appeared, a total rebuke of what the government was doing at that very moment; the “stimulus” expense and the shift in role of the PBOC from passive (2015) agent to more aggressive. One of the most widely cited metaphors contained within the diatribe was how there always seemed to be this idea a country could be “growing a tree in the air”; building an economy out of none but finance.

Puzzled over not just that particular quirk but others as well, almost everyone here in the West completely missed the point – even though it was spelled out for them. Whoever it was behind the words, they were authoritative at least in terms of economic expectations. The world had been counting on and waiting for China’s eventual “V” shaped recovery from the “rising dollar.” The figure in the People’s Daily warned it wasn’t the correct letter:

I need to stress, that the L-shape will last for a certain period of time, and it’s certainly longer than one or two years. [emphasis added]

No one knows for sure who this authoritative figure was seemingly in defiance of established Chinese economic doctrine, but many including myself believe it was none other than Uncle He.

Liu wasn’t openly contradicting the Communist economic position, either, he was instead clarifying it.

To the West, a dangerously slowed China (with massive downside rather than upside risks) seems inconceivable.

But mainstream commentary is, obviously, woefully uninformed on the economy in China as well as everywhere else.

Chinese authorities have been acting for years, several before this mysterious article ever appeared, in more realistic fashion about what’s going on in the world; particularly the monetary world. They were, as everyone else, under grand illusions about “stimulus” and monetary policy in 2009 and to some extent still in 2012. By 2014, however, it was perfectly clear especially in losing control of CNY things weren’t going nearly so well anywhere; China most of all.

Xi Jinping spoke last fall at the 19th Party Congress about “rejuvenation”, which was not quite the same as the word implies. He was, as has been described, alluding to quality of growth over quantity, the sort of thing you do only when you can no longer count on or even opt for the latter. I said it was the official embrace of a no-growth world. Everything about that Congress from its political conclusions, and those still being done, was with the purpose of an “L” shaped global not just Chinese pattern.

Globally synchronized growth continues to be the baseline expectation in the West. Western economists are still looking for leadership from China’s economy to achieve it. They shouldn’t be, nor should they have been. Unlike our clueless technocrats who can’t seem to make sense of, let alone explain, the current economy, China’s have figured out the (monetary) puzzle. If Chinese economic statistics weren’t enough to illustrate it, they’ve been quite open about it this the whole time.

Now they are acting on those expectations.

Instead of the Great “Recession”, perhaps it should have been called the Great L. It took several more years, but even China’s vaunted miracle growth fell victim alongside all the rest of the world. It’s a massively different outlook, this globally synchronized L. Brexit, Trump, Italy, and now Xi’s amplifying totalitarianism. They’re all very different responses to the same thing. Paraphrasing Churchill from another era, it’s gone on so long now the whole world has clearly passed into the age of consequences.

This is some boom.

Published:3/20/2018 7:03:24 PM
[Markets] Key Words: Fox News analyst quits, calling network ‘propaganda machine’ for Trump A longtime Fox News contributor said Tuesday he’s leaving the network, and blasted it for becoming a “propaganda machine.”
Published:3/20/2018 6:28:56 PM
[Markets] Yellowstone Supervolcano Fears Rise As World's Largest Active Geyser Erupts First Time Since 2014

A series of potential eruptions have been reported from the world's largest active geyser at Yellowstone National Park. If confirmed, they would be the first since 2014. reports that park officials said employees reported seeing an eruption at the Steamboat Geyser in northwest Wyoming Thursday evening.

Steamboat is located in a part of the park that’s snowed in much of the year. Roads into the area currently are closed for spring plowing.

As's Mac Slavo notes, the geyser can shoot water more than 300 feet during significant eruptions and the park service made the announcement about the world’s tallest active geyser on Friday,as geologists compared the accounts to thermal sensors in the area. It was determined by scientists that it “could be a series of minor eruptions,” as opposed to one big eruption.

A series of earthquakes have been rumbling underground over the past few months, with as many as 200 recorded in a matter of days. The volcano is “under strain” according to some experts but researchers still continue to say not to worry, because the Steamboat Geyser’s eruptions had little connection to a volcano like Yellowstone. Using Global Positioning System, borehole tiltmeters, and borehole strainmeters to measure minute changes in deformation at Yellowstone, David Mencin and Glen Mattioli said:

“the strain signal is larger than would be expected if the crust under Yellowstone were completely solid”.

Historically, the geyser has gone anywhere from four days to 50 years in between eruptions. Unlike its counterpart Old Faithful (named for its predictability) and a favorite attraction, the Steamboat Geyser is far from easy to predict.  It can go 4 days or 50 years between eruption, the last time being in 2014.

Yellowstone National Park contains more than 10,000 thermal features and sits on top of the world’s largest volcano, capable of sending 2,000 times more matter into the sky than the Mount St. Helens eruption. The last volcanic eruption at Yellowstone was 70,000 years ago.

According to the Casper Star Tribune, Jacob Lowenstern, a former scientist in charge of the Yellowstone Volcano Observatory explained the likely reason for the eruption. 

“Their [geyser] plumbing systems are in the upper few hundred feet of the Earth,” he said. “As you get hotter and hotter and deeper and deeper, the permeability and ability of water to move around shuts off. There’s not a whole lot of connectivity of the reservoirs once you get deep.”

The park hasn’t had many inquiries from geyser watchers yet, said Vicki Regula, a public affairs assistant, though the 2014 eruption drew plenty of viewers. “It was magnificent to see,” she said.

Published:3/20/2018 6:28:52 PM
[Markets] The Wall Street Journal: Toyota suspends driverless-car testing in U.S. after Uber fatality Toyota Motor Corp. said Tuesday it would suspend certain autonomous-vehicle testing operations on public roads after an Uber Technologies Inc. self-driving car struck and killed a pedestrian in Arizona.
Published:3/20/2018 5:37:56 PM
[Markets] Second Undercover Cambridge Analytica Video Drops: Claim They "Won Election For Trump"

One day after UK television channel ITN 4 news released a video showing a British political data firm's CEO suggesting they could help entrap a political rival with bribes, sex workers and even an offer "he can't refuse," the news outlet has dropped a second video of the encounter in which the firm takes credit for Trump's 2016 election win. 

An undercover Channel 4 News operative posing as a prospective client who desired to affect the outcome of the election in Sri Lanka, recorded several interviews with Cambridge Analytica CEO Alexander Nix and other executives bragging about various methods of playing dirty politics. 

"It doesn't have to be true," Nix said. "It just has to be believed."

Nix was suspended earlier today, and the company issued the following statement that reads in part:  

The Board of Cambridge Analytica has announced today that it has suspended CEO Alexander Nix with immediate effect, pending a full, independent investigation.

In the view of the Board, Mr. Nix’s recent comments secretly recorded by Channel 4 and other allegations do not represent the values or operations of the firm and his suspension reflects the seriousness with which we view this violation.

In today's video, the British data company was secretly filmed discussing coordination between the Trump campaign and outside groups.

Analytica, bosses also talked about:

  • The full scale of their pivotal work in Trump’s election win
  • How they avoid Congressional investigations into their foreign clients
  • Setting up proxy organisations to feed untraceable messages onto social media
  • Using a secret email system where messages self-destruct and leave no trace
  • Cambridge Analytica’s involvement in the “Defeat Crooked Hilary” brand of attack ads

In a series of meetings filmed at London hotels over four months, between November 2017 and January 2018 an undercover reporter for Channel 4 News posed as a fixer for a wealthy client hoping to get candidates elected in Sri Lanka. -Channel 4

CA reps bragged to the undercover operative that the company allowed Trump to win with a narrow margin of just "40,000 votes" in three states despite losing the popular vote by over 3,000,000 votes. 

Nix bragged about their work for the campaign, telling the operative "We did all the research, all the data, all the analytics, all the targeting, we ran all the digital campaign, the television campaign and our data informed all the strategy.

Another executive at CA, Mark Turnbull, said “Sometimes you can use proxy organisations who are already there. You feed them. They are civil society organisations.. Charities or activist groups, and we use them – feed them the material and they do the work…

“We just put information into the bloodstream to the internet and then watch it grow, give it a little push every now and again over time to watch it take shape. And so this stuff infiltrates the online community and expands but with no branding – so it’s unattributable, untrackable.”

Channel Four notes in their report; "No doubt, some of CA's claims about the Trump campaign are nothing more than self-serving sales patter." 

Of note, Ted Cruz's campaign dropped the company during the 2016 campaign after its psychographic models were unable to identify likely Cruz supporters. As for the Trump campaign's decision to drop the firm months before the election;

The crucial decision was made in late September or early October when Mr. Trump's son-in-law Jared Kushner and Brad Parscale, Mr. Trump's digital guru on the 2016 campaign, decided to utilize just the RNC data for the general election and used nothing from that point from Cambridge Analytica or any other data vendor. -CBS

Cambridge Analytica has denied using bribes, entrapment "or so-called honey-traps."

Defeat Crooked Hillary

During another meeting with the Channel 4 operative, Turnbull bragged about their "Defeat Crooked Hillary" advertising campaign, funded by Rebekah Mercer's Make America Number 1 super-pac, seen over 30 million times during the campaign. 

While coordination between an official election campaign and outside groups is illegal, CA insists they employed a strict firewall between activities and that they were transparent about their work. 

No paper trail

During a discussion at a hotel, Alexander Nix describes how CA utilizes ultrasecure free email service, ProtonMail, which utilizes a timed self-destruct mechanism to eliminate evidence. 

No-one knows we have it, and secondly we set our… emails with a self-destruct timer… So you send them and after they’ve been read, two hours later, they disappear. There’s no evidence, there’s no paper trail, there’s nothing.”


As we previously reported, CA, an offshoot of UK company SCL group, was created in 2013 with a $15 million investment by billionaire GOP donor Robert Mercer and a major push from former Breitbart executive chairman and former Trump advisor, Steve Bannon. 

In 2014, SCL entered into a contract with a company called Global Science Research (GSR), owned by Aleksandr Kogan - a Cambridge-based psychologist. Kogan's app, called "thisismydigitallife," harvested the data of millions of users which Cambridge Analytica bought.

When Facebook found out in 2015 that Cambridge / SCL had purchased the data, they was asked to stop and delete all of the harvested data. They said they did - however Facebook banned Cambridge Analytica and their parent company SCL after an anonymous source which Facebook won't disclose reported that not all of the data had been deleted. 

Last fall, special counsel Robert Mueller asked Cambridge Analytica to turn over all emails from any employees who worked on the Trump campaign contract, which the firm complied with.

The Trump campaign's contact with the firm ended on Election day 2016 and is no longer associated in any way. 

Published:3/20/2018 5:37:56 PM
[Markets] After the Bell: Dow Gains 116 Points, but There Was Nothing to Be Happy About The Dow Jones Industrial Average finished up 116 points. It was the day before the Federal Reserve announcement, and very little was stirring, as the major indexes remained stuck in a range throughout the day. While we know what the Fed is likely to do—hike interest rates by a quarter point—but the big question is how many more rate hikes we can expect this year, and next. Published:3/20/2018 5:37:56 PM
[Markets] The Fed: 5 things to watch from the Fed decision Here are five things that economists are watching closely at this week’s Fed interest-rate committee meeting.
Published:3/20/2018 4:56:59 PM
[Markets] What Happened in the Stock Market Today On a day most indexes made gains, Arena Pharmaceuticals skyrocketed following drug trial results and Duluth Holdings fell on a weak forecast for 2018 sales. Published:3/20/2018 4:56:59 PM
[Markets] What Do They Know That We Don't? DC Officials Flock To Doomsday Camps

Authored by Mac Slavo via,

Washington D.C. government officials are flocking to doomsday camps around the country.  Which of course begs the question: what do they know that we do not?

According to the Washington Examiner, a building network of backwoods doomsday camps around the country are pulling in members from affluent areas and even Washington national security officials as the threats grow from nuclear war, an EMP (electromagnetic pulse), or virus attack.  Dubbed Fortitude Ranch, the outposts promise protection and a year’s supply of food for those unable to build their own bunker with preparations for a SHTF scenario. What’s more, until a crisis strikes, the doomsday camps are being used for prepper training and vacations.

One of Fortitude Ranch’s members from the Baltimore area said that he and others joined after “waking up” to the potential of a national crisis from an attack, financial meltdown, or political violence. “For most of us, something rattled our cages and woke us up,” he said.

We’re seeing members from all the three letter agencies, said Fortitude creator Drew Miller, a retired Air Force colonel, and intelligence officer, in a reference to the Central Intelligence Agency, Defense Intelligence Agency, Federal Bureau of Investigation and more.  Miller called an attack or even a weather-related electromagnetic pulse shutdown of the electric grid “inevitable,” and a driving force in his project.

Prepping has offered many a sense a freedom none of us have anymore.  No longer needing the government for anything, preppers can survive most scenarios that will leave many others begging for their slavery again and in return, for the government to give them abject poverty in exchange.

Through memberships and his own cryptocurrency called “Fortitudes,” Miller has raised about $400,000 and established a ranch in West Virginia and Colorado with 10 others planned. An open house at the West Virginia ranch is scheduled for April 21-23.

He said that for the West Virginia ranch, “most members are professional Washington area folks. They don’t have time to do this own their own.” The cost is about $1,000 per person per year to join. –Washington Examiner

“You’d have to be an idiot not to think it will happen,” said Miller, author of Rohan Nation: Reinventing America After the 2020 Collapse.” Miller also said that the camps are nearly as survivable in an attack as the Mt. Weather FEMA site near Virginia’s Shenandoah River where several Washington leaders were housed after the 9/11 attacks.

Each camp has a shooting range and is equipped to handle between 50 and 500 people during any SHTF scenario. The camps will have lodges, underground bunkers, and guard towers. In the event of a social meltdown, members will be responsible for manning those towers.

With all of the high-powered government officials signing up as members at Fortitude Ranch, it’s pretty safe to say that if you are not prepping now, you should probably start. A good reference for those just beginning to tread into the realm of prepping is the book titled The Prepper’s Blueprint.

Published:3/20/2018 4:56:57 PM
[Markets] Salesforce agrees to acquire Mulesoft in $6.5 billion deal Salesforce agrees to acquire Mulesoft in $6.5 billion deal Published:3/20/2018 4:09:24 PM
[Markets] How driverless cars could save lives even sooner than we think An Uber self-driving vehicle hit and killed a pedestrian in Arizona.
Published:3/20/2018 4:09:23 PM
[Markets] Stock market rebounds from tech selloff as energy sector aids advance U.S. stocks ended higher on Tuesday, led by strong gains in the energy sector as the overall market attempted to reclaim some ground lost the previous day when tech shares fell sharply. Published:3/20/2018 4:09:23 PM
[Markets] Here's What The Fed Will Say Tomorrow

There is one thing that is certain ahead of tomorrow's FOMC meeting, at least according to the market: the Fed will hike rates.

Besides the Fed Funds futures markets, one big tell that markets have taken a hawkish turn as Steven Englander points out is that 2yr yields went up yesterday despite the absence of economic data and a seriously downbeat equity market. Today, equities were generally flat, with no data released, and short term yields keep rising. Additionally, the sharp bounceback in 10yr yields on flat S&P futures indicates that fears of a hawkish FOMC outcome are growing.

The question then is whether the Fed will hike rates 3 or 4 times in 2018 and 2 or 3 times in 2019. Here opinions differ, and as Morgan Stanley writes, based on our stress-testing of the dot plot, it is possible to get to a full median of 4 hikes in 2018, particularly if the Chair moves, "but we think it is too early in the year for the FOMC to agree more tightening is needed, particularly in light of continued uncertainty about just how much tightening the first full year of balance sheet shrinkage will deliver. Also, having over-promised and under-delivered on rate hikes in 2015 and 2016, we think the FOMC will be reluctant to raise the median path too aggressively early this year and risk a repeat scenario—at least at this meeting."

Here the gating factor will be the yield curve, which at the current rate, will likely be flat or inverted by September:

By September, a flat-to-inverted yield curve, continued balance sheet runoff and tighter financial conditions, as well as higher positive real rates will warrant close examination of how much further the FOMC wants to push rates in this cycle. Thereafter, we expect that in early 2019, fiscal stimulus will push a very late-cycle economy to new heights, leading the Fed to hike two additional times—in March and June. With the midpoint of the target range near neutral (at 2.625%), this is likely where the hiking cycle ends in this expansion.

For now, however, there is just one question on every trader's mind: will the Fed telegraph 3 or 4 hikes tomorrow. And while most banks expect an upward drift in the dots to raise the median across most of the forecast horizon, they note that it will be a high hurdle to get all the way to 4 hikes in 2018 (not for Goldman though, whose base case is 4 hikes and potentially even 5).Others,such as Morgan Stanley expect the median to remain at 2.125% in 2018, because as many as 3 participants could add a 4th hike at this early stage—before confirmation of the "kink" in core inflation coming out, and before even the first official take on 1Q GDP —and the median would still be unchanged from December.

In other words, for the median path in 2018 to move to 4 hikes the dot plot would need at a minimum all but one participant currently at 3 hikes to move to 4. The following table illustrates just what it might take.

Goldman agrees, and writes that while its own forecast is that the FOMC will deliver four hikes both this year and next year, it expects a more measured increase in the dots next Wednesday, as shown in Exhibit 6.

By our count—which factors in Yellen’s departure and our expectations for the other participants—four members would have to boost their projections above the December median (of three hikes) for the March SEP to show a four-hike baseline in 2018. Six individuals projected a three-hike 2018 pace at the December meeting (i.e. just one hike below four), and given the upbeat public remarks and encouraging data, we believe such an increase is indeed likely. We also expect the 2020 median dot to increase, but by less than half of a hike.

We will have more to say about the dot plots in our full preview later today, but before previewing what the FOMC statement could look like, here is another interesting assumption from Morgan Stanley: Fed chair Powell could change the FOMC format to add a press conference after every meeting, thus making every meeting potentially live.

Press conference following every meeting?

Under Chair Powell's leadership, we expect the FOMC to adopt the practice of holding a press conference following each of its 8 meetings per year, likely to come as an announcement at the December 2018 meeting (to begin in 2019). While previous Chairs Yellen and Bernanke focused on being highly prepared for every press conference (making each one quite an endeavor for Chair and staff alike), Chair Powell has already shown in testimony he may be more willing to speak off the cuff, taking a more casual approach.

Processes are formal within the Federal Open Market Committee, and evolve slowly. We think it would likely take about nine months from the time the idea is submitted for Committee discussion to the time of execution. Follow the minutes
of meetings this year to gauge when the idea is proposed, how it evolves, and eventually we might be able to anticipate its announcement.

Chair Powell has committed to continuing transparency in Fed communications under his leadership. Moving to a Q&A after every meeting is consistent with that view, but will need to be meticulously laid out so that markets are well  prepared —and so that the move alone isn't taken as a sign the FOMC is ready to speed up the pace of hikes.

Again, there will be more in our full FOMC preview due shortly, but for now, we leave readers with two preview blackline statements, one from Morgan Stanley and one from Goldman Sachs, laying out what and where the two banks expect to see notable changes to the Fed language.  What is interesting is that while both banks expect a modest walk back of the current economic conditions - especially in housing - while leaving the rest of the statement unchanged, they still expect a 25 bps hike. 

First, here is Morgan Stanley:

And here is Goldman's preview:

Published:3/20/2018 4:09:22 PM
[Markets] Capitol Report: Kudlow’s rise breathes life into indexing capital gains to inflation | Trump has discussed firing lawyer Ty Cobb Larry Kudlow’s rise breathes life into indexing capital gains to inflation; President Donald Trump has discussed firing lawyer Ty Cobb; Republican leaders back a second special counsel; and more.
Published:3/20/2018 3:34:56 PM
[Markets] Stockman Fears Washington's Fiscal Folly Will Spark A "Yield Shock Of Biblical Proportions"

Authored by David Stockman via Contra Corner blog,

That didn't take long. The $20 trillion national debt marker was crossed on September 8th, but it only took another 186 days to vault over the $21 trillion level last Thursday.

Then again, you haven't seen nothin' yet. The annual deficit will approach $1.2 trillion in the coming fiscal year; breach the $2.0 trillion market by the middle of the next decade at the latest; and pile a total of $17 trillion onto the national debt over the next 10 years.

Moreover, these numbers are about as locked-in as tomorrow's sunrise. So it is fair to say that objectively the public debt is already $40 trillion and that's just within the decade of the 2020s. And as we show below, that monstrous inflation of the public debt could not come at a worse time in the political, demographic and monetary cycle.

Still, we get slightly ahead of the story. What's relevant in the near term is that every bit of political resistance to the growth of Federal deficits during the Obama era is now over and gone. The nation's fiscal accounts are now actually in free fall---and for as far as the eye can see into the future.

We have been christening the Donald as the Great Disrupter all along---the political accident that will at last bring the destructive rule of the Wall Street/Washington establishment to a thundering demise. And nowhere is that more evident than with respect to the Donald's pivotal position at the center of the fiscal calamity now unfolding.

Needless to say, Trump has finally locked-up the gears of fiscal policy tighter than a drum. That's because he embodies a trifecta of fiscal impulses that amounts to pure madness. To wit, the Donald is pro-Warfare State, pro-Welfare State and has just slashed Uncle's Sam's tax take to 16.6% of GDP----the lowest rate since 1950.

Accordingly, there is exactly zero chance of any legislative action to stem Washington's exploding red ink (see below) until after the 2020 election, and it will be far too late by then.

That is to say, the Donald is not about to sign legislation that would raise taxes, cut Social Security/Medicare or sharply ratchet back defense spending. Nor is there any possible congressional majority to serve up even a down payment on this necessary fiscal fix in the first place.

Indeed, it is now evident that the Congressional GOP has thrown whatever vestige of fiscal rectitude it held onto during the Obama years to the winds.

In their desperation to show that they can govern apart from the mad man in the Oval Office Congressional Republicans recently passed the most irresponsible, unfunded tax bill since the 1980s at the tail end of what is now nearly the longest business expansion in history; and then moved within weeks to blow the budget sequester caps sky high, thereby adding $300 billion to defense and domestic discretionary spending during the next two years alone---even as they shoveled-out another $120 billion of disaster relief spending with no honest offsets whatsoever.

Of course, the alternative of a bipartisan fiscal responsibility coalition emerging in the foreseeable future is about as likely as vows of chastity being taken in a whore house, and we do not employ that particular metaphor at random.

Indeed, Wolf Richter's excellent chart below depicts the dismal fiscal cycle that is now operative in the Imperial City. To wit, what used to be called the debt ceiling has effectively become the debt floor.

That is, there is now a cycle in which the statutory borrowing limit remains temporarily in effect (flat areas marked "debt ceiling") until the Treasury runs low on cash. Then the ceiling is "suspended" (rising squiggly line) as long as necessary for political convenience---during which time the Treasury borrows like crazy.

During the five weeks since the "ceiling" was lifted on February 9, for example, the US treasury borrowed a cool $535 billion; and during the two suspensions combined since last September it has issued a staggering $1.2 trillion in new debt obligations.

Never mind that computes to $6.5 billion per day. After all, as one talking head attempted to school your editor on CNBC last week, the Federal deficit is only 3.5% of GDP. What's to worry?

Our short answer to this thirty-something hot shot, of course, is just about everything is to worry. That's because Wall Street is way behind the curve in comprehending that the monstrous fiscal freight train coming down the tracks is no mere statistical factoid at 3.5% of GDP.

To the contrary, the current fiscal equation is sui generis. It embodies a freakish and incendiary confluence of politics, policy, demographics, the business cycle, central banking and global developments that is utterly different---and massively more dangerous---- than anything that has gone before.

So we commence this multi-part series not merely to rebuke the Halftime Report idiot who spoke for much of Wall Street when he averred it was all getting better on the fiscal front because current deficits are far smaller than Obama's. It seems that the only rebuke perma-bulls like Joe Terranova and his ilk of day traders understand is getting hit upside the head by a 40% stock plunge, anyway.

Still, the Wall Street brokers are making another run at the retail mullets---even trotting out high powered and ordinarily sensible market technicians like JPMorgan's Marko Kolanovic---to urge one last run at buying the dip.

The Donald's contretemps to the contrary notwithstanding, the global economy is proceeding just fine, they insist. And besides, the chart points beckon: The 10% February dip--including two 1,000 point plunges on the Dow in the same week--- is just August 2015 or February 2016 all over again. That is, a bullish pause that refreshes.

In a word, that is one giant load of Wall Street horse manure. And we are here to tell you that unlike the boy in Ronald Reagan's favorite story, which we mentioned last week, there ain't no damn pony anywhere in sight!

The world economy may bump along for a quarter or two, but structurally it's a monumental mess because it all turns on a hideous freak of world economic history that we call the $40 trillion Red Ponzi. And in the jaws of the thundering monetary/fiscal clash looming just around the corner in the bond pits, there ain't no stinkin' trading charts that matter a whit, anyway.

What matters 1000X more than the daily stock charts are the following two epochal force vectors that we shall elaborate upon in the balance of this series. That is, (1) the explosion of giant structural deficits driven by demographics, political dysfunction and the ascendant Warfare State; and (2) the historically unprecedented pivot to quantitative tightening by the central banks or what amounts to a vast de-monetization of the public debt.

In combination, they guarantee a "yield shock" of biblical proportions, which will eventually eviscerate the cap rates upon which the entire towering bubble in the equity market is predicated.

The first vector, of course, is the exploding structural deficit, which will come as a huge shock to Wall Street. That's because it has been house-trained for so long on the "deficits don't matter" mantra owing to central bank monetization that it can no longer recognize or assess relevant scale.

To wit, the idea that the upcoming 6% of GDP deficit ($1.2 trillion in FY 2019) is at least not as bad as Obama's deficits is just plain stupid. The largest Obama deficit was 9.8% of GDP and it occurred at the bottom of the worst US recessioin since the 1930s (FY 2009); it fell steadily from there t0 2.4% of GDP by FY 2015.

Bad as the Obama deficits were, what is materializing now is an altogether different kettle of fish. The huge Trump deficits will hit at the 10th year of what will be a record business expansion that will be 125 months-old by the end of FY 2019.

Stated differently, the Trump deficits stand squarely in harm's way in front of the next recession; and, worse still, they are growing in size as a structural policy matter owing to the retirement time bomb otherwise known as the 80-million strong Baby Boom generation.

Wall Street's inability to appreciate the cyclical and demographic context of these erupting deficits, of course, represents just one more case of the recency bias. The central banks have falsified bond yields so egregiously and for so long, that the unprecedented deficit magnitudes now baked into the cake are simply unrecognized.

For instance, the Fed did print the Obama Administration out of its giant deficits, but even then they set all time records. During Barry's eight year term the Federal deficit averaged 5.8% of GDP, and one single fact points to the aberrational nature of the Obama record.

To wit, Obama's 8-year deficit average of 5.8% of GDP exceeded the worst Reagan deficit (5.7%) at the very bottom of the deep 1982 recession.

Likewise, it was more than triple the 1.5% annual average during the George W. Bush years, and far above the 1% of GDP average during the Clinton years. It also far exceeded the 3.8% of GDP deficit average during the 12-year Reagan-Bush tenure, and also left big spending Jimmy Carter in the dust, whose average deficit amounted to 2.3% of GDP.

So here is the first chart that trumps (so to speak) anything in the short-term stock charts by a country mile. As will be detailed in further installments, the $2.4 trillion deficit projected for FY 2028 is hard-baked into the future, and represents the best case!

The actual deficit by the end of the 2020s will be far larger---once the next recession rips through the fiscal equation.

Still, the $2.4 trillion deficit projected below under Rosy Scenario amounts to 10% of GDP, and at a point that would be 230 months after the last recession!

So we'd say that what we are heading into ain't no buyable dip. It's a financial chasm like the world has never known, and one that the central bank pivot to QT (Part 2) will turn into an outright nightmare.

Published:3/20/2018 3:34:54 PM
[Markets] U.S. stocks finish higher, powered by energy-sector rally U.S. stocks finish higher, powered by energy-sector rally Published:3/20/2018 3:29:15 PM
[Markets] Dollar, Bitcoin, & Bond Yields Pop As Stocks Get Zuckerberg'd Again

A lot of sound and fury today for no return... because Powell will save us all tomorrow


Despite modest gains in stocks, Trannies were the only index to get back into the green from Friday's close; NASDAQ remains the week's biggest loser...


The S&P 500 has now seen 16 days of plus or minus 1% moves in either direction since the start of February, which compares to only 10 occasions through the 13 months ending in January.


Facebook did rebound from its worst levels of the day but was still ugly...


FANGMAN stocks bounced with Amazon and nVidia back into the green from Friday...

NOTE - Amazon passed Alphabet as the 2nd-most valuable public company behind Apple.


Oracle crashed to its lowest in 6 weeks...


GE lowest since Sept 2009


But bank stocks bounced back today...


So much for rotation to value as FB dumped...


Vol fell on the day but remains elevated to Friday's OPEX close... with Nasdaq vol the biggest riser on the week...


Treasuries were sold all day.. ahead of tomorrow's FOMC meeting...


Once Asia closed, the USD was bid, erasing yesterday's losses and then some - to its highest since March 1st...


Dollar strength sent PMs and copper lower but crude spiked over 2% on the day..


Cryptos extended their gains today as the G-20 statement confirmed rumors of no looming global crackdown...

Published:3/20/2018 3:29:14 PM
[Markets] Cambridge Analytica has suspended its CEO in wake of Facebook data furor Cambridge Analytica has suspended its CEO in wake of Facebook data furor Published:3/20/2018 2:23:31 PM
[Markets] Market Extra: Historic jump in ‘fear index’ in February sounds a stock-market warning February’s historic surge in a prominent gauge of stock-market volatility may have ushered in an end to a protracted period of calm on Wall Street, but it also offers a worrisome sign about market structure during times of extreme turmoil.
Published:3/20/2018 2:23:31 PM
[Markets] Markets Now: Dow Gains 170 Points as Tech Stages a Comeback The Dow Jones Industrial Average was sitting pretty at the end of January. The S&P 500 has risen 0.3% to 2721.90, while the Dow Jones Industrial Average has gained 169.06 points, or 0.7%, to 24,779.97. The Nasdaq Composite has risen 0.5% to 7379.66. Published:3/20/2018 2:23:30 PM
[Markets] Why Citi Is Suddenly Freaking Out About The Exploding LIBOR-OIS

When it comes to ongoing blow out in the Libor-OIS spread, which this morning jumped to another 9 year wide, rising to 54.6bps or the most since May 2009 after 3M USD Libor rose for the 30th consecutive day from 2.2225% to 2.2481%...

... there are two types of analysts (and analysis): those who dismiss the move as merely symptomatic of the deluge in T-Bill issuance and nothing else, a view adopted seemingly by much of Wall Street and most market commentators at a certain terminal sales-funded financial outlet... and those who warn that not only could the move indicate something far more sinister, but what is more troubling, is that no matter what is behind it, financial conditions are becoming increasingly tighter with every passing day, and could potentially result in a funding crisis not only among banks, but also impact the broader.

Our approach has been the latter, and as we showed last week, there are six possible explanations for the sharp move in the spread:

  • an increase in short-term bond (T-bill) issuance
  • rising outflow pressures on dollar deposits in the US owing to rising short-term rates
  • repatriation to cope with US Tax Cuts and Jobs Act (TCJA) and new trade policies, and concerns on dollar liquidity outside the US
  • risk premium for uncertainty of US monetary policy
  • recently elevated credit spreads (CDS) of banks
  • demand for funds in preparation for market stress

Those who say "don't panic" have been focusing squarely on the first three, while we, and other traders, are increasingly concerned that the answer may be found in the latter, and far more concerning, three explanations.

Now, in a report by one of Wall Street's most respected analysts and credit strategists, Citi's Matt King echoes our repeated warnings, and writes that "the dramatic rise in $ LIBOR-OIS spread is contributing to a general increase in nervousness around risk assets", a process he thinks "has further to go."

Recall our take of the ongoing blowout from March 11:

Whatever the cause of the ongoing blow out in Libor-OIS, this move is having defined, and adverse, consequences on both dollar funding and hedging costs... It's not just rates: the consequences of rising dollar funding costs will eventually impact every aspect of the fixed income market, even if simply taken in isolation due to the ongoing spike in 3M Libor which still is the benchmark reference rate for hundreds of trillions in floating-rate debt.

The reality, however, is that without a specific diagnosis what is causing the sharp surge wider, and thus without a predictive context of high much higher it could rise, and how it will impact the various unsecured funding linkages of the financial system, it remains anyone's guess how much wider the Libor-OIS spread can move before it leads to dire consequences for the financial system.

Fast forward to today when King picks up where we left off, and notes that while technical in nature, "the widening nevertheless reflects an increasing scarcity of $ funding over and above the Fed’s intended tightening" and "In coming months, we expect this pressure to spread from unsecured money markets and repo to the cross-currency basis." It gets worse:

The bad news is that we think it has further to go in coming months, and expect the effects to become more far-reaching. It contributes to our preference for € credit over $ credit, and expectation that much of the foreign money buying $ credit will shift towards € credit in coming months.

But the biggest risk, and one which those who complacently ignore the move in this critical spread ignore, is the implications it could have on the Fed's overall normalization plans, because as King warns, the sudden tightening in financial conditions "contributes to our bearishness on credit markets as a whole, and conviction that central banks’ carefully stage-managed exit from extreme stimulus is liable to lead to a sharper tightening of financial conditions than they have been anticipating."

In other words, after just 1-2 more rate hikes, not only will it result in a whimpering of the Fed's tightening cycle end, but it could also lead to a bang in the stock market which has similarly been complete ignoring the sharp move in the L-OIS, oblivious to the sharp funding squeeze behind the scenes.

Before we continue, here is King's own take on what is causing the move: spoiler alert - it's not just the surge in T-Bill issuance.

The unprecedented widening in $ LIBOR-OIS has at once awakened unwelcome memories of 2007-8, and yet at the same time left analysts scrambling for explanations. The most commonly cited factor is increased T-bill issuance. But while T-bills may have widened earlier (already in 2017), in the latest move they have actually outperformed vs Eurodollars and Libor rather than underperformed – hardly what would be expected if their issuance was overwhelming everything else. (Figure 4). Presumably the cause is something US-specific, since – in stark contrast with 2007-08 and 2011-12 – LIBOR-OIS spreads in € and £ have been almost completely unaffected (Figure 5).

The immediate explanation which makes most sense to us is a series of changes in $ markets following US tax reform. These seem likely to be structural rather than temporary.

Just as we and many others predicted, repatriation has led to a sharp flattening of the $ credit curve. While last year the flattening seemed to be driven largely by the long end (and expectations of reduced issuance by corporates using bond issuance+offshore cash to fund share buybacks), since February there has been a shift towards a sell-off, with the front end underperforming in beta-adjusted terms (Figure 6). This occurred among both financials and nonfinancials, and was initially concentrated in $, though there are now some signs € credit is trying to follow suit, especially among financials (Figure 7).

What King, correctly, thinks has happened is that corporations with offshore cash piles have gone from seeing those funds as being trapped almost indefinitely to recognizing that they could be called upon to spend that cash at short notice, "most likely on M&A or share buybacks. As such, they have been anxious to reduce the duration of their holdings."

Indicatively, here is a chart from BofA, which shows the 25 largest US HG non-financial holders of overseas cash, which as Q4 held $1.07tr in total cash, cash equivalents, short-term marketable securities and investments, of which $888bn resided abroad. The full breakdown of various cash equivalent holdings is shown below.

The repatriation of offshore cash has been reflected in part in front end bond selling, but the changes are more visible in money markets. In brief, volumes are up, but maturities are sharply down. The average maturity of CP outstandings has fallen – in the case of A2/P2 issuers to post-crisis lows. A similar maturity shortening has been visible in repo markets.

To be sure, the details of this conventional pathway are well understood (we explained them in detail recently), and on the surface, King admits it would all sounds just like a "strong in a teacup."

Yes, a few issuers may find they need to pay up to borrow rather more in short maturities now that corporate treasurers’ cash piles are not at their beck and call, and yes, this may well be a structural rather than a temporary shift. But it hardly constitutes the sort of trigger for broad-based weakness in risk assets that LIBOR-OIS widening is sometimes taken to be.

This is precisely where the apologists stop in the analysis of the consequences of the move wider in Libor-OIS, a position reinforced further by the lack of other signs of stress which have traditionally accompanied LIBOR-OIS widening have so far been absent.

But, as King warns, "this is about to change."

First, the Citi strategist looks at the correlation between the FRA-OIS and the Cross-FX basis, which traditionally have moved together during times of stress, yet which have so far avoided a parallel move. However, not for long though, as King explains:

Normally when one bank funding market gets stressed, multiple funding markets become stressed as borrowers pre-emptively draw down liquidity wherever they can find it – hence the strong correlation between FRA/OIS and FX OIS basis. So widening in $ LIBOR-OIS has typically been associated with widening in the  crosscurrency bases, and vice versa. But this year’s pickup in LIBOR-OIS is to date a notable exception (Figure 12).

The reason for this? The Fed is masking the liquidity signal with the $2.1 trillion in excess reserves it has generously handed out to banks. As King notes, until now, banks’ excess reserves have remained ample, ensuring that FX swap markets had abundant liquidity and stayed relatively tame even as CP markets became more stressed.

Note that excess reserves are a necessary but not a sufficient condition for there not to be stress in the system. Banks not only need reserves to be available; they also need to be willing to take advantage of them by engaging in lending activity within the constraints of their capital requirements – leverage ratios in particular. Reserves have taken on added importance in the post-crisis era as a key $ liquidity source foreign investors can borrow, especially for those in lower-yielding DMs.

The cushioning role of reserves also explains why although boosting excess reserves through successive rounds of QE has typically helped to reduce $ funding stresses in the system, draining reserves (or even just reducing their rate of increase) has often led to increased stress (Figure 13) – even when their level from a strict regulatory perspective has been more than adequate.

Of course, now that the Fed's balance sheet is in rolloff mode, reserves are starting to decline, even if very, very slowly. That's one way reserves will shrink; another way is the upcoming moves in the Treasury General Account at the Fed. King looks at both below:

There are two main drivers of excess reserves, and – while it is conceivable that near-term worries are overdone – both are set to tighten in coming months.

The most obvious – and gradual – is the Fed’s balance sheet reduction. Just as QE led to a $2tn expansion in excess reserves, so as the Fed’s securities holdings are allowed to roll off and its balance sheet contracts, so banks’ excess reserves are contracting in direct proportion. In 18Q1 the contraction has been $20bn/month; from April the pace steps up to $30bn/month, with two more $10bn increments scheduled from June and September.

The second factor is the level of the Treasury General Account (TGA) at the Fed. This – finally – is where T-bill issuance comes in, not through the weight of supply on RV between short-term market rates but through its indirect impact on banks’ excess reserves. When Treasury issuance increases – either through bills or bonds – Treasury either spends the money immediately or deposits it at the Fed. If they spend it immediately – on social security, or infrastructure, or anything else – the level of private sector deposits in the banking system remains unchanged. Even though private sector funds will have been used to buy the Treasury issuance – thereby reducing deposits – Treasury’s spending will sooner or later lead to the same amount being re-deposited in the banking system. The asset which corresponds to the banks’ deposit liabilities is the level of their reserves at the Fed – which will therefore also remain unchanged.

If instead Treasury’s spending is deferred, deposit liabilities in the banking system fall as someone buys the issuance and are instead transferred to the Treasury General Account at the Fed. Once again, the banks’ asset which falls in parallel with their deposit liabilities is the level of reserves.

This relationship explains why there has been a close link between movements in the TGA and movements in banks’ reserves in recent years (Figure 14), with reserves moving roughly $2 for every $1 change in the TGA . This is because there have been other changes in the liability side of the Fed balance sheet besides TGA, such as an increased RRP facility, expanded deposit programs for CCPs, and a natural increase in paper cash, as well as the Fed normalization in recent months.

So why is this macro-level accounting lesson important? Because it has a direct consequence on the cross-currency basis: the one aspect of the liquidity tightening story that has so far not been observed even as Libor-OIS was shot  wider. Specifically, the level of reserves has been a direct determinant of stress in money markets – the cross-currency basis in particular. As a rule of thumb, a $200bn reduction in reserves has added about 10bp to the 5y €/$ basis (Figure 15). And as Citi adds, moves in the $/¥ basis have if anything been larger still.

Next, King explains why as a result of seasonal affects, especially as it relates to the tax-collection cycle, the recent surge in Bills has not been sufficient to boost the TGA, and reduce reserves. We will spare readers the details, suffice to note that according to King, should the recent increase in Bill issuance persist, by June banks’ reserves could have fallen by around $300bn.

If realized, this would warrant renewed widening in the cross-currency basis, and would almost certainly stoke the general degree of anxiety about a sharp tightening of $ liquidity.

One possible counter here is that in order to avoid a funding squeeze the Fed could inject extra liquidity, however as we explained last week, this is unlikely, at least until there is a pronounced hit to risk assets at which point the Fed will have no choice but to intervene.

Until then, Citi expects conditions to tighten before anything is implemented, most likely in 2019. As for the Fed, King believes that it seems unlikely they will suddenly spring into action now when they studiously ignored the speeches from the BIS and other central banks when the cross-currency basis gapped out in 2016.

So what happens next?

Well, if the predicted tightening does occur as expected, Citi anticipates three quite far-reaching effects.

First, the foreign bid for $ credit – which has all but evaporated in the past couple of months – will come under greater pressure still.

Optimists may hope that we are simply seeing traditional seasonal weakness, and that once Japanese fiscal year-end
has passed, the pace of buying will pick up again (Figure 16). But to us this seems unlikely. The main driver of Japanese and other foreign investors’ hedge costs is not the cross-currency basis, but the difference in short rates. Even if current Libor and basis pressures were to subside rather than to increase, further Fed rate hikes seem likely to drive hedge costs up – in the case of Japanese investors, from around 2.5% now to over 3% by year end (Figure 17). This consumes almost all of the yield on all but the lowest quality $ investments.

This is something we touched upon two weeks ago when we said that "the rise in dollar funding costs will damage the profitability of hedged investing and lending by foreign financial institutions."

Second, and this is directly a continuation of what we said last week, the rise in $ money market rates would represent a tightening of financial conditions beyond that intended by the Fed.

LIBOR is still the reference point for the majority of leveraged loans, interest-rate swaps and some mortgages. In addition to that direct effect, higher money market rates and weakness in risk assets are the two conditions most likely to contribute towards mutual fund outflows. If those in turn created a further sell-off in markets, the negative impact on the economy through wealth effects could be greater even than the direct effect from interest rates.

Citi's third and final point why analysts ignore the blowout in L-OIS at their expense, is that in addition to all these if not anticipated, then at least foreseeable, consequences of tighter $ liquidity, there are quite likely to be additional unanticipated consequences as well.

For example, as shown in the stunning chart below (left side) LIBOR-OIS has in recent years been a very good leading indicator for DXY, with higher spreads leading to a stronger dollar with a 3-month lag (Figure 18). Of course, it is worth noting that $ weakness has been a major contributor to the risk-on environment over the past year (Figure 19) – through its association with stronger emerging markets, through EMFX reserve accumulation contributing to easier global money supply, through its optical contribution to earnings growth at US and global corporates, and through stronger commodity prices.

In other words, if there is indeed a linkage between Libor-OIS and the DXY, then expect a massive spike in the dollar in coming weeks, which in turn would roil risk assets.

In conclusion, King notes that while as a bank Citi is still forecasting a weaker dollar on "fundamental grounds – together with almost everyone else", if the upcoming funding shortage and dollar liquidity tightening does lead to a stronger dollar, "all of these processes have the ability in principle to run in reverse."

Translation: the blow out in Libor-OIS not only matters, but could have very direct - and dire - consequence on equities in the coming weeks.

Published:3/20/2018 2:23:30 PM
[Markets] The New York Post: Trump can be sued by ex-‘Apprentice’ contestant for defamation, judge rules President Trump must face a defamation lawsuit by a former contestant on his reality TV show “The Apprentice” after a Manhattan judge ruled in a first-of-its kind decision that he could not claim immunity through his job as the nation’s commander-in-chief.
Published:3/20/2018 2:11:28 PM
[Markets] Cambridge Analytica Suspends CEO Alexander Nix

Amid a barrage of ethical and legal questions over business practices, the board of Cambridge Analytica has thrown their CEO under the bus suspended CEO Alexander Nix, pending a full, independent investigation.

Alexander Tayler has been asked to serve as Acting-CEO.

Full Statement:

The Board of Cambridge Analytica has announced today that it has suspended CEO Alexander Nix with immediate effect, pending a full, independent investigation.

In the view of the Board, Mr. Nix’s recent comments secretly recorded by Channel 4 and other allegations do not represent the values or operations of the firm and his suspension reflects the seriousness with which we view this violation.

We have asked Dr. Alexander Tayler to serve as acting CEO while an independent investigation is launched to review those comments and allegations.

We have asked Julian Malins QC to lead this investigation, the findings of which the Board will share publicly in due course.

The Board will be monitoring the situation closely, working closely with Dr. Tayler, to ensure that Cambridge Analytica, in all of its operations, represents the firm’s values and delivers the highest-quality service to its clients.

*  *  *

Having been 'caught on tape' offering bribes and sex workers to entrap political opponents, this is not a total shock, but we note this statement flies in the face of the "we were just testing the prospective client" argument they tried to pitch earlier.

Furthermore, there are still two more segments to the Channel 4 documentary to come and we suspect Mr.Nix did not appear any better in those.

Published:3/20/2018 2:11:27 PM
[Markets] US STOCKS-Wall St edges up on energy bump; Facebook slide continues U.S. stocks edged up on Tuesday as higher oil prices buoyed the energy sector, but another slump in Facebook Inc shares curbed gains. Oil prices rose more than 2 percent to touch a three-week high, driven by tensions in the Middle East and the possibility of further declines in Venezuelan crude output. Published:3/20/2018 2:11:27 PM
[Markets] Former Facebook-er: Cambridge Analytica-Style Data-Harvesting Was "Shockingly Routine"

The Cambridge Analytica scandal that erupted over the weekend has snowballed into the biggest threat to CEO and founder Mark Zuckerberg's rule since the company's 2012 IPO.

But, as we noted earlier, the manner in which Cambridge Analytica allegedly leveraged the data it purportedly "stole" from Facebook (or rather, refused to delete after receiving it from an intermediary who himself had improperly accessed it, according to the company) isn't all that unusual. Case in point, Carol Davidsen, Obama's director of integration and media analytics during his 2012 campaign, revealed that Facebook knowingly helped the Obama campaign collect as much user data as possible - even from the friends of users who may not have explicitly consented to the data collection.

When Facebook found out about the data mining for political purposes - the same thing they just banned Cambridge Analytica for doing - they "didn't stop us," the Obama staffer said. Representatives from Facebook even traveled to Obama campaign headquarters and candidly told campaign workers, including Davidsen, that they were allowing the Obama campaign do things they wouldn't have allowed other developers to do.

Fast forward nearly six years and Facebook Security Chief Alex Stamos is planning to leave the company in August after clashing with executives over their refusal to prioritize policing how user data is accessed and manipulated over ever-expanding advertising profits.


And now, another former Facebook employee has come forward to reveal that, before the company started tightening its data security practices after its IPO, the type of "unauthorized" access that Facebook suspended Cambridge Analytica for was routinely carried out by app developers. The reason? Facebook's advertising business can increase profits by offering more data to advertisers and developers. And the more successful games like FarmVille and Candy Crush become, the more money Facebook - which takes a piece of developers' profits - stands to make.

Combined, these factors created a powerful incentive to look the other way.

Asked what kind of control Facebook had over the data given to outside developers, he replied:

"Zero. Absolutely none. Once the data left Facebook servers there was not any control, and there was no insight into what was going on."

The employee, Sandy Parakilas, first accused Facebook of prioritizing data mining of consumer safety in a New York Times op-ed published in November, when the scandal surrounding a "Russian troll farm's" alleged purchases of Facebook ads and promoted posts was still in full swing.

While the company insists that it has strengthened its oversight in the years since Parakilas's departure, the degree of negligence described by Parakilas is staggering nonetheless. If he had to guess, Parakilas would say that, in reality, the majority of Facebook users have probably had their data improperly sold or shared.

Parakilas said he "always assumed there was something of a black market" for Facebook data that had been passed to external developers. However, he said that when he told other executives the company should proactively "audit developers directly and see what’s going on with the data" he was discouraged from the approach.

He said one Facebook executive advised him against looking too deeply at how the data was being used, warning him: "Do you really want to see what you’ll find?" Parakilas said he interpreted the comment to mean that "Facebook was in a stronger legal position if it didn’t know about the abuse that was happening."

He added: "They felt that it was better not to know. I found that utterly shocking and horrifying."

The developer feature that allowed a UK-based psychology professor to access data from 50 million Facebook users is called "Friends Permission".

That feature was a boon to outside software developers who, from 2007 onwards, were allowed to build quizzes and games that were hosted on the platform. Parakilas says the company could've easily disabled this feature - which helped developers sneakily hoover up the data of friends of assenting users - but it chose not to.

Why? It was making too much money.

The apps proliferated on Facebook in the years leading up to the company’s 2012 initial public offering, an era when most users were still accessing the platform via laptops and computers rather than smartphones.

Facebook took a 30% cut of payments made through apps, but in return enabled their creators to have access to Facebook user data.

Parakilas does not know how many companies sought Friends Permission data before such access was terminated around mid-2014. However, he said he believes tens or maybe even hundreds of thousands of developers may have done so.

Parakilas estimates that "a majority of Facebook users" could have had their data harvested by app developers without their knowledge. The company now has stricter protocols around the degree of access third parties have to data.

* * *

Lawmakers and regulators in both the US and UK are demanding investigations and hearings into the lapse, which they are squarely blaming on Facebook. The company said it would meet with the House Judiciary Committee to brief lawmakers on what happened.

However, any attempts at reconciliation or reform might be too little, too late: Lawmakers are demanding a scalp - somebody to blame for President Trump's improbable electoral triumph over the "eminently qualified" Hilary Clinton.

...And Zuckerberg would be a suitable pariah.

Published:3/20/2018 1:32:59 PM
[Markets] Your data is at risk on Facebook, but so is your mental health The company is embroiled in a data breach scandal, reportedly affecting up to 50 million users.
Published:3/20/2018 1:08:32 PM
[Markets] Dow, Nasdaq gain despite negative market breadth The Dow Jones Industrial Average rallied 95 points in afternoon trade, with 17 of its 30 components gaining ground, despite market internals showing overall breadth is clearly negative. The number of advancing ... Published:3/20/2018 1:08:31 PM
[Markets] Steen Jakobsen: Now Is The Time To Be In Capital-Preservation Mode

Authored by Adam Taggart via,

Steen Jakobsen, Chief Investment Officer and Chief Economist of Saxo Bank, is sounding a clear warning of an arriving market correction.

Over-inflated asset prices, over-crowded trades, anemic market liquidity, and a continued decline in the credit impulse set the table for a banquet of consequences, in Steen's view.

Confident a market correction of at least 15% lies ahead, Jakobsen urges investors to exit leveraged positions and build cash.

As for a longer view, he predicts commodities will be one of the best asset classes to own over the next five to ten years:

Every single product available to investors today at has less liquidity than is perceived. I think one of the biggest gaps between perception and reality right now is the ability to actually exit the portfolio you're in. Whether that's an ETF, whether that's credit, or whether that's even some of the small cap stocks.

We already have a proof of this because the spike in February. Think about it: it was just a 5% move in terms of price, but it created almost a 10,000% increase in volatility. If a 5% move creates that sort of noise in the system, it shows that we're playing musical chairs. And when the music stops we're not missing one chair, but we're going to be missing three chairs in a ten-chair race.

It's pretty clear that the liquidity side is a concern. This afternoon a un-named Central Bank called me up and wanted to talk about liquidity in ETFs and the bigger risk of the market itself.

If you look at the breadth of the stock market over the last couple of weeks, it's very, very, very narrow. So we're all chasing the same investments, we're chasing the same themes. We're assume everything is benign when we talk about risk.

But I'm very concerned. My quantitative model supports this caution; it's saying we really have to be in the mode of capital preservation now. This is the time for capital preservation.

Click the play button below to listen to Chris' interview with Steen Jakobsen (45m:44s).

Published:3/20/2018 1:08:29 PM
[Markets] Jeff Reeves's Strength in Numbers: Are Facebook, Amazon and Google bad for America? Each is a disruptor and, in some ways, a liability for the economy and society.
Published:3/20/2018 12:44:33 PM
[Markets] Armed Resource Officer Stops Maryland High School Gunman

A 17-year-old gunman is dead following an exchange with an armed School Resource Officer (SRO) at Great Mills High School in Maryland on Tuesday morning. Two students were injured.

The gunman opened fire on a 16-year-old female student before class in a central hallway, hitting a male classmate, before the (SRO) exchanged fire with the shooter who was armed with a handgun, disabling him and ending the incident. The SRO was not injured in the exchange which began at 7:45 a.m.

The female student is in critical but stable condition at a trauma facility, while her male classmate is in stable condition. They were taken to separate hospitals in D.C. where the shooter died at 10:41 a.m.

The ATF and FBI are investigating the incident which came just days after threats were made on Snapchat against the school. The sheriff's department reportedly investigated the threat but did not determine it to be authentic. 

"This is what we train for, this is what we prepare for," said Sheriff Tim Cameron. 

Quick thinking student Jonathan Freese called CNN from his cell phone during lockdown in math class, telling the network "I'm still a little shaken up." 

Freese said the school had held drills a couple of times for this kind of situation.

"I didn't really expect for this to happen. I do always feel safe, though, because they always have police at the school," he said. -CNN

School busses were used to transport students to a neighboring school to be reunited with their parents.

The shooting comes a week after Great Mills High School students staged a walk-out to protest gun violence in the wake of the February 14 school shooting in Parkland, Florida which was not stopped by the school's resource officer, Scot Peterson. 

President Trump has repeatedly called for arming teachers following the Parkland incident as a means to safeguard students against future mass shootings.

Published:3/20/2018 12:44:32 PM
[Markets] Dow Rebounds, S&P 500 and Nasdaq Waver as Facebook and Oracle Tumble The Dow rises but the S&P 500 and Nasdaq fluctuate amid sharp declines for Facebook and Oracle. Published:3/20/2018 12:44:31 PM
[Markets] Why millennials should be saving more for retirement The younger you start saving, the more your older self will thank you
Published:3/20/2018 11:46:13 AM
[Markets] Technical Indicator: Market bears resurface ahead of Fed decision Technical Indicator: Market bears resurface ahead of Fed decision Published:3/20/2018 11:46:13 AM
[Markets] Meet Facebook's Biggest Holders Who Are Having A Very Bad Day (Or Two)

Amid the biggest two-day demise in Mark Zuckerberg's social network in six years, slashing below its 200-day moving-average, many are wondering where the dip-buyers have gone... and who the biggest losers are, so far!

These are the 30 biggest holders who are having a very bad week...


And these are the 10 holders who added the most in the last quarter - before this collapse eviscerated all of their gains...


Finally, while admittedly programmatic, we note that Zuck has been selling too...


Of course, the question is - when will Facebook announce a massive buyback scheme?

Published:3/20/2018 11:46:10 AM
[Markets] Charting technical cross currents, market bears resurface ahead of the Fed Technically speaking, the S&P 500 has violated its 50-day moving average, while thus far maintaining major support ahead of the Federal Reserve’s policy statement, writes Michael Ashbaugh. Published:3/20/2018 11:46:09 AM
[Markets] Chipotle recruits new marketing chief from Bloomin' Brands Chipotle recruits new marketing chief from Bloomin' Brands Published:3/20/2018 11:07:11 AM
[Markets] CryptoWatch: Prominent crypto bull declares ‘bear market’ for crypto ‘largely over’ The carnage that has ravaged the cryptocurrency market over the past few weeks may be near an end, according to Thomas Lee, head of research at Fundstrat Global Advisors.
Published:3/20/2018 11:07:11 AM
[Markets] S&P, Nasdaq Red As Facebook Carnage Continues

Facebook shares are down another 6%, now trading at their lowest in over 5 months...

This is the biggest two-day drop in Facebook since July 2012... (and furthest below 200DMA ever)


And are weighing on the broad markets as S&P and Nasdaq join Small Caps in the red for the day...

Published:3/20/2018 11:07:10 AM
[Markets] Facebook's stock-price decline continues Facebook's stock-price decline continues Published:3/20/2018 9:33:40 AM
[Markets] The average investor has turned against Facebook and other FAANG stocks Money flows in FAANG stocks have turned negative from extremely positive.
Published:3/20/2018 9:33:40 AM
[Markets] The Fed easily could make stocks spring higher, says J.P. Morgan On this first official day of spring, it’s still feeling wintery for stocks, especially if you’re a Facebook bull. But maybe a present is coming from the Federal Reserve. That’s the suggestion from our ... Published:3/20/2018 9:33:39 AM
[Markets] Fourth Nor'Easter Of The Month Could Paralyze North East (Again)

Just when you thought it was the first day of spring...

Ed Vallee, head meteorologist at Vallee Weather Consulting LLC., warns of the fourth nor’easter this month — expected to slam into the North East on Wednesday:

“Another coastal storm will take shape Tuesday off the eastern seaboard. Intermittent snow and mixed precipitation will impact the Mid-Atlantic Tuesday then spread into New England Wednesday. Snow will be heavy at times Wednesday into Wednesday night, allowing it to periodically accumulate on roadways despite the higher March sun angle. Snow may impact morning commutes in Baltimore and DC, then impact evening commutes from Philadelphia to Boston Wednesday with low visibility and snow covered roads.

Coastal flooding, gusty winds, and heavy, wet snow is expected which, in tandem, may lead to power outages in some locations. Snowfall will wind down from southwest to northeast Wednesday night.”

The National Weather Service (NWS) issued winter storm advisories, warnings, and watches for most of the Ohio-Valley, Mid-Atlantic, and North East up to Boston, Massachusetts (as of Tue, Mar. 20, 2018 at 7:50:08 am EDT) for Wednesday into Thursday.

“The fourth NorEaster for this month is expected to bring up to a foot of snow along the spine of the Appalachians, across northern New Jersey, and into the lower Hudson Valley of New York during the next couple of days,” said NWS.

According to the European Centre for Medium-Range Weather Forecasts (ECMWF), the heaviest snowfall totals will be along parts of the I-95 corridor on Wednesday, which could severely impact commutes from Baltimore to Washington, D.C in the morning and Philadelphia to Boston in the evening.

However, Vallee criticizes the ECMWF model and thinks snowfall totals could at lesser degrees near metro areas.

“10:1 ratio maps are going to be too high in this event: snow will melt on paved surfaces today and Wednesday in most metro areas. Best chance for accum. snow on pavement will come Wednesday evening in NYC into New England. Bust potential very high with this system.”  

Meteorologist Steven DiMartino, the operator of NY, NJ, PA Weather, provides a detailed forecast for the upcoming weather event. DiMartino’s analysis suggests “many locations will have snow on the grass but only slush on the roadways and teated surfaces, even in the heavier snow regions.”

A weakening area of low pressure will pass to the south of the region today with a mix of snow, sleet, and rain expected through this evening. Little if any snow accumulation is expected from this first wave of precipitation. Winds will be from the northeast at 10 to 20 mph, increasing to 15 to 25 mph this evening. Temperatures will rise into the mid to upper 30’s for highs this afternoon.

Periods of snow, sleet, and rain showers can be expected tonight through tomorrow morning leading to slick and icy roadways, especially where untreated. Winds will be from the northeast at 15 to 25 mph with gusts over 30 mph at times. Temperatures will fall into the lower 30’s for lows throughout the region.

A second low pressure system will redevelop off the southern Mid Atlantic coast tomorrow morning and then track through the coastal waters towards the 40N/70W benchmark while rapidly intensifying. As this low pressure system intensifies, the precipitation will become moderate to very heavy. Bands of intense snowfall will develop throughout the region from 2 PM to 8 PM tomorrow. In these snow bands, snowfall rates of 1? to 3? per hour are possible. Meanwhile, sleet and rain will mix in with the snow making for icy conditions where sleet could become a dominant precipitation type. Snowfall accumulations throughout much of the region will range from 4? to 8? with areas of 12? or higher. The wide range of snowfall totals will depend on the precipitation type and location of intense snow bands. If more sleet mixes in for a location, snowfall amounts are likely to be around 4? but 1? to 3? of sleet would be possible. If more snowfall than sleet develops than around 8? is more likely. Further, if a location happens to remain over an intense band of snowfall with enhanced snowfall rates, than some locations will potentially go over 12?. There is also potential for some urban areas that the snow will have a difficult time accumulating as surface temperatures will be marginal. Aside from the heavy precipitation, strong winds will be a threat with sustained northeasterly winds at 15 to 30 mph with gusts between 40 and 70 mph. These strong winds and gusts will lead to visibility below 2 miles, downed trees, wind damage, and power outages. Further, coastal flooding will be a threat with tides 1 to 3 feet above the astronomical high tides. Temperatures will range from the lower to mid 30’s.

Travel is NOT suggested between 2 PM and 8 PM tomorrow due to these conditions.

The storm will exit on Thursday morning with some lingering snow showers followed by clearing skies towards the afternoon. Winds will be from the northwest at 15 to 30 mph with gusts over 40 mph. Temperatures will range from the mid to upper 20’s for lows and lower to mid 40’s for highs.

High pressure will be in control for Friday on through Monday with clear skies to scattered cloud cover. A storm will pass to the south of the region on Sunday that may lead to a few isolated showers over extreme southern New Jersey. Temperatures on Friday will range from the mid 20’s for lows and upper 30’s to lower 40’s for highs. Temperatures on Saturday will range from the lower to mid 20’s for lows and lower to mid 40’s for highs. Temperatures on Sunday will range from the mid 20’s for lows and lower to mid 40’s for highs. Temperatures on Monday will range from the mid 20’s for lows and lower to mid 40’s for highs.

Here are the latest tweets from Social Media Meteorologist who have commented on the upcoming weather event: 

“Nor’easter Number 4: NWS “adjusted” forecast snowfall amounts for New York City — now 14-16? with almost 15? expected in Central Park. 12-inches or 1-foot in Boston,” detailed Ryan Maue, Meteorologist & Atlanta Bureau Chief @weatherdotus.

“It’s Nor’Easter # 4!! Here’s The Latest Expected Snowfall, Up to A Foot Is Possible In Some Local Spots,” said Bill Evans, Senior Meteorologist WABC-TV New York City.

“Good Tuesday morning! Spring begins officially at 12:15pm but… we’ve got more winter on the way. Winter storm watches and warnings are up for tomorrow’s #noreaster Turn on #wcvb until 7am for the timeline and of snow, wind and coastal flooding,” said Cindy Fitzgibbon, Meteorologist at WCVB (Boston).

And here's how much snow you can expect to wake up to early Thursday AM...

Frank Giannasca, a Weather Channel senior meteorologist, believes there is a silvering lining to the fourth nor’easter expected to punish the East Coast mid-week: it will probably be the last of one of the season…

“The reason for the nor’easters is a pattern that we’re in right now where we’ve had some blocking in the high latitudes,” he said. “Oftentimes, when we have this blocking, it tends to produce a pattern of cold air over the Eastern United States that allows the storm track to move around the country and develop strong storms in the East Coast.”

“As for how long that’s going to stick around, for at least the time being, this might be the last one, at least from what I can see.”

Published:3/20/2018 9:33:38 AM
[Markets] Maryland high-school shooting draws response from federal agents Maryland high-school shooting draws response from federal agents Published:3/20/2018 8:49:27 AM
[Markets] Wall Street opens higher as financials gain Wall Street's main indexes opened higher on Tuesday, led by gains in financial stocks ahead of a near-certain interest rate hike by the Federal Reserve, but declines in Facebook and Oracle weighed on technology ... Published:3/20/2018 8:49:23 AM
[Markets] Wall Street Unexpectedly Turns Extremely Bearish On Global Growth

Last week , in the aftermath of the latest disappointing Chinese data, we noted that after closely tracking the recent surge in the S&P, the popular Citi Macro Surprise index slumped as numerous global growth indicators suddenly missed expectations and/or declined outright.

It appears that this troubling development was not lost on Wall Street, because according to the respondents of the latest monthly Global Fund Manager Survey conducted by Bank of America in which 176 participants with $514bn AUM responded to various questions, expectations for faster global growth tumbled a whopping 19% to net 18% in March, the lowest level since the UK voted to leave the EU in June 2016, and suggesting that the global macro impulse has now faded.

And while the global economy may not be seen as in recession just yet, it's almost there: no less than 74% of investors surveyed now believe the global economy is in the late cycle: this was the highest percentage in survey history, while at the same time respondents voiced the highest inflation expectations in over 13 years. As a reminder, global growth turns south coupled with inflation you get "stagflation", and when as a result the "late cycle" economy end, recession begins.

Looking at this unexpected spike in pessimism, BofA's Chief Investment Strategist, Michael Hartnett, who conducts the monthly survey writes that this month's FMS "shows cracks in the bull case emerging, specifically concerns over

  • a) trade…FMS tail risk #1 now trade war,
  • b) stagflation…lowest global growth expectations since Jul'16, highest inflation expectations since June'04, and
  • c) leverage…investor desire for cash flow to improve corporate balance sheets highest since Jun'10.

More from Hartnett, who warns that “cracks in the bull case are starting to emerge, with fund managers citing concerns over trade, stagflation and leverage."

So has this perceived slowdown in the global economy, which has yet to manifest itself in a change to rate hike expectations by either the market or the Fed, are the same fund manager respondents taking appropriate action and derisking?

Well, recall that this particular survey is the one we dub "endlessly paradoxical", and this month was no different, because even as the "smart money" sees both a stagflation and recession as just around the corner, they put in even more cash into the market. Indeed, as Hartnett notes, "ominously investors yet to act on fears, as rates and earnings are keeping the bulls bullish: FMS shows investors stubbornly long global stocks, banks, tech, still short bonds, defensives, and cash levels fell from 4.7% to 4.6%."

In other words, everyone is nervous and... not only not doing anything about it, but adding even more risk exposure!

To be sure this glaring disconnect between what Wall Street thinks and how it invests is something we have repeatedly commented, and is most likely just an indication of how broken the market has become thanks to constant central bank intervention.

And while Wall Street may be suddenly fearing a sharp economic slowdown, what do they think in terms of actual risks catalysts? The answer: the threat of a trade war (30%) returns to the top of list of tail risks most commonly cited by investors for the first time since January 2017, followed by inflation (23%) and a slowdown in global growth (16%).

This is the first time Trade War has emerged as the top risk according to Wall Street, and follows last month's top risk of inflation and bond crash.

Another notable finding, and the reason why yesterday's tech dump spooked so many: according to Wall Street, “Long FAANG+BAT” remains the most crowded trade (38%) - which we confirmed recently when looking at hegde fund 13F filings; "Short USD” is now the second most crowded trade (17%), while “Short Volatility” slips to sixth from first in January.

This is the second consecutive month in which "Long FAANG+BAT” is seen as the most crowded trade, and explains why should a selloff begin in earnest, it could get very messy, as investors will scramble to frontrun each other in getting out of the biggest "hedge fund hotel" position in recent history.

Finally, for all those asking what Wall Street believes will be the "magic level" in the 10Y which sends stock tumbling, the answer - according to the survey - is 3.60%

And here are the other key findings from the latest survey:

  • 58% of investors surveyed believe global EPS will grow more than 10% in the next 12 months
  • The net percentage of investors who would like to see companies improve their balance sheets is at the highest level in over 8 years
  • Fund managers are stubbornly long global stocks, banks, and tech, while remaining short bonds and defensives
  • Investors are reducing risk by increasing allocations to defensives such as staples, REITS, the U.S. and banks; they are rotating out of cyclicals and value plays including energy, discretionary, materials and the UK
  • Allocation to banks climbed to the second highest level on record, with net 36% of investors surveyed indicating they are overweight the sector
  • Pessimism toward UK equities hits an all-time high as net 42% of investors surveyed say they are underweight the region
  • On Japan, global investors are still overweight Japan equities (net 26%) and, for the first time since 2009, the majority of fund managers do not expect the Japanese yen to depreciate over the next 12 months
Published:3/20/2018 8:49:22 AM
[Markets] Metals Stocks: Gold flirts with new low for 2018 ahead of Fed meeting Gold futures on Tuesday gave back all of Monday’s gains and then some, tracking a firmer dollar ahead of a Federal Reserve meeting that’s expected to deliver a widely expected interest-rate hike.
Published:3/20/2018 8:19:13 AM
[Markets] Top 5 Things to Know in the Market on Tuesday - Here are the top five things you need to know in financial markets on Tuesday, March 20: Published:3/20/2018 8:19:12 AM
[Markets] Oh No! We Are Running Out Of People

Authored by Mike Shedlock via MishTalk,

Barring a recession, it appears the US is running out of people...

We aren't. The chart is misleading.

The Wall Street Journal asks Is America Running Out of Unemployed People to Fill Jobs?

For every job opening in America, there’s now barely more than one unemployed person available to take it. In mid-2015, there were 2.3 million more unemployed people than open jobs. By January, the gap had narrowed to 372,000.

Pool of Potential Workers

There is a huge pool of workers as shown by the following Advisor Perspectives chart on the Labor Force Participation Rate.

In every age group except 55 and over, fewer people are working on a percentage basis than in 2000.

Many of them are not counted as "unemployed" even though they want a job. Why?

Wanting a job is not enough to be counted. Nor is looking for a job on Monster or other places. Before the BLS counts you as unemployed, you actually have to apply for a job, send out a resume. or have an interview.

Admittedly, many of those who are not working are unskilled. However, fast food places and most retail trade jobs do not require skills other than to show up for work on time and be polite to customers.

Aging Workforce

The biggest differences in that chart are in age groups 55-64 and 35-44.

Age group 35-44 constituted 27% of the labor force in 2000 but only 21% in 2017.

In contrast, age group 55-64 constituted 10% of the workforce in 2000 but 17% in 2007.

People are working longer and longer.

Most have to because they did not save enough for retirement. Also, companies like older workers who are on Medicare or have no dependents.


Thanks to cheap Fed-sponsored financing, companies over-expanded.

Retail companies need employees even though they are getting their clocks cleaned by Amazon.

Such overexpansion accounts for much of the job needs.

Job Gain Recession?

If we have a recession, even a mild one, in which there are not significant job losses, the crush on earnings rates to be massive.

The lead chart suggests a different outcome.

We are nine years into an expansion, with the economy slowing, and the Fed intent on getting in three more hikes this year.

Take your pick. Either way, the market is hugely overpriced.

Published:3/20/2018 8:19:11 AM
[Markets] South Korea’s steel heartland frets about looming American tariffs Seoul's government is frantically trying to win an exemption to the tariffs. Published:3/20/2018 7:37:14 AM
[Markets] S&P 500, NASDAQ, and Dow Declined on March 19 The S&P 500 declined in four out of five trading days last week and closed at one-week low price levels. Carrying forward the weakness, the S&P 500 opened lower on Monday and closed the day below two-week low price levels. The market sentiment was weak on Monday due to several factors like concerns about a possible global trade war, the tech sell-off, and an ongoing investigation into Russia’s interference in the 2016 presidential election. Facebook’s sell-off was a catalyst to the broad market meltdown on Monday, which caused all of the major sectors to decline. Published:3/20/2018 7:37:12 AM
[Markets] Recession: When You See It, It Will Be Too Late

Authored by Lance Roberts via,

“There are no signs of recession. Employment growth is strong. Jobless claims are low and the stock market is up.” 

This is heard almost daily from the media mainstream pablum.

The problem with a majority of the “analysis” done today is that it is primarily short-sighted and lazy, produced more for driving views and selling advertising rather than actually helping investors.

For example:

“The economy is currently growing at more than 2% annualized with current estimates near 2% as well.”

If you are growing at 2%, how could you have a recession anytime soon?

Let’s take a look at the data below of real economic growth rates:

  • January 1980:        1.43%
  • July 1981:                 4.39%
  • July 1990:                1.73%
  • March 2001:           2.30%
  • December 2007:    1.87%

If you look at each of those dates, the economy was clearly growing. But each of those dates is the growth rate of the economy immediately prior to the onset of a recession.

You will remember that during the entirety of 2007, the majority of the media, analyst, and economic community were proclaiming continued economic growth into the foreseeable future as there was “no sign of recession.”

I myself was rather brutally chastised in December of 2007 when I wrote that:

“We are now either in, or about to be in, the worst recession since the ‘Great Depression.’”

Of course, a full year later, after the annual data revisions had been released by the Bureau of Economic Analysis (BEA), the recession was officially revealed. Unfortunately, by then it was far too late to matter.

It is here the mainstream media should have learned their lesson. But unfortunately, they didn’t.

The chart below shows the S&P 500 index with recessions and when the National Bureau of Economic Research dated the start of the recession.

There are three lessons that should be learned from this:

  1. The economic “number” reported today will not be the same when it is revised in the future.
  2. The trend and deviation of the data are far more important than the number itself.
  3. “Record” highs and lows are records for a reason as they denote historical turning points in the data.

For example, the level of jobless claims is one data series currently being touted as a clear example of why there is “no recession” in sight. As shown below, there is little argument that the data currently appears extremely “bullish” for the economy.

However, if we step back to a longer picture we find that such levels of jobless claims have historically noted the peak of economic growth and warned of a pending recession.

This makes complete sense as “jobless claims” fall to low levels when companies “hoard existing labor” to meet current levels of demand. In other words, companies reach a point of efficiency where they are no longer terminating individuals to align production to aggregate demand. Therefore, jobless claims naturally fall.

But there is more to this story.

Less Than Meets The Eye

The Trump Administration has taken a LOT of credit for the recent bumps in economic growth. We have warned this was not only dangerous, credibility-wise, but also an anomaly due to three massive hurricanes and two major wildfires that had the “broken window” fallacy working overtime.

“The fallacy of the ‘broken window’ narrative is that economic activity is only changed and not increased. The dollars used to pay for the window can no longer be used for their original intended purpose.”

If economic destruction led to long-term economic prosperity, then the U.S. should just regularly drop a “nuke” on a major city and then rebuild it. When you think about it in those terms, you realize just how silly the whole notion is.

However, in the short-term, natural disasters do “pull forward” consumption as individuals need to rebuild and replace what was previously lost. This activity does lead to a short-term boost in the economic data, but fades just as quickly.

A quick look at core retail sales over the last few months, following the hurricanes, shows the temporary bump now fading.

The other interesting aspect of this is the rise in consumer credit as a percent of disposable personal income. The chart below indexes both consumer credit to DPI and retail sales to 100 starting in 1993. What is interesting to note is the rising level of credit card debt required to sustain retail sales.

Given that retail sales make up roughly 40% of personal consumption expenditures which in turn comprises roughly 70% of GDP, the impact to sustained economic growth is important to consider.

Furthermore, what the headlines miss is the growth in the population. The chart below shows retails sales divided by the current 16-and-over population. (If you are alive, you consume.) 

Retail sales per capita were previously on a 5% annualized growth trend beginning in 1992. However, after the financial crisis, the gap below that long-term trend has yet to be filled as there is a 23.2% deficit from the long-term trend. It is also worth noting the sharp drop in retail sales per capita over just the last couple of months in particular.

Since 1992, as shown below, there have only been 5-other times in which retail sales were negative 3-months in a row (which just occurred). Each time, the subsequent impact on the economy, and the stock market, was not good. 

So, despite record low jobless claims, retail sales remain exceptionally weak. There are two reasons for this which are continually overlooked, or worse simply ignored, by the mainstream media and economists.

The first is that despite the “longest run of employment growth in U.S. history,” those who are finding jobs continues to grow at a substantially slower pace than the growth rate of the population.

If you don’t have a job, and are primarily living on government support (1-of-4 Americans receive some form of benefit) it is difficult to consume at higher levels to support economic growth.

Secondly, while tax cuts may provide a temporary boost to after-tax incomes, that income boost is simply being absorbed by higher energy, gasoline, health care and borrowing costs. This is why 80% of Americans continue to live paycheck-to-paycheck and have little saved in the bank. It is also why, as wages have continued to stagnate, the cost of living now exceeds what incomes and debt increases can sustain.

As I have discussed several times during the 4th-quarter of 2017:

Very likely, the next two quarters will be weaker than expected as the boost from hurricanes fade and higher interest rates take their toll on consumers. So, when mainstream media acts astonished that economic growth has once again slowed, you will already know why.”

Not surprisingly the economic data rolling in has been exceptionally weak and the first quarter GDP growth is now targeted at less than 2% annualized growth.

However, it is not only in the U.S. the economic “bump” is fading, but globally as well as Central Banks have started to remove their monetary accommodations. As noted by the ECRI:

“Our prediction last year of a global growth downturn was based on our 20-Country Long Leading Index, which, in 2016, foresaw the synchronized global growth upturn that the consensus only started to recognize around the spring of 2017.

With the synchronized global growth upturn in the rearview mirror, the downturn is no longer a forecast, but is now a fact.

The chart below shows that quarter-over-quarter annualized gross domestic product growth rates in the three largest advanced economies — the U.S., the euro zone, and Japan — have turned down. In all three, GDP growth peaked in the second or third quarter of 2017, and fell in the fourth quarter. This is what the start of a synchronized global growth downswing looks like.”

“Still, the groupthink on the synchronized global growth upturn is so pervasive that nobody seemed to notice that South Korea’s GDP contracted in the fourth quarter of 2017, partly due to the biggest drop in its exports in 33 years. And that news came as the country was in the spotlight as host of the winter Olympics.

Because it’s so export-dependent, South Korea is often a canary in the coal mine of global growth. So, when the Asian nation experiences slower growth — let alone negative growth — it’s a yellow flag for the global economy.

The international slowdown is becoming increasingly obvious from the widely followed economic indicators. The most popular U.S. measures seem to present more of a mixed bag. Yet, as we pointed out late last year, the bond market, following the U.S. Short Leading Index, started sniffing out the U.S. slowdown months ago.”

You can see the slowdown occurring “real time” by taking a look at Personal Consumption Expenditures (PCE) which comprises roughly 70% of U.S. economic growth. (It is also worth noting that PCE  growth rates have been declining since 2016 which belies the “economic growth recovery” story.)

The point here is this:

“Economic cycles are only sustainable for as long as excesses are being built. The natural law of reversions, while they can be suspended by artificial interventions, cannot be repealed.” 

While there may currently be “no sign of recession,” there are plenty of signs of “economic stress” such as:

The shift caused by the financial crisis, aging demographics, massive monetary interventions and the structural change in employment which has skewed the seasonal-adjustments in economic data. This makes every report from employment, retail sales, and manufacturing appear more robust than they would be otherwise. This is a problem mainstream analysis continues to overlook but will be used as an excuse when it reverses.

While the calls of a “recession” may seem far-fetched based on today’s economic data points, no one was calling for a recession in early 2000 or 2007 either. By the time the data is adjusted, and the eventual recession is revealed, it won’t matter as the damage will have already been done.

As Howard Marks once quipped:

“Being right, but early in the call, is the same as being wrong.” 

While being optimistic about the economy and the markets currently is far more entertaining than doom and gloom, it is the honest assessment of the data, along with the underlying trends, which are useful in protecting one’s wealth longer-term.

Is there a recession currently? No.

Will there be a recession in the not so distant future? Absolutely.

But if you wait to “see it,” it will be too late to do anything about it.

Whether it is a mild, or “massive,” recession will make little difference to individuals as the net destruction of personal wealth will be just as damaging. Such is the nature of recessions on the financial markets.

Published:3/20/2018 7:37:12 AM
[Markets] Need to Know: The Fed easily could make stocks spring higher, says J.P. Morgan On this first official day of spring, it’s still feeling wintery for stocks, especially if you’re a Facebook bull. But maybe a present is coming from the Federal Reserve. That’s the suggestion from our call of the day, provided by J.P. Morgan strategists.
Published:3/20/2018 6:50:46 AM
[Markets] Oracle's stock sinks as disappointing results prompt analyst downgrades Oracle's stock sinks as disappointing results prompt analyst downgrades Published:3/20/2018 6:50:46 AM
[Markets] Emperor Xi Delivers Stark Warning To Trump: Hands Off Taiwan

President Donald Trump may have kicked the hornet's nest by signing on Friday the "Taiwanese Travel Act", encouraging official visits to Taiwan by officials at all levels with an emphasis on "national security officials."

The signing angered the newly crowned Chinese President Emperor Xi Jinping, who lashed out at Trump and the US during a speech on Tuesday marking the start of his second term running the world's most populous country. Xi warned that attempts to sow divisions between China and Taiwan would be "punished by history".

His speech follows Chinese bureaucrats' rubber-stamping changes to the constitution that could allow Xi to serve as leader for life, or as some have correctly defined it, emperor.

"Any actions or tricks to separate the country are bound to fail," Xi said. "They will receive the condemnation of the people and the punishment of history."


"We cannot allow, and it is impossible for, an inch of our great country’s territory to separate from China," said Mr. Xi.

Also, several close Xi allies have been confirmed in senior government posts - though Xi somewhat unexpectedly named Yi Gang the next chairman of the People's Bank of China, a veteran deputy governor whose only task it appears is to preserve continuity. China's legislature also approved former anti-graft czar Wang Qishan as vice president and economic adviser Liu He - poised to become China's financial superregulator - as vice premier.


Xi warned in his speech that China has the means to retaliate against attempts to divorce Taiwan from the mainland, per Bloomberg.

In an address to China’s almost 3,000-member national parliament, Xi said China had the capabilities to stop any attempt to formalize the democratically ruled island’s independence. The remarks came just days after U.S. President Donald Trump signed a law allowing high-level official visits to Taiwan, a move that would elevate its diplomatic status.

"All acts and schemes to split China are doomed to failure and will be condemned by the people and punished by history," Xi told the closing session of the National People’s Congress in Beijing. "The Chinese people have the firm will, full confidence and sufficient ability to defeat all activities to split the country."

The remarks on Taiwan were part of a roughly 40-minute speech in which Xi repeatedly emphasized the importance of “the people’s” support for the Communist Party’s rule. The president said public backing was fundamental to achieving his goal of becoming a global power by 2050.

One academic who spoke with Bloomberg said the speech constituted an "official warning" from the People's Republic of China: Don't interfere in mainland-Taiwan relations.

"This is an official warning from China’s top leader to the U.S. and Taiwan," said Wang Jiangyu, an international law professor at the National University of Singapore. "It’s an announcement that China will never compromise on Taiwan-related issues."

While Trump and Xi have maintained the appearance of a cordial relationship, the two men have clashed on issues ranging from Taiwan to trade. As a reminder, just days after his electoral victory, Trump inadvertently offended the Communist Party by accepting a congratulatory phone call from Taiwanese president Tsai Ing-wen who has repeatedly antagonized the mainland after her predecessor, Ma Ying-jeou, pushed for closer social and economic ties. That call, as it was later revealed, was actually the result of a months-long lobbying push spearheaded by former Republican presidential candidate Bob Dole.

Tsai has refused to endorse China's "One China" framework, which stipulates that Taiwan is essentially a province. Trump initially signaled support for the doctrine after the phone-call incident, but has also recently taken a tougher stance against Beijing. The new legislation will raise Taiwan's profile in Washington by allowing reciprocal visits between diplomats of both countries, per the Wall Street Journal.

Xi consolidated his power during a quinquennial meeting of China's rubberstamp legislature back in November. At the time, he was unanimously reelected for a second term, and his name was added to the Chinese constitution - making him the first living leader, and only the third since Mao Zedong, to have their name added to the constitution. At the meeting, analysts noted that the lack of a clear successor in the Politburo suggested that Xi will run for at least one more term.

Published:3/20/2018 6:50:45 AM
[Markets] Package explodes outside FedEx facility in Texas, one hurt: WSJ Package explodes outside FedEx facility in Texas, one hurt: WSJ Published:3/20/2018 6:22:26 AM
[Markets] Capitol Report: The investors duped by the Theranos fraud never asked for one important thing Theranos and founder Elizabeth Holmes raised $700 million from mostly wealthy investors without ever having to provide financial statements audited by an independent public accounting firm.
Published:3/20/2018 6:22:26 AM
[Markets] Package Bound For Austin Explodes At Texas FedEx Warehouse

In a disturbing development, a package believed to be headed for Austin, Texas exploded at a FedEx facility in Schertz, Texas - a suburb of San Antonio that's roughly a 60 mile drive from the state capitol, the Washington Post reported.

The FBI told CBS that it's "more than possible" the blast is linked to the recent ones in Austin before law enforcement sources confirmed it.

The explosion occurred at around 12:30 am Tuesday morning (local time). The bomb, which contained nails and shrapnel, wounded at least one woman, FBI Special Agent Michelle Lee told reporters.

Work at the facility, which was staffed by 75 people, has ground to a halt as the FBI and ATF arrived on the scene. A local CBS affiliate received a call from one woman whose husband works at the facility. She told the station that he was not being allowed to leave.

Since March 2, five explosions (including Tuesday morning's blast) have rocked the Austin area. Police have warned the public that the incidents appear to be linked, and that they are "currently dealing with a serial bomber".

In addition to the two men who were wounded after Sunday night's explosion, two black men have been killed and an elderly Hispanic woman has been wounded. Police say they haven't ruled out the possibility that the attacks - which began on March 2 - were racially motivated. The first three bombs were left on doorsteps. But Sunday's explosion in Austin was likely triggered by a tripwire, which suggests that the suspects have a higher level of sophistication than police had initially believed. So far, there's not enough evidence for police to classify the incidents as terrorism or hate crimes.

"We don't know what the motive behind these may be. We do know that both of the homes that were the recipients of these packages belonged to African Americans, so we cannot rule out that hate crime is at the core of this," said Austin Police Chief Brian Manley.

Authorities don't appear to have any leads in a case that's looking suspiciously like the infamous "unabomber" case from the 1990s.

Published:3/20/2018 6:22:26 AM
[Markets] Facebook, Fed, Oracle and Dairy Queen - 5 Things You Must Know U.S. stock futures point to further losses for Wall Street on Tuesday, with tech shares remaining under pressure after Facebook's tumble during the previous session. Published:3/20/2018 6:22:25 AM
[Markets] Europe Markets: European stocks turn lower as tech stocks weigh on U.S. futures European stocks slipped Tuesday, with investors appearing to hesitate after a tech-led selloff hurt the regional market in the prior session, and as they prepare for a possible interest-rate hike by the Federal Reserve.
Published:3/20/2018 5:27:35 AM
[Markets] Cambridge Analytica CEO Caught On Camera Offering Bribes And Sex Workers To Entrap Political Opponents

The CEO of a British political data firm which was hired and subsequently fired during course of the 2016 presidential election by Ted Cruz, Ben Carson and Donald Trump, was caught on hidden camera in offering a prospective client methods to entrap a political rival - including bribes, sex workers and even an offer "he can't refuse."

That prospective client, however, was the UK's ITN Channel 4 news - which conducted a four-month undercover investigation of Cambridge Analytica (CA) while posing as potential clients interested in affecting the outcome of the Sri Lankan elections.  The results of Channel 4's investigation revealed that Cambridge Analytica - headed by CEO Alexander Nix, has secretly worked to influence over 200 elections around the world - in some cases using subcontractors or various front companies.  

In one exchange, Nix suggests his firm could send "some girls around to the candidate's house" in ordder to obtain compromising information and create political leverage.

"It doesn't have to be true," Nix said. "It just has to be believed."

In another segment, Nix discusses how Cambridge Analytica will "offer a large amount of money to the candidate, to finance his campaign in exchange for land for instance, and we'll have the whole thing recorded, we'll blank out the face of our guy and we post it on the internet." 

In order to maintain cover, Cambridge Analytica operatives would often pose as students or tourists. 

Managing director Mark Turnbull was also recorded bay ITN news discussing his relationships with former UK spies now working at private companies which can be tapped for private intelligence gathering, along with Israeli intelligence companies. 

Cambridge Analytica has denied using bribes, entrapment "or so-called honey-traps."

Cambridge Analytica came under scrutiny over the weekend after a whistleblower, Chris Wylie, told The Guardian that he helped the company develop and Facebook app which would pay individuals to take a survey. Unbeknownst to users, however, was that users who had not adjusted their Facebook privacy settings were subject to a massive amount of data harvesting - both their own and their friends and contacts as well. 

Wylie says he helped develop a "psychological warfare weapon" to capitalize on the "vulnerabilities" of Facebook users. Around 50 million users to be exact. 

Publicly, the company advertises its ability to build "psychographic" profiles that can microtarget social media political advertising to people based on traits like "extroversion" or "neuroticism." -CBS News

What we worked on was ... data harvesting programs where we would pull data from users of apps and all of their friend networks and run that data through algorithms that could profile their personality traits and other psychological attributes,” Wylie told CNN on Monday evening.

That said, the Trump campaign fired Cambridge Analytica before the general election, according to CBS News

The Trump campaign never used the psychographic data at the heart of a whistleblower who once worked to help acquire the data's reporting -- principally because it was relatively new and of suspect quality and value. The profiling approach utilized by Cambridge Analytica allowed it to predict the voting likelihoods of individual people based on personality, the firm claimed. -CBS

Of note, Ted Cruz's campaign dropped the company during the 2016 campaign after its psychographic models were unable to identify likely Cruz supporters. As for the Trump campaign's decision to drop the firm;

The crucial decision was made in late September or early October when Mr. Trump's son-in-law Jared Kushner and Brad Parscale, Mr. Trump's digital guru on the 2016 campaign, decided to utilize just the RNC data for the general election and used nothing from that point from Cambridge Analytica or any other data vendor. -CBS

CA, an offshoot of UK company SCL group, was created in 2013 with a $15 million investment by billionaire GOP donor Robert Mercer and a major push from former Breitbart executive chairman and former Trump advisor, Steve Bannon. 

In 2014, SCL entered into a contract with a company called Global Science Research (GSR), owned by Aleksandr Kogan - a Cambridge-based psychologist. Kogan's app, called "thisismydigitallife," harvested the data of millions of users which Cambridge Analytica bought.

When Facebook found out in 2015 that Cambridge / SCL had purchased the data, they was asked to stop and delete all of the harvested data. They said they did - however Facebook banned Cambridge Analytica and their parent company SCL after an anonymous source which Facebook won't disclose reported that not all of the data had been deleted. 

Last fall, special counsel Robert Mueller asked Cambridge Analytica to turn over all emails from any employees who worked on the Trump campaign contract, which the firm complied with.

The Trump campaign's contact with the firm ended on Election day 2016 and is no longer associated in any way. 

Published:3/20/2018 5:27:33 AM
[Markets] Why are these cute little pictures so dangerous? These 16x16-pixel images can cash your tax refund check, drain your credit, or steal your health care.
Published:3/20/2018 4:06:34 AM
[Markets] Global Stocks Steady After Tech Wipe-Out, But U.S. Futures Weaken Ahead of Fed Global stocks were steady Tuesday as investors returned to big-name equities following yesterday's Facebook-led wipe-out of the tech sector and prepped for this week's interest rate decision from the U.S. ... Published:3/20/2018 4:06:34 AM
[Markets] Porton Down Scientists Under Extreme Pressure To Confirm Nerve Gas As Russian

Authored by Craig Murray via The Strategic Culture Foundation,

I have now received confirmation from a well placed FCO source that Porton Down scientists are not able to identify the nerve gas as being of Russian manufacture, and have been resentful of the pressure being placed on them to do so.

Porton Down would only sign up to the formulation “of a type developed by Russia” after a rather difficult meeting where this was agreed as a compromise formulation.

The Russians were allegedly researching, in the “Novichok” programme a generation of nerve agents which could be produced from commercially available precursors such as insecticides and fertilisers. This substance is a “novichok” in that sense. It is of that type. Just as I am typing on a laptop of a type developed by the United States, though this one was made in China.

To anybody with a Whitehall background this has been obvious for several days.

The government has never said the nerve agent was made in Russia, or that it can only be made in Russia. The exact formulation “of a type developed by Russia” was used by Theresa May in parliament, used by the UK at the UN Security Council, used by Boris Johnson on the BBC yesterday and, most tellingly of all, “of a type developed by Russia” is the precise phrase used in the joint communique issued by the UK, USA, France and Germany yesterday: This use of a military-grade nerve agent, of a type developed by Russia, constitutes the first offensive use of a nerve agent in Europe since the Second World War.

When the same extremely careful phrasing is never deviated from, you know it is the result of a very delicate Whitehall compromise. My FCO source, like me, remembers the extreme pressure put on FCO staff and other civil servants to sign off the dirty dossier on Iraqi WMD, some of which pressure I recount in my memoir Murder in Samarkand. She volunteered the comparison to what is happening now, particularly at Porton Down, with no prompting from me.

Separately I have written to the media office at OPCW to ask them to confirm that there has never been any physical evidence of the existence of Russian Novichoks, and the programme of inspection and destruction of Russian chemical weapons was completed last year.

Did you know these interesting facts?

OPCW inspectors have had full access to all known Russian chemical weapons facilities for over a decade – including those identified by the “Novichok” alleged whistleblower Mirzayanov – and last year OPCW inspectors completed the destruction of the last of 40,000 tonnes of Russian chemical weapons

By contrast the programme of destruction of US chemical weapons stocks still has five years to run

Israel has extensive stocks of chemical weapons but has always refused to declare any of them to the OPCW. Israel is not a state party to the Chemical Weapons Convention nor a member of the OPCW. Israel signed in 1993 but refused to ratify as this would mean inspection and destruction of its chemical weapons. Israel undoubtedly has as much technical capacity as any state to synthesise “Novichoks”.

Until this week, the near universal belief among chemical weapons experts, and the official position of the OPCW, was that “Novichoks” were at most a theoretical research programme which the Russians had never succeeded in actually synthesising and manufacturing. That is why they are not on the OPCW list of banned chemical weapons.

Porton Down is still not certain it is the Russians who have apparently synthesised a “Novichok”. Hence “Of a type developed by Russia”. Note developed, not made, produced or manufactured.

It is very carefully worded propaganda. Of a type developed by liars.

This post prompted another old colleague to get in touch. On the bright side, the FCO have persuaded Boris he has to let the OPCW investigate a sample. But not just yet. The expectation is the inquiry committee will be chaired by a Chinese delegate. The Boris plan is to get the OPCW also to sign up to the “as developed by Russia” formula, and diplomacy to this end is being undertaken in Beijing right now.

I don’t suppose there is any sign of the BBC doing any actual journalism on this?

Published:3/20/2018 4:06:33 AM
[Markets] Fenner shares jump 25% on £1.2 billion buyout by Michelin Fenner shares jump 25% on £1.2 billion buyout by Michelin Published:3/20/2018 3:30:51 AM
[Markets] Futures Movers: Oil prices rebound as Middle East tensions persist Oil prices moved higher on Tuesday, helped as U.S. stock futures pointed to a modest rebound for Wall Street, while concerns over tensions between Iran and Saudi Arabia, and about Venezuela production, continued to underpin prices.
Published:3/20/2018 3:30:51 AM
[Markets] Turkey's Erdogan Vows New Military Operations Into Eastern Syria And Sinjar, Iraq

Following Turkey's two-month long invasion of Northern Syria and subsequent takeover of the predominantly Kurdish town of Afrin, the logical question that remains is: what 's next for the 'Mad Sultan' Erdogan?

President Recep Tayyip Erdogan's Sunday victory speech didn't lack for the usually robust symbolism denoting neo-Ottoman aspirations far beyond the borders of Turkey (Erdogan gleefully exclaimed, "Now the Turkish flag will fly over there! The flag of the Free Syrian Army will fly over there!" - while comparing the Afrin campaign to the Ottoman defense of Gallipoli during World War I at a ceremony marking the WWI allied powers assault to open the Dardanelles).

And true to form the Turkish president on the following day promised further "extensions" of his forces in the region, including into Eastern Syria and Iraq.

Cartoon via

During a speech in Ankara on Monday, Erdogan declared "3,622 YPG terrorists neutralized so far" in Afrin, and promised more to come:

“We have now put a comma down and God willing we will make a full stop. We won’t be limited to this [operation]. There will be extensions. They will also be sorted out. Our intention is not invade but to carry out operations to cleanse terrorists and eliminate terrorist threats to our country.” 

As reported by the Turkish daily Hurriyet, Erdogan pledged to expand east into Syrian Kurdish YPG territory (Kurdish "People's Protection Units" which Turkey considers an extension of the terrorist PKK), which would pit his forces (including his Free Syrian Army/FSA ground proxies) against the US armed and trained Syrian Democratic Forces (SDF).

This would include locations east of the Euphrates river and areas occupied by US forces. Erdogan continued:

“We have completed an important stage of ‘Operation Olive Branch’ by taking control of the city center of Afrin. We will continue this process until we have entirely abolished the corridor through Manbij, Ayn al-Arab, Tel-Abyad, Ras al-Ayn and Qamishli."

Likely, this is merely more of 'Sultan' Erdogan's empty chest thumping for the sake of his political base which has been nothing new throughout the Syrian war; however, the fact remains that Afrin represents two enormous geopolitical victories for Turkey, namely: 1) the Pentagon was quick to throw the YPG in Afrin under the bus (to cover its tracks, the Pentagon has attempted to make a linguistic distinction between the YPG per se and the Syrian Democratic Forces - the former comprises the bulk of the latter - as well as a distinction between YPG operating in Afrin Canton and the rest of Kurdish forces in Rojava), and 2) Russia opened Syrian airspace over Afrin canton and Idlib in a move without which the Turkish aerial campaign would have been impossible.

And perhaps more brazen was Erdogan's signaling that Turkey could set its sights on rooting out the PKK from Northern Iraq. He put the Iraqi government on notice in the following:

“We have told the central [Iraqi] government that the PKK is establishing a new headquarters in Sinjar. ‘If you can deal with it, you handle it. But if you cannot we will suddenly enter Sinjar one night and clear this region of terrorists. If we are friends, you will make it easy for us. We told all this to previous Iraqi central governments as well. If things are furthered prolonged then another ‘Operation Olive Branch’ will be carried out there.”

This follows previous talks in past months with the Baghdad government over possible Turkish-Iraqi cooperation regarding rooting out PKK militants from the area of Sinjar in Iraq's north, however, Iraq is unlikely to respond possibly to threats of Turkey's army "suddenly entering Sinjar one night...".

Regarding Afrin, Erdogan indicated that Turkish forces would eventually retreat once "terrorists" were rooted out, leaving the city and area to its “real owners" - a continuation on his previously openly expressed goal of radical demographic shift in northwest Syria based on claimed ethnic statistics. 

It was during a televised speech in late January upon the launch of 'Operation Olive Branch' wherein Erdogan first vowed "to give Afrin back to its real owners." He stated at the time that "55% of Afrin is composed of Arabs with %35 of Kurds coming there later on" - with the implication that Turkey's military campaign would drastically reduce the predominantly Kurdish population back down below Erdogan's proposed demographic numbers. 

For this reason, Syrian Kurdish media has consistently accused Turkey of launching the campaign out of a desire to ethnically cleanse the Turkish border region of its historically Kurdish identity. Indeed Erdogan's own words during televised speeches clearly reveal military aims that fit the textbook definition of genocide, to say nothing of the actual atrocities that have been ongoing on the ground

Published:3/20/2018 3:30:51 AM
[Markets] Asia Markets: Tech stocks weigh on Asian markets after Wall Street selloff Asian stocks fell Tuesday, though paring earlier losses after tech shares fell sharply in the U.S. overnight due to concerns about whether Facebook Inc. did enough to stop improper access and handling of user data.
Published:3/20/2018 2:57:07 AM
[Markets] Vladimir Putin's Mysterious Fortune

Authored by Charles Benavidez via,

Vladimir Putin just secured himself another six-year term in power following Russian elections Sunday, and now is a good time to revisit just how much secretive wealth is propping up the Russian strongman.

Putin’s riches are buried in a complex web of proxies - and that’s no surprise for a former KGB agent.

In February, ahead of presidential elections, the Russian Central Election Commission released its ‘official’ disclosures of Putin’s wealth, saying he earned roughly $673,000 between 2011 and 2016, based on his average yearly salary of around $112,000.

Boosting this modest income was a declared $241,000 in 13 banks accounts, an 800-square-foot apartment in St. Petersburg, 230 shares in Bank Saint Petersburg and two Soviet-era sports cars. They even disclosed a 2009 Lada, for good measure.

Critics beg to differ, of course, and insist that a few big-ticket items have been left off the disclosure list.

Former Russia fund manager Bill Browder says Putin is worth $200 billion. If that’s true, it would mean that Putin is the richest man in the world - worth more than Bill Gates and Jeff Bezos, combined.

Browder, the former CEO of Hermitage Capital Management, testified before the Senate Judiciary Committee in July last year, as a key element of the probe into Russia’s interference in the 2016 elections.

Browder had hired Russian attorney Sergei Magnitsky to investigate official corruption, but Magnitsky died in Russian custody in 2009, leading to the U.S. Magnitsky Act sanctions in 2012.

According to Browder, with the arrest of Russia’s then more powerful oligarch, Mikhail Khodorkovsky, in July 2003, Putin became the “biggest oligarch in Russia and the richest man in the world, and my anti-corruption activities would no longer be tolerated.

“After Khodorkovsky’s conviction, the other oligarchs went to Putin and asked him what they needed to do to avoid sitting in the same cage as Khodorkovsky. From what followed, it appeared that Putin’s answer was, ‘Fifty percent’. He wasn’t saying 50 percent for the Russian government or the presidential administration of Russia, but 50 percent for Vladimir Putin personally,” Browder told the Senate.

Browder told the senate that Magnitsky was murdered to cover up the theft of $230 billion from the Russian treasury of which Putin was a beneficiary—but that’s only the fluff of a much larger fortune, he said.

“Recent revelations from the Panama Papers have shown that Putin’s closest childhood friend, Sergei Roldugin, a famous cellist, received $2 billion of funds from Russian oligarchs and the Russian state. I estimate that he has accumulated $200 billion of ill-gotten gains from these types of operations over his 17 years in power. He keeps his money in the West and all of his money in the West is potentially exposed to asset freezes and confiscation. Therefore, he has a significant and very personal interest in finding a way to get rid of the Magnitsky sanctions,” Browder said.

Another key figure to have put a number on Putin’s estimated wealth was Stanislav Belkovsky, a former mid-level Kremlin advisor who claimed in 2007that Putin was worth at least $40 billion. That wouldn’t make him the richest man in the world, but it would have put him in the Forbes top 10 at the time.

In 2013, Belkovsky estimated Putin’s wealth at $70 billion.

As Putin takes his seat for another six years, no one can verify his financial assets, still—and anyone who tries will hit a roadblock, or worse. But the Russian president displays more wealth than a Lada and $112,000 allow for. In other words, his suits cost more than his salary, and that’s just the beginning.

The list of alleged assets is along one, but here are the highlights:

A $1-billion palace on the Black Sea, built with state money, according to the BBC:

(Click to enlarge)

Also on the alleged list is a $500-million yacht, plus three others, along with 60 planes - none of which have been officially photographed.

Published:3/20/2018 2:57:06 AM
[Markets] France: Toward Total Submission To Islam, Destruction Of Free Speech

Authored by Guy Milliere via The Gatestone Institute,

After the murders of much of the staff at the French satirical magazine Charlie Hebdo in Paris on January 7, 2015, the hostage-taking and slaughter at a kosher supermarket two days later confirmed what was already obvious: France was a target of Islamic terrorism. A huge demonstration, organized in Paris on January 11, brought together a million and a half people, with politicians from around the world in attendance.

For a brief moment, France seemed to be the country where the multitudes were ready to stand up for freedom of speech, and the government was ready to fight for Western values.

Unfortunately, that impression did not last long.

For years, freedom of speech in France has been in the process of being crushed, particularly regarding Islam and Islamic terrorism. Journalists who said that Islam often did not look much like a religion of peace but more like a religion of war were systematically and harshly prosecuted. Charlie Hebdo's new director and editor-in-chief were also not spared: they were sued as early as 2006, the year the magazine republished the Danish Mohammed cartoons. They were sued again in 2007, 2012 and 2013. The writer Michel Houellebecq was summoned to court in 2010 for saying that Islam is a "stupid" religion. The first judicial sentence against the polemist Éric Zemmour dates from 2011. The website Riposte Laïque was established in 2007 to fight censorship, defend secularism, and preserve the right to criticize Islam. Lawsuits against its founder, Pierre Cassen, immediately became overwhelming.

Judicial harassment against those who still dared to speak "incorrectly" about Islam did not stop after the murders at Charlie Hebdo: rather, they intensified. The terrorist attacks that took place in France in November 2015 and in July 2016 did not lead to any demonstrations; merely to displays of sadness, fear and resignation. French politicians used empty words, spoke of the dangers of "fanaticism" and said that France was "at war" -- but they never named an enemy. Journalists and writers who said that terrorists attacking France were Muslim, and that "Islamism" was not foreign to Islam, had to answer for their words in court and were fined thousands of euros.

Both Éric Zemmour and Pierre Cassen have spent hours on trial providing conclusive evidence -- in vain.

Since the election of President Emmanuel Macron a year ago, the situation has become worse. On June 20, 2017, at the end of a post-Ramadan iftar dinner he shared with Muslim leaders, President Macron stated that " one should make believe that Islam is not compatible with the Republic"; that " no one should say that France reject Muslim faith" and that "attempt to give Islam the image of a religion condoning murder and terror" must be condemned. Most French critics of Islam got the message and cautiously chose silence. Riposte Laïque did not, but here were consequences.

On January 20, 2018, Pierre Cassen was convicted of "incitement to hatred against Muslims" and a fine of $12,000 was imposed on him. He was also given a three-month suspended prison sentence. He will soon be tried again for repeating the same "crime", and could be sent to prison.

Several European governments have made it clear that criticizing Islam may lead to prosecution and conviction. Recently, British, Danish and German citizens have been handed suspended sentences. If Pierre Cassen is imprisoned, it will be the first time that someone in a Western democracy is sent to jail for criticizing a religion.

Worse, Cassen is not even the author of the article targeted by the judges, and the article only says what is obvious: that extremist Muslims are at war with France and the West, and that incitement to kill infidels is present in the Qur'an. Cassen was sentenced as the editor of Riposte Laïque; since 2012, however, Riposte Laïque has been hosted by Switzerland and has a Swiss editor. Pierre Cassen no longer even has an official role in the organization. He is just easy prey because he lives in France. Pierre Cassen, clearly a victim of prosecutorial abuse, is planning to apply for political asylum in Switzerland.

Two members of the French National Assembly, Gilbert Collard and Marine Le Pen, a former presidential candidate who secured 35% of votes in the May 2017 run-off, were also recently charged with "inciting violence". They did not even publish texts criticizing Islam. After a journalist compared their party (National Front) to the Islamic State, they tweeted photos showing atrocities committed by the Islamic State, and added under the photos: "This is the Islamic State". They are also facing serious fines and prison sentences. The photos they tweeted are not even secret: they are widely available on the internet.

Originally, Collard and Le Pen were protected by parliamentary immunity. Their parliamentary immunity, however, was revoked by an almost unanimous vote in the French National Assembly. This is the first time that members of a democratic Western government risk being imprisoned for publishing widely available photos of Islamic crimes.

French laws are being used more and more often by the French justice system to suppress any criticism of Islam. Furthermore, in a dangerous inversion of reality, critics of Islamic terrorist violence are now systematically presented by French judges as examples of incitement to hatred and violence. The threat of jail time is added to the threat of fines.

Consequently, those who criticize Islam -- or who just show the results of Islamic terrorism -- are victims of fierce prosecution, while hate-filled, racist organizations are never touched. The Islamic "Natives of the Republic" movement, for instance, regularly publishes texts saying that " greedy Jews control the global financial system" and that "Zionists kill Palestinian children for pleasure" but are never condemned. Houria Bouteldja, the spokesperson for the movement, published a book describing Jews as vicious supporters of "Islamophobia", and stating that the Holocaust is "infinitely less than a detail" of history. She recently took part in anti-Israel demonstrations where flags of Hamas and Hezbollah were waved and portraits of murderers of Jews were held up. Jewish organizations expressed their indignation and filed complaints -- to no avail.

The French government and the French justice system claim to treat all religions equally, but they treat Islam as if it were "more equal than others" -- able to enjoy special privileges.

In France, attacks against Islam are benign and rare, but lead to severe convictions: in January 2016, a man dropped slices of ham in front of a mosque. He was immediately sent to jail for several weeks. Attacks against Christianity, however, are countless, sometimes violent, but almost never lead to any conviction. French theaters produce anti-Christian shows almost every year. In a play called "On the Concept of the Face of God," currently on tour throughout the country, for almost two hours, a large portrait of Jesus Christ is insulted and covered with matter that is supposed to be feces. The French Ministry of Culture subsidizes the tour. No theater director, however, would imagine producing an anti-Islam show.

Six to eight million Muslims live in France, and the number is increasing. France's 400,000 remaining Jews have not yet left France, but every year their the numbers shrink. Practicing Christians vanish; churches are often empty.

Polls show that a significant proportion of the French population thinks that Islam is a threat, but French authorities choose to harass those who speak of this threat.

In 2005, the situation was already serious. Muslim riots took place throughout the country. French President Jacques Chirac asked imams to restore calm and began to abandon the French government's sovereignty over many districts. A few years later, President Nicolas Sarkozy claimed to organize an "Islam of France", based on a structure he had created in 2003 when he was Minister of the Interior. He asked French Muslim leaders to call for "moderation". He failed: French Muslim leaders said unanimously that "Islam is not violent" and "does not need moderation". He promised to end "no-go zones" and to take back the districts abandoned under Jacques Chirac. He also failed; in 2006 there were already 751 no-go zones in France, and "as of last count," that number is no different. President François Hollande did nothing and let the situation rot. President Emmanuel Macron now speaks of the need to "reorganize the Islam of France" but instead appears to surrender.

In 2005, Muslim riots took place throughout France. President Jacques Chirac began to abandon the government's sovereignty over many districts. Pictured: Riot police watch as a warehouse burns in the Paris suburb of Aubervilliers on November 4, 2005, on the eighth consecutive night of rioting. (Photo by Pascal Le Segretain/Getty Images)

Macron recently said he wants to create the post of "Grand Imam of France", a man who would be the "spiritual leader" of Islam in France. He added that he would like to see the construction of large "cathedral mosques" in every important French city. He also wants the Arabic language to be taught in every high school, to maintain a relationship between Muslims and the language of their religion. He promises affirmative action in favor of Muslims and a more resolute fight against "those who attack Islam". He never uses the words "radical Islam". He speaks of "radicalization", but says that the main danger is the "radicalization of secularism". He does not hide that those who defend secularism -- and a clear separation between the government and Islam (Riposte Laïque, for example) -- are an obstacle on the path he intends to follow. Clearly, the fight against "radicalization of secularism" is in high gear!

Marwan Muhammad, spokesman of the "Collective against Islamophobia in France" said in 2011:

"Who has the right to say that in thirty to forty years, France will not be a Muslim country? No one in this country has the right to extinguish our right to hope for a society that is globally faithful to Islam ".

Every day in France, men such as Marwan Muhammad have more reason to hope.

Prominent Islamic preacher Tariq Ramadan is presently being held at the Fleury-Mérogis prison near Paris: judges could not dismiss the overwhelming charges against him of rape. Some French Muslims still claim he is being unfairly accused. Many others say he is an impostor and seem ready to get rid of him. They say it is urgent to create "authentic French Islamic institutions" fully "recognized by the French government". President Macron could not have said it better. The Islamization of France will not stop.

President Macron recently said he wants a law against "fake news". If the law is adopted, all online magazines in France that do not broadcast what the government defines as "true news" could be subject to immediate government suspension. If they are located outside France, access to them would be blocked. Islamic online magazines and websites are not on the list of "fake news" providers. What online magazines and websites top the list? Those that question Islam.

Published:3/20/2018 1:21:16 AM
[Markets] Have a home equity loan? Here’s what you need to know about your taxes If you don’t know how President Trump’s new tax law will affect you, you’re not alone.
Published:3/20/2018 12:43:26 AM
[Markets] Paul Craig Roberts: War Is On The Horizon

Authored by Paul Craig Roberts,

Have Washington and its British vassal set a stage for testing whether Russia has the stomach for war?

How else do we interpret the announcement by General Sergey Rudskoy, chief of the Operational Directorate of the Russian General Staff,  that

we have reliable information at our disposal that US instructors have trained a number of militant groups in the vicinity of the town of At-Tanf, to stage provocations involving chemical warfare agents in southern Syria. They are preparing a series of chemical munitions explosions. This fact will be used to blame the government forces. The components to produce chemical munitions have been already delivered to the southern de-escalation zone under the guise of humanitarian convoys of a number of NGOs.

The provocations will be used as a pretext by the United States and its allies to launch strikes on military and government infrastructure in Syria.

Don’t expect to hear anything about this in the totally discredited Western presstitute media, which is a propaganda ministry for war.

The Russian government must be kicking itself that it again failed to finish the job in Syria and instead permitted Washington to expand its Syrian presence, arm and train its mercenaries, provide chemical weapons, and assemble its fleet to attack Syrian forces in order to prevent their reconquest of Syrian territory.

The question before us is:

If the information that General Rudskoy cited is correct, what will Russia do?

Will Russia use its missile defences and air superiority to shoot down the US missiles and aircraft, or will Russia accept the attack and again denounce the illegality of Washington’s action and protest to the UN?

If Russia accepts the attack, Washington will push harder. Sooner or later Russia will be unable to accept another push, and war will break out.

If war breaks out, will it be a limited conventional war or will Washington use the excuse to launch nuclear ICBMs against Russia? These questions must be going through the minds of Russia’s leadership. Russia faces the grave danger that Washington’s Fifth Column inside Russia, the Atlanticist Integrationists, those Russians in the political and business leadership who believe Russia must be, at all costs, integrated into the Western world, will lock the government in indecision and expose Russia to a nuclear first strike.

So far Russia has continued to defeat itself by playing according to the rules of diplomacy and international law despite the obvious fact that Washington has no respect for either. During the past week, Washington’s British vassal, a country of no military or political significance, demonstrated total contempt for Russia and its president, Vladimir Putin. In other words, the insult to Russia came from a mere vassal state of Washington’s empire. An alleged poisoning by an alleged Russian nerve gas, the very existence of which is doubted by US and UK experts, of an inconsequential former spy and his daughter has been blamed, without a shred of evidence, on Russia by the British prime minister, defense minister, and foreign minister.

The British prime minister violated law and agreements to which Britain is partner by giving Russia 24 hours to respond to an accusation for which no evidence was provided. Law and the agreements require that the country making an accusation share the evidence with the accused country, which has 10 days to assess the evidence and reply. The British government refused to abide by the agreement to which it is partner. Moreover, the British foreign minister Boris Johnson personally accused Russia’s President Putin of ordering the attempted murder of the inconsequential spy. For more information on the former spy and his lack of consequence and the absurdity of the orchestrated event, see recent postings on my website.

Not content with the unprecedented insult to Russia and its President, the British defense minister of a country that has no capability whatsoever of defending itself against Russia, even with its liege lord’s help, said in response to Russia’s rejection of the unsupported-by-any-evidence charge that “Russia should shut up and go away.”

This was too much for the Russian Ministry of Defense. General Igor Konashenkov replied:

The rhetoric of an uncouth shrew demonstrated by the Head of the British Ministry of Defense makes his utter intellectual impotence perfectly evident. All this confirms not only the nullity of all accusations towards Russia we have been hearing from London for the last several years but also that the ‘accusers’ themselves are nonentities.

The ‘Great’ Britain has long turned not only into a cozy nest for defectors from all over the world but also into a hub for all sorts of fake news-producing agencies: from the British ‘Syrian Observatory for Human Rights’ to the created by a British intelligence officer pseudo-Syrian ‘White Helmets’.

“As to boorish words of the British Defense Minister regarding Russia, it seems that in the absence of the real results of professional activity, rudeness is the only weapon remaining in the arsenal of the Her Majesty’s Military.” 

Note the total dismissal of ‘Great’ Britain by the Russian Ministry of Defence as a military and political power. From the Russian military’s standpoint Washington’s British vassal state is a total nonentity. This suggests that the Russian military is focused on Washington and is unlikely to tolerate Washington’s agents in Russian government and business circles if they attempt to leave Russia exposed by indecision.

Perhaps the Russians will decide it is past time for them to demonstrate their superior military capabilities, and they will take out not only the US missiles and airplanes but also the fleets from which the attack is launched while putting their nuclear forces on high alert. What then would Washington do? Can a government composed of bullies drunk on hubris come to a sensible decision, or would people so arrogant as to think themselves “exceptional” and “indispensable” condemn the world, including the plants, animals, birds, and all creatures who have no idea of the murderous lunatics that rule the Western world, to death?

There is no greater threat to life on earth than Washington. Constraining Washington’s determination to destroy life on earth is the greatest challenge humanity has faced. If we fail, we all die, every one of us and all creatures.

Despite Russia’s military superiority, the humanity of the Russian government places it at a disadvantage as there is no concern for humanity in Washington.

Published:3/20/2018 12:43:25 AM
[Markets] U.S. Stocks Plummet Amid Tech Selloff Facebook shares posted their largest percentage decline in nearly four years, jolting investors who have rallied behind a handful of hot technology firms and raising fresh questions about the resiliency ... Published:3/20/2018 12:43:25 AM
[Markets] The Margin: Amazon’s Jeff Bezos brings robot dog for a walk at tech conference The founder and chief executive of Inc. showed up to the MARS conference Monday with a Boston Dynamics robot dog in tow
Published:3/19/2018 10:53:16 PM
[Markets] Hillary Resurfaces, Offers No Apology To "Racist" Trump Voters, Insults "White Women" With Husbands

Hillary Clinton has finally accepted personal responsibility for her historic loss against Donald Trump, apologized for calling half of America racist and misogynist, admitted the whole Russia thing was a smokescreen, and promised the Democratic party she'd stop undermining their efforts to rebrand ahead of Midterms.

Just kidding.

In a verbose weekend screed on Facebook - one week after she said Trump voters don't like black people "getting rights" or women "getting jobs," the closest Clinton came to the word "apologize" is that she "meant no disrespect to any individual or group" - before proceeding to suggest that weak white women might not have thought a "powerful woman" could lead, and simply voted for Trump because their husbands did:

Democrats need to do better with white women, because I know in my heart that Democrats have much more to offer them. Do I believe that some women look at a powerful woman and question whether she can lead, maybe voting for the man their husband is voting for instead? It may not be universally true or easy to hear, but yes, it’s a dynamic still at play in our society. -Hillary Clinton

"[T]here is anecdotal evidence and some research to suggest that women are unfortunately more swayed by men than the other way around," Clinton insisted. "As much as I hate the possibility, and hate saying it, it’s not that crazy when you think about our ongoing struggle to reach gender balance – even within the same household."

Clinton also said that Trump's message during the election was "looking backwards," and that she won states "that are optimistic, diverse, dynamic, moving forward." 

And so Hillary somehow once again manages to insult entire states, including those key swing states that turned red in 2016.

No wonder Democrats - including her former campaign manager - want her to stick a cork in it.

Incidentally, one assumes that Clinton dictated her non-apology to an assistant as the former Secretary of State fractured her wrist falling in the bathtub shortly after slipping twice down 15 unassuming stairs.


Published:3/19/2018 10:53:15 PM
[Markets] [$$] Volatility Gauge Rises Most Since Last Month’s Market Rout The Cboe Volatility Index rose 20% as Facebook and other technology companies dragged U.S. stocks lower, in its biggest gain since Feb. 8. Published:3/19/2018 10:53:15 PM
[Markets] Why Danny Boyle could save James Bond One of Hollywood’s most lucrative film franchises may be fading. Of the top five highest-grossing Bond movies, only one came after 1980. “Slumdog Millionaire” director Danny Boyle could change the tide. Published:3/19/2018 9:49:09 PM
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